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PURCHASE AND SALE AGREEMENT
by and between
KTI Environmental Group, Inc.,
and
CNA Realty Corp.
and
CLE, Inc.
December 30, 1998
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PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of
December30, 1998, is made and entered into by and between KTI Environmental
Group, Inc., a New Jersey corporation (the "Buyer"), and CNA Realty Corp., a
Delaware corporation ("CNA Realty") and CLE, Inc., a Nevada corporation ("CLE"
and, together with CNA Realty, the "Seller").
WHEREAS, CNA Realty desires to sell to the Buyer, and the Buyer desires
to purchase from CNA Realty, on the terms and subject to the conditions set
forth in this Agreement, all of CNA Realty's right, title and interest as a
limited partner in and to Maine Energy Recovery Company, Limited Partnership, a
Maine limited partnership (the "Partnership") (the "LP Assigned Interest"); and
WHEREAS, the Partnership issued to CNA Realty that certain Subordinated
Note, dated as of December 1, 1990, as amended by Allonge Amending Subordinated
Note, dated as of May 3, 1996, in the original principal amount of
$14,252,338.39, which note was previously divided into two Subordinated Notes,
one of which is presently owned by CNA Realty and one of which is presently
owned by CLE (the "Subordinated Notes"); and
WHEREAS, the Seller now desires to assign and sell its interests in the
Subordinated Notes to Buyer and Buyer desires to purchase the Subordinated Notes
on the terms and provisions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements and the conditions set forth in this
Agreement, the Buyer and the Seller hereby agree as follows:
ARTICLE I -- TRANSFER OF THE LP ASSIGNED INTEREST
1.01 Transfer of Assigned Interest. On the terms and subject to all of
the conditions set forth in this Agreement, at the Closing (as hereinafter
defined), CNA Realty shall sell, transfer and assign to the Buyer, and the Buyer
shall purchase and acquire from CNA Realty, all of CNA Realty's right, title and
interest, as of the date hereof, in and to the LP Assigned Interest.
1.02 Purchase Price of Assigned Interest. The purchase price for the LP
Assigned Interest shall be Two Million Four Hundred Thousand and No/100 Dollars
($2,400,000.00) (the "LP Purchase Price").
1.03 Manner of Payment. On the terms and subject to all of the
conditions set forth in this Agreement, the Buyer shall pay to CNA Realty the LP
Purchase Price by wire transfer of such amounts (in immediately available funds)
on the Closing Date in accordance with written wire transfer instructions
provided in writing by CNA Realty to the Buyer prior to Closing.
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ARTICLE II -- SALE OF SUBORDINATED NOTES
2.01 Sale. On the terms and subject to all of the conditions set forth
in this Agreement, at the Closing, the Seller shall sell, assign and transfer to
the Buyer, without recourse, all of its right, title and interest in and to the
Subordinated Notes, "as is" and "with all faults" and without representations
and warranties of the Seller except as expressly set forth in Article IV of this
Agreement.
2.02 Purchase Price. The purchase price for the Subordinated Notes (the
"Note Purchase Price") is an amount equal to the outstanding aggregate principal
amounts of the Subordinated Notes on the Closing Date, plus accrued interest to
the Closing Date.
2.03 Manner of Payment. On the terms and subject to all of the
conditions set forth in this Agreement, the Buyer shall pay to the Seller the
Note Purchase Price by wire transfer of such amount (in immediately available
funds) on the Closing Date in accordance with written wire transfer instructions
provided in writing by the Seller to the Buyer prior to Closing.
2.04. Delivery of Subordinated Notes and Assignments. On the Closing
Date the Seller shall deliver to the Buyer the original Subordinated Notes, each
endorsed or assigned to the Buyer.
ARTICLE III -- CLOSING
3.01 Closing. The closing of the transactions contemplated by Article I
and Article II of this Agreement (the "Closing") shall take place at the offices
of the Buyer. The Closing shall take place on the date hereof or at such other
location, time or date as may be agreed to in writing between the Seller and the
Buyer (such date of the Closing being herein called the "Closing Date").
3.02 General Procedure. At the Closing, each party shall deliver to the
party entitled to receipt thereof the documents required to be delivered
pursuant to Articles VI and VII hereof and such other documents, instruments and
materials (or complete and accurate copies thereof, where appropriate) as may be
reasonably required in order to effectuate the intent and provisions of this
Agreement, and all such documents, instruments and materials shall be reasonably
satisfactory in form and substance to counsel for the receiving party. The
conveyance, transfer, assignment and delivery of the LP Assigned Interest shall
be effected by CNA Realty's execution and delivery to the Buyer of an assignment
substantially in the form attached hereto as Exhibit A (the "LP Interest
Assignment"), and such other instruments of conveyance, transfer, assignment and
delivery as the Buyer shall reasonably request to cause CNA Realty to transfer,
convey, assign and deliver the LP Assigned Interest to the Buyer.
