Exhibit 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is executed and
delivered as of November 13, 2003, by and among Waste Services, Inc., a Delaware
corporation ("BUYER PARENT"); the Affiliates of Buyer Parent set forth on
EXHIBIT A ("BUYERS"); Capital Environmental Resource Inc. ("CAPITAL"), an
Ontario (Canada) corporation and an Affiliate of Buyer Parent and Buyers; Allied
Waste Industries, Inc., a Delaware corporation ("SELLER PARENT"); and the
Affiliates of Seller Parent set forth on EXHIBIT A ("SELLERS").
RECITALS
A. Sellers own and operate the collection and hauling operations,
transfer stations, landfills and recycling facilities identified opposite their
names on EXHIBIT A (collectively, the "BUSINESS").
B. Buyers desire to purchase and acquire substantially all of the
assets, properties and contractual rights of Sellers used in connection with the
Business, and Sellers desire to sell such assets, properties and contractual
rights to Buyers, all in accordance with the terms and conditions set forth in
this Agreement.
X. Xxxxxxx and the Partnership own the real property described on
EXHIBIT B-1 as "Owned Land" (the "OWNED LAND") and lease the real property
described on EXHIBIT B-2 as "Leased Land" (the "LEASED LAND" and, together with
the "OWNED LAND", the "LAND").
D. Seller Parent owns (directly or indirectly) all of the issued and
outstanding shares of the capital stock of Sellers.
E. Buyers and Buyer Parent are unwilling to enter into this Agreement
without the covenants and promises of Seller Parent set forth herein.
F. Seller Parent desires that Sellers sell such assets, properties and
contractual rights to Buyers upon the terms and subject to the conditions set
forth in this Agreement and, in order to induce Buyers to enter into this
Agreement, is willing to make the covenants and promises set forth herein.
G. As of the date hereof, Capital owns (directly or indirectly) all of
the issued and outstanding shares of the capital stock of Buyer Parent and
Buyers. Following the US Reorganization Transaction, Buyer Parent will own
(directly or indirectly) all of the issued and outstanding shares of the capital
stock of Capital and Buyers.
X. Xxxxxxx and Seller Parent are unwilling to enter into this Agreement
without the covenants and promises of Buyer Parent and Capital set forth herein.
I. Buyer Parent and Capital desire that Buyers purchase and acquire
substantially all of the assets, properties and contractual rights of Sellers
used in connection with the Business upon the terms and subject to the
conditions set forth in this Agreement and, in order to induce Sellers and
Seller Parent to enter into this Agreement, are willing to make the covenants
and promises set forth herein.
J. Except as the context otherwise requires, capitalized terms used in
this Agreement shall have the meanings assigned to them in EXHIBIT C.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and other good and valuable consideration, received to the full
satisfaction of each of them, the parties hereby agree as follows:
ARTICLE I
SALE OF ASSETS
1.1 SALE OF ASSETS BY SELLERS. On the terms and subject to the
conditions set forth in this Agreement, at the Closing, Sellers shall grant,
convey, sell, transfer and assign to Buyers, and Buyers shall purchase from
Sellers, all of Sellers' right, title and interest in and to the properties,
assets, rights, licenses, permits and contracts, wherever located, whether
tangible or intangible, real, personal or mixed, in each case that are used,
owned by, leased by or in the possession of Sellers principally in connection
with the Business, whether or not reflected on the books and records of Sellers
(the collective assets, properties, rights, licenses, permits and contracts to
be transferred by Sellers pursuant hereto are referred to collectively herein as
the "ASSETS"), free and clear of all Encumbrances except Permitted Exceptions,
and including all right, title and interest of Sellers in, to and under the
following used, owned by, leased by or in the possession of Sellers principally
in connection with the Business (but excluding the Excluded Assets):
(a) the Land, including with respect to (i) the Leased Land,
all of Sellers' leasehold interests in and to the Leased Land and improvements
thereon, and (ii) the Owned Land, all structures, improvements, buildings,
fixtures, easements and mineral, water and irrigation rights and other
appurtenances and rights and interests relating thereto owned by Sellers;
(b) subject to SECTION 1.3, all Permits held by Sellers,
including the Permits listed on SCHEDULE 1.1(B);
(c) all Equipment, including the Equipment listed on SCHEDULE
1.1(C);
(d) all Rolling Stock, including the Rolling Stock described
on SCHEDULE 1.1(D);
(e) all computer hardware and transferable, non-proprietary
software programs used, or held for use, principally in connection with the
Business;
(f) all Inventory, including the Inventory listed on SCHEDULE
1.1(F);
(g) all intangible property owned by Sellers and used or held
for use principally in connection with the Business, including all trade
secrets, intellectual property rights, patents, copyrights, inventions, symbols,
trademarks, service marks, logos and trade names used or held for use
principally in connection with the Business and owned by Sellers, except
(subject to SECTION 4.1) those symbols, trademarks, service marks, logos and
trade names that include the names of or otherwise identify Seller Parent or
include the names "Allied," "Xxxxxxxx-Xxxxxx" or "BFI" (the "RETAINED IP");
(h) all Real Estate Leases, Customer Contracts, Assumed
Leases, Employee Contracts, Other Contracts and other contracts principally
relating to the Business (collectively, the "ASSUMED CONTRACTS");
(i) the Business Names listed on SCHEDULE 1.1(I);
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(j) the telephone number(s) used in the conduct of the
Business;
(k) all shop tools, nuts and bolts owned by Sellers and used
or held for use principally in connection with the Business;
(l) all recycling property, plant or equipment used or held
for use principally in connection with the Business, wherever located (including
any items located on a customer's site);
(m) all books and records relating to the Business, whether in
hard copy or computer format, including sales and promotional material, customer
lists and vendor lists and personnel records;
(n) to the extent relating to the Business, all prepaid
expenses and deposits, including any such expenses and deposits with respect to
leases, rentals and utilities;
(o) all Accounts Receivable of the Business;
(p) all furniture, fixtures and office equipment relating to
the Business;
(q) all of Sellers' claims pursuant to any representations,
warranties and guarantees made by suppliers, manufacturers, contractors and
other third Persons in connection with products or services purchased by or
furnished to the Business prior to the Closing;
(r) to the extent relating to the Business, all rights under
agreements with employees and other third Persons concerning confidentiality and
assignment of inventions;
(s) all goodwill of the Business;
(t) all of the general and limited partnership interests of
Xxxxx Road Landfill and Recycling, Ltd. (the "PARTNERSHIP"); and
(u) all commodities and recycling inventories of the Business.
Notwithstanding the foregoing, the transfer of Assets pursuant to this
Agreement shall not include the assumption of any Liability related to any Asset
or the Assets (other than the Assumed Liabilities).
1.2 EXCLUDED ASSETS. The parties agree that certain assets of Sellers
shall remain the property of Sellers and shall not be sold to Buyers at the
Closing (the "EXCLUDED ASSETS"). Such Excluded Assets are as follows: (a) all
real property and all buildings on and fixtures to all real property of Sellers
not set forth on EXHIBIT B-1 or B-2; (b) all contracts and contract rights and
obligations of Sellers (whether oral or in writing) that do not relate
principally to the Business; (c) records which relate primarily to Excluded
Assets, Excluded Liabilities, or Taxes; (d) the stock and corporate record books
of Sellers; (e) the rights which accrue or will accrue to Sellers under this
Agreement; (f) all right, title and interest in and to any financial
responsibility, financial assurance or similar mechanisms required to be
maintained by owners or operators of landfill, transfer station or recycling
facilities under Applicable Laws; (g) any inter-company receivables from
Sellers, Seller Parent, or their Affiliates; (h) all present and future refunds
relating to Taxes of Sellers for periods prior to the Closing Date; (i) all
insurance policies and all rights with respect thereto; (j) all litigation
rights to which a Seller is plaintiff and all causes of action and claims of
every nature, kind and description; (k) all billing, route management and other
proprietary software programs and all other software programs that are not
transferable; (l) all xxxxx and other cash
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and cash equivalents on hand or in a bank; (m) all bank accounts; (n) all escrow
accounts; and (o) all properties, assets, rights, licenses, permits, and
contracts that are not used, owned by, leased by or in the possession of Sellers
principally in connection with the Business. With respect to any Excluded Assets
held by the Partnership, Seller Parent will cause the Partnership to distribute
or transfer such Excluded Assets to a Seller or an Affiliate before Closing.
1.3 NON-ASSIGNMENT OF CERTAIN CUSTOMER CONTRACTS AND PERMITS.
Notwithstanding anything to the contrary in this Agreement, to the extent that
the sale or assignment hereunder of any Customer Contract, Assumed Lease or
Permit included within the Assets shall require the consent of any third Person,
neither this Agreement nor any action taken pursuant to its provisions shall
constitute an assignment or an agreement to assign if such assignment or
attempted assignment would constitute a breach thereof or be ineffective or
result in the loss or diminution thereof; provided, however, that in each such
case, Sellers and Buyers shall each use commercially reasonable efforts to
obtain the consent of such other party to such assignment to Buyers both before
and after the Closing. If any Customer Contract, Assumed Lease or Permit is not
assigned at the Closing, Sellers shall hire a Buyer as a subcontractor to
perform the obligations under such Customer Contracts, Assumed Leases and
Permits. Pursuant to the subcontractor relationship, such Buyer shall be
entitled to receive all payments due under such Customer Contracts, Assumed
Leases and Permits with respect to work performed after Closing, and such Buyer
shall bear all expenses incurred after Closing related to such work performed
after Closing under such subcontracts. In the event that a Customer Contract,
Assumed Lease or Permit included within the Assets does not permit a
subcontractor relationship, Buyers and Sellers shall execute at Closing such
documents as may be necessary to accomplish performance of the Customer
Contract, Assumed Lease or Permit while retaining for Buyers' account the
financial, accounting and economic results associated with such Customer
Contract, Assumed Lease or Permit.
ARTICLE II
PURCHASE PRICE
2.1 PURCHASE PRICE.
(a) Subject to adjustment as provided in this ARTICLE II, the
purchase price for the Assets and the covenants of Seller Parent and Sellers
contained in ARTICLE XIII shall be $120,000,000 (the "PURCHASE PRICE"). The
Purchase Price shall be paid by Buyers as follows: (i) $7,500,000 (the
"DEPOSIT") by wire transfer of immediately available funds concurrently with the
execution of this Agreement; and (ii) subject to possible adjustment as provided
in SECTION 9.7, $112,500,000 by wire transfer of immediately available funds at
the Closing. The Purchase Price and all other dollar amounts contemplated by
this Agreement are stated in United States dollars, and all amounts payable
pursuant to this Agreement shall be paid in United States dollars.
(b) The following capitalized terms used in this Agreement
shall have the following meanings:
(i) "ADJUSTMENT AMOUNT" means an amount (which may be
positive or negative) equal to: (A) the amount of Net Working Capital as of
Closing, which amount may be positive or negative; MINUS (B) the agreed-upon
value of any Liabilities assumed by Buyers pursuant to SECTION 10.2(D)(IV).
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(ii) "NET WORKING CAPITAL" means (A) the aggregate
current assets included within the Assets, LESS (B) the aggregate current
liabilities of Sellers assumed by Buyers under SECTION 10.2, in each case
determined in accordance with GAAP on a basis consistent with the balance sheet
dated December 31, 2002 included within the Sellers' Financial Statements.
Notwithstanding the foregoing, however: (A) any liabilities described in SECTION
10.2(D) shall not be deemed current liabilities; (B) the Stay-On Bonuses to be
paid by Buyers at the Closing shall not be deemed liabilities (current or
otherwise); (C) the prepaid deposits (current or otherwise) shall be deemed
current assets; (D) the commodities and recycling inventories shall be deemed
current assets and shall be valued according to fair market value; and (E)
current liabilities shall include a reserve for bad debts calculated on a basis
consistent with the bad debt reserve for the year ended December 31, 2002
included within the Sellers' Financial Statements.
2.2 PURCHASE PRICE ADJUSTMENT.
(a) Within sixty (60) days after the Closing, Buyer Parent
shall prepare a computation of the Adjustment Amount as of the Closing Date and
deliver such computation to Seller Parent. If within twenty (20) days following
delivery of such computation Seller Parent does not deliver a written objection
thereto to Buyer Parent, then the Adjustment Amount shall be as reflected on the
computation provided pursuant to the preceding sentence. If Seller Parent timely
objects to the computation, then Buyer Parent and Seller Parent shall negotiate
in good faith and attempt to resolve their disagreement. Should such
negotiations not result in an agreement within twenty (20) days after delivery
of such written objection, then the matter shall be submitted to KPMG, LLP (the
"NEUTRAL AUDITOR"). All fees and expenses relating to the work, if any, to be
performed by the Neutral Auditor will be borne equally by Buyers and Sellers.
The Neutral Auditor will deliver to Buyer Parent and Seller Parent a written
determination (such determination to include a worksheet setting forth all
material calculations used in arriving at such determination and to be based
solely on information provided to the Neutral Auditor by Buyer Parent and Seller
Parent, or their respective Affiliates) of the disputed items within thirty (30)
days of receipt of the disputed items, which determination will be final,
binding and conclusive on the parties.
(b) Promptly following agreement on or delivery of the final,
binding and conclusive computation setting forth the Adjustment Amount, Buyer
Parent and Seller Parent shall account to each other as provided for in this
SECTION 2.2(B). If the Adjustment Amount is a positive number, then Buyers shall
pay Sellers a cash payment equal to such excess as an increase in the Purchase
Price. If the Adjustment Amount is a negative number, then Sellers shall pay
Buyers a cash payment equal to such deficit as a decrease in the Purchase Price.
Any such excess or deficit payment shall be due and payable within five (5) days
after the Adjustment Amount is determined pursuant to this SECTION 2.2 and shall
be payable in immediately available funds by wire transfer to an account
designated by Buyers or Sellers, as applicable, for such purpose.
2.3 ALLOCATION OF PURCHASE PRICE. Within thirty (30) days following the
final determination of the Adjustment Amount, the parties shall negotiate in
good faith the allocation of the Purchase Price and the Assumed Liabilities
among the Assets. The parties agree to file (or cause to be filed) all Tax
returns (including amended Tax returns and claims for refund) in a manner
consistent with such allocation of the Purchase Price described in this SECTION
2.3, and shall use their commercially reasonable efforts to sustain such
allocation in any subsequent Tax audit or Tax dispute. The parties acknowledge
and agree that the allocation reflected in this SECTION 2.3 is intended to be
made in accordance with the requirements of Code Section 1060 and will be based
on the fair market value of the Assets as determined by arm's length
negotiations.
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ARTICLE III
CLOSING
3.1 TIME AND PLACE OF CLOSING.
(a) GENERALLY. Subject to SECTION 3.1(B), the purchase and
sale provided for in this Agreement (the "Closing") shall take place at the
offices of Xxxxxxxxx Xxxxx, P.C., 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000 at 9:00 a.m., local time, as promptly as practicable (but
in any event within ten (10) Business Days) following the date on which the last
of the conditions set forth in ARTICLE VIII and ARTICLE IX are fulfilled,
satisfied or waived or at such other time or place as the parties shall agree in
writing. The date on which the Closing occurs is herein referred to as the
"CLOSING DATE." From the date hereof through the Closing Date or the earlier
termination of this Agreement, Buyer Parent and its Affiliates shall not close
any acquisition of hauling assets in Florida involving more than $5,000,000 in
annual revenues from a single seller (or Affiliates of such seller).
(b) REAL ESTATE. At the Closing, the sale and conveyance of
the Owned Land shall be consummated through an escrow established at the Title
Company, although actual payment of the Purchase Price allocable to the Owned
Land shall not be paid through the escrow.
3.2 DELIVERIES BY SELLERS AND SELLER PARENT. At the Closing, Sellers
and Seller Parent shall deliver or cause to be delivered to Buyers, all duly and
properly executed (where applicable):
(a) subject to SECTION 3.8, Deeds conveying to Buyers title to
each parcel of Owned Land subject only to the Permitted Exceptions and, for all
Leased Land, an Assignment, Assumption and Consent to Leased Land executed by
Sellers and the applicable landlord under the Real Estate Leases (if necessary);
(b) subject to SECTION 3.8, a standard owner's policy of title
insurance, or irrevocable commitment therefor, from the Title Company for each
parcel of Owned Land providing or agreeing to provide, as applicable, title
insurance in favor of Buyers in the amount determined for such parcel of Land in
accordance with SECTION 3.4(B), subject only to the Permitted Exceptions;
(c) a Xxxx of Sale;
(d) patent, trademark and copyright assignments, in form and
substance reasonably acceptable to Buyers and Sellers, providing for the
transfer of any patents, trademarks and copyrights included in the Assets;
(e) a receipt for the Purchase Price (as adjusted pursuant to
ARTICLE II);
(f) good standing certificates (i) with respect to Seller
Parent, the Partnership and Sellers, from their states of formation and (ii)
with respect to Sellers and the Partnership, from each state in which they own
any of the Assets or are carrying out the Business;
(g) sworn affidavits stating, under penalty of perjury, that
Sellers are not "foreign persons" as defined under the Code and other
appropriate evidence or documents (including any Tax clearance certificate or
similar document that may be required by any state Tax authority) necessary in
order to relieve Buyers of any obligation to withhold any portion of the
Purchase Price under Section 1445(a) of the Code or any other withholding
provision of any other Tax law;
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(h) certified copies of resolutions of the boards of directors
of Sellers and the board of directors or executive committee of Seller Parent
authorizing the execution of this Agreement and the other documents and
agreements contemplated hereby, the sale of the Assets to Buyers, and the
consummation of the Transactions, along with incumbency certificates of Sellers
and Seller Parent;
(i) a National Account subcontract substantially in the form
of EXHIBIT D (the "NATIONAL ACCOUNT Subcontract");
(j) a letter from Seller Parent's lenders confirming that all
blanket liens on the Assets will be released concurrently with the Closing;
(k) a right of first refusal agreement substantially in the
form of EXHIBIT G (the "RIGHT OF FIRST REFUSAL AGREEMENT");
(l) the payment described in SECTION 15.6(C); and
(m) such other separate documents or instruments of sale,
assignment, or transfer as Buyers shall reasonably request, including titles and
registrations for the Rolling Stock.
