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EXHIBIT 2
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STOCK PURCHASE AGREEMENT
among
XXXXXXXX-XXXXXX INDUSTRIES, INC.,
BFI INTERNATIONAL, INC.
SUEZ LYONNAISE DES EAUX, S.A.
and
SITA, S.A.
Dated as of February 16, 1998
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TABLE OF CONTENTS
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ARTICLE I
Definitions
Section 1.1 Specific Definitions................................................3
Section 1.2 Other Definitional and Interpretive
Provisions...........................................12
ARTICLE II
Purchase and Sale of Shares and Transfer and
Assignment of Rights to Intercompany Indebtedness
Section 2.1 Purchase and Sale of Shares........................................12
Section 2.2 Traite d'Apport....................................................13
Section 2.3 The Cash Closing and the Share Closing.............................15
Section 2.4 Post-Closing Adjustment............................................17
Section 2.5 Special Provisions Relating to Swire/BFI...........................20
ARTICLE III
Representations and Warranties of
Parent and the Selling Entities
Section 3.1 Corporate Organization and Qualification...........................22
Section 3.2 Authorized Capital.................................................23
Section 3.3 Ownership and Title................................................23
Section 3.4 No Dilution........................................................25
Section 3.5 Corporate Authority................................................25
Section 3.6 Conduct of Business................................................26
Section 3.7 Governmental Filings...............................................26
Section 3.8 Non-Contravention..................................................26
Section 3.9 Financial Statements; Projections..................................27
Section 3.10 Closing Consents...................................................29
Section 3.11 No Actions.........................................................29
Section 3.12 No Undisclosed Liabilities.........................................29
Section 3.13 Absence of Certain Changes.........................................30
Section 3.14 Material Contracts.................................................32
Section 3.15 Approvals..........................................................34
Section 3.16 Compliance with Laws...............................................34
Section 3.17 Insurance..........................................................35
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Section 3.18 Customers..........................................................36
Section 3.19 Affiliate Interests................................................36
Section 3.20 Title to Properties................................................37
Section 3.21 Leased Real Property...............................................37
Section 3.22 Personal Property..................................................38
Section 3.23 Intellectual Property..............................................38
Section 3.24 Employees..........................................................40
Section 3.25 Litigation.........................................................41
Section 3.26 Employee Benefits..................................................41
Section 3.27 Environmental Matters..............................................42
Section 3.28 Landfills..........................................................43
Section 3.29 Taxes..............................................................44
Section 3.30 Brokers and Finders................................................45
Section 3.31 U.S. Regulatory Representations....................................45
Section 3.32 Aggregation........................................................45
ARTICLE IV
Representations and Warranties of Purchaser
Section 4.1 Corporate Organization and Qualification...........................45
Section 4.2 Authorized Capital.................................................46
Section 4.3 No Dilution........................................................46
Section 4.4 Corporate Authority................................................47
Section 4.5 Consideration Shares...............................................48
Section 4.6 Governmental Filings...............................................48
Section 4.7 Non-Contravention..................................................48
Section 4.8 Financial Statements...............................................49
Section 4.9 Closing Consents...................................................50
Section 4.10 No Actions.........................................................50
Section 4.11 No Undisclosed Liabilities.........................................50
Section 4.12 Absence of Certain Changes.........................................51
Section 4.13 Material Contracts.................................................53
Section 4.14 Approvals..........................................................54
Section 4.15 Compliance with Laws...............................................55
Section 4.16 Insurance..........................................................56
Section 4.17 Customers..........................................................56
Section 4.18 Affiliate Interests................................................56
Section 4.19 Title to Properties................................................57
Section 4.20 Leased Real Property...............................................57
Section 4.21 Personal Property..................................................58
Section 4.22 Intellectual Property..............................................58
Section 4.23 Employees..........................................................59
Section 4.24 Litigation and Liabilities.........................................60
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Section 4.25 Employee Benefits..................................................61
Section 4.26 Environmental Matters..............................................62
Section 4.27 Landfills..........................................................63
Section 4.28 Taxes..............................................................63
Section 4.29 Brokers and Finders................................................64
Section 4.30 U.S. Regulatory Representations....................................64
Section 4.31 Aggregation........................................................64
ARTICLE V
Tax Matters
Section 5.1 Indemnification....................................................65
Section 5.2 Computation of Tax Liabilities;
Proration of Taxes...................................66
Section 5.3 Tax Returns........................................................66
Section 5.4 Allocation of Purchase Price.......................................68
Section 5.5 Transfer Taxes.....................................................68
Section 5.6 Contest Provisions.................................................68
Section 5.7 Termination of Tax Allocation Agreements...........................70
Section 5.8 Assistance and Cooperation.........................................70
Section 5.9 Characterization of Indemnification
Payments.............................................71
Section 5.10 Resolution of Calculation Disputes.................................71
ARTICLE VI
Covenants
Section 6.1 Interim Operations of International................................72
Section 6.2 Acquisition Proposals..............................................79
Section 6.3 Meeting of Purchaser's Shareholders................................81
Section 6.4 Certain Transactions...............................................82
Section 6.5 Filings; Other Action..............................................83
Section 6.6 Notification of Certain Matters....................................84
Section 6.7 Retention of Books and Records.....................................84
Section 6.8 Closing Date Financial Information.................................85
Section 6.9 Further Assurances.................................................86
Section 6.10 Standstill.........................................................86
Section 6.11 Call Option........................................................86
Section 6.12 Other Matters......................................................87
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ARTICLE VII
Conditions
Section 7.1 Conditions to the Cash Closing.....................................87
Section 7.2 Conditions to the Share Closing....................................90
ARTICLE VIII
Termination
Section 8.1 Termination........................................................92
Section 8.2 Effect of Termination..............................................92
ARTICLE IX
Survival and Indemnification
Section 9.1 Survival...........................................................93
Section 9.2 Indemnification....................................................93
Section 9.3 Calculation of Loss................................................95
Section 9.4 Other Limitations..................................................96
Section 9.5 Notice and Payment of Claims.......................................96
ARTICLE X
Miscellaneous
Section 10.1 Amendment and Waiver...............................................99
Section 10.2 Performance and Assignment.........................................99
Section 10.3 Entire Agreement...................................................99
Section 10.4 Parties in Interest; No Third Party
Beneficiaries.......................................100
Section 10.5 Schedules.........................................................100
Section 10.6 Counterparts......................................................100
Section 10.7 Section Headings..................................................100
Section 10.8 Notices...........................................................100
SECTION 10.9 GOVERNING LAW.....................................................101
Section 10.10 Resolution of Disputes............................................101
Section 10.11 Severability......................................................102
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SCHEDULES
Schedule 1.1(b) International Subsidiaries
Schedule 1.1(c) Shares and Selling Entities
Schedule 1.1.(d) Commitment Letter
Schedule 1.1(f) Intercompany Indebtedness
Schedule 3.7 Governmental Filings
Schedule 4.6 Governmental Filings
Schedule 6.1(a)(iv) Employee Compensation Program
Schedule 6.4(c)(ii) Technical Cooperation Agreement
Schedule 6.4(c)(iii) Operating Agreement
Schedule 6.4(c)(ix) "Xxxxxxxx/Puerto Rico" Schedule
Schedule 7.1(b)(ix) Parent Counsel's Opinion
Schedule 7.1(c)(viii) Purchaser Counsel's Opinion
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STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
February 16, 1998, among XXXXXXXX-XXXXXX INDUSTRIES, INC., a Delaware
corporation ("Parent"), BFI INTERNATIONAL, INC., a Delaware corporation
("International"), SUEZ LYONNAISE DES EAUX, S.A., a societe anonyme organized
under the laws of the Republic of France ("Lyonnaise"), and SITA, S.A., a
societe anonyme organized under the laws of the Republic of France
("Purchaser").
W I T N E S S E T H :
WHEREAS, Parent and International, a direct wholly-owned
subsidiary of Parent, are primarily engaged, through direct or indirect
Subsidiaries (as defined herein) of Parent or International in the waste
business, including the collection, transportation, disposal, and processing of
solid and medical waste, the collection, transportation, processing and
marketing or disposal of recyclable materials, the collection, treatment and
disposal of hazardous materials and related activities, including quarrying
operations, gas and electricity production, transportation of sand, gravel and
asphalt, and pipe inspection and renovation, outside the United States, Canada
and Mexico, but excluding the waste-to-energy business and the operations
currently conducted by the Excluded Entities (as hereinafter defined) (the
"Waste Business");
WHEREAS, Parent and International wish to sell and transfer to
Purchaser, and Purchaser desires to purchase from Parent and International,
Parent's and International's respective right, title and interest in and to the
Waste
Business;
WHEREAS, in connection with the aforementioned sale and
transfer, Parent and International wish to sell and transfer to Purchaser and/or
Subsidiaries of Purchaser (and to cause the Selling Entities (as defined herein)
to sell and transfer to Purchaser and/or Subsidiaries of Purchaser), and
Purchaser desires to purchase and/or cause certain of its Subsidiaries to
purchase from the Selling Entities certain of the Shares (as defined herein) and
the Intercompany Indebtedness (as defined herein) of the issuers thereof;
WHEREAS, Parent, certain Selling Entities and Pur chaser
intend to execute and deliver, on the Measuring Date (as hereinafter defined), a
traite d'apport in form and substance reasonably satisfactory to Parent and
Purchaser (the "Traite d'Apport"), providing for the issuance and sale by
Purchaser to the Selling Entities specified therein, and
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the purchase from Purchaser by such Selling Entities, of the Consideration
Shares (as defined herein), in exchange for the remaining Shares and the
Intercompany Indebtedness of the issuers thereof, which collectively represents
the remainder of Parent's right, title and interest in and to the Waste
Business;
WHEREAS, as an integral part of the aforementioned
transactions, Parent wishes to cause the Selling Entities to assign and transfer
to Purchaser and/or certain of Purchaser's Subsidiaries, all of Parent's and the
Parent Subsidiaries' respective rights as creditors with respect to the
Intercompany Indebtedness, the consideration paid for which assignment and
transfer shall be deemed to be included in the Consideration (as defined
herein);
WHEREAS, in connection with the aforementioned transactions,
Parent, International, Lyonnaise and Purchaser entered into an agreement, dated
as of November 8, 1997 (the "Initial Agreement"), which provides, among other
things, that the parties will enter into this Agreement in connection with such
transactions;
WHEREAS, pursuant to the terms of the Initial Agreement, (i)
Purchaser has completed its due diligence review of the International
Subsidiaries and Parent has completed its due diligence review of Purchaser,
(ii) Ernst & Young has completed its examination of the financial statements and
books and records of the Selling Entities and the International Subsidiaries and
(iii) Purchaser has received a commitment letter (the "Commitment Letter") of
Credit Agricole Indosuez and Natexis Banque with respect to a facility of FF 3.6
billion (attached as Schedule 1.1(d) hereto); and
WHEREAS, in connection with, and conditioned upon, the
aforementioned sale and transfer, Purchaser and OHI Holding International B.V.
("Xxxx") entered into a Shareholders Agreement, dated November 9, 1997 (the
"Xxxx Shareholders Agreement"), with respect to the Xxxx Joint Venture (as
defined herein);
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements contained herein, and on
the terms and subject to the conditions set forth herein, the parties agree as
follows:
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ARTICLE I
Definitions
Section 1.1 Specific Definitions. As used in this Agreement,
the following terms shall have the meanings set forth or referred to below:
"Acquisition Documents" means any agreement, instrument,
contract or arrangement executed within the last five years pursuant to which
Parent or any Parent Subsidiary acquired any assets, liabilities or operations
of the International Subsidiaries having a value of $5,000,000 or more in the
aggregate.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by or under common control with
such Person, including any Subsidiary of such Person and including, with respect
to Purchaser and Lyonnaise, following the transfer to Purchaser or any Purchaser
of the related Shares, the International Subsidiaries.
"Agreement" has the meaning set forth in the Preamble.
"Ancillary Agreements" means, collectively, the Shareholders
Agreement, the Technical Cooperation Agreement and the Operating Agreement.
"Approval" means any approval, authorization, consent,
license, franchise, order or permit of or by, or filing with, a Person.
"Arbitration Rules" has the meaning set forth in Section
10.10(b).
"Auditing Firm" has the meaning set forth in Section 2.4(c).
"Business Day" means any day other than a Saturday, a Sunday
or a day on which commercial banks in The City of New York or the City of Paris
are authorized or obligated by law or executive order to close.
"Call Option" means the call option described in Section 2(e)
of the Initial Agreement.
"Cash Closing" has the meaning set forth in Section 2.3(a)(i).
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"Cash Closing Date" has the meaning set forth in Section
2.3(a)(i).
"Cash Consideration" has the meaning set forth in Section 2.1.
"Civil Code" means the French Civil Code.
"Closing Net Debt" means Net Debt as of the Cash Closing Date.
"Closing Net Debt Statement" has the meaning set forth in
Section 2.4(a).
"Closing Net Worth" means Net Worth as of the Cash Closing
Date.
"Closing Net Worth Statement" has the meaning set forth in
Section 2.4(a).
"Closing Statements" has the meaning set forth in Section
2.4(a).
"Commitment Letter" has the meaning set forth in the Recitals.
"Consideration" has the meaning set forth in Section
2.2(a)(i).
"Consideration Shares" has the meaning set forth in Section
2.2(a)(i).
"Contracts" has the meaning set forth in Section 3.8.
"Debt Financing" has the meaning set forth in Section 6.4(a).
"Due Date" has the meaning set forth in Section 5.3(d)(i).
"Environmental Law" means any multi-national, national,
regional or local law, regulation, directive, treaty, convention, order, decree,
permit, authorization, common law or government requirement relating to: (i) the
protection, investigation or restoration of the environment, health, safety, or
natural resources, (ii) the handling,
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use, presence, disposal, release or threatened release of any Hazardous
Substance or waste or (iii) noise, odor, indoor air, employee exposure,
wetlands, pollution, contamination or any injury or threat of injury to persons
or property relating to any Hazardous Substance or waste.
"Excluded Entities" means, collectively, the entities not
included in the List of International Subsidiaries included as Annex A to the
Initial Agreement, Omega Holding GmbH and its subsidiaries, Xx Xxxxx Environment
Services, Renovliet and the Parent Subsidiaries in Argentina, Malaysia, Taiwan,
Thailand and Venezuela.
"Equity Offering" has the meaning set forth in Section 6.4(b).
"Final Closing" means the Share Closing or, if the Share
Closing never occurs, then the Cash Closing.
"French GAAP" means generally accepted accounting principles
in France as applied from time to time by Purchaser.
"Full Equity Subscription" has the meaning set forth in
Section 2.2(b)(iii).
"Governmental Entity" means any court, tribunal, arbitrator,
arbitration panel, or any governmental, administrative, or regulatory authority,
agency, commission, or body or similar entity.
"Hazardous Substance" means any substance that is: (i) listed,
classified or regulated as hazardous, toxic, or harmful pursuant to any
Environmental Law; (ii) any petroleum product or by-product, industrial,
commercial or special waste, asbestos-containing material, lead product,
hazardous material, polychlorinated biphenyls, radioactive materials or
manufacturing by-product; and (iii) any other hazardous, toxic or harmful
substance which is the subject of regulatory action by any Governmental Entity
in connection with any Environmental Law.
"Indemnified Party" has the meaning set forth in Section 9.4.
"Indemnifying Party" has the meaning set forth in Section 9.4.
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"Initial Agreement" has the meaning set forth in the Recitals.
"Intercompany Indebtedness" shall mean the indebtedness owed
by the International Subsidiaries, on the one hand, to Parent and the Parent
Subsidiaries which are not International Subsidiaries, on the other hand
(including, without limitation, the subordinated loan owed by the Xxxx Joint
Venture to Parent and the Parent Subsidiaries), the outstanding net principal
amount of which indebtedness as of January 31, 1998 (except with respect to the
International Subsidiaries in Australia and New Zealand, as to which such
amounts are set forth as of December 31, 1997), with respect to each
International Subsidiary, is set forth in Schedule 1.1(f).
"International" has the meaning set forth in the Preamble.
"International Acquisition Proposal" has the meaning set forth
in Section 6.2(a).
"International Balance Sheet" has the meaning set forth in
Section 3.9(a)(i).
"International Employee Benefit Plans" has the meaning set
forth in Section 3.26(a).
"International Financial Statements" has the meaning set forth
in Section 3.9(a)(i).
"International Income Statement" has the meaning set forth in
Section 3.9(a)(i).
"International Intellectual Property" has the meaning set
forth in Section 3.23.
"International Material Adverse Effect" has the meaning set
forth in Section 3.1.
"International Material Contracts" has the meaning set forth
in Section 3.14(a).
"International Personal Property Leases" has the meaning set
forth in Section 3.22(b).
"International Real Property Lease" has the meaning set forth
in Section 3.21.
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"International Subsidiaries" means, collectively, all of the
Persons listed on Schedule 1.1(b) and any other Parent Subsidiary through which
the Waste Business is conducted, except as set forth on Schedule 1.1(b).
"Law" has the meaning set forth in Section 3.8.
"Local GAAP" has the meaning set forth in Section 3.9(a)(i).
"Loss" has the meaning set forth in Section 9.2(a).
"Lyonnaise" has the meaning set forth in the Preamble.
"Measuring Date" has the meaning set forth in Section
2.2(b)(i).
"Measuring Price" has the meaning set forth in Section
2.2(b)(i).
"Net Debt" means the sum of (i) 100% of the short term debt
(including the accrued interest and the current portion of long term debt) and
the long term debt of the International Subsidiaries other than the Xxxx Joint
Venture and Swire/BFI, less 100% of the cash and marketable securities of such
Subsidiaries (other than cash set aside for capital expenditures pursuant to
Section 6.1(b)(xi)(B)), (ii) 50% of (A) the short term debt (including the
accrued interest and the current portion of long term debt) and the long term
debt of the Xxxx Joint Venture and its consolidated Subsidiaries less (B) the
cash and marketable securities of the Xxxx Joint Venture and its Subsidiaries
(other than cash set aside for capital expenditures pursuant to Section
6.1(b)(xi)(B)), and (iii) 50% of (A) the short term debt (including the accrued
interests and the current portion of long term debt) and the long term debt of
Swire/BFI and its consolidated Subsidiaries, less (B) the cash and marketable
securities of Swire/BFI (other than cash set aside for capital expenditures
pursuant to Section 6.1(b)(xi)(B)) and loans by Swire/BFI to the Swire Group.
Net Debt shall exclude the Intercompany Indebtedness.
"Net Worth" means the difference of (i) the sum of
shareholders' equity of the International Subsidiaries and the Intercompany
Indebtedness and (ii) (a) the amount of
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goodwill of the International Subsidiaries plus (b) deferred
tax assets of the International Subsidiaries.
"Operating Agreement" has the meaning set forth in Section
6.4(c)(iii).
"Xxxx" has the meaning set forth in the Recitals.
"Xxxx Joint Venture" means Xxxx Entsorgungs- dienstleistungen
GmbH.
"Xxxx Shareholders Agreement" has the meaning set forth in the
Recitals.
"Parent" has the meaning set forth in the Preamble.
"Parent Closing Consents" has the meaning set forth in Section
3.10.
"Parent Contracts" has the meaning set forth in Section 3.8.
"Parent Minimum" has the meaning set forth in Section
2.2(b)(iii).
"Parent Percentage Ownership" has the meaning set forth in
Section 9.2(b).
"Parent Subsidiaries" means, collectively, all of the
Subsidiaries of Parent, including but not limited to International and the
International Subsidiaries.
"Paris Stock Exchange" means the premier marche a reglement
mensuel de la Bourse de Paris.
"Past Practice" has the meaning set forth in Section
5.3(d)(i).
"Person" means any individual, corporation, joint stock
company, limited liability company, partnership, firm, joint venture, trust,
association, unincorporated organization, governmental or regulatory body or
other entity.
"Post-Closing Adjustment" has the meaning set forth in Section
2.4(d).
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"Purchased Entity" means each International Subsidiary other
than any issuer of the Shares.
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Acquisition Proposal" has the meaning set forth in
Section 6.2(b).
"Purchaser Balance Sheet" has the meaning set forth in Section
4.8.
"Purchaser Balance Sheet Date" has the meaning set forth in
Section 4.8.
"Purchaser Closing Consents" has the meaning set forth in
Section 4.9.
"Purchaser Contracts" has the meaning set forth in Section
4.7.
"Purchaser Employee Benefit Plans" has the meaning set forth
in Section 4.25.
"Purchaser Financial Statements" has the meaning set forth in
Section 4.8.
"Purchaser Income Statement" has the meaning set forth in
Section 4.8.
"Purchaser Intellectual Property" has the meaning set forth in
Section 4.22.
"Purchaser Material Adverse Effect" has the meaning set forth
in Section 4.1.
"Purchaser Material Contracts" has the meaning set forth in
Section 4.13(a).
"Purchaser Personal Property Leases" has the meaning set forth
in Section 4.21(b).
"Purchaser Real Property Lease" has the meaning set forth in
Section 4.20.
"Purchaser Shares" means the ordinary shares, FF50 par value,
of Purchaser.
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"Recipient" has the meaning set forth in Section 5.6(a).
"Registrar" has the meaning set forth in Section 2.3(b)(ii).
"Resolution Period" has the meaning set forth in Section
2.4(b)
"Selling Entities" means, collectively, all Parent
Subsidiaries that own, beneficially or of record, any of the Shares, or possess
rights as creditors with respect to the Intercompany Indebtedness, including but
not limited to the Parent Subsidiaries set forth on Schedule 1.1(c).
"Share Closing" has the meaning set forth in Section
2.3(b)(ii).
"Share Closing Date" has the meaning set forth in Section
2.3(b)(i).
"Shares" means, collectively, the number and type of equity
securities and other ownership interests of the International Subsidiaries
specified in Schedule 1.1(c).
"Shareholders Agreement" has the meaning set forth in Section
6.4(c)(i).
"Shareholders Meeting" has the meaning set forth in Section
2.3(b)(i).
"Subsidiary" means, with respect to any Person, any other
Person, whether incorporated or unincorporated, of which at least a majority of
the securities or ownership interests having by their terms ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions is directly or indirectly owned or controlled by such Person
or by one or more of its direct or indirect Subsidiaries or by such Person and
any one or more of its respective Subsidiaries. The term Subsidiary, when used
with respect to Parent and International, shall be deemed to include the Xxxx
Joint Venture and Swire/BFI.
"Swire/BFI" means Swire/BFI Waste Services, Ltd.
"Target Net Debt" has the meaning set forth in Section 2.4(d).
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"Target Net Worth" has the meaning set forth in Section
2.4(d).
"Tax" means all taxes, including without limitation, income,
gross receipts, windfall profits, gains, excise, severance, property,
production, sales, value added, use, transfer, license, franchise, employment,
withholding, capital, wage or similar taxes or assessments, together with
interest, additions or penalties with respect thereto and any interest in
respect of such interest, additions or penalties.
"Tax Arbitrator" has the meaning set forth in Section 5.10.
"Tax Audit" has the meaning set forth in Section 5.6(a).
"Tax Package" has the meaning set forth in Section 5.3(e).
"Tax Return" means any return, declaration, report, claim for
refund or information return or statement thereto, including any amendment
thereof.
"Technical Cooperation Agreement" has the meaning set forth in
Section 6.4(c)(ii).
"Third Party Claim" has the meaning set forth in Section
9.6(c)(i).
"Traite d'Apport" has the meaning set forth in the Recitals.
"Transfer Taxes" has the meaning set forth in Section 5.5.
"Unresolved Changes" has the meaning set forth in Section
2.4(c).
"U.S. GAAP" means generally accepted accounting principles in
the United States consistently applied by Parent.
"VAT" means any value-added or other similar sales tax.
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"Waste Business" has the meaning set forth in the Recitals.
Section 1.2 Other Definitional and Interpretive
Provisions.
(a) The words "hereof", "herein", and "hereunder" and words of
similar import, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement.
(b) Terms defined in the singular have a comparable meaning
when used in the plural, and vice versa.
(c) The terms "dollars" and "$" mean United States dollars.
(d) The term "FF" means French francs.