ARTICLE IV -- REPRESENTATIONS AND WARRANTIES OF SELLER
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The sale and assignment of the LP Assigned Interest and the
Subordinated Notes is without recourse and without representation or warranty,
express or implied, except that the Seller represents and warrants to the Buyer
that:
4.01 Execution, Delivery; Valid and Binding Agreement. The execution,
delivery and performance of this Agreement by the Seller and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Seller and no other proceedings on its part are necessary to authorize the
execution, delivery and performance of this Agreement. This Agreement has been
duly executed and delivered by the Seller and, assuming that this Agreement is
the valid and binding agreement of the Buyer, constitutes the valid and binding
obligation of the Seller, enforceable in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights or by general principles of equity.
4.02 No Breach. To the Seller's knowledge and in reliance upon the
conditions precedent described in Section 6.02 hereof having been satisfied, the
execution, delivery and performance of this Agreement by the Seller and the
consummation of the transactions contemplated hereby do not conflict with or
result in any breach of any of the provisions of, or constitute a default under,
result in a violation of, result in the creation of a right of termination or
acceleration or any lien, security interest, charge or authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of any indenture, mortgage, lease, loan
agreement or other agreement or instrument by which the Seller is bound or
affected (other than any indenture, mortgage, lease, loan agreement or other
agreement or instrument to which the Partnership is a party) or any law,
statute, rule or regulation or order, judgment or decree to which the Seller is
subject.
4.03 Good Title; No Liens. To the best of their knowledge, CNA Realty
owns good title to the LP Assigned Interest and the Seller owns the Subordinated
Notes, free and clear of all liens and encumbrances, and each is holding them
for its own account. CNA Realty has not previously sold, transferred or assigned
any of its interest in the LP Partnership, nor has it acquired any of its
interest in the LP Partnership during the past twelve months. The Seller has not
previously sold, transferred or assigned any of its respective interests in the
Subordinated Notes, nor has it acquired any of its interest in the Subordinated
Notes during the past twelve months.
4.04 No Brokers; Adequacy of Purchase Price. The Seller has not dealt
with any broker in connection with this transaction. The Buyer has provided all
information requested by the Seller with respect to the Partnership, the LP
Assigned Interest and the Subordinated Notes and all other matters with respect
thereto requested by the Seller, and the Seller is satisfied with the Purchase
Price and is freely making its decision to sell the LP Assigned Interest and the
Subordinated Notes for its own reasons with no additional information requested
or required.
ARTICLE V -- REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Seller that:
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5.01 Execution, Delivery; Valid and Binding Agreement. The execution,
delivery and performance of this Agreement by the Buyer and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Buyer, and no other corporate proceedings on its part are necessary to
authorize the execution, delivery or performance of this Agreement. This
Agreement has been duly executed and delivered by the Buyer and, assuming that
this Agreement is the valid and binding agreement of the Seller, constitutes the
valid and binding obligation of the Buyer, enforceable in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights or by general principles of equity.
5.02 No Breach. The execution, delivery and performance of this
Agreement by the Buyer and the consummation by the Buyer of the transactions
contemplated hereby do not conflict with or result in any breach of any of the
provisions of, constitute a default under, result in a violation of, result in
the creation of a right of termination or acceleration or any lien, security
interest, charge or encumbrance upon any assets of the Buyer, or require any
authorization, consent, approval, exemption or other action by or notice to any
bank, trustee or other person (however constituted) or any court or other
governmental body, under the provisions of any indenture, mortgage, lease, loan
agreement or other agreement or instrument by which the Buyer is bound or
affected (other than those obtained and in full force and effect as of the
Closing Date) or any law, statute, rule or regulation or order, judgment or
decree to which the Buyer is subject. The execution of the Agreement and the LP
Interest Assignment is authorized by the partnership agreement of the
Partnership, giving effect to receipt of the ENI Consent, and no further consent
or approval of the partners of the Partnership, other than those expressly
required by Section VII hereof, is required.
5.03 Accredited Investor; Investment Purposes. The Buyer is an
"accredited investor" as defined under RegulationD promulgated under the
Securities Act of 1933, as amended. The Buyer is acquiring the LP Assigned
Interest and the Subordinated Note for its own account for investment and not
with a view to, or for sale or resale in connection with, any public
distribution thereof or with any present intention of selling, distributing or
otherwise disposing of the LP Assigned Interest or the Subordinated Notes,
except such sales thereof as are made not in violation of the Securities Act of
1933, as amended, the applicable securities or "blue sky" laws of any State and
any other applicable law. The Buyer possesses sufficient knowledge and
experience in financial and business matters so that it is capable of evaluating
the merits and risks of purchasing the LP Assigned Interest and the Subordinated
Notes.