3.3 DELIVERIES BY BUYERS AND BUYER PARENT. At the Closing, Buyers and
Buyer Parent shall deliver or cause to be delivered to Sellers, all duly and
properly executed (where applicable):
(a) the portion of the Purchase Price to be paid at Closing as
provided in SECTION 2.1, by wire transfer of immediately available funds to such
account as shall have been specified in writing by Sellers to Buyers not less
than two (2) Business Days prior to Closing;
(b) certified copies of resolutions of the boards of directors
of Buyers, Buyer Parent and Capital authorizing the execution and delivery of
this Agreement and the other documents and agreements contemplated hereby and
the consummation of the Transactions, along with incumbency certificates of
Buyers, Buyer Parent and Capital;
(c) for all Leased Land, an Assignment, Assumption and Consent
to Leased Land;
(d) good standing certificates (i) with respect to Buyer
Parent and Buyers, from their states of incorporation and (ii) with respect to
Buyers, from each state in which they will own any of the Assets or carry out
the Business;
(e) the Buyers' Assumption Agreements;
(f) the National Account Subcontract;
(g) the Right of First Refusal Agreement;
(h) the Environmental Access Agreement with respect to the
Xxxxx Road Landfill in substantially the form of EXHIBIT J; and
(i) such other separate documents or instruments of sale,
assignment, transfer or assumption as Sellers shall reasonably request.
3.4 TITLE POLICIES AND DOCUMENTS.
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(a) The parties acknowledge and agree that before the
execution of this Agreement, the Title Company delivered to Buyers and Buyers
delivered to Sellers the following: (i) a Title Commitment insuring fee simple
title in the name of Buyers for each parcel of Owned Land (except for a portion
of 0000 Xxxxxx Xxxx, Xxx Xxxx Xxxxxx, Xxxxxxx and a portion of the Nassau
Landfill), and (ii) legible copies of the documents identified in Schedule B or
the requirements section of each Title Commitment. Within two (2) Business Days
after receipt of a written request from Buyers, Sellers shall execute and
deliver authorizations that may be sent by Buyers to governmental and other
public authorities that authorize such authorities to reveal to Buyers all
information, if any, in any files the authorities have on the Land, or any part
thereof, provided such authorizations do not authorize or request inspections
with respect to the Land. Except as expressly provided in SECTION 3.5, all costs
attributable to the issuance of the Title Commitments, any title searches, title
reports, standard owners' title policies, standard leasehold title policies,
endorsements, modifications to standard exceptions, and other title-related
costs shall be borne solely by Buyers and paid to the Title Company at the
Closing. Sellers agrees to execute all customary affidavits, in reasonable form,
and other reasonable documents, in order to permit the issuance of the title
policies and the requested endorsements, including (if applicable) a
"non-imputation" endorsement to the effect that title defects known to the
officers, directors, and stockholders of the owner prior to the Closing shall
not be deemed "facts known to the insured" for purposes of the policies.
(b) The value of the Land for title insurance, transfer tax,
documentary stamps and other relevant purposes will equal the fair value of each
parcel as determined by the relevant governmental assessor, as adjusted by the
multiplier covering such assessor, as determined by National Property Tax
Management, Inc.
3.5 TITLE AND SURVEY REVIEW; PERMITTED EXCEPTIONS; OTHER TERMINATION
RIGHTS. Except as provided below, Buyers shall have thirty (30) days after the
execution of this Agreement to notify Sellers in writing of any Unpermitted
Exceptions for any parcel of Land. Buyers will deliver to Sellers all new Title
Commitments, all amendments to any Title Commitments, all new Surveys and any
updates to any Surveys within five (5) days after Buyers' receipt thereof. In
addition, if a new Title Commitment, an amendment to a Title Commitment, a new
Survey or an updated Survey is issued after the applicable thirty (30) day
period that discloses an Unpermitted Exception not previously disclosed, Buyers
shall provide notice of objection to such Unpermitted Exception to Sellers
within ten (10) days after receipt of the amendment to the Title Commitment or
new Survey or an update to the Survey, as applicable. If Buyers fails to timely
deliver an objection notice as required by the previous sentence, Buyers shall
be conclusively deemed to have approved the matter as of the last day of the
relevant objection period. Sellers shall have ten (10) days after notice of any
Unpermitted Exception is given by Buyers within which to give notice to Buyers
in writing as to whether Sellers elect to cure or insure around any such matter;
provided, however, that Sellers shall be required to cure, or insure around at
Sellers' expense, any monetary Unpermitted Exception (i.e., financing
Encumbrances and other monetary liens affecting the Land). Except with respect
to a monetary Unpermitted Exception, failure to notify Buyers in writing within
such period of their election to cure or insure around shall be deemed Sellers'
election not to cure or insure around. Buyers shall have five (5) days following
receipt of Sellers' notice or deemed notice electing not to cure or insure
around in which to (a) elect to waive their objection to any Unpermitted
Exception that Sellers do not elect to cure or insure around, or (b) remove the
affected parcel of Land from the Transactions (in which case the Purchase Price
shall be reduced by the value of such parcel as determined in accordance with
SECTION 3.4(b)). If Buyers fail to notify Sellers in writing of Buyers' election
within such five (5)-day period, Buyers shall be deemed to have elected in
accordance with (a) of the preceding sentence and such Unpermitted Exception
shall be
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deemed a Permitted Exception. In addition to Buyers' other rights under this
SECTION 3.5, Buyers may also terminate this Agreement under this SECTION 3.5 if
the Unpermitted Exceptions that Sellers do not elect to cure or insure around,
taken as a whole, could reasonably be expected to result in a Material Adverse
Change if the rights, benefits or privileges under such Unpermitted Exceptions
are properly asserted or enforced by the beneficiaries thereof or the
restrictions affecting such Owned Land under such Unpermitted Exceptions are
enforced.
3.6 SURVEY. Buyers acknowledge and agree that before the execution of
this Agreement, they have obtained any ALTA surveys they desire with respect to
the Land (the "SURVEYS"), except for a portion of 0000 Xxxxxx Xxxx, Xxx Xxxx
Xxxxxx, Xxxxxxx and a portion of the Nassau Landfill. Within ten (10) days after
the execution of this Agreement, Buyers shall deliver to Sellers any Survey they
have obtained and not yet delivered with respect to the Land, except for a
portion of 0000 Xxxxxx Xxxx, Xxx Xxxx Xxxxxx, Xxxxxxx and a portion of the
Nassau Landfill (which Buyers shall deliver to Sellers within five (5) days
after they receive the same). The costs of all Surveys obtained under this
SECTION 3.6 shall be borne solely by Buyers and paid to the appropriate Survey
preparer in accordance with Buyers' separate arrangements with each such
preparer.
3.7 PRORATIONS AND CHARGES. All Taxes relating to the Owned Land for
any tax year prior to the real estate tax year in which the Closing occurs shall
be paid in full by Sellers on or before the Closing Date or an amount sufficient
to fully discharge the same shall be deposited in escrow by Sellers on the
Closing Date with the Title Company for payment to the relevant Tax authority.
Taxes relating to the Owned Land for the current tax year shall be prorated
between Sellers and Buyers as of the Closing Date on a daily, pro-rata basis
based upon the latest available estimates of the amount thereof or the actual
amount of such Taxes. With respect to Leased Land, the appropriate parties shall
prorate, effective as of the close of business on the Closing Date, to the
extent relevant rent, real estate taxes, operating costs (e.g., CAMs) and any
other amounts (other than payments attributable to a breach of the Real Estate
Lease by Sellers) due under the applicable Real Estate Lease, which proration
shall be included within the adjustment under SECTION 2.2. Buyers and Sellers
shall each pay one-half of the escrow fees and any cancellation fees owing to
the Title Company. Documentary and other customary Closing costs, such as
recording fees, shall be allocated to and paid by Sellers or Buyers, as the case
may be, in accordance with the custom for similar transactions in the county
where the Owned Land is located.
3.8 UNSATISFIED CONDITIONS; OTHER TERMINATION RIGHTS. If, as of the
Closing Date, any Unsatisfied Conditions exist, then Buyers shall have the
following rights:
(a) Buyers may close under this Agreement subject to the
Unsatisfied Conditions, in which case (i) that portion of the Purchase Price
allocated to each parcel of Land affected by any Unsatisfied Conditions,
together with a reasonable allocation of Closing costs, including tax
prorations, title costs, and transfer taxes, will be placed in escrow with the
Title Company until all Unsatisfied Conditions have been resolved, satisfied
and/or delivered, as applicable, and all items listed in SECTION 3.2 have been
delivered with respect to each parcel of Land affected by Unsatisfied
Conditions, (ii) Sellers or Buyers, as applicable, shall diligently work to
ensure that the Unsatisfied Conditions are resolved, satisfied or delivered as
soon as reasonably possible, but in no event later than thirty (30) days
following Closing, (iii) Buyers' right to remove an affected parcel of Land from
the Transactions pursuant to SECTION 3.5 shall continue to apply notwithstanding
the Closing, (iv) Buyers may, upon written notice to Sellers, remove any parcel
of Land affected by Unsatisfied Conditions which are not resolved, satisfied
and/or delivered, as applicable, within thirty (30) days following the Closing
Date, (v) Buyers and Sellers shall enter into, on or before Closing, Temporary
Use Agreements with respect to
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any affected parcel of Land that Buyers reasonably deem to be necessary for the
operation of the Business following the Closing Date, and (vi) notwithstanding
clause (i) of this SECTION 3.8(A), with respect to each parcel of Land that
Buyers remove from the Transactions pursuant to SECTION 3.5 or pursuant to
clause (iv) of this SECTION 3.8(a), the Title Company shall immediately return
the escrowed Purchase Price for such parcel of Land to Buyers unless Sellers
offer Buyers the economic rights associated with the Land, through an operating
agreement, long term lease or other mechanism reasonably acceptable to Buyers,
in which case an amount equal to the funds due to Sellers for the first payment
period (e.g., if payments are made on an annual basis, the first year's
payments; if payments are made on a monthly basis, the first month's payments)
under such operating agreement, long term lease or other mechanism shall be paid
to Sellers and the remainder of the escrowed Purchase Price for such parcel
shall be paid to Buyers; or
(b) If the Unsatisfied Conditions existing as of the scheduled
Closing Date, taken as a whole, could reasonably be expected to result in a
Material Adverse Change if not resolved, Buyers may terminate this Agreement by
delivering written notice to Sellers.
3.9 STAY-ON BONUSES. Buyer Parent shall perform the obligations of
Seller Parent to make payments in an aggregate amount of $350,000 (the "STAY-ON
BONUSES") under the Retention Bonus Agreements in substantially the form of
EXHIBIT E (the "RETENTION BONUS AGREEMENTS") in accordance with the terms of
such agreements.
ARTICLE IV
POST CLOSING COVENANTS
4.1 REMOVAL OF IDENTIFICATION. On or before the date which is six (6)
months after the Closing, Buyers shall remove from the Assets or otherwise
conceal all visible usage of the Retained IP; provided, however, that Buyers
shall have until the date which is twelve (12) months after the Closing to
remove or conceal all usage of Retained IP in connection with customer
containers. Until the relevant date, Buyers shall have a non-transferable,
non-exclusive, royalty-free right and license to use the Retained IP in the
conduct of the Business in a manner consistent with Sellers' pre-Closing usage
thereof.
4.2 FURTHER ASSURANCES. From time to time on and after the Closing and
without further consideration except as provided herein, the parties shall each
deliver or cause to be delivered to any other party at such times and places as
shall be reasonably requested, such additional instruments as any of the others
may reasonably request for the purpose of carrying out this Agreement and the
Transactions. Seller Parent, also without further consideration, agrees to
cooperate with Buyers and to use its reasonable commercial efforts to have its
officers and employees and the officers and employees of Sellers cooperate on
and after the Closing Date in furnishing to Buyers information, evidence,
testimony, and other assistance in connection with obtaining all necessary
Permits and approvals and in connection with any third party actions,
proceedings, arrangements or disputes of any nature with respect to matters
pertaining to all periods prior to the Closing Date; provided, however, that
this obligation shall not apply to disputes among the parties, and that Seller
Parent shall not be required to expend any sum of money toward that end beyond
reasonable and typical overhead expenditures. Seller Parent and Sellers shall
also, upon Buyers' request, provide Buyers with copies of any records which
Buyers reasonably request relating to the Business but which constitute Excluded
Assets with, at Sellers' option, all information not related to the Business
redacted. Buyer Parent, also without further consideration, agrees to cooperate
with Sellers and to use its reasonable commercial efforts to have the
10
officers and employees of Buyers cooperate on and after the Closing Date in
furnishing to Sellers information, evidence, testimony, and other assistance
(including reasonable access to the Assets and Land) in connection with any
third party actions, proceedings, arrangements or disputes of any nature with
respect to matters pertaining to all periods prior to the Closing Date;
provided, however, that this obligation shall not apply to disputes among the
parties, and that Buyer Parent shall not be required to expend any sum of money
toward that end beyond reasonable and typical overhead expenditures.
4.3 TRANSITION MATTERS.
(a) BILLING AND CASH PROCESSING SERVICES. For a period of
ninety (90) days following the Closing Date (the "TRANSITION PERIOD"), Sellers
shall perform the billing and cash processing services relating to the Business
for Buyers' account and without additional consideration to Sellers. Sellers
agree to perform the billing and cash processing services in accordance with
past practices of Sellers. All payments made to Sellers on behalf of Buyers
after the Closing and relating to the Assets shall be deemed to be the property
of Buyers. At least once per month, if Sellers receive any cash from the
Accounts Receivable, whether deposited in Sellers' lock boxes or otherwise,
Sellers shall transfer and deliver such cash, checks and other property to
Buyers without charge by Sellers, and will account to Buyers for all such
receipts. The parties agree that after the Closing they will transfer and
deliver to the other, from time to time and at least once per month, any cash,
checks or other property that they may receive on or after the Closing which
properly belongs to the other party.
(b) COMPUTER SUPPORT. During the Transition Period, Sellers
shall provide or cause to be provided to Buyers, without additional
consideration, access during normal business hours, through Seller Parent's or
its Affiliates' personnel, to the customer billing, collection and route
management systems used in the Business and will provide such standard reports
with respect to the Business as Buyers reasonably require to efficiently operate
the Business and to facilitate a smooth transition of the Assets.
(c) EMPLOYEE BENEFITS. Upon Buyers' request, Seller Parent
shall continue to provide health care benefits to the Business Employees on the
same terms and conditions as presently provided for a period of up to ninety
(90) days following the Closing. Buyers shall reimburse Seller Parent for its
actual costs in providing such benefits.
(d) UNUSED VACATION. Sellers shall pay all amounts owing to
Business Employees for unused, accrued vacation and sick days up to the Closing
Date.
4.4 UNIFORM RENTAL AGREEMENT. Beginning on the first day of the first
month following Closing and ending on October 15, 2006, Buyer Parent shall cause
Buyers to, and Buyers shall, rent uniforms for the Business pursuant to that
certain Cintas Corporation Multiple Location Rental Account Agreement, dated
April 16, 2001, between Cintas Sales Corporation ("CINTAS") and Allied Waste
Industries, Inc. - Southeast Region (the "UNIFORM Contract"). Buyers' obligation
to rent uniforms under the Uniform Contract shall extend to all of the Business
Employees (the "MINIMUM UNIFORMED EMPLOYEES"); provided, however, that, in the
event Buyers close or cease to operate any one of the facilities included among
the Assets, and terminate the employment of Business Employees on account
thereof, the number of Minimum Uniformed Employees shall be reduced accordingly.
Buyers may, but are not obligated to, rent uniforms under the Uniform Contract
for more than the Minimum Uniformed Employees. Notwithstanding anything herein
to the contrary, if in the judgment of Buyer Parent acting reasonably, (a) the
Uniform Contract is amended in a manner adverse to Buyers or (b) Cintas, Seller
Parent or their respective Affiliates breach any of their obligations under the
Uniform Contract or this
11
SECTION 4.4, Buyers may terminate their obligations under this SECTION 4.4 by
written notice to Seller Parent. Seller Parent and its Affiliates may terminate
the Uniform Contract or enter into a new uniform contract that would not impose
any Liability or obligation on Buyers without the consent of or liability to
Buyers or Buyer Parent. The price and delivery terms for the uniforms rented by
Buyers shall not differ from the price and delivery terms provided to Sellers
under the terms of the Uniform Contract. Notwithstanding anything to the
contrary contained herein, if Cintas does not deliver the uniforms to Buyers
(after Closing) in accordance with the terms of the Uniform Contract, Buyers
shall not be required to pay Sellers for the uniforms that were not delivered
and Buyers shall be entitled to terminate their obligations under this SECTION
4.4. Within fifteen (15) days following the end of each calendar month
(beginning after the second calendar month following the Closing Date), Sellers
shall provide Buyers with an invoice, including appropriate supporting
documentation in reasonable detail, setting forth the aggregate amount of
uniforms rented by Buyers during the previous calendar month. If there is no
dispute relating to the invoice, Buyers shall pay each invoice received from
Sellers no later than thirty (30) days after receipt of such invoice. Buyer
Parent and Buyers acknowledge and agree that: (a) the current terms of the
Cintas Uniform Contract are acceptable to them; and (b) their sole remedy for
any violation by Seller Parent or its Affiliates of this SECTION 4.4 shall be
termination of their obligations pursuant to this SECTION 4.4.
4.5 BLANKET LIEN RELEASES. The Assets are encumbered by blanket liens
in favor of Seller Parent's various lenders, all of which liens will be released
concurrently with the Closing. Within sixty (60) days after the Closing Date,
Sellers shall deliver evidence to Buyers of the release of all such security
interests as of the Closing Date.
4.6 NATIONAL ACCOUNTS. For a period of three (3) years following the
Closing Date, if Seller Parent or any of its Affiliates acquires a new National
Account after the Closing with operations in the Counties described in SECTION
13.3, Seller Parent shall subcontract these new National Accounts to Buyers
pursuant to subcontract arrangements substantially similar to the National
Account Subcontract.
