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EXHIBIT (10)(i)
ASSET PURCHASE AGREEMENT
BY AND AMONG
3E COMPANY ENVIRONMENTAL, ECOLOGICAL AND ENGINEERING,
NEW 3E COMPANY ACQUISITION CORPORATION,
XXXX X. XXXXX, XX,
XXXXX XXXXX,
XXXXXXXXXXX XXXXX,
XXXXXX X. XXXX,
XXXXXX XXXXXX,
AND
SAFETY-KLEEN SYSTEMS, INC.
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August 27, 2002
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), dated as of August
27, 2002, is entered into by and among New 3E Company Acquisition Corporation, a
Delaware corporation (the "Purchaser"), Safety-Kleen Systems, Inc., a Wisconsin
corporation ("Safety-Kleen"), Xxxx X. Xxxxx, XX, Xxxxx Xxxxx, Xxxxxxxxxxx Xxxxx,
Xxxxxx X. Xxxx, Xxxxxx Xxxxxx (such individuals collectively, the "Minority
Shareholders"), and 3E Company Environmental, Ecological and Engineering, a
California corporation (the "Company"). The Company, Safety-Kleen, the Minority
Shareholders and the Purchaser are sometimes collectively referred to herein as
the "Parties" and individually as a "Party." Capitalized terms used herein and
not otherwise defined herein have the meanings given to such terms in Section 11
below.
WHEREAS, the Company operates a business engaged in, among other
activities, the rendering of compliance assistance services with respect to the
handling of hazardous materials and related consulting projects (collectively,
the "Business");
WHEREAS, the Company's issued and outstanding capital stock consists
of 797,000 shares of common stock (the "Company Stock"), of which 604,000 shares
are owned by Safety-Kleen, and 193,000 shares (the "Minority Shares") are owned
by the Minority Shareholders in the respective amounts set forth on Schedule 9B
hereto;
WHEREAS, on June 9, 2000, Safety-Kleen and certain of its subsidiaries
filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code,
which ensuing bankruptcy cases (collectively, the "Bankruptcy Case") are now
pending in the United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court"), as part of a jointly administered bankruptcy proceeding;
WHEREAS, the Company has not filed a petition for relief and is not a
party to the Bankruptcy Case;
WHEREAS, the board of directors of the Company and all of the
shareholders of the Company, including all of the Minority Shareholders, have
determined that the transactions contemplated by the Agreement are in the best
interests of the Company and its shareholders and by resolutions duly adopted,
have approved this Agreement and the transactions contemplated hereby
(collectively, the "Transactions");
WHEREAS, the Purchaser desires to purchase from the Company, and the
Company desires to sell to the Purchaser, all of the Company's right, title and
interest in and to the Purchased Assets, and the Purchaser desires to assume all
of the Assumed Liabilities, in each case, on the terms and subject to the
conditions of this Agreement; and
WHEREAS, Safety-Kleen desires to purchase from the Minority
Shareholders, and the Minority Shareholders desire to sell to Safety-Kleen, all
of the Minority Shares, on the terms and subject to the conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and
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understandings contained herein, and intending to be legally bound,
the Parties hereby agree as follows:
Section 1. Purchase of Assets; Assumption of Liabilities; Sale of Shares.
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1A. PURCHASE AND TRANSFER OF ASSETS. Upon the terms and subject to
the conditions and provisions contained in this Agreement and in the Sale
Approval Order, at the Closing, the Company shall sell, convey, transfer, assign
and deliver to the Purchaser, and the Purchaser shall acquire and accept from
the Company, all of the Company's right, title and interest in and to the
Purchased Assets, free and clear of all Excluded Liabilities and Liens arising
therefrom.
1B. ASSUMED LIABILITIES. At the Closing, the Purchaser shall assume
and undertake to pay, perform and discharge when due or required to be performed
(without duplication) all of the Assumed Liabilities.