5.04 Investigation; Access to Information. The Buyer is the general
partner of the Partnership and as such is familiar with the Partnership, the
assets of the Partnership, the Partnership Agreement, and the documents and
agreements related thereto as it in the exercise of its independent judgment
deemed necessary under the circumstances. The Buyer is entering into this
Agreement and the transactions contemplated hereby without reliance upon any
representation or warranty (expressed or implied) from the Seller other than
such representations and warranties as are expressly set forth in Article IV of
this Agreement. The Buyer specifically
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does not request, desire or require the Seller or any affiliate of the Seller or
either of them to make any additional representations or warranties with respect
to the Partnership and or any of its subsidiaries or affiliates, the LP Assigned
Interest or the Subordinated Notes or any other matter with respect to the
transactions contemplated by this Agreement. The Buyer has been furnished with
all information regarding the LP Assigned Interests and the Subordinated Notes
that it has requested from the Seller, and acknowledges that the Seller makes no
representation or warranty and undertakes no responsibility with respect to the
value or income potential or collectability of the LP Assigned Interest or the
Subordinated Notes. The Buyer is satisfied with the Purchase Price and is freely
making its decision to purchase the LP Assigned Interest and the Subordinated
Notes for its own reasons with no additional information requested or required.
5.05 Brokers. The Buyer has not dealt with any broker in connection
with this transaction.
5.06 No Insolvency Proceedings. No voluntary or involuntary petition in
bankruptcy, petition seeking reorganization or arrangement, assignment for the
benefit of creditors, or other action under federal, state or other insolvency
laws is pending against or contemplated by the Buyer.
ARTICLE VI -- THE CLOSING
6.01 Seller's Closing Obligations. On the Closing Date, (a)CNA Realty
shall have delivered to the Buyer the executed LP Interest Assignment and (b)the
Seller shall have delivered to the Buyer the Subordinated Notes and the
Subordinated Note Assignments and such other instruments of conveyance,
transfer, assignment and delivery as the Buyer shall have reasonably requested
pursuant to Section 3.02 hereof.
6.02 Buyer's Closing Obligations. On the Closing Date, the Buyer shall
have (a)paid to CNA Realty by wire transfer in immediately available funds the
LP Purchase Price, (b) paid to the Seller by wire transfer in immediately
available funds the Note Purchase Price, (c) delivered to the Seller, (i) a duly
executed counterpart of the Note Subordination Agreement in the form of Exhibit
B as delivered to the Senior Lenders (as defined in said Note Subordination
Agreement), and (ii) a consent to sale and waiver of rights to notice and
purchases duly executed by Energy National, Inc. and KTI (the "ENI Consent"), in
the form of Exhibit C hereto; and (c)satisfied (or the Seller has waived in
writing) each of the conditions to the Seller's obligations set forth in Article
VII.
ARTICLE VII -- OTHER CONDITIONS TO CLOSING
On or prior to the Closing Date, the Buyer shall have satisfied or
caused to be satisfied each of the following conditions:
7.01 Amendment of Partnership Agreement. The Partnership Agreement
shall have been amended as of the Closing Date to adjust the percentage
interests of partners to reflect the
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sale of the LP Assigned Interest, and to make such other amendments thereof as
are necessary to reflect the transactions contemplated hereby.
7.02 Notices and Consents. The Buyer shall have duly performed and
complied with Sections 10.2 and 10.3 of the Partnership Agreement, and will have
executed and delivered all notices of this transaction required to be given to,
and obtained all consents from, the Partnership or any of its partners and all
other parties to any material agreement to which the Partnership is a party
which requires such notice to be given or consent obtained, including the ENI
Consent.
ARTICLE VIII -- MISCELLANEOUS
8.01 Expenses. Except as otherwise expressly provided for herein, the
Seller and the Buyer will pay all of their own expenses in connection with the
negotiation of this Agreement, the performance of their respective obligations
hereunder and the consummation of the transactions contemplated by this
Agreement (whether consummated or not).
8.02 Amendment and Waiver. This Agreement may not be amended or waived
except in a writing executed by the party against which such amendment or waiver
is sought to be enforced. No course of dealing between any persons having any
interest in this Agreement will be deemed effective to modify or amend any part
of this Agreement or any rights or obligations of any person under or by reason
of this Agreement.
8.03 Complete Agreement. This Agreement contains the complete agreement
between the parties and supersedes any prior understandings, agreements or
representations by or between the parties, written or oral, which may have
related to the sale of the LP Assigned Interest or the Subordinated Note.
8.04 Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
instrument.
8.05 Governing Law. The internal law, without regard to conflicts of
laws principles, of the State of New York will govern all questions concerning
the construction, validity and interpretation of this Agreement and the
performance of the obligations imposed by this Agreement.
8.06 Survival. The covenants, representations and warranties contained
in this Agreement shall survive the Closing.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
KTI ENVIRONMENTAL GROUP, INC.
By /s/ Xxxxxx X. Xxxxxx
Its Senior Vice President
CNA REALTY CORP.
By /s/ Xxxxxx X. Xxxx
Its President
CLE, INC.
By /s/ Xxx Xxxxxx
Its President
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