4.7 FUEL PURCHASE AGREEMENT. Beginning on the first day of the first
month following Closing and ending on February 28, 2005, Buyer Parent shall
cause Buyers to, and Buyers shall, purchase from Sellers an aggregate of 87,339
gallons of fuel per calendar month (the "MONTHLY MINIMUM"), allocated among the
portions of the Business as provided in EXHIBIT F, from Sellers' Midwest
allotment of fuel under the Contractual Delivered Fuel Supply Sales Agreement
(the "TRANSMONTAIGNE AGREEMENT"), dated February 27, 2002, between Seller Parent
and TransMontaigne Product Services, Inc. ("TRANSMONTAIGNE"). Seller Parent
shall inform Buyers of any amendment to the TransMontaigne Agreement.
Notwithstanding anything herein to the contrary, if in the judgment of Buyer
Parent acting reasonably, (a) the TransMontaigne Agreement is amended in a
manner adverse to Buyers or (b) TransMontaigne, Seller Parent or their
respective Affiliates breach any of their obligations under the TransMontaigne
Agreement or this SECTION 4.7, Buyers may terminate their obligations under this
SECTION 4.7 by written notice to Seller Parent. Seller Parent and its Affiliates
may terminate the TransMontaigne Agreement or enter into a new fuel supply
agreement which would not impose any Liability or obligation on Buyers without
the consent of or liability to Buyers or Buyer Parent. The sales price and
delivery terms for the fuel purchased by Buyers shall not differ from the sales
price and delivery terms provided to Sellers under the terms of the
TransMontaigne Agreement. Notwithstanding anything to the contrary contained
herein, if TransMontaigne does not deliver the fuel to Buyers (after Closing) in
accordance with the terms of the TransMontaigne Agreement, Buyers shall not be
required to pay Sellers for the fuel that was not delivered. Within fifteen (15)
days following the end of each calendar month (beginning after the second
calendar month following the Closing Date), Sellers shall
12
provide Buyer Parent with an invoice, including appropriate supporting
documentation in reasonable detail, setting forth the aggregate amount of fuel
purchased by Buyers during the previous calendar month. If there is no dispute
relating to the invoice, Buyer Parent agrees to pay each invoice received from
Sellers no later than thirty (30) days after receipt of such invoice. Buyer
Parent and Buyers acknowledge and agree that: (a) the current terms of the
TransMontaigne Agreement are acceptable to them; and (b) their sole remedy for
any violation by Seller Parent or its Affiliates of this SECTION 4.7 shall be
termination of their obligations pursuant to this SECTION 4.7.
4.8 RECYCLING MATERIALS MARKETING. If any party to the contracts listed
on SCHEDULE 4.8 for the sale of recyclable materials refuses to consent to the
assignment or subcontracting to Buyers of such contract, Buyers agree, and Buyer
Parent agrees to cause Buyers, to sell to Sellers, if requested by Sellers, on a
pass through basis and consistent with the terms of the applicable contract, an
amount of the type and quality of recyclable materials (consistent with historic
volumes) called for by the contract during the term of such contract, including
any renewals.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
SELLERS AND SELLER PARENT
Sellers and Seller Parent, jointly and severally, represent and warrant
to Buyers and Buyer Parent that the statements contained in this ARTICLE V: (i)
are correct and complete as of the date of this Agreement; (ii) will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
ARTICLE V), subject to supplements to the Disclosure Schedules as provided in
SECTION 7.8, and except for those representations and warranties that, by their
terms or nature, speak as of a specific date that is not the Closing Date; and
(iii) shall survive the Closing in accordance with SECTION 11.1. Each matter
referred to in any Disclosure Schedule shall be deemed to have been disclosed
for all relevant purposes in all other parts or sections of all other Disclosure
Schedules the subject matter of which is reasonably related to the subject
matter of the Disclosure Schedule in which disclosure is made.
5.1 ORGANIZATION; AUTHORITY.
(a) Each of Sellers, the Partnership and Seller Parent is a
corporation or limited partnership duly organized, validly existing and in good
standing under the laws of the state of its formation and is duly authorized,
qualified and licensed under all Applicable Laws to carry on the Business in the
places and in the manner in which the Business is presently conducted.
(b) Each of Sellers and Seller Parent has all necessary power
and authority to enter into this Agreement and the Ancillary Agreements, to
consummate the Transactions and perform its obligations under this Agreement and
the Ancillary Agreements.
(c) The Partnership does not own or control (directly or
indirectly) any equity interest or investment in any corporation, partnership,
joint venture, association or other business organization.
(d) The entire general partnership interest in the Partnership
is owned by BFI Waste Systems of North America, Inc. and the entire limited
partnership interest in the Partnership is owned by Xxxxxxxx-Xxxxxx Industries
of Florida, Inc., and no other equity interests of the Partnership are (or will
be as of Closing) issued and outstanding. All of the issued and outstanding
partnership interests of the
13
Partnership were validly issued and are fully paid, nonassessable and free of
preemptive rights and are owned beneficially and of record as set forth in this
SECTION 5.1(D). All distributions declared with respect to the partnership
interests of the Partnership have been paid or distributed.
(e) There are no outstanding (i) subscriptions, options,
calls, puts, contracts, commitments, understandings, restrictions, arrangements,
rights or warrants, including any right of conversion or exchange under any
outstanding security, debenture, instrument or other agreement obligating the
Partnership or any Seller to issue, deliver or sell, or cause to be issued,
delivered or sold, additional equity interests in the Partnership or obligating
the Partnership or any Seller to grant, extend or enter into any such agreement
or commitment, or (ii) obligations of the Partnership to repurchase, redeem or
otherwise acquire any securities referred to in clause (i) above. There are no
voting trusts, proxies or other agreements or understandings to which the
Partnership is a party or is bound with respect to the voting of any of the
partnership interests of the Partnership.
5.2 BINDING EFFECT. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by Sellers and Seller Parent are within
their respective corporate powers and have been approved by all requisite action
of Sellers and Seller Parent, and no other proceedings on the part of Sellers
and Seller Parent are necessary to authorize the execution and delivery of this
Agreement and the Ancillary Agreements or the consummation by Sellers and Seller
Parent of the Transactions and the performance of their obligations under this
Agreement and the Ancillary Agreements. This Agreement has been, and upon
delivery, the Ancillary Agreements will be, duly executed and delivered by each
of Sellers and Seller Parent and, assuming the due authorization, execution and
delivery hereof by Buyers, Buyer Parent and Capital, constitutes and will
constitute the valid and legally binding agreement of Sellers and Seller Parent
enforceable against Sellers and Seller Parent in accordance with their
respective terms.
5.3 PERMITS. Sellers and the Partnership have all Permits necessary in
order to enable them to own the Assets and conduct the Business as currently
conducted. Except as set forth on SCHEDULE 5.3, to the best of Sellers'
knowledge, Sellers and the Partnership are and have been in compliance with the
terms and conditions of all Permits and all of the Permits are now valid, in
good standing and in full force and effect. Sellers shall not undertake,
following the Closing, any challenges to the Permits or applications for
Permits.
5.4 ASSETS; PERSONAL PROPERTY.
(a) The Assets constitute all real, personal, tangible and
intangible property and assets (i) presently used in the Business or (ii)
necessary for the conduct of the Business as such business has been heretofore
conducted. Except as set forth on SCHEDULE 5.4, there are no existing options or
rights of first refusal granted by Sellers, the Partnership or Seller Parent to
any Person to acquire any of the Assets or the Business and there are no
outstanding governmental orders that would give any Person any such option or
right.
(b) No Affiliates of Seller Parent other than Sellers and the
Partnership are presently engaged in business activities in the Counties
described in SECTION 13.3.
(c) Each piece of Equipment is being transferred to Buyers in
its "as is" condition.
(d) Each motor vehicle, attachment, accessory and piece of
materials handling equipment comprising the Rolling Stock is being transferred
to Buyers in its "as is" condition.
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(e) All of the Assets are either owned by Sellers or are
leased by Sellers under an agreement set forth on SCHEDULE 5.4(E) (the "ASSUMED
LEASES"). Each Assumed Lease is in full force and effect. No default by Sellers
or, to the best of Sellers' knowledge, any other party to any Assumed Lease,
exists.
(f) At the Closing, Sellers shall have good and marketable
title to the owned Assets and valid leasehold interests in the leased Assets,
free and clear of all Encumbrances other than Permitted Exceptions. By virtue of
the grant, conveyance, sale, transfer, and assignment of the Assets under the
Deeds and the Xxxx of Sale, Buyers shall receive good and marketable title to
the owned Assets, free and clear of all Encumbrances other than Permitted
Exceptions.
5.5 REAL PROPERTY.
(a) Sellers and the Partnership have good, valid and
marketable title in fee simple to the Owned Land and valid leasehold interests
in the Leased Land, and at Closing such title and leasehold interest shall be
free of all Encumbrances, subject to the Permitted Exceptions. To the extent in
its possession or under its control, Seller Parent has delivered to Buyer Parent
copies of (i) all title policies, title commitments or any certificate of title
relating to the Owned Land, (ii) complete and legible copies of all instruments
and documents affecting title to the Owned Land and (iii) all surveys of the
Owned Land. Seller Parent and Sellers are not aware of any error in the
documents referred to in the preceding sentence delivered to Buyer Parent.
(b) Except as set forth on SCHEDULE 5.5(B):
(i) There are no Proceedings pending, or to the best
of Sellers' knowledge, threatened, which would result in a change in the
allowable uses of the Land or which would modify the right of Buyers to use the
Land for its current uses after the Closing Date.
(ii) Neither Sellers, nor to the best of Sellers'
knowledge, the landlords, are in default under any Real Estate Lease.
(iii) Each Real Estate Lease is in full force and
effect.
(iv) There are no tenants, licensees or parties with
a possessory right or reversionary interest with respect to the Land.
(v) There are no Proceedings (including condemnation
or eminent domain proceedings) pending or, to the best of Sellers' knowledge,
threatened against all or any part of the Land.
(vi) Seller Parent and Sellers have delivered to
Buyers true and complete copies of all Real Estate Leases.
(vii) Sellers, the Partnership and Seller Parent have
not received any notice of, nor to the best of Sellers' knowledge is there (A)
any violation of any applicable zoning ordinance, building code, use or
occupancy restriction, covenant, condition or restriction of record or any other
violation of applicable law relating to the Land or the improvements thereon or
(B) any pending special assessments affecting all or any part of the Land.
15
(viii) No Person has any right of first refusal,
option or the right to acquire all or any part of the Land.
(c) Neither Sellers nor the Partnership are "foreign persons"
as the term is defined in Section 1445 of the Code and any applicable
regulations promulgated thereunder.
5.6 CONTRACTS.
(a) Listed on SCHEDULE 5.6 hereto is a complete and accurate
list of all (i) Customer Contracts that accounted for annual revenues in excess
of $200,000 during the 2002 fiscal year, (ii) Employee Contracts and (iii) all
other agreements, contracts or other instruments ("OTHER CONTRACTS") to which a
Seller, the Partnership or Seller Parent is a party and by which the Assets are
affected or bound (A) which relate to the ownership or use of real property
(including the Land), (B) which relate to the purchase or lease of any fixed
asset with respect to the Business, whether or not such purchase or lease was
made in the ordinary course of business, for an aggregate price in excess of
$125,000 in any twelve (12) month period, (C) which contain a covenant or
agreement limiting the freedom of the Business to compete in any line of
business or in any line of business in any location, or (D) which have payment
obligations (whether to or by Sellers, the Partnership or Seller Parent) in
excess of $125,000 in any twelve (12) month period, in each case as of the date
hereof, true and complete copies of which have been made available to Buyers.
The disclosure of a contract on SCHEDULE 5.6 shall not constitute a
representation that such contract satisfies one or more of the foregoing
criteria.
(b) Except as set forth in SCHEDULE 5.6, all Customer
Contracts, Employee Contracts and Other Contracts are in full force and effect
and are valid, binding and enforceable against the respective parties thereto in
accordance with their respective provisions, and neither Sellers nor the
Partnership, as applicable, are in default, nor has there occurred an event or
condition which with the passage of time or the giving of notice (or both) would
constitute a default by Sellers or the Partnership, with regard to the payment
or performance of any obligation under any Customer Contract, Employee Contract
or Other Contract. Seller Parent, the Partnership and Sellers have not received
any notice that any Person intends or desires to modify, waive, amend, rescind,
release, cancel or terminate any Customer Contract, Employee Contract or Other
Contract.
(c) To the best of Sellers' knowledge, neither the execution
and delivery of this Agreement, the consummation of the Transactions nor the
performance of the parties' respective obligations under this Agreement and the
Ancillary Agreements will have an adverse effect on any Customer Contract,
Employee Contract, Other Contract, Assumed Lease, Real Estate Lease or Permit.
5.7 EMPLOYEES; COMPENSATION. Attached as SCHEDULE 5.7 is a complete and
accurate list of (i) all Business Employees, (ii) their rate of compensation as
of the date of delivery of the Disclosure Schedules (including a breakdown of
the portion thereof attributable to salary, bonus, and other compensation,
respectively), (iii) any bonus, incentive or compensation plans (other than
plans subject to ERISA) in which they participate, (iv) any vacation and sick
pay plans, including accruals thereunder, and (v) any severance plans,
agreements, arrangements or obligations relating to any such employee, including
any amounts owed to any such employee thereunder as of the Closing Date or
arising out of or in connection with the consummation of the Transactions or the
performance of the parties' respective obligations under this Agreement and the
Ancillary Agreements. Except (i) as otherwise contemplated by this Agreement or
the Ancillary Agreements, (ii) as set forth on SCHEDULE 5.7, and (iii) for
employees governed by Employee Contracts, each Business Employee is an employee
at will. Except as set forth on SCHEDULE 5.7, Sellers and the Partnership are in
compliance with all Applicable Laws affecting
16
employment and employment practices with respect to the Business, including
terms and conditions of employment and wages and hours.
5.8 COMPLIANCE WITH LAW; NO CONFLICTS.
(a) Except as set forth in SCHEDULE 5.8(A): (i) to the best of
Sellers' knowledge, Sellers, the Partnership and the Business are, and at all
times since January 1, 2000 have been, in compliance with Applicable Law; (ii)
Sellers, the Partnership and Seller Parent are not involved in any litigation or
administrative proceeding relating to any of the Assets or the Business seeking
to impose fines, penalties or other liabilities or seeking injunctive relief for
violation of any Applicable Laws or Permits; (iii) Sellers, the Partnership and
Seller Parent are not aware of any investigation or other form of review
relating to Sellers, the Partnership, the Business or any of the Assets with
respect to any Applicable Law or Permit; and (iv) Sellers and the Partnership
have been issued, and have kept in force and effect, all Permits necessary to
own the Assets and operate the Business under Applicable Laws.
(b) Except as set forth in SCHEDULE 5.8(B), the execution,
delivery and performance of this Agreement and the Ancillary Agreements, the
consummation of the Transactions and the fulfillment of the terms of this
Agreement and the Ancillary Agreements by Sellers and Seller Parent do not and
will not:
(i) conflict with, or result in a breach or violation
of, the Organizational Documents;
(ii) conflict with, or result in a material breach
under any document, agreement or instrument to which Seller Parent or a Seller
is a party or the creation or imposition of any Encumbrance on any of the Assets
or the Business pursuant to: (A) any Applicable Law to which Seller Parent,
Sellers or any of their respective properties are subject, or (B) any judgment,
order or decree to which Seller Parent or a Seller is bound or any of their
respective property is subject; or
(iii) except for those notices, consents or approvals
required under the HSR Act and the Attwoods Consent Decree, and except for the
notices, consents or approvals required under the Customer Contracts and Other
Contracts required to be listed on SCHEDULE 5.6, the Permits, the Assumed Leases
and the Real Estate Leases (collectively, the "REQUIRED CONSENTS") all as set
forth on SCHEDULE 5.8(B)(III), (A) require Sellers or the Partnership to provide
notice to, or obtain the consent or approval of, any governmental authority or
agency or other third Person, (B) constitute a default under or give rise to any
right of termination, cancellation or acceleration of, or to a loss of any
benefit to which Sellers or the Partnership are entitled under such Permit,
Customer Contract, Other Contract, Assumed Lease or Real Estate Lease or (C)
result in the creation or imposition of any Encumbrance on any Asset, other than
Permitted Exceptions.
5.9 TAXES. Except as set forth on SCHEDULE 5.9:
(a) Seller Parent, the Partnership and Sellers, either
separately or as members of an Affiliated Group, have completed and filed all
Tax returns required to be filed with any Tax authority, and have paid (or have
had paid on their behalf) all Taxes shown as due and payable thereon. Such Tax
returns reflect all Taxes due and payable with respect to the periods covered by
them. No Tax return filed by Sellers or the Partnership, either separately or as
a member of an Affiliated Group, for any Pre-Closing Period will result in any
Taxes or other governmental charges upon the Assets, Buyer Parent, Buyers, or
Capital whether as a transferee of the transferred assets or otherwise. There
are no
17
Encumbrances for Taxes on any of the Assets other than Encumbrances for Taxes
not yet due and payable.
(b) There is no actual pending or, to the best of Sellers'
knowledge, threatened or expected claim, audit, investigation, dispute or other
proceeding concerning any Taxes of Seller Parent or Sellers or the Partnership
that will result in a claim against any of the Assets, Buyer Parent, Buyers or
Capital.
Seller Parent, Sellers and the Partnership have timely
withheld and paid all Taxes required to be paid or owing with respect to any
payment to any officer, shareholder, director, current or former employee,
independent contractor or third party.
5.10 LITIGATION. Except as set forth on SCHEDULE 5.10, (a) there are no
Proceedings pending or, to the best of Sellers' knowledge, threatened, against
Sellers, the Partnership or Seller Parent relating to any of the Assets or the
Business, at law or in equity, before any federal, state or local court or
regulatory agency, or other governmental or private authority and (b) there are
no existing orders, judgments or decrees of any governmental or private
authority affecting any of the Assets or the Business.