(e) References in this Agreement to Schedules 1.2 through 1.29
shall refer to the like-numbered Schedules delivered pursuant to Section 3(c) of
the Initial Agreement. References in this Agreement to Schedules 2.1 through
2.28 shall refer to the like-numbered Schedules to the Initial Agreement, in the
form in which they became final pursuant thereto.
ARTICLE II
Purchase and Sale of Shares and Transfer and Assignment of
Rights to Intercompany Indebtedness
Section 2.1 Purchase and Sale of Shares. The parties
agree that, on the terms and subject to the conditions of this Agreement, at the
Cash Closing, (i) Purchaser will purchase from the Selling Entities, and Parent
and International will cause the Selling Entities to sell to Purchaser or one or
more of its Subsidiaries, the Shares listed in Part One of Schedule 1.1(c), and
(ii) Parent will assign and transfer, and cause the Parent Subsidiaries to
assign and transfer, all of Parent's and the Parent Subsidiaries' respective
rights as creditors with respect to the Intercompany Indebtedness as to which
the issuers of the Shares listed in Part One of Schedule 1.1(c) are obligors,
and (iii) Purchaser and/or certain of Purchaser's Subsidiaries shall pay to
Parent and/or certain Parent Subsidiaries, in consideration for the sales and
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transfers described in clauses (i) and (ii) of this Section 2.1, $950,000,000 in
cash (the "Cash Consideration"). An amount of Cash Consideration equal to the
aggregate principal amount (as of the Cash Closing Date) of the Intercompany
Indebtedness as to which the issuers of the Shares listed in Part One of
Schedule 1.1(c) are obligors shall represent the consideration paid for the
assignment and transfer of such Intercompany Indebtedness pursuant to clause
(ii) of the immediately preceding sentence.
Section 2.2 Traite d'Apport.
(a)(i) The parties agree that at the Share Closing, (i) on the
terms and subject to the conditions set forth in the Traite d'Apport, (A)
Purchaser will issue and sell to the Selling Entities specified in the Traite
d'Apport, in consideration for the transfers described in clauses (i)(B) and
(ii) of this Section 2.2(a), the number of Purchaser Shares determined in
accordance with Section 2.2(b) (the "Consideration Shares" and, collectively
with the Cash Consideration, the "Consideration"), and (B) Parent will, and will
cause the Parent Subsidiaries to, deliver to Purchaser, in exchange therefor,
the Shares listed in Part Two of Schedule 1.1(c), and (ii) on the terms and
subject to the conditions of this Agreement, Parent will assign and transfer,
and will cause the Parent Subsidiaries to assign and transfer, all of Parent's
and the Parent Subsidiaries' respective rights as creditors with respect to the
Intercompany Indebtedness as to which the issuers of the Shares listed in Part
Two of Schedule 1.1(c) are obligors. The Consideration Shares issued pursuant to
this Section 2.2(a) shall have dividend rights (jouissance) from January 1,
1998, provided that Parent hereby waives its right to receive dividends for the
portion of the year prior to the Cash Closing Date, the amount of such dividends
to be pro rated based on the number of days from January 1, 1998 through the
Cash Closing Date compared to the number of days in 1998. A number of
Consideration Shares, equivalent to the quotient of (x) the aggregate principal
amount (as of the Share Closing Date) of the Intercompany Indebtedness as to
which the issuers of the Shares listed in Part Two of Schedule 1.1(c) are
obligors, divided by (y) the Measuring Price, shall be deemed to represent the
consideration paid for the assignment and transfer of such Intercompany
Indebtedness pursuant to clause (ii) of the first sentence of this Section
2.2(a).
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(ii) The transfers of the Shares listed in Part Two of
Schedule 1.1(c) in exchange solely for the Consideration Shares are intended by
Parent to qualify for United States federal income tax purposes as
reorganizations within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended.
(b) The number of Consideration Shares to be delivered at the
Share Closing shall be determined as follows:
(i) There shall be determined a "Measuring Price" for
a Purchaser Share, which shall be the per share price at which the
Purchaser Shares are to be offered pursuant to the Equity Offering. The
Measuring Price shall be determined in accordance with Article 186-1 of
Law No. 66-537 dated 24 July 1966. The date on which the Measuring
Price is determined is herein referred to as the "Measuring Date".
(ii) If the Measuring Price is equal to or greater
than FF 1,080 on the Measuring Date, the number of Purchaser Shares to
be issued to Parent at the Share Closing shall be fixed as that number
of whole Purchaser Shares (rounding to the nearest whole number) equal
to the quotient obtained by dividing FF 2,700,000,000 by the Measuring
Price. Such number of Purchaser Shares so determined shall be issued at
the Share Closing.
(iii) If the number of Purchaser Shares to be issued
at the Share Closing pursuant to the foregoing procedure shall be less
than 15% of the outstanding Purchaser Shares (the "Parent Minimum")
after the consummation of the transactions contemplated hereby and
assuming 100% subscription ("Full Equity Subscription") of all
Purchaser Shares to be offered pursuant to the Equity Offering, then
either Parent or Purchaser shall have the right, until Midnight, Paris
time, on the Measuring Date, to terminate (by action of their
respective boards of directors) this Agreement.
(iv) If the Measuring Price is less than FF 1,080 on
the Measuring Date, Purchaser shall issue 2,500,000 Purchaser Shares at
the Share Closing.
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(v) The Purchaser Shares to be issued in the Equity
Offering shall have dividend rights (jouissance) from January 1, 1998.
Section 2.3 The Cash Closing and the Share Closing.
(a) (i) Subject to the satisfaction or waiver of the
conditions set forth in Section 7.1, the consummation of the transactions
referred to in Sections 2.1 and 6.11 (the "Cash Closing") shall take place at
the offices of Xxxxxxxx & Xxxxxxxx, 0 Xxxxx Xxxxxxx, 00000 Xxxxx, Xxxxxx at
10:00 A.M. local time, on March 31, 1998, or at such earlier time and place as
the parties hereto may mutually agree. The date on which the Cash Closing occurs
is referred to herein as the "Cash Closing Date".
(ii) At the Cash Closing, subject to the satisfaction or
waiver of the conditions set forth in Section 7.1:
(A) Parent and International shall deliver, or cause
the Selling Entities to deliver, to Purchaser certificates or other
documents or instruments repre senting the Shares listed in Part One of
Schedule 1.1(c), duly endorsed and in form suitable for transfer to
Purchaser or one or more of Purchaser's Subsidiaries (as shall be
specified by Purchaser to Parent not fewer than 10 days prior to the
Cash Closing), and shall cause the Selling Entities or the
International Subsidiaries to take all actions, and deliver to
Purchaser or one of Purchaser's Subsidiaries all documents and
instruments reasonably necessary to effect the transactions set forth
in Section 2.1.
(B) Purchaser shall pay to Parent and/or Subsidiaries
of Parent by wire transfer, to an account designated by Parent not less
than five Business Days prior to the Cash Closing, immediately
available funds in an amount equal to the Cash Consideration.
(C) Parent shall pay to Purchaser the amount due
pursuant to Section 6.11.
(D) Parent shall, and shall cause the Parent
Subsidiaries to, deliver to Purchaser documents and instruments in form
and substance satisfactory to Purchaser evidencing the assignment and
transfer, of
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all of Parent's and the Parent Subsidiaries' respective rights as
creditors with respect to the Intercompany Indebtedness as to which the
issuers of the Shares listed in Part One of Schedule 1.1(c) are
obligors.
(E) Each of Parent and Purchaser shall deliver to the
other such certificates, documents and instruments evidencing (A) the
completion of the transactions contemplated by Section 6.4 and (B) the
satisfaction of conditions to the Cash Closing set forth in Section
7.1.
(b) (i) Subject to the satisfaction or waiver of the
conditions set forth in Section 7.2, the consummation of the transactions
referred to in Section 2.2 (the "Share Closing") shall take place at the offices
of Xxxxxxxx & Xxxxxxxx, 0 Xxxxx Xxxxxxx, 00000 Xxxxx, Xxxxxx at 10:00 A.M. local
time, immediately following the extraordinary meeting of Purchaser's
shareholders (the "Shareholders Meeting") to approve the issuance of the
Consideration Shares, or at such later time and place as the parties hereto may
mutually agree. The date on which the Share Closing occurs is referred to herein
as the "Share Closing Date".
(ii) No later than the second business day prior to the Share
Closing, Purchaser shall file a request with SICOVAM for SICOVAM to record (at
the Share Closing) the Consideration Shares in a special account with SICOVAM in
the name of Purchaser and shall take all action necessary to cause SICOVAM to
notify Credit du Nord, as registrar of the Purchaser Shares (the "Registrar"),
at the Share Closing, that it has so registered the Consideration Shares in its
accounts. It is understood that such Consideration Shares will not be fungible
with the other outstanding Purchaser Shares until January 1, 1999.
(iii) At the Share Closing, subject to the satisfaction or
waiver of the conditions set forth in Section 7.2:
(A) Parent and International shall cause the Selling
Entities specified in the Traite d'Apport to deliver, to Purchaser
certificates or other documents or instruments representing the Shares
listed in Part Two of Schedule 1.1(c), duly endorsed and in form
suitable for transfer to Purchaser, and shall cause such Selling
Entities or the International Subsidiaries to take all actions, and
deliver to Purchaser all
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documents and instruments reasonably necessary to
effect the transactions set forth in Section 2.2;
(B) Purchaser shall take all action necessary to
cause the Registrar to register each Selling Entity specified in the
Traite d'Apport as the owner of the respective number of Consideration
Shares specified in the Traite d'Apport.
(C) Parent shall, and shall cause the Parent
Subsidiaries to deliver to Purchaser documents and instruments in form
and substance satisfactory to Purchaser evidencing the assignment and
transfer, of all of their respective rights as creditors with respect
to the Intercompany Indebtedness as to which the issuers of the Shares
listed in Part Two of Schedule 1.1(c) are obligors.
(D) Each of Parent and Purchaser shall deliver to the
other such certificates, documents and instruments evidencing the
satisfaction of conditions to the Share Closing set forth in Section
7.2.
(c) All transfer or assignments of Parent's and the Parent
Subsidiaries' respective rights as creditors with respect to the Intercompany
Indebtedness pursuant to Section 2.1 or 2.2 or this Section 2.3 shall be made on
a "no recourse" basis with respect to the assigning entity.
Section 2.4 Post-Closing Adjustment.
(a) As soon as practicable, but in no event later than 60
calendar days following the Cash Closing Date, Parent and Purchaser shall
jointly prepare a balance sheet which includes a calculation as of the Cash
Closing Date of (i) Closing Net Debt (the "Closing Net Debt Statement") and (ii)
Closing Net Worth (the "Closing Net Worth Statement", together with the Closing
Net Debt Statement, the "Closing Statements"), each reviewed by Xxxxxx Xxxxxxxx
and prepared in accordance with U.S. GAAP on a basis consistent with the
preparation of the September 30, 1997 financial statements set forth in
Schedules 3.9(a)(i) and 3.9(a)(ii). For purposes of applying the provisions of
this Section 2.4, the comparison of the amounts set forth herein and the amounts
for such items in the Closing Statements will be made on a constant currency
basis (i.e., calculated using the foreign exchange rates used by Parent in
preparing its September 30, 1997 financial statements, as set forth in Schedule
1.9(c))
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and will not take into account adjustments made in applying the purchase method
of accounting for business combinations to the transactions contemplated by this
Agreement.
(b) After receipt of the Closing Statements, Parent and
Purchaser shall have 30 days to review the Closing Statements, together with the
workpapers used in the preparation thereof. Parent, Purchaser and their
respective accountants shall have full access to (i) all relevant books, records
and employees of Parent, Purchaser and the International Subsidiaries and (ii)
Parent's and Purchaser's respective accountants and their relevant supporting
workpapers. Unless either Parent or Purchaser delivers written notice to the
other on or prior to the 30th day after the preparation of the Closing
Statements, stating that Parent or Purchaser, as the case may be, has objections
to the Closing Statements and describing any such objections with particularity,
Parent and Purchaser shall be deemed to have accepted and agreed to the Closing
Statements. If, on or prior to the 30th day after the preparation of the Closing
Statements, either Parent or Purchaser shall notify the other of its objections
to the Closing Statements, Parent and Purchaser shall, within 10 days (or such
longer period as the parties may agree) following such notice (the "Resolution
Period"), attempt in good faith to resolve their differences, and any resolution
by them as to any disputed amounts shall be final, binding and conclusive.
(c) Any amounts remaining in dispute at the conclusion of the
Resolution Period ("Unresolved Changes") shall be submitted to an
internationally recognized firm of independent auditors independent of Parent,
Purchaser and their respective Affiliates (such firm being referred to as the
"Auditing Firm"), within 10 days after the expiration of the Resolution Period.
In the event of a dispute among the parties as to which firm of independent
auditors should be the Auditing Firm, the dispute shall be resolved by an
"expert" nominated pursuant to Article 1843-4 of the Civil Code. Each party
agrees to execute, if requested by the Auditing Firm, an engagement letter
containing reasonable terms. All fees and expenses relating to the work, if any,
to be performed by Xxxxxx Xxxxxxxx or the Auditing Firm in accordance with this
Section 2.4 shall be borne equally by Parent and Purchaser. The Auditing Firm
shall act as an expert (not as an arbitrator) to determine, based on the
provisions of this Section 2.4, only the Unresolved Changes. The Auditing Firm's
determination of (i) the amount of Closing Net Debt shall be no greater than the
amount of
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Closing Net Debt claimed by Purchaser and no less than the amount of Net Debt
claimed by Parent and (ii) the amount of Closing Net Worth shall be no less than
the amount of Closing Net Worth claimed by Purchaser and no greater than the
amount of Closing Net Worth claimed by Parent. The Auditing Firm's determination
of the Unresolved Changes shall be made within 30 days of the submission of the
Unresolved Changes thereto, shall be set forth in a written statement delivered
to Parent and Purchaser and shall be final, binding and conclusive on the
parties for all purposes.
(d) In the event that Parent and Purchaser agree to the
Closing Statements, then within five Business Days following such agreement
Parent shall pay to Purchaser the amount, if any, equal to the sum of (i) the
amount by which Closing Net Debt exceeds $215,500,000 ("Target Net Debt") and
(ii) the amount by which $262,000,000 ("Target Net Worth") exceeds the amount of
Closing Net Worth (the "Post-Closing Adjustment"). In the event that there are
Unresolved Changes at the end of the Resolution Period, (1) if Parent and
Purchaser agree that a Post-Closing Adjustment is owed to Purchaser regardless
of the ultimate resolution of any Unresolved Changes, then the minimum amount
which Parent and Purchaser agree is owed to Purchaser shall be paid within five
Business Days after the end of the Resolution Period and any additional amounts
owing to Purchaser with respect to the Unresolved Changes shall be paid within
five Business Days after resolution thereof by the Auditing Firm and (2) in all
other cases, any and all payments shall be made within five Business Days after
resolution of the Unresolved Changes by the Auditing Firm.
(e) It is the intent of the parties that the provisions of
this Section 2.4 operate to permit Purchaser to acquire the benefits, and be
subject to the liabilities, of ownership of the Waste Business as of and from
the Cash Closing Date.
(f) Any payments made in respect of the Post-Closing
Adjustment or Unresolved Changes shall be deemed to be adjustments to the Cash
Consideration for all Tax purposes. The portion of any such payment that is
reasonably attributable to an adjustment pertaining to a particular
International Subsidiary whose Shares are listed in Part One of Schedule 1.1(c)
shall be deemed to be a reduction of the portion of the Consideration allocated
to such International Subsidiary in Schedule 5.4. The portion
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of any such payment that is not reasonably attributable to an adjustment
pertaining to a particular International Subsidiary whose Shares are listed in
Part One of Schedule 1.1(c) shall be deemed to reduce the purchase price of each
of the International Subsidiaries whose Shares are listed in Part One of
Schedule 1.1(c), with such reduction calculated on a pro rata basis.
Section 2.5 Special Provisions Relating to Swire/BFI. (a) In
the event that Parent and International are otherwise unable to transfer their
interest in Swire/BFI to Purchaser at the Cash Closing, then: (i) the amount of
Cash Consideration payable at the Cash Closing shall be reduced by $137,500,000;
(ii) Purchaser shall deposit into an escrow account established in accordance
with Section 2.5(b) below $137,500,000; and (iii) the post-closing adjustments
set forth in Section 2.4 will be calculated on a separate basis for Swire/BFI
and the remainder of the Waste Business as described in Section 2.5(c) below.
(b) The escrow account referred to in Section 2.5(a) above
shall be with a bank in New York satisfactory to Parent and Purchaser and
subject to an escrow agreement containing customary terms and conditions and in
form and substance satisfactory to Parent and Purchaser. The escrow agreement
shall provide that (i) the principal of the account shall be invested in high
quality, dollar-denominated investments determined jointly by Parent and
Purchaser; (ii) all interest on the amounts deposited under the agreement shall
be held for the benefit of the party to which the principal of the account is
ultimately paid; (iii) upon notice to the escrow agent by Purchaser and Parent
that the transfer of Swire/BFI to Purchaser has been consummated in accordance
with the terms of this Agreement, the principal amount of the escrow account
shall be paid over to Parent; and (iv) in the event that Swire/BFI has not been
transferred to Purchaser on or prior to June 30, 1998, the principal amount of
the escrow account shall be paid over to Purchaser. Parent and Purchaser shall
share equally the fees and expenses of the escrow agent under the escrow
agreement.
(c) In the event the post-closing adjustments for Swire/BFI
and the remainder of the Waste Business are to be calculated on a separate
basis, (i) with respect to the Waste Business other than Swire/BFI, the Target
Net Debt for purposes of Section 2.4(d)(i) and Section 7.1(b)(iii) shall be
$229,200,000 in lieu of $215,500,000 and the Target Net
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Worth for purposes of Section 2.4(d)(ii) shall be $253,775,000 in lieu of
$262,000,000, in each case with respect to such portion of the Waste Business;
and (ii) with respect to Swire/BFI, the Target Net Debt for purposes of Section
2.4(d)(i) and Section 7.1(b)(iii) shall be negative $13,700,000 and the Target
Net Worth for purposes of Section 2.4(d)(ii) shall be $8,225,000.
(d) During such time as the escrow arrangements provided in
this Section 2.5 remain in effect, the provisions of this Agreement regarding
the operations of the Waste Business (including, without limitation, the
provisions of Article VI) shall continue in effect.
(e) Parent agrees that it will not consent to any transfer of
an interest in Swire/BFI by any other shareholder in Swire/BFI. Parent further
agrees that, from and after the Cash Closing Date, Parent and the Parent
Subsidiaries will not take, accept or receive any dividends or distributions
paid in cash, stock or other assets in respect of its interest in the Swire/BFI,
any payment of interest in respect of indebtedness owed by Swire/BFI to Parent
or the Parent Subsidiaries unless all such amounts have been or will be loaned
to Swire/BFI and will constitute Intercompany Indebtedness transferred to
Purchaser upon the transfer of Swire/BFI to Purchaser (the consideration for
which transfer shall be deemed to be included in the portion of the Cash
Consideration paid in respect of such transfer), or any management or technical
assistance fees from Swire/BFI (except contractually required fees paid in
respect of services actually rendered and as to which notice has been given to
Purchaser).
(f) For purposes of applying Article V of the Agreement with
respect to Swire/BFI, references to the "Cash Closing Date" shall be deemed to
be the date on which Swire/BFI is actually transferred to Purchaser.
(g) It shall be a condition to closing of the transfer of
Swire/BFI to Purchaser that the conditions set forth in Section 7.1(a)(i) and
(ii), Section 7.1(b)(i), (ii), (iii), (iv), and (ix) be satisfied with respect
to Swire/BFI (it being understood that Purchaser may, in its sole discretion,
waive any such condition).
(h) In the event that the transfer of Swire/BFI does not
occur, the parties shall cooperate and negotiate in good faith concerning
arrangements that will cause Purchaser
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to acquire and retain Parent's share of the benefit of Swire/BFI's cash flows
and earnings and the liability for Parent's share of Swire/BFI's liabilities and
expenses, subject to compliance with applicable contractual and regulatory
requirements.
ARTICLE III
Representations and Warranties of
Parent and the Selling Entities
Except as otherwise agreed in writing between Parent and
Purchaser, Parent and International jointly and severally represent and warrant
to Purchaser as follows:
Section 3.1 Corporate Organization and Qualifica tion. Each of
the International Subsidiaries has been duly organized and is validly existing
and in good standing under the laws of its jurisdiction of organization, and is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction where the properties owned, leased or operated by it or the
business conducted by it require such qualification, except for such failures to
so qualify or be in good standing as a foreign corporation which, in the
aggregate, could not have a material adverse effect on the general affairs,
business, assets, liabilities, financial condition, properties, operations or
results of operations of the International Subsidiaries taken as a whole, or on
the ability to operate or conduct the business of the International
Subsidiaries, taken as a whole, in the manner in which it is presently operated
or conducted (an "International Material Adverse Effect"), it being understood
that for purposes of the definition of International Material Adverse Effect
that any individual change, development or effect, or any related changes,
developments or effects, which could reasonably be expected to cause or result
in losses, damages, claims or liabilities to or against the International
Subsidiaries greater than $15,000,000 shall be deemed to be such a material
adverse effect. Each of the International Subsidiaries has the corporate power
and authority to carry on its business as currently conducted. Parent has
delivered to Purchaser a complete and correct copy of each International
Subsidiary's certificate of incorporation, by-laws or other comparable governing
instruments, each as amended to date. Such instruments are in full force and
effect.
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Section 3.2 Authorized Capital. Schedule 3.2 contains a true
and complete list of all of the International Subsidiaries and sets forth with
respect to each International Subsidiary (i) its jurisdiction of incorporation,
(ii) each jurisdiction in which it is qualified to do business as a foreign
corporation, (iii) its authorized, issued and outstanding equity securities or
ownership interests and (iv) the holder or holders of all of its issued and
outstanding equity securities or ownership interests. The authorized capital
stock or equity capitalization of each International Subsidiary consists of the
number and class of equity securities or ownership interests set forth opposite
such International Subsidiary's name on Schedule 1.2. All of the Shares have
been duly authorized and validly issued, and are fully paid and (except as set
forth on Schedule 1.2) nonassessable.
Section 3.3 Ownership and Title. Except as set forth in
Schedule 1.3, (i) each of the Shares is owned, of record and beneficially,
either directly or indirectly, by the applicable Selling Entity free and clear
of all liens, pledges, security interests, voting trust arrangements, charges,
options, restrictions, claims or other encumbrances, and (ii) each of the
outstanding equity securities or ownership interests of each Purchased Entity is
owned, of record and beneficially, either directly or indirectly, by a Purchased
Entity, free and clear of all liens, pledges, security interests, voting trust
arrangements, charges, options, restrictions, claims or other encumbrances,
except, in the case of clause (i) or clause (ii), for such encumbrances as could
not have a material adverse effect on the ability of any International
Subsidiary to operate or conduct its business in the manner in which it is
presently operated, or hinder or delay the performance by any party of its
obligations under this Agreement or hinder or delay the consummation of the
transactions contemplated herein with the result that the representation and
warranties set forth in the second sentence of this Section 3.3 will be true and
accurate. Immediately following the Cash Closing, Purchaser or one or more of
its Subsidiaries shall have good and valid title to all of the Shares set forth
in Part One of Schedule 1.1(c), free and clear of any lien, pledge, security
interest, voting trust arrangement, charge, option, restriction, claim, or other
encumbrance, except for any encumbrances on such Shares arising or perfected
following the Cash Closing. Except as set forth in Schedule 1.3, immediately
following the transfer to Purchaser or one of its Subsidiaries of the
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Shares set forth in Part One of Schedule 1.1(c), each of the outstanding equity
securities or ownership interests of each issuer of the Shares set forth in Part
One of Schedule 1.1(c) will be owned, of record and beneficially, either
directly or indirectly, by Purchaser or one of its Subsidiaries, free and clear
of all liens, pledges, security interests, voting trust arrangements, charges,
options, restrictions, claims or other encumbrances, except for any encumbrances
arising following the Cash Closing, and Purchaser will have purchased and
acquired all of Parent's direct or indirect right, title and interest in and to
the Waste Business other than the Waste Business conducted by the issuers of the
Shares set forth in Part Two of Schedule 1.1(c) and except for entities excluded
from the definition of the Waste Business as set forth in Schedule 1.1(e).
Immediately following the Share Closing, Purchaser or one or more of its
Subsidiaries shall have good and valid title to all of the Shares set forth in
Part Two of Schedule 1.1(c), free and clear of any lien, pledge, security
interest, voting trust arrangement, charge, option, restriction, claim, or other
encumbrance, except for any encumbrances on such Shares arising or perfected
following the Share Closing. Except as set forth in Schedule 1.3, immediately
following the transfer to Purchaser or one of its Subsidiaries of the Shares set
forth in Part Two of Schedule 1.1(c), each of the outstanding equity securities
or ownership interests of each issuer of the Shares set forth in Part Two of
Schedule 1.1(c) will be owned, of record and beneficially, either directly or
indirectly, by Purchaser or one of its Subsidiaries, free and clear of all
liens, pledges, security interests, voting trust arrangements, charges, options,
restrictions, claims or other encumbrances, except for any encumbrances arising
following the Share Closing, and Purchaser will have purchased and acquired all
of Parent's direct or indirect right, title and interest in and to the Waste
Business except for entities excluded from the definition of the Waste Business
as set forth in Schedule 1.1(e). Except for the International Subsidiaries,
International does not have any Subsidiaries or own of record or beneficially,
and International is not obligated to acquire, any equity security or ownership
interest or investment in any Person. Except as set forth in Schedule 1.3, no
International Subsidiary has any Subsidiaries or owns of record or beneficially,
or is obligated to acquire, any equity security or ownership interest or
investment in any Person.
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Section 3.4 No Dilution. Except as set forth in Schedule 1.4,
no International Subsidiary has any equity securities or ownership interests
reserved for issuance. Except as set forth in Schedule 1.4, there are no
subscriptions, calls, commitments, rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
plans, arrangements or commitments with respect to the issuance, sale or
purchase of any equity securities or ownership interests of any International
Subsidiary or any securities or obligations convertible or exchangeable into or
exercisable for, or giving any Person a right to subscribe for or acquire,
equity securities or ownership interests of any International Subsidiary, and no
securities or obligations evidencing such rights are authorized, issued or
outstanding. Neither International nor any International Subsidiary has any
outstanding securities or instruments the holders of which have the right to
vote (or convert or exchange such securities or instruments into or for
securities having the right to vote) with the shareholders of any International
Subsidiary on any matter.
Section 3.5 Corporate Authority.
(a) Parent is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement and the Ancillary Agreements and to consummate the transactions
contemplated thereby. Xxxxxx Xxxxxxx & Co. Incorporated has rendered a written
opinion to Parent to the effect that the Consideration is fair to Parent from a
financial point of view. This Agreement is and as of and after each of the Cash
Closing and the Share Closing will be, and as of and after the Cash Closing the
Technical Cooperation Agreement, Operating Agreement and Traite d'Apport will
be, and as of and after the Share Closing the Shareholders Agreement and the
Traite d'Apport will be, valid and binding agreements of Parent, enforceable
against them in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(b) Each of the Selling Entities is a corporation duly
organized, validly existing and in good standing under
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the laws of its jurisdiction of organization and has all requisite corporate
power and authority and has taken all corporate action necessary to transfer,
convey and sell to Purchaser the Shares held by it, and no other proceedings on
the part of any Selling Entity are necessary to authorize the transactions
contemplated by this Agreement.
Section 3.6 Conduct of Business. Parent and the Parent
Subsidiaries are engaged in the Waste Business only through the International
Subsidiaries, and neither Parent, nor any Parent Subsidiary conducts any
operations associated with, or owns any assets or properties used in, or holds
any permits or licenses used in, the Waste Business, except for (i) operations
which after the Cash Closing Date will be conducted pursuant to the Technical
Cooperation Agreement, (ii) entities excluded from the definition of the Waste
Business as set forth on Schedule 1.1(e), and (iii) operations pursuant to the
Operating Agreement between the Cash Closing and the Share Closing. None of the
International Subsidiaries is, or (to Parent's knowledge) has been, engaged in
any material business other than the Waste Business or owns or has owned any
material assets or properties which are used in any business other than the
Waste Business.
Section 3.7 Governmental Filings. Other than the filings
and/or notices obtained pursuant to Council Regulation (EEC) No. 4064/89, and
the filings and/or notices set forth in Schedule 1.7 or Schedule 3.7, no
notices, reports or other filings are required to be made by Parent or any
Parent Subsidiary with, nor are any consents, registrations, Approvals, permits
or authorizations required to be obtained by Parent or any Parent Subsidiary
from, any Governmental Entity, in connection with the execution and delivery of
this Agreement by Parent or International and the consummation by Parent or any
Parent Subsidiaries of the transactions contemplated hereby, except for notices,
reports, filings, consents, registrations, Approvals, permits or authorizations,
the failure to make or obtain which could not, in the aggregate, have an
International Material Adverse Effect, hinder or delay the performance by any
party of its obligations under this Agreement or hinder or delay the
consummation of the transactions contemplated herein.
Section 3.8 Non-Contravention. The execution, delivery and
performance of this Agreement and the Ancillary Agreements by Parent and any
Parent Subsidiaries party
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thereto, and the consummation by Parent and any Parent Subsidiaries of the
transactions contemplated in this Agreement and therein, do not and will not (a)
violate or conflict with, or constitute a default under, any provision of the
certificate of incorporation, by-laws or comparable governing instruments of
Parent or any Parent Subsidiary, (b) violate any provision of, or constitute (or
with notice or lapse of time or both would constitute) a default under, or
accelerate or permit the acceleration of the performance required by, any
agreement, lease, contract, note, mortgage, indenture, instrument, arrangement
or other obligation (collectively, "Contracts") to which Parent or any Parent
Subsidiary is a party or by which any of them or any of their respective assets
or properties are bound or subject (collectively, the "Parent Contracts"), (c)
entitle any party to cancel or terminate, or result in any change in the rights
or obligations of any party under, or require a consent or waiver by any party
to, any Parent Contract, (d) result in the creation of a lien, pledge, security
interest, voting trust arrangement, charge, option, restriction, claim, or other
encumbrance on the equity securities, ownership interests or on the assets of
Parent or any Parent Subsidiary, (e) violate any law, statute, rule, regulation,
ordinance, requirement, administrative ruling, order, judgment, injunction,
award, decree or process of any Governmental Entity (collectively, "Law") by
which or to which any of their respective assets or properties are bound or
subject, or (f) result in the loss or impairment of any Approval of or
benefitting Parent or any Parent Subsidiary; except (i) in the case of clauses
(b), (d), (e) and (f) of this Section, for such violations, defaults,
accelerations, losses or impairments as, when taken together with all other such
violations, defaults, accelerations, losses and impairments, could not have an
International Material Adverse Effect, and (ii) in the case of clauses (b) and
(c), for violations, defaults, accelerations, cancellations, terminations of and
changes in rights under the Contracts, instruments, agreements and obligations
listed in Schedule 3.8.
Section 3.9 Financial Statements; Projections. (a)(i) The
combined balance sheet of the International Subsidiaries dated September 30,
1997 contained in Schedule 3.9(a)(i) (the "International Balance Sheet") fairly
presents the combined assets, liabilities and financial position of the
International Subsidiaries as a whole as of such date in accordance with U.S.
GAAP and the accounting practices listed on Schedule 1.9(a)(ii), in each
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case consistently applied, except as specifically noted therein. The combined
statement of income of the International Subsidiaries for the year ended
September 30, 1997 contained in Schedule 1.9(a)(i) (the "International Income
Statement", and, collectively with the International Balance Sheet, the
"International Financial Statements") fairly presents the combined results of
operations and retained earnings, as the case may be, of the International
Subsidiaries as a whole for such period, in each case in accordance with U.S.
GAAP and the accounting practices listed in Schedule 1.9(a)(ii), in each case
consistently applied, except as specifically noted therein. (ii) Except as set
forth in Schedule 1.9(a)(iii), (A) each of the balance sheets contained in
Schedule 1.9(a)(iii) in respect of each individual International Subsidiary
fairly presents the assets, liabilities and financial position of such
International Subsidiary on a country-by-country basis as of the date of such
statements in accordance with the local jurisdiction accounting standards
applicable to each such Subsidiary ("Local GAAP"), and (B) each of the
statements of income and of changes in financial position (or, in the case of
the International Subsidiaries in New Zealand and the United Kingdom, the
statements of movements in equity) contained in Schedule 1.9(a)(iii) in respect
of each individual International Subsidiary fairly presents the results of
operations, retained earnings and changes in financial position (or movements in
equity), as the case may be, of such International Subsidiary for the period
covered thereby in accordance with Local GAAP. All interim financial statements
delivered by Parent pursuant to Section 5(c) of the Initial Agreement fairly
present in all material respects in accordance with U.S. GAAP the separate
company, combined or consolidated, as the case may be, financial position of
International and the International Subsidiaries covered thereby at the
respective dates thereof, and the results of their separate company or
consolidated, as the case may be, operations and stockholders' equity for
International and the International Subsidiaries covered thereby for the
respective periods covered thereby, subject to year-end adjustments (consisting
of normal recurring accruals) and the omission of explanatory footnote materials
required by U.S. GAAP.
(b) The projections regarding the financial performance of the
International Subsidiaries contained in Schedule 1.9(b) were based on
assumptions which Parent believed are reasonable as of the date of the Initial
Agreement; provided that the foregoing does not constitute
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any representation or warranty with respect to the actual results which will be
achieved by the International Subsidiaries. Parent believes that the assumptions
referred to in the immediately preceding sentence are reasonable as of the date
hereof with respect to the financial performance of the International
Subsidiaries from the date hereof through the remainder of the periods included
in the projections; provided that the foregoing does not constitute any
representation or warranty with respect to the actual results which will be
achieved by the International Subsidiaries.
Section 3.10 Closing Consents. Except for the consents,
waivers and authorizations set forth in Schedule 3.10 (the "Parent Closing
Consents"), and other than as disclosed in Section 3.7, there are no Persons or
entities, other than Parent, whose approval, consent, waiver or authorization is
legally or contractually required to consummate the transactions contemplated by
this Agreement, except for consents, waivers and authorizations, the failure to
obtain which could not, in the aggregate, have an International Material Adverse
Effect, hinder or delay the performance by any party of its obligations under
this Agreement or hinder or delay the consummation of the transactions
contemplated herein. As of the Cash Closing, each of the Parent Closing Consents
will have been duly authorized, executed and delivered by each of the parties
thereto and from and after the Cash Closing will be a valid and binding
agreement of each such party, enforceable against such party in accordance with
its terms.
Section 3.11 No Actions. There is no action, claim, dispute,
proceeding, suit, investigation or appeal pending or, to Parent's knowledge,
threatened, against Parent or any Parent Subsidiary which questions or
challenges the validity of this Agreement, any Ancillary Agreement or any Parent
Closing Consent, or any action taken or proposed to be taken by Parent or any
Parent Subsidiary pursuant hereto or thereto or in connection with the
transactions contemplated hereby and thereby, and to the knowledge of Parent or
any Parent Subsidiary no conditions exist which could reasonably be expected to
lead to any such action, claim, dispute, proceeding, suit, investigation or
appeal.
Section 3.12 No Undisclosed Liabilities. Notwithstanding any
other representation or warranty set forth in this Agreement and except as set
forth in
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Schedule 3.12, no International Subsidiary had, at September 30, 1997, any
liabilities of any nature (whether accrued, absolute, fixed, contingent,
liquidated or unliquidated or otherwise and whether due or to become due, and
whether or not required by generally accepted accounting principles to be set
forth on a balance sheet of any International Subsidiary), except as and to the
extent of the amounts specifically reflected or reserved against in the
International Balance Sheet or in the notes thereto and except for liabilities
which could not, in the aggregate, have an International Material Adverse
Effect.
Section 3.13 Absence of Certain Changes. Except as set forth
in Schedule 1.13 and except as specifically provided for in this Agreement or
agreed in writing between Parent and Purchaser, since September 30, 1997:
(a) each of the Selling Entities and the International
Subsidiaries has conducted its businesses only in the ordinary course of
business consistent with past practice;
(b) there has not occurred any damage, destruc tion or other
casualty loss with respect to any asset or real or tangible personal property
owned, leased or otherwise by International and the International Subsidiaries,
whether or not covered by insurance, which could have an International Material
Adverse Effect;
(c) no International Subsidiary has (i) sold, pledged or
agreed to sell or pledge any equity securities or ownership interests owned by
it in any of its Subsidiaries; (ii) amended or violated its certificate of
incorporation, by-laws or comparable governing documents; (iii) reclassified,
split, subdivided, combined or reclassified any of its equity securities or
ownership interests; or (iv) declared, set aside or paid any dividend payable in
securities or property other than cash with respect to any of its equity
securities or ownership interests; and no Selling Entity has sold, pledged or
agreed to sell or pledge any equity securities or ownership interests owned by
it in any of the International Subsidiaries;
(d) no Selling Entity nor any International Subsidiary has (i)
issued, sold, pledged, disposed of or encumbered any shares of, or securities
convertible or exchangeable for, or options, warrants, calls, commitments
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or rights of any kind to acquire, any of its equity securities or ownership
interests or any of its other securities, property or assets; (ii) transferred,
leased, licensed, guaranteed, sold, mortgaged, pledged, disposed of or subjected
to or permitted the imposition of any lien, claim, restriction or encumbrance
(other than statutory liens for Taxes not yet due and payable) on any of its
assets or properties, other than in the ordinary course of business consistent
with past practice; (iii) acquired directly or indirectly, by purchase,
redemption or otherwise any of its equity securities or ownership interests;
(iv) incurred any indebtedness for borrowed money or guaranteed the obligations
of any Person, or made any loans or advances, in each case except in the
ordinary course of business consistent with past practice; (v) paid, discharged
or satisfied any liability other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice, of liabilities
reflected on or reserved against the financial statements contained in Schedule
3.9(a)(i) or subsequently incurred in the ordinary course of business consistent
with past practice; (vi) entered into any International Material Contract or
agreement other than in the ordinary course of business consistent with past
practice; or (vii) authorized capital expenditures in excess of $100,000,000 in
the aggregate or made any direct or indirect acquisition of, or investment in,
assets or stock of any other Person;
(e) no International Subsidiary has, except in the ordinary
course of business consistent with past practice, (i) granted any severance or
termination pay to, or entered into any employment or severance agreement with,
or increased the compensation payable to, any director, officer or other
employee of any International Subsidiary; or (ii) established, adopted, entered
into, made any new grants or awards under or amended any International Employee
Benefit Plans;
(f) no Selling Entity nor any International Subsidiary has
settled or compromised any claims or litigation or waived, assigned or released
any rights or claims involving liability or potential liability of the
International Subsidiaries or otherwise having a value of $5,000,000 per right,
claim or action or $10,000,000 in the aggregate or, except in the ordinary
course of business consistent with past practice, modified, amended or
terminated any International Material Contracts to which it is a party or by
which it or any of its properties is bound;
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(g) there has been no change in the accounting policies or
procedures of any Selling Entity or any International Subsidiary;
(h) no Selling Entity nor any International Subsidiary has
made any Tax election or settled or com promised any Tax liability of the
International Subsidiaries or permitted any insurance policy naming an
International Subsidiary as a beneficiary or a loss payable payee to be canceled
or terminated, except, in any such case, in the ordinary course of business
consistent with past practice and except to the extent that such Tax liabilities
and insurance policy limits do not exceed $5,000,000 in the aggregate;
(i) no International Subsidiary has sold, disposed of or
otherwise abandoned, altered or written down the book value of (except for
amortization and depreciation thereof in accordance with U.S. GAAP or Local
GAAP, as the case may be), any item of the property, plant and equipment
reflected on the International Balance Sheet contained in Schedule 1.9(a)(i) or
on the accounting records of International and the International Subsidiaries as
of the Cash Closing, except for sales and dispositions not exceeding $5,000,000
in the aggregate;
(j) no Selling Entity nor any International Subsidiary has
created any lien, claim, restriction or other encumbrance on or affecting title
to the real property occupied or used by any International Subsidiary, other
than liens not affecting the use, operation or value of such real property
created in the ordinary course of business consistent with past practice, or
entered into any leases or subleases for any real or personal property providing
for annual payments greater than $15,000,000 in the aggregate; and
(k) no Selling Entity nor any International Subsidiary has
authorized or entered into an agreement to do any of the foregoing.
Section 3.14 Material Contracts.
(a) Schedule 1.14(a) contains a true and complete list of each
agreement, instrument, contract or arrangement to which any International
Subsidiary is a party or by which it or any of their respective properties or
assets are bound: (i) which relates to the borrowing of money and
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pursuant to which the outstanding indebtedness is in excess of $5,000,000, or
(ii) under which any International Subsidiary made or received payments in
excess of $5,000,000 during 1997 or is reasonably likely to make or receive
payments in excess of $5,000,000 during 1998; or (iii) which accounts for 2% or
more of any Purchased Entity's revenue per annum or imposes any encumbrance,
lien or restriction on any assets or properties (including International
Intellectual Property) used in the manufacture or sale of any such product or
service (collectively, the "International Material Contracts").
(b) Except as set forth in Schedule 1.14(b) and except for
such failures to be valid, binding and enforceable, breaches, defaults,
violations and events as could not, in the aggregate, have an International
Material Adverse Effect, hinder or delay the performance by any party of its
obligations under this Agreement or hinder or delay the consummation of the
transactions contemplated herein, (i) each International Material Contract is a
valid and binding obligation of each of the parties thereto and is enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles, except for such failures to be valid and binding as could not,
individually or in the aggregate, have an International Material Adverse Effect,
(ii) no International Subsidiary is in violation or breach of, or in default
under, any International Material Contract and, to Parent's knowledge, no other
party to any International Material Contract is in violation or breach thereof,
or in default thereunder, except, in either case, for such violations, breaches
and defaults as could not, individually or in the aggregate, have an
International Material Adverse Effect, and (iii) to Parent's knowledge, no event
has occurred that, with the passage of time or the giving of notice or both,
would permit the unilateral modification, acceleration, or termination of any
International Material Contract.
(c) Parent has caused to be delivered or made available to
Purchaser a true, complete and current copy of each International Material
Contract.
(d) Except as set forth on Schedule 3.14(d)(i), and except for
agreements providing, in the aggregate, for the nonstatutory compensation and
benefits summarized in
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Schedule 1.14(d)(ii), neither Parent nor any Parent Subsidiary is a party to or
bound by any agreement, instrument, contract or arrangement (i) to which any
directors, executive officers or affiliates of Parent or any Parent Subsidiary,
is a party or is bound, or (ii) which contains any provision or covenant
limiting (x) the ability of any International Subsidiary to engage in any line
of business, to compete with any Person, to do business with any Person or in
any location or to employ any Person or (y) the ability of any Person to compete
with or obtain products or services from any International Subsidiary.
(e) Schedule 1.14(e) lists each Acquisition Document.
Section 3.15 Approvals. Each of the International Subsidiaries
has all Approvals required for the conduct of its business, except for
Approvals, the failure to obtain which could not, in the aggregate, have an
International Material Adverse Effect, hinder or delay the performance by any
party of its obligations under this Agreement or hinder or delay the
consummation of the transactions contemplated herein. All such Approvals are
valid and in full force and effect, and the International Subsidiaries are in
compliance with all such Approvals, except for such failures to be valid or to
be in compliance as could not, individually or in the aggregate, have an
International Material Adverse Effect. Except for such proceedings as could not,
individually or in the aggregate, have an International Material Adverse Effect,
there is no proceeding pending or, to Parent's or International's knowledge,
threatened, that disputes the validity of any such Approval or that is likely to
result in the revocation, cancellation or suspension, or any adverse
modification of, any such Approval.
Section 3.16 Compliance with Laws. Except as set forth in
Schedule 1.16:
(a) Parent, each Parent Subsidiary and their respective
businesses, facilities, operations and agreements have complied with all Laws
and Approvals, except for such instances of noncompliance as, when taken
together with all other instances of noncompliance, could not have an
International Material Adverse Effect.
(b) No investigation or review by any Governmental Entity with
respect to Parent, any Parent
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Subsidiary or any of their respective businesses, facilities, operations or
agreements is pending or, to Parent's knowledge, threatened, except for
investigations and reviews which could not, in the aggregate, have an
International Material Adverse Effect, hinder or delay the performance by any
party of its obligations under this Agreement or hinder or delay the
consummation of the transactions contemplated herein. To Parent's knowledge, no
Governmental Entity has indicated an intention to conduct the same, except for
such investigations and reviews as, when taken together with all other
investigations and reviews, could not have an International Material Adverse
Effect.
(c) Neither Parent nor any Parent Subsidiary has received any
notice or communication alleging any noncompliance by any International
Subsidiary with any Law or Approval that has not been cured, and no
International Subsidiary is subject to any unpaid fine or any continuing
sanction for any such noncompliance, except, in either case, for such instances
of noncompliance as, when taken together with all other instances of
noncompliance, could not have an International Material Adverse Effect.
(d) Neither Parent nor any Parent Subsidiary is in violation
of or in default under, and to Parent's knowledge, no event has occurred which,
with the lapse of time or the giving of notice or both, would result in the
violation of or default under, the terms of any judgment, decree, order,
injunction or writ of any Governmental Entity, except for such violations or
defaults as, when taken together with all other violations and defaults, could
not have an International Material Adverse Effect.
Section 3.17 Insurance. Schedule 1.17 (i) contains a true and
accurate summary of the insurance coverage of the property, assets or business
liabilities of the International Subsidiaries as a whole specifying with respect
to each such type of coverage, the term of the policies or bonds, the limits and
layers of liability and the annual premiums, and (ii) lists any agreements,
arrangements or commitments under which any International Subsidiary indemnifies
any other Person or is required to carry insurance for the benefit of any other
Person in an amount in excess of $1,000,000 in the aggregate. The policies and
bonds summarized in Schedule 1.17 are in full force and effect, all premiums due
and payable thereon have been paid, no notice of cancellation or termination has
been
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received with respect to any such policy, and the Selling Entities and the
International Subsidiaries have complied with such policies and bonds. Such
policies and bonds will remain in full force and effect through the respective
dates set forth in Schedule 3.17 without the payment of additional premiums,
except in the ordinary course of business, and will not in any way be affected
by, terminate, or lapse by reason of the transactions contemplated by this
Agreement.
Section 3.18 Customers. Since September 30, 1997, to Parent's
and International's knowledge, no municipality or other customer of any
International Subsidiary accounting for 1% or more of the consolidated annual
revenue of the International Subsidiaries has canceled or otherwise terminated
its relationship with any International Subsidiary or has at any time decreased
significantly its usage of the services of International or any International
Subsidiary and there has been no material adverse change in the business
relationship of any International Subsidiary with any such municipality or
customer, as the case may be. To Parent's and International's knowledge, no such
municipality or other customer intends to cancel or otherwise terminate its
relationship with any International Subsidiary or to decrease significantly its
usage of the services of any International Subsidiary, as the case may be.
Section 3.19 Affiliate Interests. Except as set forth in
Schedule 1.19:
(a) Neither Parent, any Parent Subsidiary nor to the knowledge
of Parent (after reasonable investigation) any director, executive officer or
affiliate of Parent, any Parent Subsidiary, International or any International
Subsidiary (i) has any interest in any property, real or personal, tangible or
intangible, of any International Subsidiary, except for interests with a value
of not greater than $1,000,000 in the aggregate, (ii) has any cause of action or
other claim whatsoever against any International Subsidiary or their respective
assets or properties, or owes any amount to, or is owed any amount by, any of
them, except for claims and indebtedness not in excess of $1,000,000 in the
aggregate, or (iii) owns, directly or indirectly, any debt, equity or other
interest or investment in any Person which is a competitor, lessor, lessee,
customer or supplier of any International Subsidiary, except securities of any
publicly-held corporation which do not exceed 1% of the outstanding voting
securities of such corporation.
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(b) There are no agreements, indebtedness, arrangements,
understandings, obligations or other rights or obligations between any
International Subsidiary, on the one hand, and Parent, any Parent Subsidiary,
International, or to the knowledge of Parent (after reasonable investigation)
any of their respective directors, officers, employees or Affiliates (other than
the International Subsidiaries), on the other hand, other than agreements,
indebtedness, arrangements, understandings, obligations and other rights which
will not survive the Cash Closing.