5.11 FINANCIAL STATEMENTS. Sellers have provided Buyers with complete
copies of (a) the audited combined balance sheets of the Business as of December
31, 2001, and 2002, the related audited combined statements of operations and
cash flows for each of the three (3) years in the period ended December 31,
2002, and the related combined statements of district's equity at December 31,
1999, 2000, 2001 and 2002 (the "ANNUAL FINANCIAL STATEMENTS") and (b) the
unaudited balance sheet of the Business as of September 30, 2003, and the
related unaudited statements of operations and cash flows for the nine (9)
months then ended (the "INTERIM FINANCIAL STATEMENTS" and, together with the
Annual Financial Statements, the "SELLERS' FINANCIAL STATEMENTS"). The Sellers'
Financial Statements present fairly in all material respects the financial
position, results of operations, cash flows and, in the case of the Annual
Financial Statements, the changes in equity of the Business as of and for the
periods indicated. The Sellers' Financial Statements have been prepared in
accordance with GAAP.
5.12 CONDUCT OF SELLERS' BUSINESS. Since the Balance Sheet Date, except
as disclosed on SCHEDULE 5.12 or as contemplated by this Agreement there has not
been any:
(a) sale or transfer of, or any agreement to sell or transfer,
any assets of the Business, or any plan, agreement or arrangement granting any
preferential right to purchase or acquire any interest in any of the assets of
the Business, or requiring consent of any Person to the transfer and assignment
of any of the assets of the Business;
(b) sale or transfer of any motor vehicle, attachment,
accessory or piece of materials handling equipment comprising rolling stock of
the Business from the Business to any other business operation of Seller Parent
or its Affiliates, other than in the ordinary course of business consistent with
the past practice of the Business;
(c) waiver of any material rights or claims of Sellers, the
Partnership or Seller Parent related to the assets of the Business;
(d) material breach, amendment or termination of any contract,
agreement or other instrument to which Sellers, the Partnership or Seller Parent
is a party and by which the respective assets
18
of Seller Parent, the Partnership or Sellers are affected or bound or loss of
any material customer of the Business;
(e) transaction by Seller Parent, the Partnership or Sellers
outside the ordinary course of business with respect to the assets of the
Business or the Business;
(f) change in the pricing and purchasing policies of Sellers,
the Partnership with respect to the Business, other than in the ordinary course
of business consistent with the past practice of the Business;
(g) change in the customary payment cycles for any of Sellers'
or the Partnership's payables or receivables with respect to the Business;
(h) change in any method of accounting or accounting policies
or policy used by Seller Parent, the Partnership or Sellers, except as required
by Applicable Law or by the Financial Accounting Standards Board;
(i) change in the customary methods of operation of the
Business;
(j) change or increase in any compensation payable to, or
benefits made available to, any Business Employees, except (i) to the extent
required by Applicable Law, or (ii) pursuant to a collective bargaining
agreement, or (iii) in the ordinary course of business consistent with past
practice; or
(k) action by Sellers, the Partnership Seller Parent, or any
employee, officer or agent of Sellers, the Partnership or Seller Parent
committing to do any of the foregoing.
5.13 ENVIRONMENTAL COMPLIANCE; HAZARDOUS MATERIALS; DISPOSAL SITES.
(a) Except as set forth in SCHEDULE 5.13(A):
(i) Except in compliance with all Applicable Laws,
neither Sellers, with respect to the Business or the Assets, nor the
Partnership, have owned, leased, had an interest in, generated, transported,
stored, handled, recycled, reclaimed, disposed of, or contracted for the
disposal of, Hazardous Materials;
(ii) There have been no spills, leaks, deposits or
other releases into the environment or onto or under the Land of any Hazardous
Materials except in compliance with Applicable Laws; and
(iii) No Encumbrances with respect to environmental
liability have been imposed against Sellers, the Partnership or Seller Parent
(insofar as they relate to any of the Land or the Assets) or any of the Assets
under CERCLA, any comparable state statute or other Applicable Law.
(b) Except as set forth in SCHEDULE 5.13(B), none of Seller
Parent, the Partnership or Sellers has received written notice from any
governmental or regulatory authority or unaffiliated third Person alleging a
violation of or liability or potential liability arising under Environmental
Laws relating to the Business or the Assets.
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(c) Included on SCHEDULE 5.13(C) is a complete list of the
names and addresses of all disposal sites (including Hazardous Materials
disposal sites) at any time now or in the past utilized by Sellers relating to
the Business or the Assets or the Partnership.
5.14 CORRUPT PRACTICES. Except in compliance with all Applicable Laws,
none of Seller Parent, the Partnership or Sellers, nor any of their respective
officers, directors, employees or agents, has, directly or indirectly, ever
made, offered or agreed to offer anything of value to (a) any employees,
representatives or agents of any customers of the Business for the purpose of
attracting business or (b) any domestic governmental official, political party
or candidate for government office or any of their employees, representatives or
agents with respect to the Business or the Assets.
5.15 ACCOUNTS RECEIVABLE. All Accounts Receivable represent, or will
represent as of Closing, valid obligations from sales actually made or services
actually performed by Sellers in the ordinary course of business, except that
the Accounts Receivable may include certain pre-billed services. No Account
Receivable is subject to a valid defense, set-off or counterclaim. The Accounts
Receivable will be collectible by Buyers in the ordinary course of business
through the use of commercially reasonable efforts, subject to the reserves
therefor included within the Net Working Capital as of the Closing, as reflected
in the Adjustment Amount.
5.16 AFFILIATES' RELATIONSHIPS.
(a) SCHEDULE 5.16 contains an accurate and complete list of
all contractual arrangements between Sellers, the Partnership and their
respective Affiliates that (i) are currently in effect and (ii) relate to the
Land or the Assets.
(b) Since the Balance Sheet Date, and except as contemplated
by this Agreement, no Seller has transferred or otherwise disposed of any assets
of the Business to any of its Affiliates.
5.17 PERFORMANCE BONDS; LETTERS OF CREDIT; FINANCIAL ASSURANCES. Set
forth on SCHEDULE 5.17 are all of the outstanding performance bonds, letters of
credit and other financial assurances provided by or on behalf of Sellers or the
Partnership with respect to the Land or the Assets. To the best of Sellers'
knowledge, there are no financial assurance requirements with respect to the
Assets other than those set forth on SCHEDULE 5.17.
5.18 EMPLOYMENT AND LABOR MATTERS. Except as set forth in SCHEDULE
5.18, neither the Partnership nor, with respect to the Business, Sellers, are a
party to (a) any collective bargaining agreement, (b) any agreement respecting
the employment of any Business Employee other than the Employee Contracts, or
(c) any agreement for the provision of consulting or other professional services
which is not cancelable without penalty on less than thirty (30) days' notice.
Except as set forth in SCHEDULE 5.18, within the last five (5) years the
Business has not experienced any labor disputes, union organization attempts or
any work stoppage due to labor disagreements. Except to the extent set forth in
SCHEDULE 5.18, (a) there is no unfair labor practice charge or complaint against
the Partnership or Sellers, with respect to the Business, pending or, to the
best of Sellers' knowledge, threatened; (b) there is no labor strike, dispute,
request for representation, slowdown or stoppage actually pending or, to the
best of Sellers' knowledge, threatened against or affecting the Business nor any
secondary boycott with respect to services of the Business; (c) no question
concerning representation has been raised to the Partnership or Sellers or, to
the best of Sellers' knowledge, is threatened respecting the employees of the
Business; (d) no grievance, nor any arbitration proceedings arising out of or
under collective bargaining agreements, is pending with respect to the Business;
and (e) there are no administrative charges, court
20
complaints or written threatened complaints against Sellers or the Partnership
concerning alleged employment discrimination or other employment related matters
with respect to the Business pending or, to the best of Sellers' knowledge,
threatened before the U.S. Equal Employment Opportunity Commission or any other
governmental entity.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF BUYERS, BUYER PARENT AND CAPITAL
Buyers, Buyer Parent and Capital, jointly and severally, represent and
warrant to Sellers and Seller Parent that the statements contained in this
ARTICLE VI: (i) are correct and complete as of the date of this Agreement; (ii)
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this ARTICLE VI), except for those representations and warranties
that, by their terms or nature, speak as of a specific date that is not the
Closing Date; and (iii) shall survive the Closing in accordance with SECTION
11.1.
6.1 ORGANIZATION. Each of Buyers, Buyer Parent and Capital is duly
organized, validly existing and in good standing under the laws of the state of
its organization.
6.2 AUTHORITY. Each of Buyers, Buyer Parent and Capital has all
necessary power and authority to enter into this Agreement and the Ancillary
Agreements and to consummate the Transactions and perform its obligations under
this Agreement and the Ancillary Agreements to which it is a party.
6.3 NO CONFLICTS. The execution, delivery and performance of this
Agreement, the Ancillary Agreements, the consummation of the Transactions and
the fulfillment of the terms of this Agreement and the Ancillary Agreements, as
applicable, by Buyers, Buyer Parent and Capital do not and will not:
(a) conflict with, or result in a breach or violation of the
Articles or Certificates of Incorporation and Bylaws of Buyers, Buyer Parent or
Capital;
(b) conflict with, or result in a material breach under any
document, agreement or other instrument to which Buyers or Buyer Parent is a
party, or result in the creation or imposition of any Encumbrance on any
properties of Buyers or Buyer Parent pursuant to: (i) any law or regulation to
which Buyers or Buyer Parent or any of their property is subject, or (ii) any
judgment, order or decree to which Buyers or Buyer Parent is bound or any of
their property is subject; or
(c) except for any filings required under the HSR Act and
pursuant to the Attwoods Consent Decree, and except for the Required Consents,
require Buyers to provide notice to, or to obtain the consent or approval of,
any governmental authority or agency or any other third Person.
6.4 BINDING EFFECT. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by Buyer Parent are within its corporate
powers and have been approved by all requisite action of Buyer Parent, and no
other proceedings on the part of Buyer Parent are necessary to authorize the
execution and delivery of this Agreement and the Ancillary Agreements, the
consummation by Buyer Parent of the Transactions and the performance of its
obligations under this Agreement and the Ancillary Agreements. The execution,
delivery and performance by Buyers of this Agreement and the Ancillary
Agreements to which they are parties are within the corporate powers of
21
Buyers and have been approved by all requisite action of Buyers and no other
proceedings on the part of Buyers are necessary to authorize the execution and
delivery of this Agreement and each Ancillary Agreement to which Buyers are
parties. The execution, delivery and performance by Capital of this Agreement
and the Ancillary Agreements to which it is a party are within the corporate
powers of Capital and have been approved by all requisite action of Capital and
no other proceedings on the part of Capital are necessary to authorize the
execution and delivery of this Agreement and each Ancillary Agreement to which
Capital is a party. This Agreement has been, and upon delivery, the Ancillary
Agreements will be, duly executed and delivered by Buyer Parent and, assuming
the due authorization, execution and delivery hereof by Sellers and Seller
Parent, constitutes and will constitute the valid and legally binding agreement
of Buyer Parent enforceable against Buyer Parent in accordance with their
respective terms. This Agreement has been duly executed and delivered by Buyers
and each Ancillary Agreement will be, upon its delivery by Buyers that are
parties to such agreement, duly executed and delivered by Buyers and, assuming
the due authorization, execution and delivery hereof by Sellers and Seller
Parent, this Agreement constitutes and each such Ancillary Agreement will
constitute the valid and legally binding agreement of Buyers enforceable against
Buyers in accordance with their respective terms. This Agreement has been, and
upon delivery, the Ancillary Agreements to which it is a party will be, duly
executed and delivered by Capital and, assuming the due authorization, execution
and delivery hereof by Sellers and Seller Parent, constitutes and will
constitute the valid and legally binding agreement of Capital enforceable
against Capital in accordance with their respective terms.
6.5 INDEPENDENT INVESTIGATION. Buyers, Buyer Parent and Capital
acknowledge that, except as otherwise expressly set forth in this Agreement, (i)
THE ASSETS AND THE BUSINESS ARE CONVEYED "AS IS, WHERE IS" AND "WITH ALL
FAULTS," AND (II) NEITHER SELLERS NOR SELLER PARENT HAS MADE, AND SELLERS AND
SELLER PARENT HEREBY EXPRESSLY DISCLAIM AND NEGATE, ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE, WHATSOEVER, RELATING TO THE
ASSETS OR THE BUSINESS (INCLUDING ANY IMPLIED OR EXPRESSED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE). As of the date hereof,
Buyers, Buyer Parent and Capital are not aware of a breach of the
representations or warranties made by Sellers and Seller Parent in ARTICLE V.
ARTICLE VII
COVENANTS
7.1 ACCESS TO LAND AND RECORDS; DUE DILIGENCE.
(a) Between the date of this Agreement and the Closing or the
earlier termination of this Agreement, Sellers shall, and Seller Parent shall
cause Sellers to, afford to or obtain for the officers and authorized
representatives of Buyers, Buyer Parent and Capital reasonable access to all of
the Land (including for the purpose of permitting Buyers, Buyer Parent and
Capital to perform or cause to be performed, at the sole risk and expense of
Buyers, Buyer Parent, Capital and their representatives, all testing,
inspections and other procedures (i) considered desirable by Buyers, Buyer
Parent, Capital and their representatives in their sole discretion or (ii)
requested by their lenders, investors and other financing sources) in their sole
discretion, Assets, sites, and the books and records of Seller Parent and
Sellers related to the Business, all upon reasonable notice and conducted at
times agreed to by Buyer Parent. Without limiting the generality of the
foregoing, Buyers and Buyer Parent shall have the right to conduct Phase I
environmental investigations and the right to conduct Phase II environmental
22
investigations if the results of the Phase I environmental investigations
indicate that a Phase II investigation is necessary or desirable. Sellers and
Seller Parent shall allow access to Buyers, Buyer Parent, and their consultants
for the purposes of conducting such an investigation. Such access shall be
granted in accordance with an Environmental Access Agreement substantially in
the form attached as EXHIBIT H. If any Phase I or Phase II investigation
commissioned by Buyers, Buyer Parent or Capital reveals any environmental
condition (including the presence of any Hazardous Materials) on any parcel of
Owned Land that was not presented in the internally-prepared environmental
reports prepared by Seller Parent and delivered to Buyer Parent and Buyers prior
to the date hereof, Seller Parent shall be responsible, at Buyers' request, to
promptly and fully remediate such environmental condition if and solely to the
extent that remediation of such condition is required by Applicable Law and is
required by the applicable regulatory authority (e.g., remediation shall not be
required if Seller Parent receives approval from the applicable regulatory
authority to leave such environmental condition as it is without remediation).
Such remediation, to the extent required, shall comply with Applicable Law and
shall be conducted by Persons selected by Seller Parent and reasonably
acceptable to Buyer Parent, and shall follow a remediation plan prepared by
Seller Parent and reasonably acceptable to Buyer Parent. The foregoing
obligation to remediate shall continue after the Closing, and shall include any
environmental monitoring or testing following completion of remediation. Access
for such remediation shall be granted by Buyers following the Closing in
accordance with an access agreement to be agreed upon by the parties.
Notwithstanding the foregoing, if the anticipated expense to remediate any such
parcel of Owned Land exceeds $5,000,000, Seller Parent may elect not to sell
such parcel of Owned Land by promptly notifying Buyer Parent in writing of such
decision. Such parcel of Owned Land will not be transferred hereunder and the
Purchase Price will be reduced by the value of such parcel as determined in
accordance with SECTION 3.4(B). In addition to Buyers' other rights under this
SECTION 7.1(A), Buyers may also terminate this Agreement under this SECTION
7.1(A) if Seller Parent's election not to sell such parcel of Owned Land could
reasonably be expected to result in a Material Adverse Change after giving
effect to the Purchase Price reduction pursuant to the preceding sentence.
(b) Between the date of this Agreement and the Closing or the
earlier termination of this Agreement, Buyers and Buyer Parent will have
reasonable access to employees of the Business designated in writing by Seller
Parent (all of whom will be district managers or higher in the organization) and
former employees designated in writing by Seller Parent who are bound by
confidentiality agreements.
(c) Between the date of this Agreement and the Closing or the
earlier termination of this Agreement, Seller Parent and Sellers shall furnish
Buyers with such additional financial and operating data and other information
as to the Business as Buyers may from time to time reasonably request.
(d) Between the date of this Agreement and the Closing or the
earlier termination of this Agreement, Seller Parent and Sellers shall use
commercially reasonable efforts to cooperate with Buyers, their representatives,
engineers, auditors and counsel in the preparation of any documents or other
materials that may be reasonably required in connection with Buyer Parent's,
Buyers' or Capital's financing of the Transactions and any documents or
materials required by any governmental agency. Seller Parent and Sellers shall,
promptly after the date hereof and from time to time hereafter (including after
the Closing Date, but only to the extent Seller Parent or Sellers retain or have
access to such information and documents): (i) provide such information and
documents to Buyer Parent concerning Seller Parent, Sellers, the Business or the
assets of the Business as may be required or appropriate for inclusion in a
proxy statement, registration statement or any other filing, notification or
report made by Buyer Parent or any of its Affiliates pursuant to Applicable Law
or in any offering memorandum,
23
prospectus or other offering document or bank book prepared in connection with
Buyers', Buyer Parent's or Capital's financing efforts related to the
Transactions; (ii) cause counsel and independent accountants of Seller Parent
and Sellers to cooperate with Buyer Parent, its Affiliates and its investment
bankers, counsel and independent accountants in the preparation of such filings,
notifications, reports and offering documents; and (iii) use their commercially
reasonable efforts to obtain consents and "comfort letters" from such
accountants as required in connection with such filings, notifications and
reports.
(e) Unless Seller Parent otherwise agrees in writing, all
access shall be coordinated with Seller Parent, and Buyers, Buyer Parent and
their agents and employees shall not enter the Land and perform inspections or
meet with employees unless accompanied by a representative of Seller Parent.
Seller Parent shall have the right to approve, or to refuse approval for,
testing which in Seller Parent's reasonable opinion would materially interfere
with the operations of the Business, prior to such testing being undertaken.
(f) Buyer Parent and Buyers agree to repair any damage caused
by or attributable to their exercise of their rights pursuant to this SECTION
7.1 or to Buyer Parent, Buyers or any of their agents or employees being in or
on the Land, including any damage caused by the customary drilling and boring
carried out by environmental consultants, and Buyer Parent and Buyers shall
jointly and severally indemnify and save harmless Seller Parent and Sellers from
all costs of repairing any such damage attributable to Buyer Parent's and
Buyers' exercise of their rights pursuant to this SECTION 7.1 or to Buyer
Parent, Buyers or any of their respective agents or employees being in or on the
Land. If Buyer Parent and Buyers do not perform such repairs, Seller Parent and
Sellers shall have the right to perform, or cause to be performed, such work and
to obtain reimbursement for the reasonable costs of such work (including
reasonable legal and consulting fees) from Buyer Parent and Buyers, which costs
shall be payable by Buyer Parent and Buyers to Sellers upon demand. The
provisions of this paragraph of this SECTION 7.1 shall survive the termination
of this Agreement.
7.2 ACTIVITIES OF SELLERS PRIOR TO CLOSING. Between the date of this
Agreement and the Closing or the earlier termination of this Agreement, Sellers
shall, and Seller Parent shall cause Sellers and the Partnership to:
(a) carry on the Business in the ordinary and usual course
consistent with past practice;
(b) maintain the Assets in as good working order and condition
as at present, ordinary wear and tear excepted;
(c) use commercially reasonable efforts to maintain their
relationships with suppliers, customers, consultants, employees, independent
contractors, government agencies, communities and others having business
relations with Sellers in the operation of the Business, and promptly notify
Buyers of the loss of any customer or group of customers material to the
Business;
(d) provide unaudited balance sheets and the related unaudited
statements of operations for each month between the date hereof and the Closing;
and
(e) provide all commercially reasonable assistance to Buyers
to provide for an orderly transfer of the Assets and the Business from Sellers
to Buyers.
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7.3 PROHIBITED ACTIVITIES PRIOR TO CLOSING. Between the date of this
Agreement and the Closing or earlier termination of this Agreement, except as
contemplated by this Agreement, Seller Parent shall not (as its relates to the
Business) and shall cause Sellers and the Partnership not to, without the prior
written consent of Buyers, which consent will not be unreasonably withheld:
(a) change their pricing and purchasing policies, other than
in the ordinary course of business consistent with the past practice of the
Business;
(b) shorten or lengthen the customary payment cycles for any
of their payables or receivables;
(c) engage in any practice, take any action, fail to take any
action or enter into any transaction which could cause any representation or
warranty of Seller Parent or Sellers in this Agreement to be untrue or result in
a breach of any covenant made by Seller Parent or Sellers in this Agreement;
(d) make any change in any method of accounting or accounting
policies or policy used by Seller Parent or Sellers, except as required by
Applicable Law or by the Financial Accounting Standards Board;
(e) make any changes in the customary methods of operation of
the Business;
(f) breach, amend or terminate any Real Estate Lease, other
Assumed Lease, Permit, Customer Contract, Employee Contract or Other Contract;
(g) enter into any transaction outside the ordinary course of
the business of Sellers or otherwise prohibited hereunder;
(h) sell, transfer, lease or otherwise dispose of any Assets
other than in the ordinary course of business;
(i) sell or transfer any motor vehicle, attachment, accessory
or piece of materials handling equipment comprising the Rolling Stock from the
Business to any other business operation of Seller Parent or its Affiliates,
other than in the ordinary course of business consistent with the past practice
of the Business;
(j) except for the Encumbrance of real property Taxes, cause,
permit or suffer to exist any Encumbrance, covenant, condition, restriction,
assessment, easement, right of way, obligation, encroachment or liability
("TITLE DEFECT") whatsoever with respect to the Land;
(k) change or increase any compensation payable to, or
benefits made available to, any Business Employees, except (i) to the extent
required by law, or (ii) pursuant to a collective bargaining agreement in effect
on the date hereof, or (iii) in the ordinary course of business consistent with
past practice;
(l) relinquish, or seek to modify or amend any substantive
term of, any Permit; or
(m) agree to do any of the foregoing.
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7.4 CONTACT WITH GOVERNMENT OFFICIALS AND CUSTOMERS. Sellers and Seller
Parent shall use their commercially reasonable efforts to cooperate with Buyers
in making contact with (a) the appropriate governmental agencies and officials
having information about or jurisdiction over Sellers, the Partnership, Seller
Parent, the Business, the Land, Assets or obligations or rights of Sellers,
including environmental and land use agencies and officials, in order to assist
Buyers in completing their regulatory evaluation of the Business and the Assets
and securing any consents necessary to transfer the Permits or in securing new
permits; and (b) the customers under the Customer Contracts, in order to secure
any consents necessary to transfer the Customer Contracts to Buyers as
contemplated by this Agreement. Buyers and Sellers shall use commercially
reasonable efforts to obtain before Closing all consents necessary to transfer
the Permits (or Buyers will use commercially reasonable efforts to obtain new
permits for any non-transferable Permits), the Customer Contracts, the Real
Estate Leases and the other Assumed Leases to Buyers at the Closing.
7.5 PUBLIC ANNOUNCEMENTS. Except as otherwise required by law or the
rules of the New York Stock Exchange or The Nasdaq Stock Market, the parties
agree that no press release or other written communication shall be issued by
Sellers or Seller Parent, on the one hand, or Buyers, Buyer Parent or Capital,
on the other hand, containing information regarding the other party, this
Agreement or the Transactions (including the fact that the Transactions are
being discussed or the terms of the Transactions) without the prior written
approval of both Seller Parent and Buyer Parent, which approval may not be
unreasonably withheld; provided, however, that Buyer Parent, Buyers and Capital
shall be entitled to disclose information regarding this Agreement or the
Transactions to prospective lenders, purchasers of debt securities and investors
and their counsel without the approval of Sellers or Seller Parent. The parties
shall consult with each other concerning the means by which Sellers' employees,
customers and suppliers and others having dealings with Sellers will be informed
of the Transactions.
7.6 HSR APPROVAL AND ATTWOODS NOTICES. Seller Parent and Sellers
undertake and agree to file by no later than 4:00 p.m. Eastern Standard Time on
November 14, 2003, all documents required under the Attwoods Consent Decree.
Buyer Parent, Buyers, Seller Parent and Sellers undertake and agree to file by
no later than 4:00 p.m. Eastern Standard Time on November 19, 2003, all
documents required under the HSR Act. Buyer Parent and Buyers shall pay all HSR
Act filing fees. Buyer Parent, Buyers, Seller Parent and Sellers shall use
commercially reasonable efforts to cooperate with each other with respect to
such filings, and shall respond as promptly as reasonably practicable to any
inquiries received from the FTC or the Antitrust Division for additional
information or documentation and to all inquiries and requests received from any
other local, state or federal governmental authority in connection therewith.
Buyer Parent and Buyers shall use commercially reasonable efforts to avoid or
eliminate impediments under any antitrust, competition, or trade regulation law
that may be asserted by the FTC, the Antitrust Division or any other local,
state or federal governmental authority with respect to the Transactions so as
to enable the Closing Date to occur prior to the Termination Date, including by
selling, divesting or otherwise disposing of, or agreeing to sell, divest or
otherwise dispose of, any assets or businesses necessary to secure HSR Act and
other antitrust law approval, unless the FTC or Antitrust Division or other
local, state or federal governmental authority completely blocks the
Transactions. Notwithstanding anything in this Agreement to the contrary, Buyer
Parent, Buyers and Capital shall not be required to sell, divest or otherwise
dispose of, or agree to sell, divest or otherwise dispose of, any assets or
businesses with aggregate 2002 revenues in excess of ten percent (10%) of the
aggregate 2002 revenues of the Business in order to avoid or eliminate
impediments under any antitrust, competition, or trade regulation law that may
be asserted by the FTC, the Antitrust Division or any other local, state or
federal governmental authority with respect to the Transactions in order to
enable the Closing Date to occur prior to the Termination Date. Each party shall
(a) subject to Applicable Laws, promptly notify
26
the other party of any written communication to that party from the FTC, the
Antitrust Division or any other governmental entity relating to this Agreement
and, subject to Applicable Law, permit the other party to review in advance any
proposed written communication to any of the foregoing relating to this
Agreement; (b) to the extent permitted by Applicable Laws, not agree to
participate in any substantive meeting or discussion with any governmental
authority in respect of any filings, investigation or inquiry concerning this
Agreement or the Transactions unless it consults with the other party in advance
and, to the extent permitted by such governmental authority, gives the other
party the opportunity to attend and participate thereat; and (c) to the extent
permitted by Applicable Laws, furnish the other party with copies of all
correspondence, filings, and communications between them and their Affiliates
and their respective representatives on the one hand, and any government or
regulatory authority or members or their respective staffs on the other hand,
with respect to this Agreement and the Transactions. If a party shall have
complied with all of its obligations under this SECTION 7.6, but there is no
action that such party can undertake or offer to undertake in compliance with,
and subject to, this Section that would eliminate the impediment asserted by the
FTC, the Antitrust Division or other governmental authority or any order in any
suit or Proceeding, in order for the Closing Date to occur prior to the
Termination Date, assuming all conditions other than those relating to such
impediment or order have been satisfied or waived, then such party shall not be
deemed to have breached its obligations under this SECTION 7.6.
7.7 STANDSTILL AGREEMENT. Unless and until this Agreement is terminated
pursuant to ARTICLE XII without the Closing having taken place, Sellers and
Seller Parent will not directly or indirectly (through a representative, agent,
employee or otherwise) solicit or accept offers for any of the Assets or the
Business or for a merger, stock sale, consolidation or other business
combination involving any of the Assets or the Business, or respond to inquiries
from, provide or share information with, negotiate with or in any way facilitate
inquiries or offers from, third parties who express or who have heretofore
expressed an interest in acquiring any of the Assets or the Business by merger,
stock sale, consolidation or other business combination, nor will Seller Parent
permit Sellers to do any of the foregoing.
7.8 SUPPLEMENTS TO SELLERS' SCHEDULES. From time to time prior to the
date which is two (2) Business Days prior to the Closing, Sellers shall
supplement and update Sellers' Disclosure Schedules delivered pursuant to this
Agreement with respect to any matter hereafter arising which, if existing or
occurring on the date of this Agreement, would have been required to have been
set forth on such Schedules hereto. No supplement or update of a Schedule made
pursuant to this SECTION 7.8 that discloses material, adverse information shall
be deemed to cure any breach of, affect or otherwise diminish any representation
and warranty made in this Agreement unless Buyer Parent specifically agrees
thereto in writing.
Any supplement or update of a Schedule that discloses immaterial or
non-adverse information shall not constitute a breach of any representation or
warranty made in this Agreement and shall be deemed accepted by Buyers.
7.9 COMMERCIALLY REASONABLE EFFORTS. Upon the terms and subject to the
conditions of this Agreement, the parties shall each use commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement.
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ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF
SELLER PARENT AND SELLERS
The obligations of Seller Parent and Sellers to consummate the
Transactions are subject to the completion, satisfaction, or at their option,
waiver, on or prior to the Closing Date, of each of the following conditions.
8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Buyers, Buyer Parent and Capital contained in this Agreement shall have been
true and correct in all material respects on and as of the date made and shall
be true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on
and as of such date. Buyers, Buyer Parent and Capital shall have delivered to
Sellers a certificate of a duly authorized officer to the foregoing effect.
8.2 COVENANTS. Each and all of the terms, covenants and conditions of
this Agreement to be complied with and performed by Buyers and Buyer Parent on
or before the Closing Date shall have been duly complied with and performed in
all material respects. Buyers and Buyer Parent shall have delivered to Sellers a
certificate of a duly authorized officer to the foregoing effect.
8.3 NO LEGAL PROHIBITION. No injunction or order shall be in effect
prohibiting consummation of the Transactions or which would make the
consummation of the Transactions unlawful.
8.4 NO ADVERSE PROCEEDING. No Proceeding shall have been instituted and
be pending before a court or any other governmental agency or body which seeks
to restrain or prohibit any of the Transactions; provided, however, that the
provisions of this SECTION 8.4 shall not apply if Seller Parent or a Seller has
directly or indirectly solicited or encouraged any such Proceeding.
8.5 DELIVERIES. Buyer Parent and Buyers shall be prepared to make or
cause to be made the deliveries described in SECTIONS 3.3.
8.6 HSR ACT. The waiting period (and any extension thereof) under the
HSR Act applicable to the Transactions shall have expired or been earlier
terminated by the FTC or the Antitrust Division.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS
OF BUYERS, BUYER PARENT AND CAPITAL
The obligations of Buyers, Buyer Parent and Capital to consummate the
Transactions are subject to the completion, satisfaction or, at their option,
waiver, on or prior to the Closing Date, of each of the following conditions.
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Sellers and Seller Parent contained in this Agreement shall have been true
and correct in all material respects on and as of the date made and shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of such date. Sellers and Seller Parent shall have delivered to Buyers a
certificate of a duly authorized officer to the foregoing effect.
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9.2 COVENANTS. Each and all of the terms, covenants and conditions of
this Agreement to be complied with and performed by Sellers and Seller Parent on
or before the Closing Date shall have been duly complied with and performed in
all material respects. Sellers and Seller Parent shall have delivered to Buyers
a certificate of a duly authorized officer to the foregoing effect.
9.3 NO LEGAL PROHIBITION. No injunction or order shall be in effect
prohibiting consummation of the Transactions or which would make the
consummation of the Transactions unlawful.
9.4 NO ADVERSE PROCEEDING. No Proceeding shall have been instituted and
be pending before a court or any other governmental agency or body which seeks
to restrain or prohibit any of the Transactions; PROVIDED, HOWEVER, that the
provisions of this SECTION 9.4 shall not apply if Buyer Parent or Buyers has
directly or indirectly solicited or encouraged any such Proceeding.
9.5 DELIVERIES. Sellers and Seller Parent shall be prepared to make or
cause to be made the deliveries described in SECTION 3.2.
9.6 HSR ACT. The waiting period (and any extension thereof) under the
HSR Act applicable to the Transactions shall have expired or been earlier
terminated by the FTC or the Antitrust Division.
9.7 CONSENTS AND APPROVALS. Buyers shall have received the Required
Consents. Notwithstanding the foregoing, (i) the condition set forth in this
SECTION 9.7 shall not apply with respect to the Required Consents for Permits if
the relevant Permit authority approves a management or operating agreement
reasonably acceptable to Sellers and Buyers allowing the Transactions to close
without transfer or reissuance of a Permit having been completed, and (ii) with
respect to Customer Contracts, Required Consents need only be obtained for those
Customer Contracts identified on EXHIBIT I; provided that if any Required
Consent for any Permit or Customer Contract set forth on EXHIBIT I is not
obtained by the time that the other conditions to Closing have been satisfied or
are waived, and the parties are not permitted to enter into a management or
operating agreement as contemplated by clause (i) of this SECTION 9.7 or a
subcontractor or other relationship as contemplated by SECTION 1.3 (a
"MANAGEMENT ARRANGEMENT"), then:
(a) with respect to Assets of the Business other than those
relating to the Jacksonville Division (as defined on EXHIBIT I):
(1) the Closing shall nevertheless occur, the Permit
or Customer Contract and related Assets (other than the related Land (as
identified on EXHIBITS B-1 and B-2), which shall be transferred at the Closing)
and Business Employees for which the Required Consent was not obtained shall be
withheld from the Closing, and the Purchase Price shall be adjusted by the
amount identified on EXHIBIT I for each Required Consent not obtained; and
(2) with respect to any Permits, Customer Contracts
and related Assets that are withheld from the Closing pursuant to subsection
(a)(1) above, the relevant Permits, Customer Contract and Assets shall be
transferred to Buyers, the Business Employees will be employed by Buyers, and
the withheld Purchase Price shall be paid by Buyers to Sellers, promptly
following the receipt of the Required Consent or the execution by Buyers and
Sellers of an agreement for a Management Arrangement; and
(b) with respect to the Assets of the Business relating to the
Jacksonville Division (including all related Land (as identified on EXHIBITS B-1
and B-2) (the "JACKSONVILLE LAND")):
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(1) the Closing with respect thereto shall not occur
until such time as Required Consents for the Jacksonville Division Permits and
Customer Contracts set forth on EXHIBIT I representing an aggregate of at least
$3,276,000 of the aggregate Purchase Price Adjustment Amount shown on EXHIBIT I
have either (x) been obtained or (y) an agreement for a Management Arrangement
relating thereto shall have been executed (the "JACKSONVILLE CONDITION"). If the
Closing with respect to the Assets of the Jacksonville Division is delayed in
accordance with this clause (b)(1), the Purchase Price payable at the Closing
shall be reduced by $27,789,000;
(2) following the satisfaction of the Jacksonville
Condition, (x) the Jacksonville Land and (y) those Permits, Customer Contracts
and related Assets and Business Employees for which the Required Consent was
obtained or with respect to which an agreement for a Management Arrangement
shall have been executed shall be promptly transferred to Buyers, the relevant
Business Employees will be employed by Buyers, and an amount equal to the excess
of (I) $27,789,000 over (II) the aggregate Purchase Price identified on EXHIBIT
I relating to those Permits, Customer Contracts and related Assets and Business
Employees for which the Required Consent has not yet been obtained or an
agreement for a Management Arrangement has not yet been executed shall be paid
by Buyers to Sellers; and
(3) all remaining Permits, Customer Contracts and
related Assets and Business Employees for which the Required Consent shall not
have been obtained or an agreement for a Management Arrangement shall not have
been executed shall be transferred to Buyers, the related Business Employees
will be employed by Buyers, and the withheld Purchase Price relating thereto
shall be paid by Buyers to Sellers promptly following the receipt of the
Required Consent or the execution by Buyers and Sellers of an agreement for a
Management Arrangement.
No consent or approval (a) shall be conditioned on the cancellation or
termination of, or any material adverse modification to, any Permit, Real Estate
Lease, Assumed Lease, Customer Contract, Employee Contract and Other Contract or
(b) shall impose on Buyers or any of their Affiliates any condition, provision
or requirement with respect to the Business or its operations that is materially
more restrictive, or materially more expensive to comply with, than the
conditions imposed upon such operation prior to the Closing.
9.8 NO MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have
occurred since December 31, 2002; provided, however, that nothing disclosed in
the Disclosure Schedules (without giving effect to any supplements or updates
made by Sellers after the date hereof) or the Sellers' Financial Statements,
individually or in the aggregate, shall be deemed to be a Material Adverse
Change.