Section 3.20 Title to Properties. Except as set forth on
Schedule 1.20, each International Subsidiary has good and marketable title to or
a valid leasehold interest in all of the properties and assets (real, personal,
mixed, tangible and intangible) which are necessary to the conduct of their
respective businesses as presently conducted, free and clear of all liens,
claims, defects, encumbrances, encroachments, easements, restrictions, security
interests, mortgages or deeds of trust, except (a) liens for current Taxes not
yet due and payable, (b) such liens, easements and zoning restrictions as are
matters of public record, are not substantial in character, amount or extent and
do not impair the use or occupancy of such property or assets or the business
operations of any International Subsidiary, and (c) liens noted in the
International Financial Statements.
Section 3.21 Leased Real Property. Except as set forth in
Schedule 1.21, and except for such failures to be valid, binding and
enforceable, breaches, defaults, violations and events as could not, in the
aggregate, have an International Material Adverse Effect, hinder or delay the
performance by any party of its obligations under this Agreement or hinder or
delay the consummation of the transactions contemplated herein, (i) each lease
of real property to which any International Subsidiary is a party (each, an
"International Real Property Lease") is a valid and binding obligation of each
party thereto and is enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles, (ii) the International Subsidiaries are not in
violation or breach of, or in default under, any International Real Property
Lease, and, to Parent's knowledge, no other party to any International Real
Property Lease is in violation or breach thereof, or in default thereunder,
(iii) to Parent's and International's knowledge,
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no event has occurred that, with the passage of time or the giving of notice or
both, would permit the unilateral modification, acceleration, or termination of
any International Real Property Lease, and (iv) each International Subsidiary
which is a party to the Inter national Real Property Leases enjoys peaceful and
undisturbed possession under each International Real Property Lease.
Section 3.22 Personal Property.
(a) The equipment and fixtures used by the International
Subsidiaries in connection with their respective businesses are, in the
aggregate, in substantially good repair (reasonable wear and tear excepted) and
are adequate for the uses to which they are being put.
(b) Schedule 1.22(b) sets forth a true and complete list of
all of the leases of personal property to which any International Subsidiary is
a party which provides for payments in excess of $2,000,000 per year
(collectively, the "International Personal Property Leases"). Parent has caused
to be delivered or made available to Purchaser a true and complete copy of each
International Personal Property Lease.
(c) Except as set forth in Schedule 1.22(c), and except for
failures to be valid, binding or enforceable, defaults, and events which could
not, in the aggregate, have an International Material Adverse Effect, hinder or
delay the performance by any party of its obligations under this Agreement or
hinder or delay the consummation of the transactions contemplated herein, (i)
each International Personal Property Lease is a valid and binding obligation of
each party thereto and is enforceable against each such party in accordance with
its terms, (ii) there is no default or claim of default under any International
Personal Property Lease, and (iii) no event has occurred that, with the passage
of time or the giving of notice or both, would constitute a default by any party
to any International Personal Property Lease, or would permit unilateral
modification, acceleration, or termination of any International Personal
Property Lease.
Section 3.23 Intellectual Property. Schedule 1.23 includes a
true, complete and current list of all patents, inventions, know-how that has
been acquired for
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value, trade names, registered and unregistered trademarks, registered and
unregistered service marks and registered and unregistered copyrights owned or
used by any International Subsidiary, and all pending applications therefor and
all licenses and other agreements relating thereto, other than immaterial items
(collectively, the "International Intellectual Property"). Except as set forth
in Schedule 1.23, an International Subsidiary owns the entire right, title and
interest in and to the International Intellectual Property (including, without
limitation, the exclusive right to use and license the same) and each item
constituting part of the International Intellectual Property has been duly
registered or filed with or issued by the appropriate authorities in the
countries indicated in Schedule 1.23 and, to Parent's and International's
knowledge, such registrations, filings and issuances remain in full force and
effect. To Parent's and International's knowledge, there are no infringements or
misappropriations of any proprietary rights or International Intellectual
Property owned by or licensed by or to any International Subsidiary. The
trademarks, service marks and trade names of the International Subsidiaries are
enforceable by such entities and all patents comprising the International
Intellectual Property are valid and enforceable by the International
Subsidiaries. Except as set forth on Schedule 1.23, no consent of third parties
will be required for the use of any International Intellectual Property as a
consequence of the consummation of the transactions contem plated hereby. Except
as set forth on Schedule 1.23, (i) no claims are currently being asserted by any
Person to the use of any of the International Intellectual Property or
challenging or questioning the validity or effectiveness of any such license or
agreement, and the use of the International Intellectual Property by any
International Subsidiary does not infringe on the rights of any Person and no
suits or proceedings are pending or threatened against with respect to the
foregoing; and (ii) no claims are currently being asserted, and, to Parent's and
International's knowledge, no conditions exist upon which such claims could be
based, that any International Subsidiary is in default or is not in full
compliance with all licenses and other agreements under which it is using any
item of the International Intellectual Property. To Parent's and International's
knowledge there are no infringements of any proprietary rights owned by or
licensed by or to any International Subsidiary. The trademarks, service marks
and trade names of the International Subsidiaries are enforceable by such
entities and the
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patents of such entities are valid and enforceable by the International
Subsidiaries. The International Intellectual Property constitutes all of the
intellectual property necessary for the operation of the International
Subsidiaries' respective businesses as presently conducted and provides the
International Subsidiaries with all requisite rights to conduct their respective
businesses as presently conducted.
Section 3.24 Employees.
(a) Since September 30, 1997, there have been no increases in
salaries, wages and fringe benefits of the employees of the International
Subsidiaries (other than increases in the ordinary course of business of the
International Subsidiaries consistent with past practice), nor do any such
employees that are within the scope of applicability of collective bargaining
agreements enjoy salary benefits in excess of what is provided under the
relevant collective bargaining agreement.
(b) Since September 30, 1997, there have been no changes in
the employment conditions of any International Subsidiaries' employees nor have
any additional employment relationships commenced or offers of employment been
given by any International Subsidiary, except in the ordinary course of business
consistent with past practice.
(c) The International Subsidiaries have neither signed, nor
are they liable under any policy of any life or like personal insurances in
excess of compulsory insurances, nor do any of the employees of the
International Subsidiaries enjoy any other benefits in excess of benefits
provided by Law, except as stated in Schedule 1.24.
(d) The pension liability of the International Subsidiaries is
fully paid or provided for in the International Financial Statements and,
subsequent to the Cash Closing, the International Subsidiaries will not incur
any costs in respect of any pension liability arising out of employment before
the Cash Closing.
(e) With such exceptions as would not reasonably be likely to
have a material adverse effect on the ability of the International Subsidiaries
operating or conducting business in any particular country to operate or conduct
such business in such country, the International Subsidiaries have paid all
labor related charges.
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(f) To Parent's and International's knowledge, there are not
pending any strikes, work stoppage or like in the International Subsidiaries.
(g) To Parent's and International's knowledge there are no
claims from present or former employees of the International Subsidiaries on
account for overtime pay, wages, salaries, vacations, discrimination or
termination of employment which could reasonably be expected to cause or result
in losses, damages, claims or liabilities to or against the International
Subsidiaries greater than $5,000,000 in the aggregate.
Section 3.25 Litigation. Except as set forth on Schedule 1.25
and except for such matters as could not, in the aggregate, have an
International Material Adverse Effect, hinder or delay the performance by any
party of its obligations under this Agreement or hinder or delay the
consummation of the transactions contemplated herein, there are no (i) civil,
criminal or administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the knowledge of Parent or International, threatened
against Parent or any Parent Subsidiary, or (ii) obligations or liabilities,
whether or not accrued, contingent or otherwise, including, without limitation,
those relating to matters involving any Environmental Law and occupational
safety and health matters.
Section 3.26 Employee Benefits.
(a) Schedule 1.26(a) contains a true and accurate summary, for
each jurisdiction in which International or any International Subsidiary
conducts business, of the employees covered, amounts payable and material terms
of payment under the employment, severance, bonus, incentive, deferred
compensation, pension, profit sharing, stock option, stock, stock based, death
benefit, health, disability and other employee benefit plans or agreements (the
"International Employee Benefit Plans") maintained or contributed to by
International or any International Subsidiary in such jurisdiction. Parent has
delivered to Purchaser true, complete and correct copies of (i) each
International Employee Benefit Plan and (ii) each trust agreement and annuity or
other insurance contract relating to any International Employee Benefit Plan.
(b) Neither International nor any International Subsidiary is
in default of any material obligation to be
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performed under any of the International Employee Benefit Plans. None of the
International Employee Benefit Plans is subject to the provisions of the United
States Employee Retirement Income Security Act of 1974, as amended. Each
International Employee Benefit Plan has been administered in all material
respects in accordance with its terms. All the International Employee Benefit
Plans are in compliance in all material respects with the provisions of
applicable law. All payments, deductions from wages, reports, returns and
similar documents with respect to the International Employee Benefit Plans
required to be filed with or paid to any Governmental Entity or International
Employee Benefit Plan or distributed to any International Employee Benefit Plan
participant have been duly and timely filed, distributed or paid. There is no
pending or, to the knowledge of Parent, threatened litigation relating to any
International Employee Benefit Plan, other than routine claims for benefits.
Each International Employee Benefit Plan which is a pension plan has sufficient
assets to discharge the liabilities for benefits thereunder.
(c) Except as set forth on Schedule 3.26(c), the consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements
will not (i) entitle any employees of International or any of International
Subsidiaries to severance pay or (ii) accelerate or provide any other rights or
credits under, or increase the amount payable or trigger any other obligation
pursuant to, any of the International Employee Benefit Plans.
Section 3.27 Environmental Matters. Except as disclosed in
Schedule 1.27, and except for such instances of noncompliance, release,
liability, deficiencies in permitting, use, circumstances, conditions, failures
to reserve orders, decrees, injunctions, directives as could not, individually
or in the aggregate, have an International Material Adverse Effect: (i) Parent
and the Parent Subsidiaries have complied at all times with all applicable
Environmental Laws; (ii) no property owned or operated by Parent or any Parent
Subsidiary (including landfills, transfer stations, incinerators, or any
storage, processing or recycling facility) has released any Hazardous Substance
into the environment; (iii) no property formerly owned or operated by Parent or
any Parent Subsidiaries has released any Hazardous Substance into the
environment during such period of ownership or operation; (iv) no International
Subsidiary is subject to any liability for any Hazardous Substance disposal or
contamination on any owned or third
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party property; (v) each International Subsidiary possesses all permits,
authorizations, licenses and approvals necessary to the current conduct of its
operations and businesses and is not aware of any circumstances that would
interfere with any future permit renewal, issuance or modification required for
any planned future operations or facility expansions; (vi) neither Parent nor
any Parent Subsidiary is subject to any order, decree, injunction, directive or
investigation by any Governmental Entity or to any indemnity, agreement or other
obligation to any third party relating to liability under any Environmental Law;
(vii) none of the properties of any International Subsidiary have been used for
the handling or disposal of any Hazardous Substances other than for the handling
and disposal of uncontaminated household waste and similar materials having the
same regulatory classification in compliance with all Environmental Laws; (viii)
there are no other circumstances or conditions involving any International
Subsidiary that could be expected to result in any claims, liabilities,
investigations, costs or restrictions on the ownership, use, or transfer of any
property in connection with any Environmental Law; (ix) the International
Subsidiaries have established appropriate reserves and posted all required
financial assurances required under any Environmental Law to address all
facility closure and post-closure obligations arising under any Environmental
Law. Except with respect to conditions which could not, individually or in the
aggregate, have an International Material Adverse Effect, (x) neither Parent nor
any Parent Subsidiary has received any notice, demand, letter, claim or request
for information indicating that it may be in violation of or subject to
liability under any Environmental Law; and (ii) Parent has delivered to
Purchaser copies of all environmental reports, studies, assessments, sampling
data and other environmental information in its possession relating to any
International Subsidiary or any of their current or former properties or
operations.
Section 3.28 Landfills. Schedule 1.28 lists each landfill
owned or operated by International and the International Subsidiaries and
accurately describes each such landfill by its city or county and state or
province of location, total area (in square meters), permitted area (in square
meters), estimated remaining permitted capacity in cubic meters, estimated or
mandated closure date, and estimated closure, post-closure and reclamation
liability at its projected or mandated closure date (computed at the closure
date with and without discount to present value) and
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any other recorded or unrecorded accruals, contingent or otherwise, or reserves
related to landfill liabilities of any type.
Section 3.29 Taxes. Except as disclosed in Schedule 1.29 and
except as would not have an International Material Adverse Effect: (i) Parent,
International and the International Subsidiaries have timely filed all Tax
Returns that are required to be filed with respect to any International
Subsidiaries or any of their income, properties or operations; (ii) such Tax
Returns are true, complete and accurate in all material respects; (iii) all
Taxes due or shown as due on the returns described in clause (i) with respect to
any International Subsidiaries (without regard to whether such Taxes have been
assessed and without regard to whether the liability for such Taxes is disputed)
have been timely paid or have been provided for in a reserve which is adequate
for the payment of such Taxes and is identified in Schedule 1.29; (iv) each of
the International Subsidiaries maintained adequate provisions on its books for
all Taxes that have accrued but are not yet due; (v) no adjustments or
deficiencies relating to the Tax Returns referred to in clause (i) or any Taxes
attributable to any International Subsidiaries have been assessed, proposed or
asserted; (vi) there are no pending or threatened actions or proceedings for the
assessment or collection of Taxes against any International Subsidiaries; (vii)
there are no outstanding waivers or agreements extending or tolling the
applicable statute of limitations for any period with respect to any Taxes of
any International Subsidiaries; (viii) no audit or examination with respect to
any International Subsidiaries is presently pending or threatened; (ix) no
material claim has ever been made by an authority in a jurisdiction where any of
the International Subsidiaries does not file Tax Returns that it is or may be
subject to Taxes by that jurisdiction; (x) there are no liens on any of the
assets of any International Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Taxes; (xi) none of the International
Subsidiaries is a party with Parent or International to any allocation or
sharing agreement or intercompany account system (whether written or unwritten)
in respect of Taxes; and (xii) all Tax records required to have been kept and
maintained by Parent, International and the International Subsidiaries with
respect to any International Subsidiary have been so kept and maintained, in
their proper form, for at least the minimum retention period required by the
laws or regulations of the relevant taxing jurisdiction.
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Section 3.30 Brokers and Finders. Neither Parent nor any of
its officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated in this Agreement, except that
Parent has employed Xxxxxx Xxxxxxx & Co. Incorporated as its financial advisors,
the arrangements with which have been disclosed in writing to Purchaser prior to
the date hereof.
Section 3.31 U.S. Regulatory Representations. The acquisition
of the Shares by Purchaser constitutes the acquisition of voting securities of
foreign issuers and will not confer control of (i) issuers which hold assets
located in the United States (other than investment assets and voting or
nonvoting securities of another person) having an aggregate book value of
$15,000,000 or more or (ii) a U.S. Issuer with annual net sales or total assets
of $25,000,000 or more. The terms "voting securities", "foreign issuer",
"control", "issuers", "hold", "investment assets", "person" and "U.S. Issuer" as
used in this Section 3.32 have the respective meanings set forth in the United
States Code of Federal Regulations ("C.F.R.") ss. 801.1.
Section 3.32 Aggregation. The imperfections, defects, orders,
actions, defaults, liabilities, inaccuracies and other items omitted from
disclosure in connection with the representations and warranties made in
Sections 3.1 through 3.32 on grounds of immateriality or failure to have an
International Material Adverse Effect do not and could not, taken as a whole,
cause or result in losses, damages, claims or liabilities greater than
$15,000,000.
ARTICLE IV
Representations and Warranties of Purchaser
Except as otherwise agreed in writing between Parent and
Purchaser, Purchaser represents and warrants to Parent as follows:
Section 4.1 Corporate Organization and Qualifica tion.
Purchaser is a societe anonyme duly organized and is validly existing and in
good standing under the laws of the Republic of France, and is qualified and in
good standing as a foreign corporation in each jurisdiction where the
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properties owned, leased or operated by it or the business conducted by it
require such qualification, except for such failures to so qualify or be in good
standing as a foreign corporation which, in the aggregate, could not have a
material adverse effect on the general affairs, business, assets, liabilities,
financial condition, properties, operations or results of operations of
Purchaser and its Subsidiaries, taken as a whole, or on the ability to operate
or conduct the business of Purchaser and its Subsidiaries, taken as a whole, in
the manner in which it is presently operated or conducted (a "Purchaser Material
Adverse Effect"), it being understood that for purposes of the definition of
Purchaser Material Adverse Effect that any change, development or effect which
could reasonably be expected to cause or result in losses, damages, claims or
liabilities to or against Purchaser greater than $15,000,000 in the aggregate
shall be deemed to be such a material adverse effect. Purchaser has the
corporate power and authority to carry on its business as currently conducted.
Purchaser has made available to Parent a complete and correct copy of its
statuts, as amended to date. Purchaser's statuts are in full force and effect.
Section 4.2 Authorized Capital. The authorized capital stock
or equity capitalization of Purchaser consists of 7,304,420 Purchaser Shares,
all of which were outstanding on February 16, 1998. All of the outstanding
Purchaser Shares have been duly authorized and validly issued, and are fully
paid and (except as set forth on Schedule 4.2) nonassessable. All of the
outstanding equity securities or ownership interests of each of Purchaser's
Subsidiaries is duly authorized and validly issued, and is fully paid and
(except as set forth in Schedule 2.2) nonassessable and, except as set forth in
Schedule 2.2, is owned, of record and beneficially, either directly or
indirectly, by Purchaser free and clear of all liens, pledges, security
interests, voting trust arrangements, charges, options, restrictions, claims or
other encumbrances, except for such encumbrances as could not, in the aggregate,
have a Purchaser Material Adverse Effect, hinder or delay the performance by any
party of its obligations under this Agreement or hinder or delay the
consummation of the transactions contemplated herein.
Section 4.3 No Dilution. Except as set forth in Schedule 4.3,
Purchaser does not have any Purchaser Shares reserved for issuance. Except as
set forth in Schedule 2.3, there are no subscriptions, calls, commitments,
rights, options, warrants, conversion rights, stock appreciation
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rights, redemption rights, repurchase rights, agreements, plans, arrangements or
commitments with respect to the issuance, sale or purchase of any Purchaser
Shares or other equity securities or ownership interests or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, Purchaser Shares or any equity
securities or ownership interests of Purchaser, and no securities or obligations
evidencing such rights are authorized, issued or outstanding. Purchaser does not
have any outstanding securities or instruments the holders of which have the
right to vote (or convert or exchange such securities or instruments into or for
securities having the right to vote) with the shareholders of Purchaser on any
matter.
Section 4.4 Corporate Authority. (a) Subject only to the
approval of Purchaser shareholders, Purchaser has all requisite corporate power
and authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and the Ancillary
Agreements and to consummate the transactions contemplated hereby and thereby.
(b) Lyonnaise has all requisite corporate power and authority
and has taken all corporate action necessary in order to execute, deliver and
perform its obligations under this Agreement and the Shareholders Agreement and
to consummate the transactions contemplated hereby and thereby.
(c) X.X. Xxxxxx & Co. Incorporated has rendered a written
opinion to Purchaser to the effect that the Consideration is fair to Purchaser
from a financial point of view.
(d) This Agreement is, and as of and after each of the Cash
Closing and the Share Closing will be, and as of and after the Cash Closing the
Technical Cooperation Agreement, Operating Agreement and Traite d'Apport will
be, and as of and after the Share Closing the Shareholders Agreement and Traite
d'Apport will be, valid and binding agreements of Purchaser enforceable against
Purchaser in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
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(e) This Agreement is, and as of and after each of the Cash
Closing and the Share Closing will be, and as of and after the Share Closing the
Shareholders Agreement will be, valid and binding agreements of Lyonnaise
enforceable against Lyonnaise in accordance with their respective terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(f) The Commitment Letter attached as Schedule 1.1(d) is a
true and correct copy of the commitment letter in the form executed by Purchaser
and the banks party thereto, has been duly authorized and executed by Purchaser
and has not been amended.
Section 4.5 Consideration Shares. When issued at the Share
Closing, the Consideration Shares shall be duly authorized, validly issued,
fully paid and nonassessable.
Section 4.6 Governmental Filings. Other than the filings
and/or notices obtained pursuant to Council Regulation (EEC) No. 4064/89, and
the filings and/or notices set forth in Schedule 2.6 or 4.6, no notices, reports
or other filings are required to be made by Purchaser with, nor are any
consents, registrations, Approvals, permits or authorizations required to be
obtained by Purchaser from, any Governmental Entity, in connection with the
execution and delivery of this Agreement by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby, except for notices, reports,
filings, consents, registrations, Approvals, permits or authorizations, the
failure to make or obtain which could not, in the aggregate, have a Purchaser
Material Adverse Effect, hinder or delay the performance by any party of its
obligations under this Agreement or hinder or delay the consummation of the
transactions contemplated herein.
Section 4.7 Non-Contravention. The execution, delivery and
performance of this Agreement and the Ancillary Agreements by Purchaser, and the
consummation by Purchaser of the transactions contemplated in this Agreement and
therein, do not and will not (a) violate or conflict with, or constitute a
default under, any provision of the statuts or comparable governing instruments
of Purchaser or any of its Subsidiaries, (b) violate any provision of, or
constitute (or with notice or lapse of time or both would constitute) a default
under, or accelerate or permit the
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acceleration of the performance required by, any Contracts to which Purchaser or
any of its Subsidiaries is a party or by which any of them or any of their
respective assets or properties are bound or subject (collectively, the
"Purchaser Contracts"), (c) entitle any party to cancel or terminate, or result
in any change in the rights or obligations of any party under, or require a
consent or waiver by any party to, any Purchaser Contract, (d) result in the
creation of a lien, pledge, security interest, voting trust arrangement, charge,
option, restriction, claim, or other encumbrance on the equity securities,
ownership interests or on the assets of Purchaser or any of its Subsidiaries,
(e) violate any Law, by which or to which any of their respective assets or
properties are bound or subject, or (f) result in the loss or impairment of any
Approval of or benefitting Purchaser or any of its Subsidiaries; except (i) in
the case of clauses (b), (d), (e) and (f) of this Section, for such violations,
defaults, accelerations, losses or impairments as, when taken together with all
other such violations, defaults, accelerations, losses and impairments, could
not have a Purchaser Material Adverse Effect, and (ii) in the case of clauses
(b) and (c), for violations, defaults, accelerations, cancellations,
terminations of and changes in rights under the Contracts, instruments,
agreements and obligations listed in Schedule 2.7.
Section 4.8 Financial Statements. The consolidated balance
sheet of Purchaser dated June 30, 1997 (the "Purchaser Balance Sheet Date")
contained in Schedule 2.8(a) (the "Purchaser Balance Sheet") fairly presents the
consolidated assets, liabilities and financial position of Purchaser and its
consolidated Subsidiaries as a whole as of such date in accordance with French
GAAP and the accounting practices listed on Schedule 2.8(a)(i), in each case
consistently applied, except as specifically noted therein. The consolidated
statement of income and of changes in financial condition dated June 30, 1997
contained in Schedule 2.8(a) of (the "Purchaser Income Statement", and,
collectively with the Purchaser Balance Sheet, the "Purchaser Financial
Statements") fairly presents the consolidated results of operations, retained
earnings and changes in financial condition, as the case may be, of Purchaser
and its consolidated Subsidiaries for such period, in each case in accordance
with French GAAP and the accounting practices listed on Schedule 2.8(a)(i), in
each case consistently applied, except as specifically noted therein. The income
statements delivered pursuant to
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Section 5(d) of the Initial Agreement fairly present in all material respects in
accordance with French GAAP the results of combined operations and operating
cash flows for Purchaser thereby for the respective periods covered thereby, in
each case subject to year-end adjustments (consisting of normal recurring
accruals and any changes in perimeter) and the omission of explanatory footnote
materials required by French GAAP.
Section 4.9 Closing Consents. Except for the consents, waivers
and authorizations set forth in Schedule 2.9 (the "Purchaser Closing Consents"),
and other than as disclosed in Section 4.6, there are no Persons or entities,
other than Purchaser, whose Approval, consent, waiver or authorization is
legally or contractually required to consummate the transactions contemplated by
this Agreement, except for consents, waivers and authorizations, the failure to
obtain which could not, in the aggregate, have a Purchaser Material Adverse
Effect, hinder or delay the performance by any party of its obligations under
this Agreement or hinder or delay the consummation of the transactions
contemplated herein. As of the Cash Closing, each of the Purchaser Closing
Consents will have been duly authorized, executed and delivered by each of the
parties thereto and from and after the Cash Closing will be a valid and binding
agreement of each such party, enforceable against such party in accordance with
its terms.
Section 4.10 No Actions. There is no action, claim, dispute,
proceeding, suit, investigation or appeal pending or, to Purchaser's knowledge,
threatened, against Purchaser or any of its Subsidiaries which questions or
challenges the validity of this Agreement, any Ancillary Agreement or any
Purchaser Closing Consent, or any action taken or proposed to be taken by
Purchaser or any of its Subsidiaries pursuant hereto or thereto or in connection
with the transactions contemplated hereby and thereby, and (to the knowledge of
Purchaser or any Subsidiary of Purchaser) no conditions exist which could
reasonably be expected to lead to any such action, claim, dispute, proceeding,
suit, investigation or appeal.
Section 4.11 No Undisclosed Liabilities. Notwithstanding any
other representation or warranty set forth in this Agreement and except as set
forth in Schedule 2.11, Purchaser did not have, as of June 30, 1997, any
liabilities of any nature (whether accrued, absolute, fixed, contingent,
liquidated or unliquidated or otherwise
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and whether due or to become due, and whether or not required by generally
accepted accounting principles to be set forth on Purchaser's Balance Sheet),
except as and to the extent of the amounts specifically reflected or reserved
against in the Purchaser Balance Sheet or in the notes thereto and except for
liabilities which could not, in the aggregate, have a Purchaser Material Adverse
Effect.
Section 4.12 Absence of Certain Changes. Except as set forth
in Schedule 2.12 and except as specifically provided for in this Agreement or
agreed in writing between Parent and Purchaser, since the Purchaser Balance
Sheet
Date:
(a) Purchaser has conducted its businesses only in the
ordinary course of business consistent with past practice;
(b) there has not occurred any damage, destruction or other
casualty loss with respect to any asset or real or tangible personal property
owned, leased or otherwise by Purchaser, whether or not covered by insurance,
which could have a Purchaser Material Adverse Effect;
(c) Purchaser has not (i) sold, pledged or agreed to sell or
pledge any equity securities or ownership interests owned by it in any of its
Subsidiaries; (ii) amended or violated its Statuts; (iii) reclassified, split,
subdivided, combined or reclassified any of its equity securities or ownership
interests; or (iv) declared, set aside or paid any dividend payable in
securities or property other than cash with respect to any of its equity
securities or ownership interests;
(d) Purchaser has not (i) issued, sold, pledged, disposed of
or encumbered any shares of, or securities convertible or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any of
its equity securities or ownership interests or any of its other securities,
property or assets; (ii) transferred, leased, licensed, guaranteed, sold,
mortgaged, pledged, disposed of or subjected to or permitted the imposition of
any lien, claim, restriction or encumbrance (other than statutory liens for
Taxes not yet due and payable) on any of its assets or properties, other than in
the ordinary course of business consistent with past practice; (iii) acquired
directly or indirectly, by purchase, redemption or otherwise any of its equity
securities or ownership interests; (iv)
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incurred any indebtedness for borrowed money or guaranteed the obligations of
any Person, or made any loans or advances, in each case except in the ordinary
course of business consistent with past practice; (v) paid, discharged or
satisfied any liability other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice, of liabilities
reflected on or reserved against the financial statements contained in Schedule
4.8(a) or subsequently incurred in the ordinary course of business consistent
with past practice; (vi) entered into any Purchaser Material Contract or
agreement other than in the ordinary course of business consistent with past
practice; or (vii) authorized capital expenditures in excess of $200,000,000 in
the aggregate or made any direct or indirect acquisition of, or investment in,
assets or stock of any other Person having an aggregate acquisition price in
excess of $20,000,000;
(e) Purchaser has not, except in the ordinary course of
business consistent with past practice, (i) granted any severance or termination
pay to, or entered into any employment or severance agreement with, or increased
the compensation payable to, any director, officer or other employee of
Purchaser; or (ii) established, adopted, entered into, made any new grants or
awards under or amended any Purchaser Employee Benefit Plans;
(f) Purchaser has not settled or compromised any claims or
litigation or waived, assigned or released any rights or claims involving
liability or potential liability of Purchaser or otherwise having a value of
$5,000,000 per right, claim or action or $10,000,000 in the aggregate or, except
in the ordinary course of business consistent with past practice, modified,
amended or terminated any Purchaser Material Contracts to which it is a party or
by which it or any of its properties is bound;
(g) there has been no change in the accounting policies or
procedures of Purchaser;
(h) Purchaser has not made any Tax election or settled or
compromised any Tax liability or permitted any insurance policy naming it as a
beneficiary or a loss payable payee to be canceled or terminated, except, in any
such case, in the ordinary course of business consistent with past practice and
except to the extent that such Tax liabilities and insurance policy limits do
not exceed $5,000,000 in the aggregate;
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(i) Purchaser has not sold, disposed of or other wise
abandoned, altered or written down the book value of (except for amortization
and depreciation thereof in accordance with French GAAP), any item of the
property, plant and equipment reflected on the Purchaser Balance Sheet contained
in Schedule 2.8(a) or on the accounting records of Purchaser as of the Cash
Closing, except for sales and dispositions not exceeding $5,000,000 in the
aggregate;
(j) Purchaser has not created any lien, claim, restriction or
other encumbrance on or affecting title to the real property occupied or used by
Purchaser, other than liens not affecting the use, operation or value of such
real property created in the ordinary course of business consistent with past
practice, or entered into any leases or subleases for any real or personal
property providing for annual payments greater than $15,000,000 in the
aggregate; and
(k) Purchaser has not authorized or entered into an agreement
to do any of the foregoing.
Section 4.13 Material Contracts.
(a) Schedule 2.13(a) contains a true and complete list of each
agreement, instrument, contract or arrangement to which Purchaser is a party or
by which it or any of their respective properties or assets are bound: (i) which
relates to the borrowing of money and pursuant to which the outstanding
indebtedness is in excess of $5,000,000, or (ii) under which Purchaser made or
received payments in excess of $5,000,000 during 1997 or is reasonably likely to
make or receive payments in excess of $5,000,000 during 1998; or (iii) which
accounts for 2% or more of Purchaser's revenue per annum or imposes any
encumbrance, lien or restriction on any assets or properties (including
Purchaser Intellectual Property) used in the manufacture or sale of any such
product or service (collectively, the "Purchaser Material Contracts").
(b) Except as set forth in Schedule 2.13(b) and except for
such failures to be valid, binding and enforceable, breaches, defaults,
violations and events as could not, in the aggregate, have a Purchaser Material
Adverse Effect, hinder or delay the performance by any party of its obligations
under this Agreement or hinder or delay the consummation of the transactions
contemplated herein, (i) each Purchaser Material Contract is a valid and binding
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obligation of each of the parties thereto and is enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles,
except for such failures to be valid and binding as could not, individually or
in the aggregate, have a Purchaser Material Adverse Effect, (ii) Purchaser is
not in violation or breach of, or in default under, any Purchaser Material
Contract and, to Purchaser's knowledge, no other party to any Purchaser Material
Contract is in violation or breach thereof, or in default thereunder, except, in
either case, for such violations, breaches and defaults as could not,
individually or in the aggregate, have a Purchaser Material Adverse Effect, and
(iii) to Purchaser's knowledge, no event has occurred that, with the passage of
time or the giving of notice or both, would permit the unilateral modification,
acceleration, or termination of any Purchaser Material Contract.
(c) Purchaser has caused to be delivered or made available to
Parent a true, complete and current copy of each Purchaser Material Contract.
(d) Except as set forth on Schedule 4.13(d)(i), and except for
agreements providing, in the aggregate, for the nonstatutory compensation and
benefits summarized in Schedule 2.13(d)(ii), Purchaser is not a party to or
bound by any agreement, instrument, contract or arrangement (i) to which any
directors, executive officers or affiliates of Purchaser or any Purchaser
Subsidiary, is a party or is bound, or (ii) which contains any provision or
covenant limiting (x) the ability of Purchaser to engage in any line of
business, to compete with any Person, to do business with any Person or in any
location or to employ any Person or (y) the ability of any Person to compete
with or obtain products or services from Purchaser.
Section 4.14 Approvals. Purchaser has all Approvals required
for the conduct of its business, except for Approvals, the failure to obtain
which could not, in the aggregate, have a Purchaser Material Adverse Effect,
hinder or delay the performance by any party of its obligations under this
Agreement or hinder or delay the consummation of the transactions contemplated
herein. All such Approvals are valid and in full force and effect, and Purchaser
is in compliance with all such Approvals, except for such failures to be valid
or to be in compliance as could not,
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individually or in the aggregate, have a Purchaser Material Adverse Effect.
Except for such proceedings as could not, individually or in the aggregate, have
a Purchaser Material Adverse Effect, there is no proceeding pending or, to
Purchaser's knowledge, threatened, that disputes the validity of any such
Approval or that is likely to result in the revocation, cancellation or
suspension, or any adverse modification of, any such Approval.
Section 4.15 Compliance with Laws. Except as set forth in
Schedule 2.15:
(a) Purchaser, and its businesses, facilities, operations and
agreements have complied with all Laws and Approvals, except for such instances
of noncompliance as, when taken together with all other instances of
noncompliance, could not have a Purchaser Material Adverse Effect.
(b) No investigation or review by any Governmental Entity with
respect to Purchaser or any of its businesses, facilities, operations or
agreements is pending or, to Purchaser's knowledge, threatened, except for
investigations and reviews which could not, in the aggregate, have a Purchaser
Material Adverse Effect, hinder or delay the performance by any party of its
obligations under this Agreement or hinder or delay the consummation of the
transactions contemplated herein. To Purchaser's knowledge, no Governmental
Entity has indicated an intention to conduct the same, except for such
investigations and reviews as, when taken together with all other investigations
and reviews, could not have a Purchaser Material Adverse Effect.
(c) Purchaser has not received any notice or communication
alleging any noncompliance by Purchaser with any Law or Approval that has not
been cured, and Purchaser is not subject to any unpaid fine or any continuing
sanction for any such noncompliance, except, in either case, for such instances
of noncompliance as, when taken together with all other instances of
noncompliance, could not have a Purchaser Material Adverse Effect.
(d) Purchaser is not in violation of or in default under, and
to Purchaser's knowledge, no event has occurred which, with the lapse of time or
the giving of notice or both, would result in the violation of or default under,
the terms of any judgment, decree, order, injunction
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or writ of any Governmental Entity, except for such violations or defaults as,
when taken together with all other violations and defaults, could not have a
Purchaser Material Adverse Effect.
Section 4.16 Insurance. Schedule 2.16 (i) contains a true and
accurate summary of the insurance coverage of the property, assets or business
liabilities of Purchaser specifying with respect to each such type of coverage,
the term of the policies or bonds, the limits and layers of liability and the
annual premiums, and (ii) lists any agreements, arrangements or commitments
under which Purchaser indemnifies any other Person or is required to carry
insurance for the benefit of any other Person in an amount in excess of
$1,000,000 in the aggregate. The policies and bonds summarized in Schedule 2.16
are in full force and effect, all premiums due and payable thereon have been
paid, no notice of cancellation or termination has been received with respect to
any such policy, and Purchaser has complied with such policies and bonds. Such
policies and bonds will remain in full force and effect through the respective
dates set forth in Schedule 4.16 without the payment of additional premiums,
except in the ordinary course of business, and will not in any way be affected
by, terminate, or lapse by reason of the transactions contemplated by this
Agreement.
Section 4.17 Customers. Since the Purchaser Balance Sheet
Date, to Purchaser's knowledge, no municipality or other customer of Purchaser
accounting for 1% or more of Purchaser's consolidated annual revenue has
canceled or otherwise terminated its relationship with Purchaser or has at any
time decreased significantly its usage of the services of Purchaser and there
has been no material adverse change in the business relationship of Purchaser
with any such municipality or customer, as the case may be. To Purchaser's
knowledge, no such municipality or other customer intends to cancel or otherwise
terminate its relationship with Purchaser or to decrease significantly its usage
of the services of Purchaser, as the case may be.
Section 4.18 Affiliate Interests. Except as set forth in
Schedule 2.18, neither Purchaser, any Purchaser Subsidiary nor to the knowledge
of Purchaser (after reasonable investigation) any director, executive officer or
affiliate of Purchaser or any Purchaser Subsidiary (i) has any interest in any
property, real or personal, tangible or intangible, of Purchaser, except for
interests with a value
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of not greater than $1,000,000 in the aggregate (ii) has any cause of action or
other claim whatsoever against Purchaser or their respective assets or
properties, or owes any amount to, or is owed any amount by, any of them, except
for claims and indebtedness not in excess of $1,000,000 in the aggregate, or
(iii) owns, directly or indirectly, any debt, equity or other interest or
investment in any Person which is a competitor, lessor, lessee, customer or
supplier of Purchaser, except securities of any publicly held corporation which
do not exceed 1% of the outstanding voting securities of such corporation.
Section 4.19 Title to Properties. Except as set forth on
Schedule 2.19, Purchaser has good and marketable title to or a valid leasehold
interest in all of the properties and assets (real, personal, mixed, tangible
and intangible) which are necessary to the conduct of its businesses as
presently conducted, free and clear of all liens, claims, defects, encumbrances,
encroachments, easements, restrictions, security interests, mortgages or deeds
of trust, except (a) liens for current Taxes not yet due and payable, (b) such
liens, easements and zoning restrictions as are matters of public record, are
not substantial in character, amount or extent and do not impair the use or
occupancy of such property or assets or the business operations of Purchaser and
(c) liens noted in the Purchaser Financial Statements.
Section 4.20 Leased Real Property. Except as set forth in
Schedule 2.20, and except for such failures to be valid, binding and
enforceable, breaches, defaults, violations and events as could not, in the
aggregate, have a Purchaser Material Adverse Effect, hinder or delay the
performance by any party of its obligations under this Agreement or hinder or
delay the consummation of the transactions contemplated herein, (i) each lease
of real property to which Purchaser is a party (each, a "Purchaser Real Property
Lease") is a valid and binding obligation of each party thereto and is
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles, (ii) Purchaser is not in violation or breach of, or in default
under, any Purchaser Real Property Lease, and, to Purchaser's knowledge, no
other party to any Purchaser Real Property Lease is in violation or breach
thereof, or in default thereunder, (iii) to Purchaser's knowledge, no event has
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occurred that, with the passage of time or the giving of notice or both, would
permit the unilateral modification, acceleration, or termination of any
Purchaser Real Property Lease, and (iv) Purchaser enjoys peaceful and
undisturbed possession under each Purchaser Real Property Lease.
Section 4.21 Personal Property.
(a) The equipment and fixtures used by Purchaser in connection
with its businesses are, in the aggregate, in substantially good repair
(reasonable wear and tear excepted) and are adequate for the uses to which they
are being put.
(b) Schedule 2.21(b) sets forth a true and complete list of
all of the leases of personal property to which Purchaser is a party which
provides for payments in excess of $2,000,000 per year (collectively, the
"Purchaser Personal Property Leases"). Purchaser has caused to be delivered or
made available to Parent a true and complete copy of each Purchaser Personal
Property Lease.
(c) Except as set forth in Schedule 2.21(c), and except for
failures to be valid, binding or enforceable, defaults, and events which could
not, in the aggregate, have a Purchaser Material Adverse Effect, hinder or delay
the performance by any party of its obligations under this Agreement or hinder
or delay the consummation of the transactions contemplated herein, (i) each
Purchaser Personal Property Lease is a valid and binding obligation of each
party thereto and is enforceable against each such party in accordance with its
terms, (ii) there is no default or claim of default under any Purchaser Personal
Property Lease, and (iii) no event has occurred that, with the passage of time
or the giving of notice or both, would constitute a default by any party to any
Purchaser Personal Property Lease, or would permit unilateral modification,
acceleration, or termination of Purchaser any Purchaser Personal Property Lease.
Section 4.22 Intellectual Property. Schedule 2.22 includes a
true, complete and current list of all patents, inventions, know-how that has
been acquired for value, trade names, registered and unregistered trademarks,
registered and unregistered service marks and registered and unregistered
copyrights owned or used by any Purchaser Subsidiary, and all pending
applications therefor and all licenses and other agreements relating thereto,
other than
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immaterial items (collectively, the "Purchaser Intellectual Property"). Except
as set forth in Schedule 2.22, Purchaser owns the entire right, title and
interest in and to the Purchaser Intellectual Property (including, without
limitation, the exclusive right to use and license the same) and each item
constituting part of the Purchaser Intellectual Property has been duly
registered or filed with or issued by the appropriate authorities in the
countries indicated in Schedule 2.22 and, to Purchaser's knowledge, such
registrations, filings and issuances remain in full force and effect. To
Purchaser's knowledge, there are no infringements or misappropriations of any
proprietary rights or Purchaser Intellectual Property owned by or licensed by or
to Purchaser. The trademarks, service marks and trade names of Purchaser are
enforceable by Purchaser and all patents comprising the Purchaser Intellectual
Property are valid and enforceable by Purchaser. Except as set forth on Schedule
2.22, no consent of third parties will be required for the use of any Purchaser
Intellectual Property as a consequence of the consummation of the transactions
contemplated hereby. Except as set forth on Schedule 2.22, (i) no claims are
currently being asserted by any Person to the use of any of the Purchaser
Intellectual Property or challenging or questioning the validity or
effectiveness of any such license or agreement, and the use of the Purchaser
Intellectual Property by Purchaser does not infringe on the rights of any Person
and no suits or proceedings are pending or threatened against with respect to
the foregoing; and (ii) no claims are currently being asserted, and, to
Purchaser's knowledge, no conditions exist upon which such claims could be
based, that Purchaser is in default or is not in full compliance with all
licenses and other agreements under which it is using any item of the Purchaser
Intellectual Property. To Purchaser's knowledge there are no infringements of
any proprietary rights owned by or licensed by or to Purchaser. The trademarks,
service marks and trade names of Purchaser are enforceable by Purchaser and the
patents of Purchaser are valid and enforceable by Purchaser. The Purchaser
Intellectual Property constitutes all of the intellectual property necessary for
the operation of Purchaser's businesses as presently conducted and provides
Purchaser with all requisite rights to conduct its businesses as presently
conducted.
Section 4.23 Employees.
(a) Since the Purchaser Balance Sheet Date, there
have been no increases in salaries, wages and fringe
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benefits of the employees of Purchaser (other than increases in the ordinary
course of business of Purchaser consistent with past practice), nor do any such
employees that are within the scope of applicability of collective bargaining
agreements enjoy salary benefits in excess of what is provided under the
relevant collective bargaining agreement.
(b) Since the Purchaser Balance Sheet Date, there have been no
changes in the employment conditions of Purchaser's employees nor have any
additional employment relationships commenced or offers of employment been given
by Purchaser, except in the ordinary course of business consistent with past
practice.
(c) Purchaser has neither signed, nor is it liable under any
policy of any life or like personal insurances in excess of compulsory
insurances, nor do any of the employees of Purchaser enjoy any other benefits in
excess of benefits provided by Law, except as stated in Schedule 2.23.
(d) With such exceptions as would not reasonably be likely to
have a material adverse effect on the ability of Purchaser operating or
conducting business in any particular country to operate or conduct such
business in such country, Purchaser has paid all labor related charges.
(e) To Purchaser's knowledge, there are not pending any
strikes, work stoppage or like in Purchaser.
(f) To Purchaser's knowledge there are no claims from present
or former employees of Purchaser on account for overtime pay, wages, salaries,
vacations, discrimination or termination of employment which could reasonably be
expected to cause or result in losses, damages, claims or liabilities to or
against Purchaser greater than $5,000,000 in the aggregate.
Section 4.24 Litigation and Liabilities. Except as set forth
on Schedule 2.24 and except for such matters as could not, in the aggregate,
have a Purchaser Material Adverse Effect, hinder or delay the performance by any
party of its obligations under this Agreement or hinder or delay the
consummation of the transactions contemplated herein, there are no (i) civil,
criminal or administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the knowledge of Purchaser, threatened against
Purchaser or any of its Subsidiaries, or
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(ii) obligations or liabilities, whether or not accrued, contingent or
otherwise, including, without limitation, those relating to matters involving
any Environmental Law and occupational safety and health matters.
Section 4.25 Employee Benefits.
(a) Schedule 2.25 contains a true and accurate summary, for
each jurisdiction in which Purchaser conducts business, of the employees
covered, amounts payable and material terms of payment under the employment,
severance, bonus, incentive, deferred compensation, pension, profit sharing,
stock option, stock, stock based, death benefit, health, disability and other
employee benefit plans or agreements (the "Purchaser Employee Benefit Plans")
maintained or contributed to by Purchaser in such jurisdiction. Purchaser has
delivered to Parent true, complete and correct copies of (i) each Purchaser
Employee Benefit Plan and (ii) each trust agreement and annuity or other
insurance contract relating to any Purchaser Employee Benefit Plan.
(b) Purchaser is not in default of any material obligation to
be performed under any of the Purchaser Employee Benefit Plans. None of the
Purchaser Employee Benefit Plans is subject to the provisions of the United
States Employee Retirement Income Security Act of 1974, as amended. Each
Purchaser Employee Benefit Plan has been administered in all material respects
in accordance with its terms. All the Purchaser Employee Benefit Plans are in
compliance in all material respects with the provisions of applicable law. All
payments, deductions from wages, reports, returns and similar documents with
respect to the Purchaser Employee Benefit Plans required to be filed with or
paid to any Governmental Entity or Purchaser Employee Benefit Plan or
distributed to any Purchaser Employee Benefit Plan participant have been duly
and timely filed, distributed or paid. There is no pending or, to the knowledge
of Purchaser, threatened litigation relating to any Purchaser Employee Benefit
Plan, other than routine claims for benefits. Each Purchaser Employee Benefit
Plan which is a pension plan has sufficient assets to discharge the liabilities
for benefits thereunder.
(c) Except as set forth on Schedule 2.25(c), the consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements
will not (i) entitle any employees of Purchaser to severance pay or
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(ii) accelerate or provide any other rights or credits under, or increase the
amount payable or trigger any other obligation pursuant to, any of the Purchaser
Employee Benefit Plans.
Section 4.26 Environmental Matters. Except as disclosed in
Schedule 2.26 and except for such instances of noncompliance, release,
liability, deficiencies in permitting, use, circumstances, conditions, failures
to reserve orders, decrees, injunctions, directives and investigations as could
not, individually or in the aggregate, have a Purchaser Material Adverse
Effect,: (i) Purchaser has complied at all times with all applicable
Environmental Laws; (ii) no property owned or operated by Purchaser (including
landfills, transfer stations, incinerators, or any storage, processing or
recycling facility) has released any Hazardous Substance into the environment;
(iii) no property formerly owned or operated by Purchaser has released any
Hazardous Substance into the environment during such period of ownership or
operation; (iv) Purchaser is not subject to any liability for any Hazardous
Substance disposal or contamination on any owned or third party property; (v)
Purchaser possesses all permits, authorizations, licenses and approvals
necessary to the current conduct of its operations and businesses and is not
aware of any circumstances that would interfere with any future permit renewal,
issuance or modification required for any planned future operations or facility
expansions; (vi) Purchaser is not subject to any order, decree, injunction,
directive or investigation by any Governmental Entity or to any indemnity,
agreement or other obligation to any third party relating to liability under any
Environmental Law; (vii) none of the properties of Purchaser have been used for
the handling or disposal of any Hazardous Substances other than for the handling
and disposal of uncontaminated household waste and similar materials having the
same regulatory classification in compliance with all Environmental Laws; (vii)
there are no other circumstances or conditions involving Purchaser that could be
expected to result in any claims, liabilities, investigations, costs or
restrictions on the ownership, use, or transfer of any property in connection
with any Environmental Law; (x) Purchaser has established appropriate reserves
and posted all required financial assurances required under any Environmental
Law to address all facility closure and post-closure obligations arising under
any Environmental Law. Except with respect to conditions which could not,
individually or in the aggregate, have a Purchaser Material
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Adverse Effect, (vi) Purchaser has not received any notice, demand, letter,
claim or request for information indicating that it may be in violation of or
subject to liability under any Environmental Law; and (ii) Purchaser has
delivered to Parent copies of all environmental reports, studies, assessments,
sampling data and other environmental information in its possession relating to
Purchaser or any of its current or former properties or operations.