9.9 FINANCING. Buyers, Buyer Parent and Capital shall have received the
proceeds of a financing, in an amount and on terms reasonably acceptable to
Buyer Parent, sufficient to enable Buyers to consummate the Transactions.
ARTICLE X
LIABILITIES AND OBLIGATIONS
10.1 EXCLUDED LIABILITIES. Except as explicitly set forth in SECTION
10.2, neither Buyer Parent nor Buyers shall, by the execution and performance of
this Agreement or otherwise (including by acquisition of the partnership
interests in the Partnership or under theories of successor liability),
30
assume, become directly or indirectly responsible for or incur, and Seller
Parent and Sellers, jointly and severally, hereby expressly agree to pay and
perform, all liabilities and obligations of any kind, character or description,
whether known or unknown, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined, determinable or otherwise
(each, a "LIABILITY") of Sellers, Seller Parent or the Partnership arising out
of or relating to actions or omissions occurring or conditions existing on or
prior to the Closing Date, including those matters disclosed in SCHEDULES
5.13(A), 5.13(B) AND 5.13(C) (collectively, the "EXCLUDED LIABILITIES")
including any Liability of Sellers to Seller Parent, any other Sellers or any
other Affiliate of Seller Parent.
10.2 ASSUMPTION OF OBLIGATIONS. Subject to the terms and conditions set
forth herein, at the Closing Buyers shall assume from Sellers only the
Liabilities described in the remainder of this SECTION 10.2 (the "ASSUMED
LIABILITIES"):
(a) Buyers shall assume and perform, and Buyer Parent shall
cause Buyers to assume and perform, all obligations under the Customer
Contracts, Employee Contracts, Other Contracts, Assumed Leases, Permits, Real
Estate Leases and other contracts included within the Assets, to the extent such
obligations first accrue and are required to be performed subsequent to the
completion of the Closing (provided that such obligations do not arise as a
result of a breach by Sellers thereof on or prior to Closing).
(b) Buyers shall assume and perform, and Buyer Parent shall
cause Buyers to assume and perform, at the Closing all closure/post-closure
obligations with respect to the Assets (including those set forth on SCHEDULE
5.17), and, subject to SECTION 10.2(C), to provide all required financial
responsibility/assurance related thereto, enabling Sellers to gain release of
financial responsibility/assurance they have posted.
(c) Buyers shall, and Buyer Parent shall cause Buyers to, use
commercially reasonable efforts to replace performance bonds and letters of
credit with respect to the Assets set forth on SCHEDULE 5.17 and post substitute
financial assurances as required under environmental Permits within thirty (30)
days after the Closing. Buyers shall, and Buyer Parent shall cause Buyers to,
pay Sellers interest at the rate of nine and one-half percent (9.5%) per annum
on un-replaced or un-substituted instruments from the 31st day after the Closing
until they are replaced or substituted.
(d) Buyers agree to assume and perform, and Buyer Parent
agrees to cause Buyers to assume and perform, (i) the direct costs of relocation
of a possible overfill at Nassau Landfill existing as of the date of this
Agreement, (ii) the direct costs of any additional capping required at Nassau
Landfill after the Closing Date, (iii) the direct costs of additional cell
development at Xxxxx Road Landfill after the Closing Date, and (iv) all other
Liabilities which Buyer Parent designates in writing prior to the Closing and
which Sellers agree to assume.
ARTICLE XI
INDEMNIFICATION
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND COVENANTS.
(a) The representations and warranties contained in this
Agreement and the liabilities and obligations of the parties with respect
thereto shall survive the Closing hereunder as follows:
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(i) the representations and warranties in SECTIONS
5.6(C), 5.10, 5.12(A) AND 5.15 shall survive the Closing for a period of six (6)
months after the Closing Date;
(ii) the representations and warranties in SECTIONS
5.5(B)-(C), 5.6(A)-(B), 5.7, 5.11, 5.17 AND 5.18 shall survive the Closing for a
period of fifteen (15) months after the Closing Date;
(iii) the representations and warranties in SECTIONS
5.4(B), 5.4(C), 5.4(D), 5.14, 5.16, 6.1, 6.2, 6.3 AND 6.4 shall survive the
Closing for a period of twenty-four (24) months after the Closing Date;
(iv) the representations and warranties in SECTIONS
5.3 AND 5.8 shall survive the Closing for a period of forty-eight (48) months
after the Closing Date;
(v) the representations and warranties in SECTIONS
5.9 AND 5.13 shall survive until expiration of the applicable statute of
limitations period; and
(vi) the representations and warranties in SECTIONS
5.1, 5.2, 5.4(A), 5.4(E), 5.4(F), 5.5(A) 5.12(B), AND 6.5 shall survive the
Closing for a period of eighty four (84) months after the Closing Date;
provided that the foregoing shall not limit an indemnification claim alleging
fraud by a party to this Agreement or its Affiliates.
(b) The covenants and agreements set forth in this Agreement
(including the covenants and agreements set forth in SECTIONS 10.1 and 10.2 and
the indemnification obligations set forth in SECTION 7.1, SECTION 11.2, SECTION
11.3 and SECTION 15.5) shall survive the Closing without limitation.
11.2 INDEMNIFICATION BY SELLER PARENT AND SELLERS. Sellers and Seller
Parent agree that they shall, jointly and severally, indemnify, defend (as to
Third Party Claims only), protect and hold harmless Buyer Parent, Buyers, and,
after the Closing, the Partnership, their respective officers, shareholders,
directors, divisions, subdivisions, Affiliates, subsidiaries, parent, agents,
employees, successors and assigns at all times from and after the Closing Date
from and against all Liabilities, claims, damages, actions, suits, Proceedings,
demands, assessments, adjustments, penalties, losses, costs and expenses
whatsoever (including court costs, reasonable attorneys' and expert witness fees
and expenses and expenses of investigation) (collectively, "DAMAGES") whether
equitable or legal, matured or contingent, known or unknown, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, whether arising out of
occurrences prior to, at or after the date of this Agreement, incurred as a
result of or incident to: (a) any breach of, or misrepresentation in, the
representations and warranties by Sellers or Seller Parent set forth herein, or
in the Schedules, Exhibits, certificates, documents or agreements attached
hereto or delivered pursuant hereto by Sellers or Seller Parent; (b) breach of
any agreement or covenant on the part of Seller Parent or Sellers made in this
Agreement, or in the Schedules, Exhibits, certificates, documents or agreements
attached hereto or delivered pursuant hereto by Sellers or Seller Parent; (c)
any Excluded Liability; or (d) any Excluded Asset. Notwithstanding any other
provision set forth in this Agreement, indemnifiable claims set forth in (a)
through (d) of this SECTION 11.2 shall include any claim by a third Person that,
if true, would mean that a condition for indemnification set forth in
subsections (a) through (d) of this SECTION 11.2 had been satisfied.
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11.3 INDEMNIFICATION BY BUYERS AND BUYER PARENT. Buyers and Buyer
Parent agree that they shall, jointly and severally, indemnify, defend (as to
Third Party Claims only), protect and hold harmless Sellers and Seller Parent
and their respective officers, shareholders, directors, divisions, subdivisions,
Affiliates, subsidiaries, parent, agents, employees, successors and assigns at
all times from and after the Closing Date from and against all Damages, whether
equitable or legal, matured or contingent, known or unknown, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, incurred by Sellers or
Seller Parent as a result of or incident to: (a) any breach of, or
misrepresentation in, the representations and warranties of Buyers, Buyer Parent
or Capital set forth herein, or in the Schedules, Exhibits, certificates,
documents or agreements attached hereto or delivered pursuant hereto by Buyers,
Buyer Parent or Capital; (b) breach of any agreement or covenant on the part of
Buyers, Buyer Parent or Capital made in this Agreement, or in the Schedules,
Exhibits, certificates, documents or agreements attached hereto or delivered
pursuant hereto by Buyers, Buyer Parent or Capital; or (c) any Assumed
Liability. Notwithstanding any other provision set forth in this Agreement,
indemnifiable claims set forth in (a) through (c) of this SECTION 11.3 shall
include any claim by a third Person that, if true, would mean that a condition
for indemnification set forth in subsections (a) through (c) of this SECTION
11.3 had been satisfied.
11.4 LIMITATION ON LIABILITY. The indemnification obligations set forth
in SECTIONS 11.2(A) and 11.3(A): (a) shall apply only if a Closing occurs, and
then only after the aggregate amount of claims for indemnification from the
Indemnifying Party and its Affiliates under this Agreement exceeds $4,500,000
and thereafter the Indemnifying Party shall be liable for all indemnification
obligations above $4,500,000; and (b) shall be limited to an aggregate amount
not to exceed thirty-five percent (35%) of the Purchase Price actually paid by
Buyers, Buyer Parent and their Affiliates; PROVIDED, HOWEVER, that (x) the
foregoing limitations shall not apply to the indemnification obligations of an
Indemnifying Party in connection with an indemnification claim arising out of
(i) a breach of the representation and warranty in SECTION 5.1, 5.2, 5.4(A),
5.4(E), 5.4(F), 5.5(A) OR 5.12(B) or (ii) the fraud of the Indemnifying Party or
its Affiliates, and (y) only claims, or series of related claims, equal to or in
excess of $100,000 shall apply toward the $4,500,000 deductible.
11.5 INDEMNIFICATION PROCEDURE BETWEEN BUYERS AND SELLERS. Upon the
occurrence of any claim for which indemnification is believed to be due
hereunder, the Indemnified Party shall provide notice of such claim to the
Indemnifying Party, stating in general terms the circumstances giving rise to
the claim, specifying the amount of the claim (or an estimate thereof) and
making a request for any payment then believed due (subject to the limitations
herein). Upon receipt of any such notice, both the Indemnified Party and the
Indemnifying Party shall use all reasonable efforts to cooperate and arrive at a
mutually acceptable resolution of such dispute within the next thirty (30) days.
If a resolution is not reached within the thirty (30) day period, either party
may commence the dispute resolution procedures set forth in ARTICLE XVI. If the
Indemnifying Party does not respond within such thirty (30) day period, the
claim for indemnification shall be deemed accepted by the Indemnifying Party. If
all or a portion of such claim amount is owed to the Indemnified Party, the
Indemnifying Party shall (subject to the terms of SECTION 11.4) within ten (10)
days of such determination, pay the Indemnified Party such amount owed in cash.
11.6 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO THIRD-PARTY CLAIMS.
(a) If any third Person shall notify an Indemnified Party with
respect to any matter (a "THIRD PARTY CLAIM") that may give rise to a claim for
indemnification against an Indemnifying Party or if any party who may make a
claim for indemnification under this Agreement otherwise becomes aware of any
matter that may give rise to such a claim or wishes to make such a claim
(whether or not related
33
to a Third Party Claim), then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that no delay on the
part of the Indemnified Party in notifying any Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then solely to
the extent) the Indemnifying Party is thereby prejudiced.
(b) Any Indemnifying Party will have the right to assume the
defense of any claim or any litigation resulting therefrom, provided that (i)
the counsel for the Indemnifying Party who shall conduct the defense of such
claim or litigation shall be reasonably satisfactory to the Indemnified Party
and (ii) the Indemnified Party may participate in such defense at such
Indemnified Party's expense. Except with the prior written consent of the
Indemnified Party, no Indemnifying Party, in the defense of any such claim or
litigation, shall consent to entry of any judgment or order, interim or
otherwise, or enter into any settlement that provides for injunctive or other
nonmonetary relief affecting the Indemnified Party or that does not include as
an unconditional term thereof the giving by each claimant or plaintiff to such
Indemnified Party of a release from all liability with respect to such claim or
litigation. In the event that the Indemnified Party shall in good faith
determine that the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such claim by the
Indemnifying Party might be expected to affect adversely the Indemnified Party,
or that the Indemnified Party may have available to it one or more defenses or
counterclaims that are inconsistent with one or more of those that may be
available to the Indemnifying Party in respect of such claim or any litigation
relating thereto, the Indemnified Party shall have the right at all times to
take over and assume control over the defense, settlement, negotiations or
litigation relating to any such claim at the sole cost of the Indemnifying
Party, provided that if the Indemnified Party does so take over and assume
control, the Indemnified Party shall not settle such claim or litigation without
the written consent of the Indemnifying Party, such consent not to be
unreasonably withheld or delayed. In the event that the Indemnifying Party does
not accept the defense of any matter as above provided, the Indemnified Party
shall have the full right to defend against any such claim or demand and shall
be entitled to settle or agree to pay in full such claim or demand. In any
event, the Indemnifying Party and the Indemnified Party shall cooperate in the
defense of any claim or litigation subject to this ARTICLE XI and the records
and personnel of each shall be reasonably available to the other with respect to
such defense.
ARTICLE XII
TERMINATION OF AGREEMENT
12.1 TERMINATION BY BUYER PARENT. Buyer Parent may at any time prior to
the Closing, by written notice in the manner hereinafter provided, terminate
this Agreement in the event of a material breach by Sellers or Seller Parent (i)
of the representations and warranties of Sellers and Seller Parent or (ii) in
the observance, or in the due and timely performance of any of the covenants or
agreements contained herein on their part to be performed, which breach of
covenant or agreement shall not have been cured within fifteen (15) Business
Days following written notice thereof from Buyer Parent. In addition, Buyer
Parent, by notice in the manner hereinafter provided, may terminate this
Agreement if any of the conditions set forth in ARTICLE IX shall become
incapable of fulfillment (other than due to acts or omissions of Buyer Parent or
its Affiliates) on or before the Closing Date and shall not have been waived by
Buyers.
12.2 TERMINATION BY SELLER PARENT. Seller Parent may at any time prior
to the Closing, by written notice in the manner hereinafter provided, terminate
this Agreement in the event of a material breach by Buyers, Buyer Parent or
Capital (i) of the representations and warranties of Buyers, Buyer Parent or
Capital or (ii) in the observance, or in the due and timely performance of any
of the covenants
34
or agreements contained herein on their part to be performed, which breach of
covenant or agreement shall not have been cured within fifteen (15) Business
Days following written notice thereof from Seller Parent. In addition, Seller
Parent, by notice in the manner hereinafter provided, may terminate this
Agreement if any of the conditions in ARTICLE VIII shall become incapable of
fulfillment (other than due to acts or omissions of Seller Parent or its
Affiliates) by or before the Closing Date and shall not have been waived by
Sellers.
12.3 TERMINATION DATE. This Agreement may be terminated by Seller
Parent or Buyer Parent by notice to the other if the Transactions shall not have
been consummated by 5:00 p.m. (MST) on December 31, 2003 (other than as a result
of a breach of this Agreement by the party giving such notice or by its
Affiliates), unless such date shall be extended by the mutual written consent of
Seller Parent or Buyer Parent.
12.4 EFFECT OF TERMINATION. If this Agreement is validly terminated
pursuant to SECTION 12.1, 12.2 or 12.3, this Agreement shall thereafter become
null and void, and there shall be no liability or obligation on the part of any
of the parties (or any other their respective officers, director, employees,
agents or other representatives or Affiliates), except that (a) the provisions
of SECTIONS 13.1, 13.2, 13.5, 15.6 and ARTICLE XVI shall survive such
termination, (b) such termination shall not relieve any party hereto of any
liability for any willful material breach of this Agreement prior to such
termination and (c) such termination shall not relieve any party hereto of its
obligations under SECTION 12.5, if applicable.
12.5 CERTAIN CONSEQUENCES OF TERMINATION.
(a) If this Agreement is terminated by Seller Parent pursuant
to SECTION 12.2(I) or (II), or if this Agreement is terminated because the
condition set forth in SECTION 9.9 has not been satisfied, then Seller Parent
shall be entitled to retain the Deposit as a termination fee.
(b) If this Agreement is terminated by Buyer Parent pursuant
to SECTION 12.1(I) or (II), then Seller Parent shall return the Deposit to Buyer
Parent and Seller Parent shall pay Buyer Parent an amount equal to the Deposit
as a termination fee.
(c) If this Agreement is terminated other than in accordance
with SECTION 12.5(A) or (B), then Seller Parent shall return the Deposit to
Buyer Parent.
(d) The parties acknowledge that the agreements contained in
this SECTION 12.5 are an integral part of the transactions contemplated by this
Agreement. Except as provided in SECTION 12.4(B), the remedies set forth in this
SECTION 12.5 constitute the parties' sole and exclusive remedies in the event of
or with respect to a termination of this Agreement.
ARTICLE XIII
NONDISCLOSURE; NONCOMPETITION
13.1 NONDISCLOSURE BY SELLERS AND SELLER PARENT. Sellers and Seller
Parent recognize and acknowledge that they had in the past, currently have, and
in the future may possibly have, access to confidential information of Buyers,
Buyer Parent or Capital, including lists of customers, operational policies, and
pricing and cost policies that are valuable, special and unique assets of
Buyers, Buyer Parent or Capital and their respective businesses. Sellers and
Seller Parent each agree that they will not, except as may be required by law or
valid legal process, disclose such confidential information to any
35
Person for any purpose or reason whatsoever, except to authorized
representatives of Buyers, unless such information is or becomes known to the
public generally through no fault of Sellers or Seller Parent. In connection
with the foregoing, the parties acknowledge and agree that they may be
competitors in the waste collection, hauling, disposal and recycling business in
the markets serviced by Buyers, Buyer Parent and Capital, and that, except as
specifically set forth herein, this Agreement shall not be interpreted to
preclude Sellers from providing waste collection, hauling, disposal or recycling
services in such markets or elsewhere. The provisions of this SECTION 13.1 shall
apply at all times prior to the Closing Date and for a period of one (1) year
following the first to occur of (i) the Closing Date and (ii) termination of
this Agreement without a Closing having occurred.