Section 4.27 Landfills. Schedule 2.27 lists each landfill
owned or operated by Purchaser and accurately describes each such landfill by
its city or county and state or province of location, total area (in square
meters), permitted area (in square meters), estimated remaining permitted
capacity in cubic meters, estimated or mandated closure date, and estimated
closure, post-closure and reclamation liability at its projected or mandated
closure date (computed at the closure date with and without discount to present
value) and any other recorded or unrecorded accruals, contingent or otherwise,
or reserves related to landfill liabilities of any type.
Section 4.28 Taxes. Except as disclosed in Schedule 2.28 and
except as would not have a Purchaser Material Adverse Effect: (i) Purchaser has
timely filed all Tax Returns that are required to be filed with respect to
Purchaser or any of its income, properties or operations; (ii) such Tax Returns
are true, complete and accurate in all material respects; (iii) all Taxes due or
shown as due on the returns described in clause (i) with respect to Purchaser
(without regard to whether such Taxes have been assessed and without regard to
whether the liability for such Taxes is disputed) have been timely paid or have
been provided for in a reserve which is adequate for the payment of such Taxes
and is identified in Schedule 2.28; (iv) Purchaser has maintained adequate
provisions on their books for all Taxes that have accrued but are not yet due;
(v) no adjustments or deficiencies relating to the Tax Returns referred to in
clause (i) or any Taxes attributable to Purchaser has been assessed, proposed or
asserted; (vi) there are no pending or (to the knowledge of Purchaser)
threatened actions or proceedings for the assessment or collection of Taxes
against Purchaser; (vii) there are no outstanding waivers or agreements
extending or tolling the applicable statute of limitations for any period with
respect to any Taxes of Purchaser; (viii) no audit or examination with respect
to Purchaser is presently pending or (to the knowledge of Purchaser) threatened;
(ix) no
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material claim has ever been made by an authority in a jurisdiction where
Purchaser does not file Tax Returns that it is or may be subject to Taxes by
that jurisdiction; (x) there are no liens on any of the assets of Purchaser that
arose in connection with any failure (or alleged failure) to pay any Taxes; (xi)
Purchaser is not a party to any allocation or sharing agreement or intercompany
account system (whether written or unwritten) in respect of Taxes; and (xii) all
Tax records required to have been kept and maintained by Purchaser have been so
kept and maintained, in their proper form, for at least the minimum retention
period required by the laws or regulations of the relevant taxing jurisdiction.
Section 4.29 Brokers and Finders. Neither Purchaser nor any of
its officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated in this Agreement, except that
Purchaser has employed X.X. Xxxxxx & Co. Incorporated as its financial advisors,
the arrangements with which have been disclosed in writing to Parent prior to
the date hereof.
Section 4.30 U.S. Regulatory Representations. The acquisition
of the Consideration Shares by Parent constitutes the acquisition of voting
securities of a foreign issuer and as of the date hereof, and as of the Closing
Date, Purchaser (and all of the entities controlled by Purchaser) (i) did not,
and will not hold assets located in the United States (other than investment
assets or voting or nonvoting securities of another person) having an aggregate
book value of $15,000,000 or more and (ii) had not made aggregate sales in or
into the United States of $25,000,000 or more in its most recent fiscal year.
Purchaser is a foreign person. The term "voting securities", "foreign issuer",
"entities", "controlled", "hold", "investment assets", "person", and "foreign
person", as used in this Section 4.31, have the respective meanings set forth in
C.F.R. ss. 801.1.
Section 4.31 Aggregation. The imperfections, defects, orders,
actions, defaults, liabilities, inaccuracies and other items omitted from
disclosure in connection with the representations and warranties made in
Sections 4.1 through 4.31 on grounds of immateriality or failure to have a
Purchaser Material Adverse Effect do not
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and could not, taken as a whole, cause or result in losses, damages, claims or
liabilities greater than $15,000,000.
ARTICLE V
Tax Matters
Section 5.1 Indemnification.
(a) Parent's Indemnification of Purchaser. Parent and
International shall be liable for and shall indemnify and hold harmless
Purchaser and its Affiliates from, against and in respect of (i) any Taxes
imposed with respect to the Selling Entities, (ii) any Taxes imposed with
respect to any of the International Subsidiaries for the taxable periods, or
portions thereof, ended on or before the Cash Closing Date, but only to the
extent that Parent would be required to make a payment arising from the breach
of the representation and warranty set forth in Section 3.29, and (iii) any
Transfer Taxes for which Parent is liable pursuant to Section 5.5 hereof, except
with respect to clause (ii), Tax liabilities (A) previously paid, or (B)
previously reserved for and reflected in the International Financial Statements.
(b) Purchaser's Indemnification of Parent. Purchaser shall
indemnify and hold harmless Parent and its Affiliates (other than the
International Subsidiaries) from, against and in respect of any Taxes imposed
with respect to any of the International Subsidiaries for any taxable period, or
portion thereof, beginning after the Cash Closing Date.
(c) Certain Post-Closing Refunds and Credits. If Parent or any
Affiliate of Parent becomes entitled to a refund or credit of Taxes with respect
to any International Subsidiary for any period for which Parent is liable for
Taxes under Section 5.1(a) and such Taxes are attributable to the carryback of
losses, credits or similar items from a taxable year or period that begins after
the Cash Closing Date and such items are attributable to any International
Subsidiary, Parent shall promptly pay to Purchaser the amount of such refund or
credit together with any interest thereon. If Purchaser or its Affiliates
receive a refund of any Taxes for which Parent and International are responsible
pursuant to Section 5.1(a), Purchaser or its Affiliates shall remit such refund
to Parent within 30 days of receipt
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of such refund and, if such refund relates to an asset reflected in the
calculation of the Closing Net Worth, the amount of such refund shall not be
included in the calculation of Net Worth.
Section 5.2 Computation of Tax Liabilities; Proration of
Taxes. Whenever it is necessary to determine the liability for Taxes for a
portion of a taxable year or period that begins before and ends after the Cash
Closing Date, the determination of the Taxes or such earnings and profits for
the portion of the year or period ending on, and the portion of the year or
period beginning after, the Cash Closing Date shall be determined by assuming
that the taxable year or period ended at the close of business on the Cash
Closing Date, except that Taxes, exemptions, allowances or deductions that are
calculated on an annual basis shall be prorated on the basis of the number of
days in the annual period elapsed through the Cash Closing Date.
Section 5.3 Tax Returns.
(a) Unless prohibited by applicable law, at Purchaser's
request, the taxable years of any International Subsidiary shall be closed at
the close of business on the Cash Closing Date for purposes of all Tax Returns
and determining liabilities for Taxes for the taxable year in which Cash Closing
occurs. Purchaser shall notify Parent in writing of its making such request
contemporaneously with the making of the request.
(b) Except to the extent otherwise provided herein, Parent,
International and the Selling Entities and each of the International
Subsidiaries shall file or cause to be filed when due (i) all Tax Returns for
any of the International Subsidiaries that are due on or before the Cash Closing
Date and (ii) all Tax Returns relating to each of the International Subsidiaries
that filed on a consolidated, combined or unitary basis with respect to a group
that includes Parent, International or the Selling Entities for all periods (or
portions thereof) ending on or before the Cash Closing Date. At the reasonable
request of Parent, Purchaser shall assist Parent in filing all applicable
extensions for Tax Returns to be filed by Parent, International, and each of the
International Subsidiaries pursuant to this Section 5.3(b).
(c) Purchaser shall file or cause to be filed when due all Tax
Returns with respect to each of the
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International Subsidiaries due to be filed after the Cash Closing Date other
than the Tax Returns referred to in Section 5.3(b).
(d) (i) Parent shall deliver a copy of each non-United States
Tax Return to be filed by Parent, International, and each of the International
Subsidiaries pursuant to Section 5.3(b), along with all schedules, work papers,
and other documentation that are relevant to the preparation of such Tax Returns
to Purchaser not less than 30 days prior to the date on which such Tax Return is
due to be filed (taking into account any applicable extensions) (the "Due
Date"). Such Tax Returns shall not be filed without Purchaser's prior written
approval, which will not be unreasonably withheld. If Purchaser objects to any
items reflected on such Tax Returns, the parties shall attempt to resolve the
disagreement, provided that all such Tax Returns shall be prepared consistent
with Past Practice, except to the extent Purchaser and Parent agree otherwise.
For purposes of this Article V, "Past Practice" as to the preparation of Tax
Returns and Tax information materials includes, but is not limited to, the past
practice of the parties preparing such documents as to the content of such
documents and the information, schedules and work papers used to prepare such
documents and the method of computation of separate taxable income, Tax credits
and other relevant measures of items of income, deduction, gain, loss and credit
of the entities to which such documents relate.
(ii) If Parent, International or the Selling Entities may be
liable for any portion of Taxes payable in connection with any Tax
Return to be filed by Purchaser with respect to a taxable period
beginning before and ending on or after the Closing Date, Purchaser
shall cause such Tax Return to be prepared on a basis which is
consistent with such previously filed returns and in accordance with
Past Practice, except to the extent Purchaser and Parent agree
otherwise. Purchaser shall deliver a copy of each such Tax Return and
any schedules, work papers and other documentation that are relevant to
the preparation of such return to Parent not less than 30 days prior to
the Due Date. If Parent objects to any items reflected on such Tax
Returns, the parties shall attempt to resolve the disagreement,
provided that (i) transactions taking place prior to the Cash Closing
Date shall be reflected in a manner consistent with Past Practice and
(ii) transactions taking place on or after the Cash Closing
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Date shall be reflected in a manner reasonably determined by Purchaser,
unless Parent or International will be adversely affected, in which
case such transactions shall be reflected in a manner consistent with
Past Practice.
(e) Information to be Provided by Purchaser. With respect to
Tax Returns to be filed by Parent pursuant to Section 5.3(b) hereof and due
after the Cash Closing Date, Purchaser shall, within 45 days of the Cash Closing
Date, prepare and provide to Parent a package of Tax information materials
relevant to the preparation of such Tax Returns (the "Tax Package"), which shall
be completed in accordance with Past Practice.
Section 5.4 Allocation of Purchase Price. The parties agree
that the allocation for all Tax reporting purposes of the Consideration among
the International Subsidiaries shall be as set forth in that certain letter
agreement, dated the date hereof, between Parent and Purchaser.
Section 5.5 Transfer Taxes. All excise, sales, use, transfer,
stamp, documentary, filing, recording and other similar Taxes and fees which may
be imposed or assessed as a result of the transactions effected pursuant to this
Agreement, together with any interest, additions or penalties with respect
thereto and any interest in respect of such interest, additions or penalties
("Transfer Taxes"), shall be borne by Parent. Any Tax Return that must be filed
in connection with Transfer Taxes shall be (i) prepared and filed when due by
the party primarily or customarily responsible under the applicable local law
for filing such Tax Return, (ii) prepared on a basis that is consistent with the
allocation of the Consideration determined hereunder and (iii) provided to the
other party at least 10 days prior to the applicable due date.
Section 5.6 Contest Provisions.
(a) Notice Requirement. Each of Purchaser, on the one hand,
and Parent, International and the Selling Entities, on the other hand (in either
case, the "Recipient"), shall promptly notify the tax director of the other
party in writing upon receipt by the Recipient of notice of any pending or
threatened audits, adjustments, assessments or deficiencies (a "Tax Audit")
which may affect the liability for Taxes of such other party, provided that
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in any event such notice shall not be given more than 10 business days after the
Recipient receives such notice. The Recipient shall provide the other party with
factual information (to the extent known) describing the asserted Tax liability
in reasonable detail and shall provide copies of any notice or other document
received from or with any Tax authority in respect of any such matters.
(b) Which Party Controls Defense.
(i) Parent's Items. If such Tax Audit relates solely to any
period ending on or prior to the Cash Closing Date, or to any Taxes for
which Parent or International is liable in full hereunder, Parent or
International shall at its expense control the defense and settlement
of such Tax Audit.
(ii) Purchaser's Items. If such Tax Audit relates solely to
any period beginning after the Cash Closing Date or to any Taxes for
which Purchaser is liable in full hereunder, Purchaser shall at its
expense control the defense and settlement of such Tax Audit.
(iii) Combined and Mixed Items. If such Tax Audit relates to
Taxes for which both (i) Parent, International or the Selling Entities
and (ii) Purchaser are liable hereunder, then to the extent possible
such Taxes shall be distinguished and the portions of the Tax Audit
relating thereto separated and each party shall control the defense and
settlement of the portion of the Tax Audit relating to the Taxes for
which it is so liable. If any Tax items or the portions of the Tax
Audit relating thereto cannot be so distinguished or separated, the
party which has the greater potential liability for those Tax items
shall control the defense and settlement of the portions of the Tax
Audit relating thereto, provided that (A) such party defends the items
as reported on the relevant Tax Return, (B) such party does not make,
accept or enter into a settlement or other compromise with respect to
any Taxes for which the other party may be liable or forego or
terminate any proceedings related or connected to the Tax Audit without
the prior written consent of the other party, which shall not be
unreasonably withheld or delayed and (C) any counsel or other advisors
retained by such party in connection with the Tax Audit and related
proceedings are reasonably satisfactory to the other party.
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(iv) Participation Rights. Any party whose liability for Taxes
may be affected by a Tax Audit shall be entitled to participate at its
expense in such defense and to employ counsel of its choice at its
expense provided that such participation shall not in and of itself
constitute control of the Tax Audit.
(c) Liability Pursuant to Indemnification Obligation.
Notwithstanding anything to the contrary provided for herein, if the liability
of a party for Taxes which are the subject of a Tax Audit is pursuant to an
indemnification obligation under this Agreement, the right of the Indemnifying
Party to control all or any portion of the Tax Audit pursuant to this Section
5.6 is subject to the requirements that the Indemnifying Party (i) notify the
Indemnified Party promptly, but in no event later than 30 days, after receiving
notice of such Tax Audit that it acknowledges its duty to indemnify and intends
to assume such control, (ii) conducts the defense and/or settlement of the Tax
Audit and related proceedings actively and diligently and uses only those
counsel and other advisors who or which are reasonably satisfactory to the
Indemnified Party and (iii) keeps the other party fully informed as to the
status of the Tax Audit and related proceedings, including, furnishing the other
party with copies of all relevant correspondence received from the taxing
authority in connection with such Tax Audit and related proceedings.
Section 5.7 Termination of Tax Allocation Agreements. Any
agreement or arrangement with respect to the allocation or sharing of Taxes,
whether or not written, that may have been entered into by the Parent or any
Parent Subsidiaries (other than the International Subsidiaries) with any of the
International Subsidiaries shall be terminated as between Parent (and each such
Subsidiary) and each of the International Subsidiaries as of the Cash Closing
Date, and thereafter no amounts shall be due from or paid by any International
Subsidiary pursuant thereto.
Section 5.8 Assistance and Cooperation. The parties agree
that, after the Cash Closing Date:
(a) Each party shall assist (and cause its affiliates to
assist) the other party in preparing any Tax Returns which such other party is
responsible for preparing and filing;
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(b) The parties shall cooperate in preparing for any Tax
Audits of, or disputes with taxing authorities regarding, any Tax Returns and
payments in respect thereof;
(c) The parties shall make available to each other and to any
taxing authority pursuant to prior written request by the other party as
reasonably requested all relevant books and records relating to Taxes, including
but not limited to, detailed financial statements and account analysis by legal
entity, journal vouchers, cash vouchers general ledgers, Tax receipts, Tax
Returns and Tax assessments;
(d) Except as otherwise provided herein, the party requesting
assistance or cooperation shall bear the other party's out-of-pocket expenses in
complying with such request to the extent that those expenses are attributable
to fees and other costs of unaffiliated third-party service providers provided
that the requesting party give prior written consent for such fees and costs to
be incurred (such consent not to be unreasonably withheld); and
(e) Each of the International Subsidiaries shall make all
claims, disclaimers and elections necessary to give full effect to any matters
taken into account in preparing the Closing Statements and included in any Tax
Return relating in whole or in part to pre-Closing periods within the
appropriate time limitations.
Section 5.9 Characterization of Indemnification Payments. All
amounts paid by Parent to Purchaser or its Affiliates or by Purchaser to Parent
pursuant to this Agreement (other than any amounts paid by Parent or
International in respect of a Loss or Tax liability with respect to any
International Subsidiary organized under the laws of or operating in the United
Kingdom or New Zealand) shall be treated as adjustments to the Cash
Consideration for all Tax purposes. Any indemnification payment under this
Section 5.9 shall be allocated among the International Subsidiaries as provided
in Section 2.4(f).
Section 5.10 Resolution of Calculation Disputes. In the event
that Parent and Purchaser cannot agree on any calculation or determination
required with respect to any matter covered by Section 3.29, 4.28 or this
Article V, the dispute shall be resolved by the Auditing Firm (or if not
independent or not available, by an "expert" nominated pursuant to Article
1843-4 of the Civil Code, acting as an
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expert and not as an arbitrator, whose decision shall be final and binding and
whose expenses shall be shared equally by Parent and Purchaser.
ARTICLE VI
Covenants
Section 6.1 Interim Operations of International.
(a) Between the Cash Closing and the Share Closing, Parent,
International and Purchaser shall cause BFI Acquisitions Ltd. and Waste Care,
Ltd., to be operated in accordance with the Operating Agreement.
(b) Parent and International covenant and agree that, from and
after the date of this Agreement and prior to the Cash Closing (unless Purchaser
shall have previously consented in writing and except as specifically provided
by this Agreement):
(i) each of the Selling Entities and the International
Subsidiaries shall conduct its businesses only in the ordinary course
of business consistent with past practice;
(ii) no International Subsidiary shall (A) sell, pledge or
agree to sell or pledge any equity securities or ownership interests
owned by it in any of its Subsidiaries; (B) amend or violate its
certificate of incorporation, by-laws or comparable governing
documents; (C) reclassify, split, subdivide, combine or reclassify any
of its equity securities or ownership interests; or (D) declare, set
aside or pay any dividend or other distribution payable in securities
or property other than cash with respect to any of its equity
securities or ownership interests, provided that such cash dividends or
other distributions are in an amount, in the aggregate with respect to
all International Subsidiaries between September 30, 1997 and the Cash
Closing Date, no more than the sum of (1) the ordinary course net
income of the International Subsidiaries during such period, (2)
$12,200,000 in respect of certain permitted asset dispositions and (3)
amounts permitted to be dividended pursuant to Section 6.4(c)(ix);
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(iii) no Selling Entity nor any International Subsidiary shall
(A) issue, sell, pledge, dispose of or encumber any shares of, or
securities convertible or exchangeable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any of its equity
securities or ownership interests or any of its other securities,
property or assets; (B) transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of or subject to or permit the imposition of
any lien, claim, restriction or encumbrance (other than statutory liens
for Taxes not yet due and payable) on any of its assets or properties,
other than in the ordinary course of business consistent with past
practice; (C) acquire directly or indirectly, by purchase, redemption
or otherwise any of its equity securities or ownership interests; (D)
incur any indebtedness for borrowed money or guarantee the obligations
of any Person, or make any loans or advances, in each case except in
the ordinary course of business consistent with past practice; (E) pay,
discharge or satisfy any liability other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice, of liabilities reflected on or reserved against the financial
statements contained in Schedule 1.9(a)(i) or subsequently incurred in
the ordinary course of business consistent with past practice; (F)
enter into any International Material Contract or agreement other than
in the ordinary course of business consistent with past practice; or
(G) authorize capital expenditures (including capital expenditures made
since September 30, 1997) in excess of $100,000,000 in the aggregate or
make any direct or indirect acquisition of, or investment in, assets or
stock of any other Person;
(iv) no International Subsidiary shall, except pursuant to the
employee compensation program in the form set forth in Schedule
6.1(a)(iv), or except in the ordinary course of business consistent
with past practice, (A) grant any severance or termination pay to, or
enter into any employment or severance agreement with, or increase the
compensation payable to, any director, officer or other employee of any
International Subsidiary; or (B) establish, adopt, enter into, make any
new grants or awards under or amend any International Employee Benefit
Plans;
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(v) no Selling Entity nor any International Subsidiary shall
settle or compromise any claims or litigation or waive, assign or
release any rights or claims involving liability or potential liability
of the International Subsidiaries or otherwise having a value of
$5,000,000 per right, claim or action or $10,000,000 in the aggregate
(such aggregate being measured since September 30, 1997) or, except in
the ordinary course of business consistent with past practice, modify,
amend or terminate any International Material Contracts to which it is
a party or by which it or any of its properties is bound;
(vi) no Selling Entity nor any International Subsidiary shall
change its accounting policies or procedures;
(vii) no Selling Entity nor any International Subsidiary shall
make any Tax election or settle or compromise any Tax liability of the
International Subsidiaries or permit any insurance policy naming an
International Subsidiary as a beneficiary or a loss payable payee to be
canceled or terminated, except, in any such case, in the ordinary
course of business consistent with past practice and except to the
extent that such Tax liabilities and insurance policy limits do not
exceed $5,000,000 in the aggregate (such aggregate being measured from
September 30, 1997);
(viii) no International Subsidiary shall sell, dispose of or
otherwise abandon, alter or write down the book value of (except for
amortization and depreciation thereof consistent with past practice and
in accordance with U.S. GAAP or Local GAAP, as the case may be), any
item of the property, plant and equipment reflected on the
International Balance Sheet contained in Schedule 1.9(a)(i) or on the
accounting records of International and the International Subsidiaries
as of the Cash Closing, except for sales and dispositions not exceeding
$5,000,000 in the aggregate (such aggregate being measured from
September 30, 1997);
(ix) no Selling Entity nor any International Subsidiary shall
create any lien, claim, restriction or other encumbrance on or
affecting title to the real property occupied or used by any
International Subsidiary, other than liens not affecting the use,
operation or value of such real property created in the
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ordinary course of business consistent with past practice, or enter
into any leases or subleases for any real or personal property
providing for annual payments greater than $15,000,000 in the aggregate
(such aggregate being measured from September 30, 1997);
(x) Parent shall cause the International Subsidiaries not to
prepay and refinance long-term indebtedness with short-term
indebtedness;
(xi) Parent shall cause the International Subsidiaries (A) to
make capital expenditure payments on or prior to March 31, 1998 or (B)
to set aside at the Cash Closing amounts in cash in respect of capital
expenditures, in an amount under clauses (A) and (B) not less than
$55,600,000 in the aggregate (measured from September 30, 1997);
(xii) Parent and the Parent Subsidiaries shall use their best
efforts to reach favorable settlements with Tarmac regarding
environmental liabilities at the Saul's Farm site in the U.K. and with
the Xxxxx family and municipal authorities regarding clean-up of the
closed landfill at Guadalajara, Spain ("Guadalajara I"), and to obtain
an agreement from Nuplex Special Waste Pty Ltd in Australia to the
effect that the noncompetition provisions of the Sale Agreement, dated
October 3, 1997, between Xxxxxxxx Liquid Waste Pty Limited and Nuplex
Special Waste Pty Ltd do not apply to Lyonnaise or any of its
Affiliates, except the International Subsidiaries.
(xiii) no Selling Entity nor any International Subsidiary
shall authorize or enter into an agreement to do any of the foregoing.
(c) Purchaser covenants and agrees that, from and after the
date of this Agreement and prior to the Cash Closing (unless Parent shall have
previously consented in writing and except as specifically provided by this
Agreement):
(i) Purchaser shall conduct its businesses only in the
ordinary course of business consistent with past practice;
(ii) Purchaser shall not (A) sell, pledge or agree to sell or
pledge any equity securities or
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ownership interests owned by it in any of its Subsidiaries; (B) except
for an amendment in the form furnished to Parent prior to the date of
this Agreement, amend or violate its Statuts; (C) reclassify, split,
subdivide, combine or reclassify any of its equity securities or
ownership interests; or (D) declare, set aside or pay any dividend
payable in securities or property other than cash with respect to any
of its equity securities or ownership interests;
(iii) Purchaser shall not (A) issue, sell, pledge, dispose of
or encumber any shares of, or securities convertible or exchangeable
for, or options, warrants, calls, commitments or rights of any kind to
acquire, any of its equity securities or ownership interests or any of
its other securities, property or assets; (B) transfer, lease, license,
guarantee, sell, mortgage, pledge, dispose of or subject to or permit
the imposition of any lien, claim, restriction or encumbrance (other
than statutory liens for Taxes not yet due and payable) on any of its
assets or properties, other than in the ordinary course of business
consistent with past practice; (C) acquire directly or indirectly, by
purchase, redemption or otherwise any of its equity securities or
ownership interests; (D) incur any indebtedness for borrowed money or
guaranteed the obligations of any Person, or make any loans or
advances, in each case except in the ordinary course of business
consistent with past practice, except for the indebtedness described in
the Commitment Letter; (E) pay, discharge or satisfy any liability
other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice, of liabilities
reflected on or reserved against the financial statements contained in
Schedule 2.8(a) or subsequently incurred in the ordinary course of
business consistent with past practice; (F) enter into any Purchaser
Material Contract or agreement other than in the ordinary course of
business consistent with past practice; or (G) authorize capital
expenditures (including capital expenditures made since September 30,
1997) in excess of $200,000,000 in the aggregate or make any direct or
indirect acquisition of, or investment in, assets or stock of any other
Person from September 30, 1997 having an aggregate acquisition price in
excess of $20,000,000;
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(iv) Purchaser shall not, except in the ordinary course of
business consistent with past practice, (A) grant any severance or
termination pay to, or enter into any employment or severance agreement
with, or increase the compensation payable to, any director, officer or
other employee of Purchaser; or (B) establish, adopt, enter into, make
any new grants or awards under or amend any Purchaser Employee Benefit
Plans;
(v) Purchaser shall not settle or compromise any claims or
litigation or waive, assign or release any rights or claims involving
liability or potential liability of Purchaser or otherwise having a
value of $5,000,000 per right, claim or action or $10,000,000 in the
aggregate (such aggregate being measured since September 30, 1997) or,
except in the ordinary course of business consistent with past
practice, modify, amend or terminate any Purchaser Material Contracts
to which it is a party or by which it or any of its properties is
bound;
(vi) Purchaser shall not change its accounting policies or
procedures;
(vii) Purchaser shall not make any Tax election or settle or
compromise any Tax liability or permit any insurance policy naming it
as a beneficiary or a loss payable payee to be canceled or terminated,
except, in any such case, in the ordinary course of business consistent
with past practice and except to the extent that such Tax liabilities
and insurance policy limits do not exceed $5,000,000 in the aggregate
(such aggregate being measured since September 30, 1997);
(viii) Purchaser shall not sell, dispose of or otherwise
abandon, alter or write down the book value of (except for amortization
and depreciation thereof in accordance with French GAAP), any item of
the property, plant and equipment reflected on the Purchaser Balance
Sheet contained in Schedule 2.8(a) or on the accounting records of
Purchaser as of the Cash Closing, except for sales and dispositions not
exceeding $5,000,000 in the aggregate (such aggregate being measured
since September 30, 1997);
(ix) Purchaser shall not create any lien, claim, restriction
or other encumbrance on or affecting title
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to the real property occupied or used by Purchaser, other than liens
not affecting the use, operation or value of such real property created
in the ordinary course of business consistent with past practice, or
enter into any leases or subleases for any real or personal property
providing for annual payments greater than $15,000,000 in the aggregate
(such aggregate being measured from September 30, 1997); and
(x) Purchaser shall not authorize or enter into an agreement
to do any of the foregoing.
(d) Until the Cash Closing, Parent shall furnish to Purchaser
copies of interim monthly financial statements for each International Subsidiary
and, no less frequently than each fiscal quarter, prepared for International and
the International Subsidiaries for such fiscal quarter on a combined basis, in
each case in accordance with U.S. GAAP and consistent with past practice, as
soon as practicable but in any event within 35 days after the end of each month
or quarter, as the case may be, together with any information ordinarily
prepared in connection with such financial statements. All such interim
financial statements shall fairly present in all material respects in accordance
with U.S. GAAP the separate company, combined or consolidated, as the case may
be, financial position of International and the International Subsidiaries
covered thereby at the respective dates thereof, and the results of their
separate company or consolidated, as the case may be, operations, stockholders'
equity and cash flows for International and the International Subsidiaries
covered thereby for the respective periods covered thereby, subject to year-end
adjustments (consisting of normal recurring accruals) and the omission of
explanatory footnote materials required by U.S. GAAP. Parent shall, and shall
cause its accountants to, assist Purchaser in translating all financial
statements provided pursuant to this Section into French GAAP.
(e) Until the Cash Closing, Purchaser shall furnish to Parent
copies of such interim monthly financial statements for Purchaser and, no less
frequently than each fiscal quarter, prepared for Purchaser for such fiscal
quarter on a combined basis, in each case in accordance with French GAAP and
consistent with past practice, as it prepares in the ordinary course of its
business, as soon as practicable but in any event within 35 days after the end
of each month or quarter, as the case may be, together with any
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information ordinarily prepared in connection with such financial statements. To
the extent that such financial statements include balance sheets, all such
interim financial statements shall fairly present in all material respects in
accordance with French GAAP the financial position of Purchaser covered thereby
at the respective dates thereof, and, to the extent that such financial
statements include income statements and cash flow statements, the results of
consolidated operations, stockholders' equity and cash flows for Purchaser
covered thereby for the respective periods covered thereby, subject to year-end
adjustments (consisting of normal recurring accruals) and the omission of
explanatory footnote materials required by French GAAP. Purchaser shall, and
shall cause its accountants to, assist Parent in translating all financial
statements provided pursuant to this Section into U.S. GAAP.
(f) Until the Cash Closing, Parent and International shall
cause the International Subsidiaries to have sufficient working capital to allow
the International Subsidiaries to maintain their working capital at prudent
levels which are sufficient to support their continued operations in the
ordinary course of their business and consistent with past practices.
(g) Parent agrees that it will not consent to any transfer of
an interest in the Xxxx Joint Venture by any other shareholder in the Xxxx Joint
Venture. Parent further agrees that, from September 30, 1997 through the Cash
Closing Date, Parent and the Parent Subsidiaries have not taken, accepted or
received and will not take, accept or receive any dividends or distributions
paid in cash, stock or other assets in respect of its interest in the Xxxx Joint
Venture, any payment of interest in respect of indebtedness owed by the Xxxx
Joint Venture to Parent or the Parent Subsidiaries unless all such amounts have
been or will be loaned to the Xxxx Joint Venture and will constitute
Intercompany Indebtedness transferred to Purchaser at the Cash Closing (the
consideration for which transfer shall be deemed to be included in the Cash
Consideration) or any management or technical assistance fees from the Xxxx
Joint Venture.
Section 6.2 Acquisition Proposals.
(a) Parent agrees that, except as otherwise agreed among the
parties, neither Parent nor any Parent
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Subsidiaries nor any of the respective employees, officers, directors, agents or
representatives (including counsel, financial advisors and accountants) of
Parent or the Parent Subsidiaries shall, and Parent shall cause such Persons not
to, initiate, solicit or encourage, directly or indirectly, any inquiries or the
making of any proposal or offer (including, without limitation, any proposal or
offer to stockholders of Parent or any Parent Subsidiary) with respect to a
merger, consolidation, acquisition, disposition or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities or ownership interests of, International or any
International Subsidiary (any such proposal or offer being hereinafter referred
to as an "International Acquisition Proposal"), or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any Person relating to an International Acquisition Proposal,
or otherwise facilitate any effort or attempt to make or implement an
International Acquisition Proposal. Parent shall immediately cease and cause to
be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing. Parent shall
take all necessary steps to inform the Persons referred to in the first sentence
of this Section of the obligations undertaken by Parent in this Section. Parent
shall notify Purchaser immediately if any such inquiries or proposals are
received by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with Parent, any Parent
Subsidiary or, to its knowledge, any of the Persons referred to in the first
sentence of this Section. Parent shall promptly request each Person which has
heretofore executed a confidentiality agreement in connection with its
consideration of acquiring any assets, liabilities and/or equity securities or
ownership interests of International or any International Subsidiary to return
all confidential information heretofore furnished to such person by or on behalf
of Parent or any Parent Subsidiary.
(b) Purchaser and Lyonnaise agree that, prior to the Share
Closing, except as otherwise agreed among the parties, neither Purchaser,
Lyonnaise nor any of their respective Subsidiaries nor any of their respective
employees, officers, directors, agents or representatives (including counsel,
financial advisors and accountants) shall, and Purchaser and Lyonnaise shall
cause such Persons not to, initiate, solicit or encourage, directly or
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indirectly, any inquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to stockholders of Purchaser,
Lyonnaise or any of their respective Subsidiaries) with respect to a merger,
consolidation, acquisition, disposition or similar trans action involving, or
any purchase of all or any significant portion of the assets or of the equity
securities or ownership interests of Purchaser (any such proposal or offer being
hereinafter referred to as a "Purchaser Acquisition Proposal"), or engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any Person relating to a Purchaser Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement a
Purchaser Acquisition Proposal. Lyonnaise and Purchaser shall immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing which
occur or have occurred prior to the Share Closing. Lyonnaise and Purchaser shall
take all necessary steps to inform the Persons referred to in the first sentence
of this Section of the obligations undertaken by Lyonnaise and Purchaser in this
Section. Prior to the Share Closing, Lyonnaise and Purchaser shall notify Parent
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with Purchaser, Lyonnaise, any of their
respective Subsidiaries or, to its knowledge, any of the Persons referred to in
the first sentence of this Section. Purchaser and Lyonnaise shall promptly
request each Person which has heretofore executed a confidentiality agreement in
connection with its consideration of acquiring any assets, liabilities and/or
equity securities or ownership interests of Purchaser to return all confidential
information heretofore furnished to such person by or on behalf of Purchaser,
Lyonnaise or any of their respective Subsidiaries.
Section 6.3 Meeting of Purchaser's Shareholders. Purchaser
shall take, consistent with applicable law and its statuts, all action necessary
to convene the Shareholders Meeting as promptly as practicable to consider and
vote upon the approval of the issuance of the Consideration Shares. Lyonnaise
agrees to cause all Purchaser Shares as to which it has voting rights to be
present for quorum and voting purposes at the Shareholders Meeting and to be
voted at the Shareholders Meeting in favor of the issuance of the
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Consideration Shares and the other transactions contemplated by this Agreement.
Section 6.4 Certain Transactions.
(a) Prior to the Closing, Purchaser shall use its best
efforts, subject to market conditions, to borrow an aggregate amount equivalent
to FF 3.6 billion on the terms and conditions set forth in the Commitment Letter
(the "Debt Financing").
(b) Purchaser shall take, consistent with applicable law and
its statuts, all actions necessary to complete, on or prior to March 31, 1998,
an equity offering with a priority subscription period to raise approximately FF
2.4 billion (the "Equity Offering").
(c) Prior to or contemporaneously with the Cash Closing:
(i) Parent and Lyonnaise shall execute and deliver, each to
the other, a Shareholders Agreement in the form set forth in Annex B to
the Initial Agreement (the "Shareholders Agreement").
(ii) Parent and Purchaser shall execute and deliver, each to
the other, a Technical Cooperation Agreement in the form set forth in
Schedule 6.4(c)(ii) (the "Technical Cooperation Agreement").
(iii) Parent, BFI Acquisitions Ltd., WasteCare, Ltd. and
Purchaser shall execute and deliver, each to the others, an Operating
Agreement in the form set forth in Schedule 6.4(c)(iii) (the "Operating
Agreement").
(iv) Parent, Purchaser and BFI-UK Ltd. shall execute and
deliver an agreement in form and substance reasonably satisfactory to
Purchaser providing for the assumption by Parent of the Mindis
arbitration and all liabilities incurred or to be incurred by Parent,
Purchaser, BFI-UK Ltd. and their respective Affiliates in connection
therewith.
(v) Parent shall assign to Purchaser any benefits (including
the benefits of any indemnification provisions) that it may have
pursuant to each Acquisition Document to the extent that such
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Acquisition Document relates to any assets, liabilities and operations
of the International Subsidiaries.
(vi) Parent shall, or shall cause a Subsidiary to, acquire all
shares of Xxxxxxxx-Xxxxxx Industries Iberica S.A. not currently held by
Parent or its Subsidiaries, without the payment of additional
consideration. In connection with such transaction, Parent may cause
Xxxxxxxx-Xxxxxx Industries Iberica S.A. to reverse the minority
interest reserves included in its balance sheet at September 30, 1997
in respect of the acquisition of such interest.
(vii) Parent shall, and shall cause the Parent Subsidiaries
to, pay in full all intercompany accounts which represent indebtedness
of Parent or the Parent Subsidiaries which are not International
Subsidiaries owed to the International Subsidiaries.
(viii) Purchaser shall execute instruments in form and
substance reasonably satisfactory to Parent and Purchaser providing for
the assumption by Purchaser of all of Parent's obligations as guarantor
or surety with respect to obligations of the International Subsidiaries
and the release of Parent's obligations with respect thereto, such
obligations either having been reflected in the International Financial
Statements or having been incurred in the ordinary course of business
since the date of such financial statements.
(ix) Parent or its designees shall purchase from one or more
International Subsidiaries the assets described in Schedule 6.4(c)(ix)
and may thereafter cause such International Subsidiaries to transfer to
Parent or another Parent Subsidiary, by dividend or otherwise, an
amount in cash not in excess of the purchase price actually paid
therefor, and Parent shall indemnify each International Subsidiary
against any additional incremental tax liabilities in connection
therewith.
(x) Parent shall cause to be transferred, relicensed,
sublicensed or otherwise made available to the International
Subsidiaries, at no cost to the International Subsidiaries, all
software licenses and related Intellectual Property necessary to
conduct the
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Waste Businesses conducted by them in the manner in which they are
currently conducted.
Section 6.5 Filings; Other Action. Subject to the terms and
conditions herein provided, Purchaser and Parent shall: (a) promptly make their
respective filings and thereafter make any other required submissions set forth
on Schedule 1.7 and Schedule 2.6, and any other regulatory filings with respect
to the transactions contemplated by this Agreement; and (b) use all reasonable
efforts to promptly take, or cause to be taken, all other action and do, or
cause to be done, all other things necessary, proper or appropriate under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as soon as practicable.
Section 6.6 Notification of Certain Matters. Each of Parent
and Purchaser shall give prompt notice to the other of: (a) the receipt, prior
to the Final Closing, of any notice of, or other communication relating to, (i)
any material environmental matter, or (ii) a default or event that, with notice
or lapse of time or both, would become a default under any Purchaser Contract or
Parent Contract, as the case may be; (b) the occurrence, prior to the Cash
Closing, of any Purchaser Material Adverse Effect or International Material
Adverse Effect or the occurrence, prior to the Cash Closing, of any event which,
so far as reasonably can be foreseen at the time of its occurrence, is
reasonably likely to result in a Purchaser Material Adverse Effect or
International Material Adverse Effect; (c) the receipt, prior to the Cash
Closing, of any notice or other communication from any third party alleging that
the consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement; (d) the instigation of or any
significant development in any regulatory proceedings, governmental complaints,
investigations or hearings (or communications indicating that any may be
contemplated) which instigation or development could have an International
Material Adverse Effect or a Purchaser Material Adverse Effect; (e) proposed
budgets, capital expenditures, acquisitions and dispositions of assets and other
decisions involving material properties of International or any International
Subsidiary or Purchaser; and (f) any matter or event which comes to the
knowledge of Parent or International and which makes or could make any
representation and warranty made by Parent or International in Article III
untrue or inaccurate, or any matter which comes to the knowledge of Purchaser
and which
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makes or could make any representation or warranty made by Purchaser in Article
IV untrue or inaccurate.
Section 6.7 Retention of Books and Records. Purchaser shall
cause the International Subsidiaries to retain, until all applicable Tax
statutes of limitations (including periods of waiver) have expired, all books,
records and other documents pertaining to the International Subsidiaries,
including all Tax Records as defined below in Section 6.8 relating to the
International Subsidiaries in existence on the Cash Closing that are required to
be retained under current retention policies and to make the same available
after the Cash Closing for inspection and copying by Parent or its advisors at
Purchaser's expense, during regular business hours and upon reasonable request
and upon reasonable advance notice. After the expiration of such period, no such
books and records shall be destroyed by Purchaser without first advising the tax
director of Parent in writing detailing the contents thereof and giving Parent
at least 120 days to obtain possession thereof. Parent agrees that such records
shall be kept strictly confidential and used only for Tax purposes.
Section 6.8 Closing Date Financial Information.
(a) Subsequent to the Cash Closing, to the extent reasonably
necessary for Parent or the Parent Subsidiaries to prepare consolidated
financial statements or any governmental permits, licenses or required filings
and to comply with reporting obligations in respect thereof, upon written
request of Parent, Purchaser and its Subsidiaries shall, at Parent's expense,
provide to Parent and its accountants within 20 business days of such request
with such computer support, access to employees and Purchaser's accountants and
financial information of Purchaser or its Subsidiaries as of the Cash Closing
and/or the Share Closing as Parent may reasonably request in the format
customarily required by Parent or the Parent Subsidiaries and, upon Parent's
request, it shall be accompanied by supplemental financial schedules customarily
required by Parent or the Parent Subsidiaries in support of such financial
information.
(b) Notwithstanding the foregoing, Purchaser shall agree to
cooperate with and assist Parent and its agents, including accounting firms and
legal counsel, in connection with the preparation or audit of any Tax Return
(including IRS Form 5471 and similar returns and reports, if
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any), refund claims and Tax claims or litigation for all taxable years,
including those taxable years ending prior to or subsequent to the Cash Closing
Date or Share Closing Date, as appropriate, in respect of information relating
to the International Subsidiaries or their activities, the Intercompany
Indebtedness and the ownership in the Purchaser Shares by Parent or its
Affiliates.
(c) Such cooperation and assistance should include: (i) upon
timely request by Parent and its agents, the provision of all Tax Records in the
possession of Purchaser and its Affiliates related to the International
Subsidiaries and the Intercompany Indebtedness to Purchaser and the Parent
Subsidiaries as may be reasonably requested by Purchaser and its Affiliates;
(ii) the availability, as reasonably requested and available, of personnel
responsible for preparing, maintaining and interpreting such Tax Records. Parent
agrees to keep as confidential any information provided or obtained, except as
may otherwise be necessary in connection with the filing of tax returns or
reports, refund claims, tax audits, tax claims and tax litigation.
(d) Records shall include, without limitation, detailed
financial statements and account analysis by legal entity, foreign tax receipts,
Tax Returns, Tax assessments, journal vouchers, cash vouchers, general ledgers,
material contracts (including those relating to acquisitions, dispositions,
organizations, and reorganizations of the International Subsidiaries) and
authorizations for expenditures.
Section 6.9 Further Assurances. At any time after the Cash
Closing, Purchaser and Parent shall promptly execute, acknowledge and deliver
any other assurances or documents reasonably requested by Purchaser or Parent,
as the case may be, and necessary for Purchaser or Parent, as the case may be,
to satisfy its obligations hereunder or obtain the benefits contemplated hereby.
Section 6.10 Standstill. Lyonnaise, Purchaser and Parent agree
that neither they nor any of their respective Affiliates nor any other Person
under the direction or at the request thereof shall, directly or indirectly,
effect purchases of Purchaser Shares during the 20 days prior to the Measuring
Date.
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Section 6.11 Call Option. Parent shall pay to Purchaser 27.5%
of the cost of purchasing the Call Option up to a maximum of $2,000,000 no later
than (i) the Cash Closing, or (ii) three days following the termination of this
Agreement. In the event of the termination of this Agreement, Purchaser shall
sell the Call Option and shall pay 27.5% of the net proceeds of such sale (if
any) to Parent up to a maximum of $2,000,000.
Section 6.12 Other Matters. At the reasonable request of
Parent (and, in no event, not later than December 31, 1998) and so long as
neither Purchaser nor its Affiliates are adversely affected, Purchaser and its
Affiliates shall assist Parent in filing with the United States Internal Revenue
Service on Form 8832 (or other applicable form) an Entity Classification
Election for any eligible Affiliate. At the reasonable request of Parent,
Purchaser shall provide to Parent information concerning the legal entity
structure and capitalization of Purchaser and Affiliates sufficient for Parent
to evaluate the effect of the filing for any Affiliate of an Entity
Classification Election.
ARTICLE VII
Conditions
Section 7.1 Conditions to the Cash Closing. (a) The respective
obligations of the parties to consummate the transactions to be consummated at
the Cash Closing are subject to the satisfaction or waiver of the following
conditions:
(i) No court of competent jurisdiction shall have issued or
entered any order which is then in effect and has the effect of making
any of the transactions contemplated by this Agreement illegal or
otherwise prohibiting their consummation.
(ii) Any waiting period (and any extension thereof) applicable
to the consummation of the transactions contemplated hereby under any
competition, merger control or similar Law, including Council
Regulation (EEC) No. 4064/89 and any Law pursuant to which the filings
and/or notices set forth on Schedule 1.7 and Schedule 2.6 have been
made, shall have expired or been terminated.
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(iii) The Commissaire aux Apports shall have issued a written
report with respect to the issuance of the Consideration Shares, such
report shall not indicate that the Commissaire aux Apports has serious
reservations about the Apport, and the Commissaire aux Apports shall
not have subsequently indicated that it has such serious reservations.
(iv) The transfer agreement between Purchaser and Parent
concerning the transfer of Parent's interest in the Xxxx Joint Venture
shall have been notarized.
(b) The obligation of Purchaser to consummate the transactions
to be consummated at the Cash Closing are subject to the satisfaction or waiver
of the following additional conditions:
(i) Each of the representations and warranties of Parent and
International contained in this Agreement shall be true and correct in
all material respects as of the Measuring Date and the Cash Closing as
though made on and as of each such date, except that those
representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date, and
Purchaser shall have received a certificate of the Chief Executive
Officer and the Chief Financial Officer of Parent to such effect.
(ii) Parent shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Measuring
Date and the Cash Closing, as the case may be, and Purchaser shall have
received a certificate of the Chief Executive Officer and the Chief
Financial Officer of Parent to such effect.
(iii) Parent shall have furnished to Purchaser evidence
reasonably satisfactory to it that the Closing Net Debt of the
International Subsidiaries does not exceed the Target Net Debt.
(iv) Parent and the Parent Subsidiaries shall have obtained
the Parent Closing Consents.
(v) Parent shall have executed and delivered the Shareholders
Agreement.
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(vi) Parent shall have executed and delivered the Technical
Cooperation Agreement.
(vii) Parent shall have executed and delivered the Operating
Agreement.
(viii) Parent shall have executed and delivered the agreement
described in Section 6.4(c)(iv).
(ix) Purchaser shall have received the opinions of Parent's
counsel, dated as of the Cash Closing Date, addressed to Purchaser
substantially to the effect set forth in Schedule 7.1(b)(ix).
(x) Purchaser shall have successfully completed the Debt
Financing and the Equity Offering.
(xi) The Xxxx Shareholders Agreement shall not have been
terminated and no court of competent jurisdiction shall have issued or
entered any order which is then in effect and has the effect of making
any of the actions or transactions contemplated by the Xxxx
Shareholders Agreement illegal or otherwise prohibiting them.
(xii) Nuplex Special Waste Pty Ltd shall have executed a
written agreement in form and substance reasonably satisfactory to
Purchaser and Lyonnaise to the effect that the provisions of the Sale
Agreement, dated October 3, 1997, between Xxxxxxxx Liquid Waste Pty
Limited and Nuplex Special Waste Pty Ltd do not apply to Scori
Environmental Services Pty Ltd., other than the International
Subsidiaries.