13.2 NONDISCLOSURE BY BUYERS AND BUYER PARENT. Buyers, Buyer Parent and
Capital recognize and acknowledge that they have in the past, currently have,
and prior to the Closing Date, will have access to confidential information of
Sellers and Seller Parent, including lists of customers, operational policies,
and pricing and cost policies that are valuable, special and unique assets of
Sellers. Buyers, Buyer Parent and Capital agree that they will not, except as
may be required by law or valid legal process, disclose such confidential
information to any Person for any purpose or reason whatsoever, prior to the
Closing Date except to authorized representatives of Sellers (including lenders,
investors and other financing sources and their respective representatives),
unless such information is or becomes known to the public generally through no
fault of Buyers or Buyer Parent. Notwithstanding the foregoing, Buyers, Buyer
Parent and Capital shall be permitted to disclose such information regarding the
Business as is determined by Buyers, Buyer Parent or Capital to be necessary or
appropriate to be disclosed in any proxy or registration statement, or any other
filing, notification or report made by Buyer Parent or any of its Affiliates
pursuant to Applicable Law or in any offering memorandum, prospectus or other
offering document or bank book prepared in connection with Buyer Parent's,
Buyers' or Capital's financing of the Transactions. In connection with the
foregoing, the parties acknowledge and agree that they may be competitors in the
waste collection, hauling, disposal and recycling business in the markets
serviced by Sellers, Seller Parent and the Business, and that nothing contained
herein shall be interpreted to preclude Buyers from providing waste collection,
hauling, disposal or recycling services in such markets or elsewhere. The
provisions of this SECTION 13.2 shall apply at all times prior to the Closing
Date and for a period of one (1) year following the first to occur of (i) the
Closing Date and (ii) termination of this Agreement without a Closing having
occurred.
13.3 NONCOMPETITION BY SELLERS. Sellers and Seller Parent agree that
for a period of three (3) years following the Closing Date (the "RESTRICTED
PERIOD"), they shall not, and shall cause their Affiliates not to, engage or
have any interest, direct or indirect, in any business in competition with the
Business, as the Business is constituted as of the Closing Date within any
county in Florida in which the Business provided services as of the Closing
Date. Notwithstanding the foregoing, however: (A) this shall not preclude
Sellers, Seller Parent or any such Affiliate from (i) owning less than one
percent (1%) in the aggregate of the securities of any publicly traded entity or
(ii) any operations subsequently acquired in Florida (the "NEW FLORIDA
Operations") as part of their acquisition of a company with operations primarily
outside of Florida; PROVIDED that Sellers and Seller Parent shall cause the New
Florida Operations to refrain from inducing, or attempting to induce, any
customer of the Business as of the Closing Date to conduct business with such
New Florida Operations unless such customer already was a customer of the New
Florida Operations at the time Sellers, Seller Parent or such Affiliate acquired
the New Florida Operations; (B) Sellers, Seller Parent and such Affiliates shall
be permitted to service any national account within such Counties if pursuant to
the terms of the relevant national account agreement, and despite their
commercially reasonable efforts, Sellers and Seller Parent are unable to
subcontract or assign the services to Buyers and Sellers and Seller Parent are
not in violation of the
36
National Account Subcontract; and (C) Sellers, Seller Parent and such Affiliates
shall be permitted to service any Customer Contract withheld from the Closing
pursuant to SECTION 9.7 until such time that such Customer Contract is
transferred to Buyers or the Purchase Price applicable to such withheld Customer
Contract is paid by Buyers to Sellers, in each case pursuant to SECTION 9.7. If
Seller Parent, Sellers or any such Affiliate shall acquire any operations in
Florida within three (3) years following the Closing Date in accordance with
clause (A) above, Buyer Parent shall have a right of first refusal for a period
of two (2) years following acquisition of such operations on the following terms
(the "RIGHT OF FIRST REFUSAL"):
(a) RIGHT OF FIRST REFUSAL.
(i) GRANT OF RIGHT. If Seller Parent, Sellers or any
such Affiliate shall receive a bona fide offer for the purchase and sale of such
operations substantially as an entirety (the "OFFER"), and if the Offer is
acceptable, then Seller Parent shall give to Buyer Parent a Right of First
Refusal to purchase such operations at the price and on the terms of the Offer.
Upon receipt of an Offer, Seller Parent shall, prior to the acceptance of such
Offer, give written notice (an "OFFER NOTICE") to Buyer Parent of the Offer,
setting forth the terms and conditions of the Offer. Notwithstanding the
foregoing, however, Buyer Parent shall have no Right of First Refusal, and
Seller Parent shall not be required to give Buyer Parent an Offer Notice, with
respect to any Offer that also involves as an integral part thereof a purchase
by Seller Parent or its Affiliates of material assets from the offeror or its
Affiliates.
(ii) PROCEDURE. If Buyer Parent elects to acquire
such operations at the price and on the terms of the Offer, it shall so notify
Seller Parent within fifteen (15) days after receiving the Offer Notice. If
Buyer Parent fails to so notify Seller Parent within this time period, then
Buyer Parent shall be deemed to have waived and relinquished its right to
acquire the operations as to the Offer, and Seller Parent, Sellers or any such
Affiliate shall be at liberty to transfer the operations to the entity making
the Offer at the price and on terms no more favorable to the offeror than those
set forth in the Offer. If for any reason the operations are not sold to the
person or entity making the Offer, or if the terms of the Offer are changed in a
manner that is more favorable to the offeror, then this Right of First Refusal
shall be reinstated and notice of any subsequent offers or revised terms shall
be given to Buyer Parent upon the same provisions for acceptance or rejection as
provided herein.
(iii) TERMS OF PURCHASE. All relevant terms and
conditions of this Agreement regarding title matters, the transfer of good and
marketable title to Buyer Parent, allocation of liabilities (including
environmental liabilities), risk of loss, representations, warranties, covenants
and agreements, and survival of representations, warranties, covenants and
agreements shall apply to the transfer of the operations as if fully set forth
herein and shall be complied with by the parties as a condition to closing for
the operations. Notwithstanding the foregoing, however, the terms and conditions
of this Agreement shall be modified as necessary to give effect to the terms,
conditions and provisions of the Offer.
(b) ASSIGNMENT AND SUCCESSION. Buyer Parent shall not assign
the Right of First Refusal without the prior written consent of Seller Parent,
which consent may not be unreasonably withheld. Seller Parent shall not assign
this Right of First Refusal. This Right of First Refusal, and all rights and
powers granted hereby, will bind and inure to the benefit of the parties and
their respective successors and permitted assigns. Notwithstanding the
foregoing, Buyer Parent may nominate an Affiliate of Buyer Parent for the
acquisition of all or a portion of the operations under this Right of First
Refusal (a "NOMINEE"), and to be "Buyer Parent" under this Right of First
Refusal, in which case all references in this SECTION 13.3 to "Buyer Parent"
shall mean and refer to such Nominee, and Seller Parent may nominate an
Affiliate of Seller Parent for the sale of all or a portion of the operations
under
37
this Right of First Refusal (a "SELLER NOMINEE"), and to be "Seller Parent"
under this Right of First Refusal, in which case all references in this SECTION
13.3 to "Seller Parent" shall mean and refer to such Sellers Nominee.
(c) NO RECORDING. Except as may be required by Applicable Law,
(a) this Right of First Refusal shall be maintained as confidential by the
parties and (b) no documents evidencing this Right of First Refusal will be
recorded or otherwise made public by the parties.
13.4 CONFIDENTIAL INFORMATION. Neither Seller Parent nor Sellers (nor
any of their respective Affiliates) shall at any time subsequent to the Closing,
except as explicitly requested by Buyers or as otherwise provided in this
Agreement, use for any purpose, disclose to any Person, or keep or make copies
of any records and files containing, any confidential information relating
primarily to the Business, the Assets or the Assumed Liabilities, all such
information being deemed to be transferred to Buyers hereunder. For purposes
hereof, "CONFIDENTIAL INFORMATION" shall mean information relating primarily to
the Business, the Assets or the Assumed Liabilities, including all customer and
vendor lists and related information, all information concerning the Business'
processes, products, costs, prices, sales, marketing and distribution methods,
properties and assets, Assumed Liabilities, and other information not previously
disclosed to the public directly by Seller Parent or Sellers. The foregoing
provisions shall not apply to any information which is or relates primarily to
an Excluded Asset or which is or relates primarily to the Excluded Liabilities,
or which relates to Tax matters. Confidential information that relates to both
Assumed Liabilities and Excluded Liabilities shall be maintained in duplicate by
both Sellers and Buyers. If at any time after the Closing, Seller Parent or
Sellers should discover that it is in possession of any records and files
containing the confidential information of Buyers, then the party making such
discovery shall immediately turn such records and files over to Buyers, which
shall upon request make available to the surrendering party any information
contained therein which is not confidential information. Seller Parent and
Sellers agree that they will not assert a waiver of loss of confidential or
privileged status of the information based upon such possession or discovery.
13.5 EQUITABLE RELIEF FOR VIOLATIONS. The parties expressly covenant
and agree that if any of them violates, or overtly threatens to violate, the
Restrictive Covenants, the non-violating party shall be entitled to an
accounting and repayment of all profits, compensation, commissions,
remuneration, or benefits which the violating party, directly or indirectly,
realized and/or may realize as the result of, arising out of, or in connection
with any such violation or threatened violation. The parties acknowledge further
that an irreparable injury may result to the non-violating party and its
Business in the event of a breach by the violating party of the Restrictive
Covenants. The parties also acknowledge and agree that the damages or injuries
that a non-violating party sustains as a result of a breach by a violating party
of the Restrictive Covenants are difficult to ascertain and money damages alone
may not be an adequate remedy to a non-violating party. The parties therefore
expressly agree that if a controversy arises concerning the rights or
obligations of a party under the Restrictive Covenants, such rights or
obligations shall be enforceable by a court decree of specific performance and a
non-violating party shall also be entitled to any injunctive relief from the
court pursuant to ARTICLE XVI necessary to prevent or restrain any violation of
the Restrictive Covenants. Such relief shall be granted without the necessity of
a showing of irreparable harm and without the posting of a bond or other
security. Such relief, however, shall be cumulative and non-exclusive and shall
be in addition to any other remedy to which the parties may be entitled in
accordance with this Agreement.
13.6 EXCEPTION FOR CERTAIN TAX DISCLOSURES. Further and notwithstanding
anything herein to the contrary, except as reasonably necessary to comply with
applicable securities laws, each party (and
38
each Affiliate, officer, employee, director, advisor, representative, or other
agent of such party) is, and has been from commencement of discussions
concerning the Transactions, permitted to (a) disclose to any and all Persons,
without limitation of any kind, the U.S. federal income tax treatment and tax
structure of the Transactions and all materials of any kind (including opinions
or other tax analyses) that are provided to such party relating to such tax
treatment and tax structure, and (b) consult any tax advisor regarding the U.S.
federal income tax treatment or tax structure of the Transactions. For this
purpose, "tax structure" is limited to any fact that may be relevant to the
understanding of the purported or claimed U.S. federal income tax treatment of
the Transactions, and "tax treatment" means the purported or claimed U.S.
federal income tax treatment of the Transactions. Neither of such terms includes
information relating to the identity of the parties.
ARTICLE XIV
TAX MATTERS
14.1 TRANSACTION TAXES. Buyers and Buyer Parent shall pay all transfer
and conveyance Taxes attributable to the Transactions, including Taxes payable
in connection with the registration of Rolling Stock.
ARTICLE XV
GENERAL
15.1 GUARANTIES.
(a) Buyer Parent hereby unconditionally and absolutely
guarantees to Seller Parent and Sellers the prompt and full payment and
performance of all covenants, agreements and other obligations of Buyers under
this Agreement and the Ancillary Agreements, including payment of the Purchase
Price and all of Buyers' indemnification obligations pursuant to ARTICLE XI. The
foregoing guaranty shall be direct, absolute, irrevocable and unconditional and
shall not be impaired irrespective of any modification, release, supplement,
extension or other change in the terms of all or any of the obligations of
Buyers under this Agreement or the Ancillary Agreements or for any other reason
whatsoever. Buyer Parent hereby waives any requirement of promptness, diligence
or notice with respect to the foregoing guaranty and any requirement that the
Seller Parent or Sellers exhaust any right or take any action against Buyers in
respect of any of their obligations hereunder.
(b) Capital hereby unconditionally and absolutely guarantees
to Seller Parent and Sellers the prompt and full payment and performance of all
covenants, agreements and other obligations of Buyer Parent and Buyers under
this Agreement and the Ancillary Agreements, including payment of the Purchase
Price and all of Buyers' indemnification obligations pursuant to ARTICLE XI. The
foregoing guaranty shall be direct, absolute, irrevocable and unconditional and,
except as set forth in the immediately preceding sentence, shall not be impaired
irrespective of any modification, release, supplement, extension or other change
in the terms of all or any of the obligations of Buyer Parent or Buyers under
this Agreement or the Ancillary Agreements or for any other reason whatsoever.
Capital hereby waives any requirement of promptness, diligence or notice with
respect to the foregoing guaranty and any requirement that the Seller Parent or
Sellers exhaust any right or take any action against Buyer Parent or Buyers in
respect of any of its obligations hereunder.
39
(c) Seller Parent hereby unconditionally and absolutely
guarantees to Buyer Parent and Buyers the prompt and full payment and
performance of all covenants, agreements and other obligations of Sellers under
this Agreement and the Ancillary Agreements, including payment of any adjustment
to the Purchase Price pursuant to ARTICLE II and all of Sellers' indemnification
obligations pursuant to ARTICLE XI. The foregoing guaranty shall be direct,
absolute, irrevocable and unconditional and shall not be impaired irrespective
of any modification, release, supplement, extension or other change in the terms
of all or any of the obligations of Sellers under this Agreement or the
Ancillary Agreements or for any other reason whatsoever. Seller Parent hereby
waives any requirement of promptness, diligence or notice with respect to the
foregoing guaranty and any requirement that Buyer Parent or Buyers exhaust any
right or take any action against Sellers in respect of any of their obligations
hereunder.
15.2 ASSIGNMENT; BINDING EFFECT; AMENDMENT. This Agreement and the
rights of the parties hereunder may not be assigned (except by operation of law)
without the prior consent of the others; provided, however, that Buyers may
assign all or any portion of this Agreement to any Affiliate of Buyers (but
Buyers shall remain responsible for their obligations hereunder) and provided,
further, however, that Buyers, Buyer Parent and Capital may assign any and all
of their respective rights, interests and obligations hereunder as security for
obligations to their lenders, financing sources, investors and other secured
parties. Notwithstanding the foregoing, however, SECTION 13.3(B) shall take
precedence over this SECTION 15.2 solely with respect to the assignment of the
Right of First Refusal. This Agreement shall be binding upon and shall inure to
the benefit of the parties, and the successors and permitted assigns of Buyers,
Buyer Parent, Sellers and Seller Parent. This Agreement may be modified or
amended only by a written instrument executed by all parties.
15.3 ENTIRE AGREEMENT. This Agreement, together with the Exhibits and
Schedules hereto, is the final, complete and exclusive statement and expression
of the agreement among the parties with relation to the subject matter of this
Agreement. This Agreement supersedes, and cannot be varied, contradicted or
supplemented by evidence of, any prior or contemporaneous discussions,
correspondence, or oral or written agreements of any kind.
15.4 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
15.5 NO BROKERS. Except with respect to the fees of Xxxxxx Brothers
(which are the responsibility of Buyers and Buyer Parent), Sellers and Seller
Parent represent and warrant to Buyers and Buyer Parent, and Buyers and Buyer
Parent represent and warrant to Sellers and Seller Parent, that the warranting
party has had no dealings with any broker or agent so as to entitle such broker
or agent to a commission or fee in connection with the Transactions. If for any
reason a commission or fee shall become due, the party dealing with such agent
or broker (which party is Buyers and Buyer Parent in the case of Xxxxxx
Brothers) shall pay such commission or fee and agrees to indemnify and save
harmless each of the other parties from all claims for such commission or fee
and from all attorneys' fees, litigation costs and other expenses relating to
such claim.
15.6 EXPENSES OF TRANSACTION. Except as otherwise provided in this
Agreement:
(a) Whether or not the Transactions shall be consummated,
Buyers will pay the fees, expenses and disbursements of Buyers, Buyer Parent,
Capital and their agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any
40
amendments hereto and all other costs and expenses incurred in the performance
and compliance with all conditions to be performed by Buyers and Buyer Parent
under this Agreement;
(b) Whether or not the Transactions shall be consummated,
Sellers will pay the fees, expenses and disbursements of Sellers and Seller
Parent and their respective agents, representatives, accountants and counsel
incurred in connection with the subject matter of this Agreement and any
amendments hereto and all other costs and expenses incurred in the performance
and compliance with all conditions to be performed by Seller Parent and Sellers
under this Agreement;
(c) At the Closing, Sellers will pay or reimburse Buyers for
$1,500,000 of financing costs incurred in connection with the financing for the
Transactions; and
(d) Whether or not the Transactions shall be consummated,
nothing in this SECTION 15.6 shall limit the rights of a non-breaching party to
recover damages, including fees and expenses if so awarded, in connection with
any claim against a party in breach hereunder.
15.7 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and may be given by overnight courier or by
delivering the same in person to such party.
(a) If to Buyers, Buyer Parent or Capital, addressed to it at:
c/o Capital Environmental Resource Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attn: Mr. Xxxxx Xxxxxxxxxx-Xxxxx, Chairman and CEO
with a copy to:
Capital Environmental Resource Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attn: Xxxxxx X. Xxxxxx, Esq., General Counsel
and a copy to:
XxXxxxxxx, Will & Xxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attn: Xxxxx Xxxxx, Esq.
(b) If to Sellers or Seller Parent, addressed to it at:
Allied Waste Industries, Inc.
00000 X. Xxxxxxxx-Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxx Xxxxxxx, Chairman and CEO
with a copy to:
41
Allied Waste Industries, Inc.
00000 X. Xxxxxxxx-Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxx, Esq., Senior Vice President
and General Counsel
and a copy to:
Xxxxxxxxx Xxxxx, P.C.
0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx XxXxxxxxx, Esq.
Notice shall be deemed given and effective the day personally delivered and one
(1) Business Day after being sent by overnight courier, subject to signature
verification. Any party may change the address for notice by notifying the other
parties of such change in accordance with this SECTION 15.7. Notwithstanding the
foregoing, copies of notices and other communications regarding title and survey
matters shall also be provided to: (a) if to Sellers or Seller Parent, addressed
to M. Xxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, P.C., 0000 X. Xxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000, and (b) if to Buyers, Buyer Parent or Capital, addressed
to Xxxxx X. Xxxxxxx, Esq., XxXxxxxxx, Will & Xxxxx, 000 Xxxxx Xxxxxxxx
Xxxxxxxxx, 00xx Xxxxx, Xxxxx, XX 00000-0000.