(c) The obligation of Parent to consummate the transactions to
be consummated at the Cash Closing are subject to the satisfaction or waiver of
the following additional conditions:
(i) Each of the representations and warranties of Purchaser
contained in this Agreement shall be true and correct in all material
respects as of the Measuring Date and the Cash Closing, as though made
on and as of each such date, except that those representations and
warranties that address matters only as of a particular date shall
remain true and correct as of such date, and Parent shall have received
a certificate of the Chief
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Executive Officer and the Chief Financial Officer of Purchaser to such
effect.
(ii) Purchaser shall have performed or complied in all
material respects will all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Measuring Date and the Cash Closing, as the case may be, and Parent
shall have received a certificate of the Chief Executive Officer and
the Chief Financial Officer of Purchaser to such effect.
(iii) Purchaser shall have obtained the Purchaser Closing
Consents.
(iv) Lyonnaise shall have executed and delivered the
Shareholders Agreement.
(v) Purchaser shall have executed and delivered the Technical
Cooperation Agreement.
(vi) Purchaser shall have executed and delivered the Operating
Agreement.
(vii) Purchaser shall have executed and delivered the
Assumption Agreement.
(viii) Parent shall have received the opinions of Purchaser's
counsel, dated as of the Cash Closing Date, addressed to Parent
substantially to the effect set forth in Schedule 7.1(c)(viii).
(d) Notwithstanding anything to the contrary in this
Agreement, it shall not be a condition to the obligations of either Purchaser or
Parent that Parent have transferred its interest in Swire/BFI to Purchaser at
the Cash Closing.
Section 7.2 Conditions to the Share Closing. (a) The
respective obligations of the parties to consummate the transactions to be
consummated at the Share Closing are subject to the satisfaction or waiver of
the following conditions:
(i) The Cash Closing shall have occurred.
(ii) The Commissaire aux Apports shall have issued a written
report with respect to the issuance of the
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Consideration Shares, such report shall not indicate that the
Commissaire aux Apports has serious reservations about the Apport and
the Commissaire aux Apports shall not have subsequently indicated that
it has such reservations.
(iii) The issuance of the Consideration Shares shall have been
approved by the requisite vote of Purchaser's Shareholders.
(iv) No court of competent jurisdiction shall have issued or
entered any order which is then in effect and has the effect of making
any of the transactions to be consummated at the Share Closing illegal
or otherwise prohibiting their consummation.
(v) No event shall have occurred prior to the Share Closing
which, in the written opinion of independent French counsel jointly
chosen by French counsel to Purchaser and French counsel to Parent (and
each party agrees to cause its counsel promptly to choose such
independent counsel upon the request of any party) is reasonably likely
to expose any of Parent, the Selling Entities, Purchaser, Lyonnaise or
any of their respective officers or employees to a meaningful risk of
being found by a French court to have violated Article 433 4(degree) of
Law n(degree) 66-537 of 24 July 1966.
(b) The obligation of Purchaser to consummate the transactions
to be consummated at the Share Closing is subject to the satisfaction or waiver
of the condition that Parent shall have performed or complied in all material
respects with all agreements and covenants required by Section 2.3(b)(iii) of
this Agreement to be performed or complied with by it on or prior to the Share
Closing, and Purchaser shall have received a certificate of the Chief Executive
Officer and the Chief Financial Officer of Parent to such effect.
(c) The obligation of Parent to consummate the transactions to
be consummated at the Share Closing is subject to the satisfaction or waiver of
the additional condition that Purchaser shall have performed or complied in all
material respects will all agreements and covenants required by Section
2.3(b)(iii) of this Agreement to be performed or complied with by it on or prior
to the Share Closing, and Parent shall have received a certificate of the
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Chief Executive Officer and the Chief Financial Officer of Purchaser to such
effect.
ARTICLE VIII
Termination
Section 8.1 Termination. This Agreement may be terminated at
any time prior to the Cash Closing:
(a) by the mutual consent of Parent and Purchaser;
(b) by either Parent and Purchaser, by giving written notice
of such termination to the other party, if such other party shall have breached
any of its material obligations or agreements under this Agreement and such
breach shall be incapable of cure or has not been cured within 60 days following
the giving of written notice of such breach to the breaching party;
(c) by either Parent or Purchaser, by giving written notice of
such termination to the other party, if there shall be in effect any Law or
regulation that prohibits the consummation of the Cash Closing or the Share
Closing or if consummation of the Cash Closing or the Share Closing would
violate any non-appealable final order, decree or judgment of any court or
Governmental Entity having competent jurisdiction;
(d) by Parent and Purchaser, by giving written notice of such
termination to the other party, if the Cash Closing shall not have occurred on
or prior to June 30, 1998; or
(e) by Lyonnaise and Purchaser if, following the issuance of
the Purchaser Shares and assuming Full Equity Subscription, Lyonnaise would own
less than 50.3% of the outstanding Purchaser Shares.
Section 8.2 Effect of Termination. In the event of the
termination of this Agreement in accordance with Section 8.1 hereof, this
Agreement shall thereafter become void and have no effect, and (except as
provided in Section 6.11) no party hereto shall have any liability to the other
party hereto or their respective affiliates, directors, officers or employees,
except that nothing herein will
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relieve any party from liability for any breach of this Agreement prior to such
termination.
ARTICLE IX
Survival and Indemnification
Section 9.1 Survival. The representations of the parties shall
survive the Cash Closing and the Share Closing until the publication of audited
financial statements of Purchaser for the year ended December 31, 1999 (which is
expected to be approximately March 31, 2000), except that (i) the
representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5,
4.1, 4.2, 4.3 and 4.4 shall survive until the thirtieth anniversary of the Final
Closing, (ii) the representations and warranties set forth in Sections 3.27 and
4.26 shall survive until the fifth anniversary of the Final Closing and (iii)
the representations and warranties set forth in Sections 3.26, 3.29, 4.25 and
4.28 shall survive until the expiration of all relevant statutes of limitations.
Section 9.2 Indemnification.
(a) Parent and International shall jointly and severally
indemnify Purchaser and each of its Affiliates (including, after the Cash
Closing, the issuers of the Shares set forth in Part One of Schedule 1.1(c) and,
after the Share Closing, the issuers of the Shares set forth in Part Two of
Schedule 1.1(c)) against any direct losses, costs, expenses and damages of any
kind or nature whatsoever (each, a "Loss") arising in connection with: (i) any
breach of any representation made by Parent or International in this Agreement
or any other certificate or document delivered pursuant to this Agreement, (ii)
any breach or violation of, or failure to perform fully, any covenant,
agreement, undertaking or obligation of Parent or International set forth in
this Agreement, or (iii) any Taxes for which Parent and International are
liable, in accordance with Section 5.1(a). The damages in respect of any such
Loss shall include an amount allowing the entity suffering the Loss to be fully
compensated for the Loss, including all costs, expenses and damages of any kind
(including Taxes) resulting from the receipt of the indemnification payment.
Other than in connection with the indemnification obligations set forth in
Section 5.1(a)(i) and (iii) and 6.4(c)(ix), Parent and International shall not
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be liable for damages arising in connection with its indemnification obligations
until the amount of damages incurred exceeds $15,000,000 in the aggregate. In
such event, Parent and International shall be liable for all such damages
including the first $15,000,000. Purchaser may, in its sole discretion, require
that any amount payable under this Section 9.2(a) or Section 5.1(a), other than
an amount payable in respect of a Loss or Tax liability arising with respect to
any International Subsidiary organized under the laws of or operating in the
United Kingdom or New Zealand, be paid directly to the Purchaser.
Notwithstanding any provision of this Section 9.2(a), no individual claim for
payment of a Loss may be made under this Section unless the Loss exceeds
$50,000.
(b) If and only if the Share Closing occurs, Purchaser shall
indemnify Parent and International against all Losses arising in connection
with: (i) any breach of any representation made by Purchaser in this Agreement
or any other certificate or document delivered pursuant to this Agreement in
respect of matters that were not publicly disclosed prior to the twentieth day
prior to the Measuring Date, (ii) any breach or violation of, or failure to
perform fully, any covenant, agreement, undertaking or obligation of Purchaser
set forth in this Agreement, or (iii) any Taxes for which Purchaser is liable,
in accordance with Sec tion 5.1(b). Other than in connection with the indemni
fication obligations set forth in Section 5.1(b), Purchaser shall not be liable
for damages arising in connection with its indemnification obligations until the
amount of damages (calculated as set forth below) incurred exceeds $15,000,000
in the aggregate. In such event, Purchaser shall be liable for all such damages
including the first $15,000,000. For purposes of calculating damages to Parent
and International in connection with any indemnity or claim, damages to Parent
or International, as the case may be, shall be calculated as the damages to
Purchaser in respect of such item multiplied by the fraction the numerator of
which is the aggregate number of Consideration Shares issued to the Selling
Entities specified in the Traite d'Apport at the Share Closing and the
denominator of which is the number of Purchaser Shares outstanding at the Share
Closing (including the issuance of the Consideration Shares) (the "Parent
Percentage Ownership"), such amount to be increased by an amount equal to such
amount multiplied by the Parent Percentage Ownership. For purposes of
calculating damages to Purchaser relating to an International Subsidiary which
is less than 100% owned, directly or indirectly, by Parent,
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Purchaser may make a claim for indemnification for such Loss, subject to the
provisions of this Section 9.2, only up to a percentage of such Loss equal to
the percentage owner ship of such International Subsidiary held, directly or
indirectly, by Parent on the Share Closing. Notwithstanding any provision of
this Section 9.2(b), no individual claim for payment of a Loss may be made under
this Section unless the Loss exceeds $50,000.
Section 9.3 Calculation of Loss.
(a) In calculating the amount of a Loss, there shall be
deducted (without duplication):
(i) an amount equal to any net Tax benefit actually realized
(including the utilization of a Tax loss or Tax credit carried forward)
as a result of such Loss by any of the International Subsidiaries (if
the claim is made by Purchaser) or by Purchaser or any of its
Affiliates (including the International Subsidiaries, where a Tax
benefit is realized after the Cash Closing but is attributable to a
period prior to the Cash Closing and not reflected on the Closing
Statements prepared in connection with the Post-Closing Adjustment
referred to in Section 2.4(d) of this Agreement) (if the claim is made
by Parent or International) and to the extent any such benefit is
realized after the indemnification payment has been made, the
Indemnified Party shall reimburse the Indemnifying Party for the amount
of such net Tax benefit when realized provided that, such net Tax
benefit is realized within the three year period beginning after the
year in which the indemnification payment is made;
(ii) the amount of any specifically identified reserve or
provision included in the International Financial Statements (if the
claim is made by Purchaser) or the Purchaser Financial Statements (if
the claim is made by International and/or Parent), with respect to the
facts or circumstances giving rise to such Loss;
(iii) the amount of (i) proceeds actually received under any
indemnification arrangement or any policy of insurance, paid to any
International Subsidiary (if the claim is made by Purchaser) or to
Purchaser or its Affiliates (if the claim is made by
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International and/or Parent), with respect to such Loss, minus (ii) the
costs of collection of such proceeds and the insurance premiums paid
with respect to any such policy for the period covering such Loss.
(b) In the event that the amount of any deduction which shall
be applied pursuant to this Section 9.3 is determined after payment by a party
under this Agreement of the amount otherwise required pursuant to Section 9.2,
the indemnified party shall repay the paying party promptly after such
determination any amount that the paying party would not have had to pay
pursuant to Section 9.2 had such determination been made at or prior to the time
of such payment.
Section 9.4 Other Limitations. No claim for indemnification,
reimbursement or any other remedy pursuant to this Article IX may be brought
with respect to breaches of representations or warranties contained herein after
the applicable expiration date set forth in Section 9.1; provided, however, that
if, prior to such expiration date, a party seeking indemnification (an
"Indemnified Party") shall have notified the party from whom it is seeking
indemnification (the "Indemnifying Party") hereunder in writing of a claim for
indemnification under this Article IX (whether or not a suit or other action
shall have been commenced in connection with such claim), providing reasonable
notice of the potential grounds for an indemnity claim with respect thereto such
Indemnified Party shall be entitled to be indemnified with respect to such claim
in accordance with this Article IX notwithstanding such expiration date,
provided that such Indemnified Party shall have asserted an indemnity claim
within one year following such expiration date.
Section 9.5 Notice and Payment of Claims.
(a) Notice. An Indemnified Party shall notify the Indemnifying
Party within a reasonable period of time after it becomes aware of facts tending
to support a claim for indemnification under this Article IX, and shall provide
the Indemnifying Party as soon as practicable thereafter all information and
documentation necessary to support and verify any Loss associated with such
claim. The failure by an Indemnified Party so to notify the Indemnifying Party
shall not relieve the Indemnifying Party of any liability that it may have to
any Indemnified Party, except to the extent that the Indemnifying Party
demonstrates that it has
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been prejudiced by the Indemnified Party's failure to give such notice in a
timely manner or failure to provide such information or documentation, as the
case may be.
(b) Payment. In the event a claim for indemnification under
this Article IX shall have been finally determined, the amount of the related
Loss shall be paid by the Indemnifying Party to the Indemnified Party, in
immediately available funds in the currency in which such Losses were
denominated, within two Business Days after such final determination. Any claim,
and the liability for and amount of Loss therefor, shall be deemed to be
"finally determined" for purposes of this Section 9.5(b) when the parties to
such action have so determined by mutual agreement or, if disputed, when the
arbitrators have made a final written determination concerning the amount of the
related Losses and the Indemnifying Party's liability therefor. Payments made by
the Indemnifying Party pursuant to this Article IX shall be deemed to be a
reduction in the Cash Consideration for all purposes.
(c) Third Party Claims. In the event that an Indemnifying
Party may be required to indemnify an Indemnified Party against any claim or
legal action made or brought by a third party, indemnification shall be provided
in accordance with the following procedures:
(i) Upon receipt by an Indemnified Party of notice of the
commencement of any action by a third party (a "Third Party Claim")
against it, such Indemnified Party shall, if a claim is to be made
against an Indemnifying Party under this Article IX, give notice to the
Indemnifying Party of the commencement of such Third Party Claim as
soon as practicable, but in no event later than 30 days after the
Indemnified Party shall have been served with process, but the failure
so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability that it may have to any Indemnified Party,
except to the extent that the Indemnifying Party demonstrates that its
defense of such Third Party Claim has been prejudiced by the
Indemnified Party's failure to give such notice in a timely manner.
(ii) If a Third Party Claim is brought against an Indemnified
Party and proper notice of the commencement of such Third Party Claim
is
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provided to the Indemnifying Party, the Indemnifying Party will be
entitled, to the extent permitted by applicable law, to participate in
the defense of such Third Party Claim and, to the extent that the
Indemnifying Party wishes, to assume the defense of such Third Party
Claim with counsel satisfactory to the Indemnified Party. Following
notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such Third Party Claim, the
Indemnifying Party shall not, as long as the Indemnifying Party
zealously conducts such defense, be liable to the Indemnified Party
under this Article IX for any fees of other counsel or any other
expenses with respect to the defense of such Third Party Claim, in each
case subsequently incurred by the Indemnified Party in connection with
the defense of such Third Party Claim.
(iii) If the Indemnifying Party assumes the defense of a Third
Party Claim, (A) it will be conclusively established for purposes of
this Agreement that the claims made in the Third Party Claim are within
the scope of and subject to indemnification under this Article IX, (B)
no compromise or settlement of such Third Party Claim may be effected
by the Indemnifying Party without the Indemnified Party's consent
unless (I) there is no finding or admission of any violation of laws,
statutes, regulations or any violation of the rights of any Person, and
(II) the sole relief provided is monetary damages that are paid in full
by the Indemnifying Party.
(iv) In the event that the Indemnifying Party timely defends,
contests or otherwise protects the Indemnified Party against a Third
Party Claim, the Indemnified Party shall never theless have the right
to, but shall not be obligated to, participate at its own expense in
the defense of the Third Party Claim with counsel of its own choosing.
(v) In the event the Indemnifying Party fails zealously to
defend, contest or otherwise protect against any Third Party Claim in a
timely matter, the Indemnified Party may, but shall not be obligated
to, defend, contest or otherwise
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protect against the same, and make any compromise or settlement thereof
and shall be entitled to recover the entire cost thereof from the
Indemnifying Party, including reasonable attorneys' fees, disbursements
and all amounts paid as a result of such claim or suit or the
compromise or settlement thereof; provided, however, that if the
Indemnifying Party subsequently undertakes the defense of such matter,
the Indemnified Party shall not be entitled to recover from the
Indemnifying Party its costs thereafter incurred in the defense thereof
other than the reasonable cost of inves tigation undertaken by the
Indemnified Party and reasonable cost of providing assistance.
ARTICLE X
Miscellaneous
Section 10.1 Amendment and Waiver. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Purchaser and Parent, or
in the case of a waiver, by the party against whom the waiver is to be
effective. No failure or delay by any party in exer cising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
Section 10.2 Performance and Assignment. Any action or
obligation to be performed by Purchaser under this Agreement shall be deemed to
be performed by Purchaser if such action or obligation is performed by a
Subsidiary of Purchaser. No party to this Agreement may assign any of its rights
or obligations under this Agreement without the prior written consent of the
other party hereto, except that Purchaser may assign any or all of its rights
under this Agreement to any wholly-owned Subsidiary or Subsidiaries of
Purchaser.
Section 10.3 Entire Agreement. This Agreement (including all
Schedules hereto) and any written agreement among Parent and Purchaser which
make specific reference to this Section 10.3 contains the entire agreement
between the parties hereto with respect to the subject matter hereof and
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supersedes all prior agreements (including, without limitation, the Initial
Agreement) and understandings, oral or written, with respect to such matters,
except to the extent expressly agreed in writing among the parties.
Section 10.4 Parties in Interest; No Third Party
Beneficiaries. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
Person other than Parent, International, Purchaser, Lyonnaise and their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
Section 10.5 Schedules. The inclusion of any matter in any
schedule to this Agreement shall not be deemed to constitute an admission by
Parent, International or Purchaser, or otherwise imply, that any such matter is
material or creates a measure for materiality for the purposes of this
Agreement.
Section 10.6 Counterparts. This Agreement and any amendments
hereto may be executed in one or more counterparts, each of which shall be
deemed to be an original, and all of which shall be considered one and the same
instrument.
Section 10.7 Section Headings. The section and paragraph
headings and table of contents contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
Section 10.8 Notices. All notices hereunder shall be deemed
given if in writing and delivered personally or sent by facsimile or by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other addresses as shall be specified by like
notice):
(a) if to Purchaser, to:
Xxxxxxx Xxxxx SITA, S.A.
00 Xxx xx Xxxxxxxx-XX000-00,
00000 Xxxxx, Cedex 09 France
With a copy to:
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Xxxxxxx Xxxxxx
Suez Lyonnaise des Eaux
00 Xxxxxx xx xx Xxxxxxx
00000 Xxxxxxxx, Xxxxx Xxxxxx
and
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
(b) if to Parent or International, to:
Xxxxx X. Xxxxx
Xxxxxxxx-Xxxxxx Industries, Inc.
000 Xxxxx Xxxxxxxx
X.X. Xxx 0000 (77253)
Xxxxxxx, Xxxxx 00000
With a copy to:
Xxxxx Xxxxxxxxxxx
Xxxxxxxx-Xxxxxx Industries, Inc.
000 Xxxxx Xxxxxxxx
X.X. Xxx 0000 (77253)
Xxxxxxx, Xxxxx 00000
Any notice given by mail shall be effective when received.
SECTION 10.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE REPUBLIC OF FRANCE WITHOUT
REFERENCE TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
Section 10.10 Resolution of Disputes. Any dispute between the
parties arising out of this Agreement, whether as to this Agreement's
construction, interpretation or enforceability or as to any party's breach or
alleged breach of any provision of this Agreement, shall be submitted to final
and binding arbitration in accordance with the following procedures:
(a) Any party may demand such arbitration by giving written
notice of that demand to the other party. Any such arbitration shall be before a
panel of three arbitrators, one selected by Parent, one selected by Purchaser
and the third (who shall serve as chairman of the
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tribunal) selected by the agreement of each of the two arbitrators selected by
the parties in the manner set forth in Section 10.11(b). The notice pursuant to
this Section 10.11(a) shall state (i) the matter in controversy and (ii) the
name of the arbitrator selected by the party giving the notice.
(b) Not more than 15 days after notice is given pursuant to
Section 10.11(a), the other party shall give written notice to the party who
demanded arbitration of the name of an arbitrator selected by the other party.
If the other party shall fail to give such notice within such 15 day period, a
second arbitrator shall be selected in accordance with the Arbitration Rules of
the International Chamber of Commerce (the "Arbitration Rules"). Not more than
30 days after the second arbitrator is so named, the two arbitrators shall
select a third arbitrator. If the two arbitrators shall fail to select a third
arbitrator within such 30 day period, the third arbitrator shall be named
pursuant to the Arbitration Rules. All arbitrators shall be fluent in English
and French.
(c) The dispute shall be arbitrated at a hearing to be
conducted in French, although documents may be submitted in English or French.
The arbitration shall take place in Geneva, Switzerland or such other place as
the parties agree and shall be concluded as soon as practicable in accordance
with the Arbitration Rules. Any award, which may be made by a majority of the
arbitrators, shall be made as soon as possible following the conclusion of the
arbitration and shall be conclusive and binding on the parties and may be
entered as a judgment of any court having jurisdiction.
(d) Each party shall bear half the arbitrators' fees and
expenses and administrative expenses of the arbitration and its own legal and
other costs.
The agreement of the parties contained in the foregoing
provisions of Section 10.11 shall be a complete defense to any action, suit or
other proceeding instituted in any court or before any administrative tribunal
with respect to any dispute between the parties arising out of this Agreement.
Section 10.11 Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the
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validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable pro
vision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and pur pose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the valid ity or enforceability of such provision, or
the application thereof, in any other jurisdiction.
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IN WITNESS WHEREOF, the parties have executed or caused this
Agreement to be executed as of the date first written above.
XXXXXXXX-XXXXXX INDUSTRIES, INC.
By:
-------------------------------------
Name:
Title:
BFI INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
SUEZ LYONNAISE DES EAUX, S.A.
By:
-------------------------------------
Name:
Title:
SITA, S.A.
By:
-------------------------------------
Name:
Title:
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OMITTED SCHEDULES
Following is a list of schedules omitted from the foregoing Stock Purchase
Agreement (the "Agreement").
1. Schedule 1.1(b) - International Subsidiaries - see definition of
"International Subsidiaries" in Article I, Definitions, of the
Agreement.
2. Schedule 1.1(c) - Shares and Selling Entities - see definitions of
"Selling Entities" and "Shares" in Article I, Definitions, of the
Agreement.
3. Schedule 1.1(d) - Commitment Letter - Commitment Letter of Credit
Agricole Indosuez and Natexis Banque with respect to a facility of FF
3.6 billion.
4. Schedule 1.1(f) - Intercompany Indebtedness - see definition of
"Intercompany Indebtedness" in Article I, Definitions, of the
Agreement.
5. Schedule 3.7 - Governmental Filings - Parent representation as to
required Governmental filings and/or notices.
6. Schedule 4.6 - Governmental Filings - Purchaser representation as to
required Governmental filings and/or notices.
7. Schedule 6.1(a)(iv) - Employee Compensation Program - list of Parent
employee compensation programs
8. Schedule 6.4(c)(ii) - Technical Cooperation Agreement - agreement as to
post-closing cooperation between the parties.
9. Schedule 6.4(c)(iii) - Operating Agreement - not applicable.
10. Schedule 6.4(c)(ix) - "Xxxxxxxx/Puerto Rico" Schedule - schedule of
documents relating to the assignment of intellectual property.
11. Schedule 7.1(b)(ix) - Parent Counsel's Opinion - Form of opinion to be
delivered by Parent's legal counsel.
12. Schedule 7.1(c)(viii) - Purchaser Counsel's Opinion - Form of opinion
to be delivered by Purchaser's legal counsel.
In addition, the Agreement refers to additional schedules that were previously
prepared in connection with the due diligence review of the transaction, where
such references are made, the contents of such schedule are also identified. The
Company agrees to furnish supplementally a copy of any omitted schedule to the
Commission upon request.