15.8 NO WAIVER. No delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach of default occurring before or after that waiver.
15.9 CAPTIONS. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
15.10 NO THIRD PARTY BENEFICIARIES. Except for the provisions of
ARTICLE XI relating to indemnified parties, nothing contained in this Agreement
is intended or shall confer upon any other Person, including any union or
employee or former employee of Seller Parent or Sellers, any legal or equitable
right, benefit or remedy of any nature whatsoever, including any rights of
employment for any specified period, under or by reason of this Agreement.
15.11 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified
in such manner as to be valid, legal and enforceable but so as most nearly to
retain the intent of the parties. If such modification is not possible, such
provision shall be severed from this Agreement. In either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
15.12 CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise
42
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local or
foreign statute shall be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"include" or "including" means include or including, without limitation. All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require.
ARTICLE XVI
DISPUTE RESOLUTION
16.1 GENERAL. The parties agree that any disputes arising out of or
related in any way to this Agreement, including a breach of this Agreement,
shall be brought exclusively in the courts of the State of Delaware and federal
courts of United States of America located in such state. By execution and
delivery of this Agreement, with respect to any dispute, each of the parties
knowingly, voluntarily and irrevocably: (a) consents, for itself and in respect
of its property, to the exclusive jurisdiction of these courts; (b) waives any
immunity or objection, including any objection to personal jurisdiction or the
laying of venue or based on the grounds of forum non conveniens, which it may
have from or to the bringing of the dispute in such jurisdiction; (c) waives any
personal service of any summons, complaint or other process that may be made by
any other means permitted by the State of Delaware; (d) waives any right to
trial by jury; (e) agrees that any such dispute will be decided by court trial
without a jury; (f) understands that it is giving up valuable legal rights under
this provision, including the right to trial by jury, and that it voluntarily
and knowingly waives those rights; and (g) agrees that any party to this
Agreement may file an original counterpart or a copy of this SECTION 16.1 with
any court as written evidence of the consents, waivers and agreements of the
parties set forth in this SECTION 16.1.
16.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
16.3 ATTORNEYS' FEES. Should any litigation be commenced under this
Agreement, the successful party in such litigation shall be entitled to recover,
in addition to such other relief as the court may award, its reasonable
attorneys' fees, expert witness fees, litigation related expenses, and court or
other costs incurred in such litigation or proceeding. For purposes of this
clause, the term "successful party" means the net winner of the dispute, taking
into account the claims pursued, the claims on which the pursuing party was
successful, the amount of money sought, the amount of money awarded, and offsets
or counterclaims pursued (successfully or unsuccessfully) by the other party. If
a written settlement offer is rejected and the judgment or award finally
obtained is equal to or more favorable to the offeror than an offer made in
writing to settle, the offeror is deemed to be the successful party from the
date of the offer forward.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
BUYERS:
Waste Services of Florida, Inc.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Its: President
--------------------------------------
Jacksonville Florida Landfill, Inc.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Its: President
--------------------------------------
BUYER PARENT:
Waste Services, Inc.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Its: President and Chief Operating Officer
--------------------------------------
CAPITAL:
Capital Environmental Resource Inc.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Its: President and Chief Operating Officer
--------------------------------------
SELLERS:
BFI Waste Systems of North America, Inc.
By: /s/ Xxxxxxxx Xxxxx
-------------------------------------
Its: Director Market Development
------------------------------------
44
Xxxxxxxx-Xxxxxx Industries of Florida,
Inc.
By: /s/ Xxxxxxxx Xxxxx
-------------------------------------
Its: Director Market Development
------------------------------------
E Leasing Company, LLC
By: /s/ Xxxxxxxx Xxxxx
-------------------------------------
Its: Director Market Development
------------------------------------
SELLER PARENT:
Allied Waste Industries, Inc.
By: /s/ Xxxxxxxx Xxxxx
-------------------------------------
Its: Director Market Development
------------------------------------
45
EXHIBIT C
DEFINITIONS
"ACCOUNTS RECEIVABLE" means all accounts receivable of Sellers and the
Partnership as of the Closing Date arising from the operation of the Business.
"ADJUSTMENT AMOUNT" has the meaning specified in SECTION 2.1(B)(I).
"AFFILIATE" means, with respect to any specified Person, a Person
controlled by, controlling or under common control with such Person.
"AFFILIATED GROUP" means an affiliated group as defined in Code Section
1504(a) or any similar group defined under a similar provision of state or local
Tax law.
"AGREEMENT" has the meaning specified in the introductory paragraph of
the Agreement.
"ANCILLARY AGREEMENTS" means the Deeds, the Xxxx of Sale, the National
Accounts Subcontract, the Retention Bonus Agreements and the other documents and
agreements delivered by the parties pursuant to the terms of this Agreement.
"ANNUAL FINANCIAL STATEMENTS" has the meaning specified in SECTION
5.11.
"ANTITRUST DIVISION" means the Antitrust Division of the United States
Department of Justice.
"APPLICABLE LAWS" means all federal, state and local statutes, laws,
rules, regulations, orders, permits (including zoning restrictions and land use
requirements and environmental laws and regulations) and licenses and all
administrative and judicial judgments, rulings, decisions and orders applicable
to Sellers, the Partnership the Assets or the Business.
"ASSETS" has the meaning specified in SECTION 1.1.
"ASSIGNMENT, ASSUMPTION AND CONSENT TO LEASED LAND" means an
assignment, in form and substance reasonably satisfactory to Buyers, for each
parcel of Leased Land of all of Sellers' rights, title and interest under each
such Real Estate Lease, together with the consent of the landlord to such
assignment if required by the applicable lease or by law.
"ASSUMED CONTRACTS" has the meaning specified in SECTION 1.1(H).
"ASSUMED LEASES" has the meaning specified in SECTION 5.4(E).
"ASSUMED LIABILITIES" has the meaning specified in SECTION 10.2.
"ATTWOODS CONSENT DECREE" means the Final Judgment of the United States
District Court for the District of Columbia, filed 12/1/94 and captioned UNITED
STATES OF AMERICA X. XXXXXXXX-XXXXXX INDUSTRIES, INC. (Civ. Action No.
1:94CV02588).
"BALANCE SHEET DATE" means December 31, 2002.
C-1
"XXXX OF SALE" means a General Conveyance, Assignment and Xxxx of Sale
in form and substance reasonably satisfactory to Buyers and Sellers, providing
for the conveyance, sale, transfer and assignment to Buyers of all of the Assets
(other than the Owned Land and Leased Land).
"BUSINESS" has the meaning specified in RECITAL A.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or other
day in which banks are authorized or required by law to be closed in Xxxxxxx,
Xxxxxxx xxx Xxxxxxx, Xxxxxxx.
"BUSINESS EMPLOYEES" means all employees of Sellers employed
principally in the Business.
"BUSINESS NAMES" means names and the right to use such names and all
similar names in the state(s) listed on SCHEDULE 1.1(I).
"BUYER PARENT" has the meaning specified in the introductory paragraph
of the Agreement.
"BUYERS" has the meaning specified in the introductory paragraph of the
Agreement.
"BUYERS' ASSUMPTION AGREEMENTS" means assumption agreements in form and
substance reasonably satisfactory to Buyers and Sellers, providing for the
assumption by Buyers of the Assumed Liabilities.
"CAPITAL" has the meaning specified in the introductory paragraph of
the Agreement.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CINTAS" has the meaning specified in SECTION 4.4.
"CLOSING" and "CLOSING DATE" have the meanings specified in SECTION
3.1(A).
"CODE" means the Internal Revenue Code of 1986, as amended.
"CUSTOMER CONTRACTS" means all contractual rights of Sellers with
Sellers' customers (whether oral or in writing) exclusively relating to the
Business, except the National Accounts.
"DAMAGES" has the meaning specified in SECTION 11.2.
"DEED" means a special or limited warranty deed, in recordable form.
"DEPOSIT" has the meaning specified in SECTION 2.1(A)(I).
"DISCLOSURE SCHEDULES" means the schedules to the specific Sections of
the Agreement delivered by Sellers and Seller Parent to Buyers, as supplemented
pursuant to SECTION 7.8.
C-2
"EMPLOYEE CONTRACTS" means all employment contracts and collective
bargaining agreements with any union insofar as they apply to persons who are
employees of the Business (but excluding employee benefit plans).
"ENCUMBRANCES" means liens, security interests, encumbrances, adverse
claims, leases, rights of repurchase or purchase, rights of first refusal,
pledges, charges, voting trusts, equities and other restrictions, limitations or
conditions on transfer of any nature whatsoever.
"ENVIRONMENTAL LAWS" means all federal, state, and local laws,
including common law, statutes, codes, ordinances, rules, regulations, permits,
or orders relating to or addressing the environment, health or safety, which
shall include the use, handling or disposal of any Hazardous Material, or
workplace or worker safety and health.
"EQUIPMENT" means all machinery, equipment, including containers, used
or held for use principally in connection with the Business and owned by Sellers
or the Partnership or, if leased, Sellers' or the Partnership's leasehold
interest therein.
"EXCLUDED ASSETS" has the meaning specified in SECTION 1.2.
"EXCLUDED LIABILITIES" has the meaning specified in SECTION 10.1.
"FTC" means the United States Federal Trade Commission. ---
"GAAP" means United States generally accepted accounting principles
applied on a consistent basis.
"HAZARDOUS MATERIALS" means hazardous wastes or hazardous substances,
infectious or medical waste, radioactive waste, pollutants, toxic substances,
toxic pollutants, or sewage sludges as those terms are defined by and/or
regulated under the Resource Conservation and Recovery Act of 1976; CERCLA; the
Atomic Energy Act of 1954; the Toxic Substances Control Act; the Occupational
Health and Safety Act; the Federal Water Pollution Control Act; the Clean Air
Act; any comparable or similar state statute; any other Applicable Law or the
rules and regulations promulgated under any of the foregoing, as each of the
foregoing may have been from time to time amended.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of
1976, as amended.
"INDEMNIFIED PARTY" means a party seeking indemnification under ARTICLE
XI.
"INDEMNIFYING PARTY" means a party from whom indemnification is sought
under ARTICLE XI.
"INTERIM FINANCIAL STATEMENTS" has the meaning specified in SECTION
5.11.
"INVENTORY" means all inventory of supplies, fuel, parts, tires,
accessories and other tangible assets of every kind, nature and description (and
interests in any of the foregoing) used,
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or held for use, principally in connection with the Business and owned by
Sellers or the Partnership.
"KNOWLEDGE," whether capitalized or not, means the actual knowledge of
the following Persons, without inquiry: Xxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxx
Xxxxx, Xxxx Xxxxx, Xxxxx Xxx and Xxxx Xxxx.
"LAND" has the meaning specified in RECITAL C.
"LEASED LAND" has the meaning specified in RECITAL C.
"LIABILITY" has the meaning specified in SECTION 10.1.
"MATERIAL ADVERSE CHANGE" means a material adverse change in the
business, financial condition or results of operations of the Business described
in this Agreement, taken as a whole.
"MINIMUM UNIFORMED EMPLOYEES" has the meaning specified in SECTION 4.4.
"MONTHLY MINIMUM" has the meaning specified in SECTION 4.7.
"NATIONAL ACCOUNT SUBCONTRACT" has the meaning specified in SECTION
3.2(I).
"NATIONAL ACCOUNTS" means customer accounts that involve a broader area
than the area served by the Business and that are managed by Sellers or by an
Affiliate of Sellers pursuant to a national account program.
"NEUTRAL AUDITOR" has the meaning specified in SECTION 2.2(B).
"NET WORKING CAPITAL" has the meaning specified in SECTION 2.1(B)(II).
"NEW FLORIDA OPERATIONS" has the meaning specified in SECTION 13.3.
"NOMINEE" has the meaning specified in SECTION 13.3(B).
"OFFER" and "OFFER NOTICE" have the meanings specified in SECTION
13.3(A)(I).
"ORGANIZATIONAL DOCUMENTS" means the Certificates or Articles of
Incorporation and Bylaws of Sellers and Seller Parent.
"OTHER CONTRACTS" has the meaning specified in SECTION 5.6.
"OWNED LAND" has the meaning specified in RECITAL C.
"PARTNERSHIP" has the meaning specified in SECTION 1.1(T).
"PERMITS" means all permits, filings, notices of intent, exemptions,
licenses, authorizations, registrations, franchises, consents, approvals and
related applications of every kind held by Sellers or the Partnership in
connection with the Business from or with any federal,
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state, local or foreign government or regulatory authorities or industrial
bodies, including all FCC radio licenses or call signs.
"PERMITTED EXCEPTIONS" means: (i) zoning ordinances and regulations
which do not materially adversely affect Buyers' use or marketability of the
Land for its current uses; (ii) real estate taxes and assessments, both general
and special, which are a lien but are not yet due and payable at the Closing
Date; (iii) easements, encumbrances not securing a financial obligation,
covenants, conditions, reservations, restrictions and other matters of record,
if any, that are not Unpermitted Exceptions; and (iv) if the Land is leased, the
Real Estate Leases.
"PERSON" means any individual, firm, partnership, association, trust,
corporation, joint venture, unincorporated organization, limited liability
company, governmental body or other entity.
"PRE-CLOSING PERIOD" means any Tax period or portion thereof ending on
or before the Closing Date.
"PROCEEDINGS" means any claim, investigation, litigation, action, suit
or proceeding, formal arbitration, informal arbitration or mediation,
administrative, judicial or otherwise. "PURCHASE PRICE" has the meaning
specified in SECTION 2.1(A).
"REAL ESTATE LEASES" means all existing leases, occupancy agreements or
licenses or similar agreements and any amendments thereto in effect in
connection with the Land.
"REQUIRED CONSENTS" has the meaning specified in SECTION 5.8(B)(III).
"RESTRICTIVE COVENANTS" means the covenants set forth in ARTICLE XIII.
"RESTRICTED PERIOD" has the meaning provided in SECTION 13.3.
"RETAINED IP" has the meaning specified in SECTION 1.1(G).
"RETENTION BONUS AGREEMENTS" has the meaning specified in SECTION 3.9.
"RIGHT OF FIRST REFUSAL" has the meaning specified in SECTION 13.3.
"RIGHT OF FIRST REFUSAL AGREEMENT" has the meaning specified in SECTION
3.2(K).
"RIGHTS" means the Permits, the Rolling Stock and the intangible assets
identified in SCHEDULE 1.1(G).
"ROLLING STOCK" means all of the motor vehicles used or held for use
principally in connection with the Business and owned by Sellers or the
Partnership or, if leased, Sellers' or the Partnership's leasehold interest
therein, and all attachments, accessories and materials handling equipment now
located in or on such motor vehicles, including all radios and the radio base
station, if any.
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"SELLER PARENT" has the meaning specified in the introductory paragraph
of the Agreement.
"SELLERS" has the meaning specified in the introductory paragraph of
the Agreement.
"SELLERS' FINANCIAL STATEMENTS" has the meaning specified in SECTION
5.11.
"SELLER NOMINEE" has the meaning specified in SECTION 13.3(B).
"STAY-ON BONUSES" has the meaning specified in SECTION 3.9.
"SURVEYS" has the meaning specified in SECTION 3.6.
"TAX" or "TAXES" means any federal, state, local, foreign, and other
income, gross receipts, sales, use, ad valorem, transfer, franchise, real
property, profits, payroll, withholding, unemployment, excise, customs, duties
and other taxes, fees, assessments and charges of any kind whatsoever, together
with any interest and any penalties and additions to tax with respect thereto.
"TEMPORARY USE AGREEMENT" means a lease, sublease, license or other
agreement between Buyers and Sellers, in form and substance reasonably
acceptable to Buyers and Sellers, which allows Buyers to use the parcel of Land
covered thereby in the manner used by Sellers prior to the Closing Date from the
Closing Date until the earlier to occur of (i) removal of such parcel of Land
from the Transactions, or (ii) resolution, satisfaction and/or delivery of all
Unsatisfied Conditions with respect to such parcel of Land and Buyers' release
of the escrowed Purchase Price for such parcel of Land to Sellers.
"THIRD PARTY CLAIM" has the meaning specified in SECTION 11.6(A).
"TITLE COMMITMENT" means a preliminary title commitment for the
issuance of an ALTA Owner's Policy of Title Insurance or for the issuance of an
ALTA Leasehold Policy of Title Insurance, as applicable.
"TITLE COMPANY" means a title company selected by Buyers.
"TITLE DEFECT" has the meaning specified in SECTION 7.3(J).
"TRANSACTIONS" means the transactions contemplated by this Agreement.
"TRANSITION PERIOD" has the meaning specified in SECTION 4.3(A).
"TRANSMONTAIGNE" has the meaning specified in SECTION 4.7.
"TRANSMONTAIGNE AGREEMENT" has the meaning specified in SECTION 4.7.
"UNIFORM CONTRACT" has the meaning specified in SECTION 4.4.
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"UNPERMITTED EXCEPTION" means any defect in the title of any of the
Land or any other matter unacceptable to Buyers disclosed by the Title
Commitments or title reports, title exception documents or the Surveys, or any
update of any of the foregoing.
"UNSATISFIED CONDITIONS" means the following conditions: (i) through no
fault of Buyers, the Title Company is not prepared to issue the title insurance
required under SECTION 3.2(B) hereof; (ii) for any parcel of Land, Buyers have
not had the time permitted under SECTION 3.5 to review Title Commitments, title
exception documents and Surveys, or any update of any of the foregoing; (iii)
for any parcel of Land, Sellers have not responded to Buyers' notice of
Unpermitted Exceptions under SECTION 3.5 and the time period set forth in
SECTION 3.5 for Sellers' response has not lapsed; (iv) for any parcel of Land,
Buyers have not responded to Sellers' response or deemed response under SECTION
3.5 and the time period set forth in SECTION 3.5 for Buyers' response has not
lapsed; and/or (v) for any parcel of Leased Land, Buyers have not received an
Assignment, Assumption and Consent to Leased Land.
"US REORGANIZATION TRANSACTION" means any restructuring or
reorganization transaction in which Capital becomes a direct or indirect
subsidiary of Buyer Parent.
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