1C. EXCLUDED LIABILITIES. Notwithstanding any other terms,
provisions or conditions in this Agreement, the Purchaser shall not assume, or
otherwise be responsible or liable for or obligated with respect to, the
following Liabilities to the extent they arise from facts, conduct, conditions
or circumstances in existence on or before the Closing Date (collectively, the
"Excluded Liabilities"):
(i) any and all Liabilities owed to Safety-Kleen or any of
its Affiliates (regardless of whether arising from an intercompany
loan, an intercompany transaction or otherwise);
(ii) any and all ERISA Liabilities;
(iii) any and all Liabilities for (a) Taxes of Safety-Kleen
or Safety-Kleen Corp. or any of their current or past Affiliates for
which the Company may be liable under Treasury regulation section
1.1502-6 (or any analogous or similar state, local or foreign law or
regulation), or (b) United States Federal income and state income and
state franchise Taxes of the Company or for which the Company may be
liable, whether directly or as a transferee, successor, by contract or
otherwise;
(iv) any and all Liabilities for brokerage or finder's fees
payable to First Analysis in connection with the Transactions;
(v) any and all Liabilities arising under guarantees or
similar instruments relating to indebtedness for borrowed money
incurred by Safety-Kleen or any of its Affiliates (other than the
Company), other than for the Company's direct benefit, including
without limitation Liabilities as a guarantor pursuant to that certain
Amended and Restated Credit Agreement, dated as of April 3, 1998, by
and among LES, Inc., Xxxxxxx Environmental
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Services (Canada) Ltd., and the lenders and agents thereunder (the
"LES Guarantee"); and
(vi) Insured Claims.
1D. Sale of Shares. Upon the terms and subject to the conditions and
provisions in this Agreement, at the Closing, Safety-Kleen shall purchase,
acquire and accept from the Minority Shareholders, and the Minority Shareholders
shall transfer and deliver to Safety-Kleen, the Minority Shares, free and clear
of all options, proxies, voting agreements, judgments, pledges, charges,
escrows, rights of first refusal or first offer, mortgages, indentures, claims,
transfer restrictions, liens, equities, encumbrances, security interests and
other encumbrances of every kind and nature whatsoever, whether arising by
agreement, operation of law or otherwise.
1E. Purchase Price.
(i) Asset Purchase Price. The consideration for the
Purchased Assets (the "Asset Purchase Price") will be (a) $12,639,218,
(b) the assumption of the Assumed Liabilities and (c) any Strategic
Transaction Payment. In accordance with Section 1F, at the Closing,
the Asset Purchase Price shall be paid by the Purchaser to the Company
as follows: (a) the Purchaser shall deliver $9,389,218 by wire
transfer of immediately available funds to an account specified by the
Company and Safety-Kleen, and (b) the Purchaser shall execute and
deliver to the Company a secured promissory note in the principal
amount of $3,250,000, in the form of Exhibit A attached hereto
(the "Secured Note"). Any additional amounts payable in connection
with a Strategic Transaction shall be paid in accordance with the
provisions of Section 1G.
(ii) Stock Purchase Price. The purchase price for the
Minority Shares (without credit for the previous option payment made
to the Minority Shareholders) shall be $3.2386 per share, for an
aggregate purchase price of $625,062.08 (the "Stock Purchase
Price"). The Stock Purchase Price will be allocated among the Minority
Shareholders as set forth in Schedule 9B hereto and shall be paid out
of the proceeds of the Asset Purchase Price by Safety-Kleen delivering
a sum equal to the Stock Purchase Price by wire transfer to the
respective accounts specified in a written notice delivered to the
Company and Safety-Kleen by each Minority Shareholder at least five
business days prior to the Closing Date.
1F. Closing. The closing of the purchase and sale of the Purchased
Assets and the Minority Shares (the "Closing") shall take place at the offices
of Duckor, Xxxxxxxxx & Xxxxxxx, A P.C., 000 Xxxx X Xxxxxx, Xxxxx 0000, Xxx
Xxxxx, XX 00000, or at such other place as may be agreed to by the Purchaser,
the Company and Safety-Kleen, at 10:00 a.m., local time, on the second business
day following satisfaction or waiver of the conditions to the Closing set forth
in Section 2, Section 3 and Section 4 below, but not earlier than 10 days
following entry of
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the Sale Approval Order (the "Closing Date"). At the Closing, the Parties shall
consummate the purchase and sale of the Purchased Assets and the Minority Shares
in the following manner:
(i) The Purchaser shall deliver to the Company $9,389,218,
by wire transfer of immediately available funds to an account
designated by the Company and Safety-Kleen;
(ii) The Purchaser shall execute and deliver to the Company
the Secured Note and each document referred to therein (including
documents evidencing or perfecting security interests granted in favor
of the Company and intercreditor arrangements), in each case in form
and substance satisfactory to Safety-Kleen in its sole discretion;
(iii) The Purchaser shall execute and deliver to the Company
such instruments of assumption as are required in order for the
Purchaser to assume the Assumed Liabilities (which instruments shall
be in form and substance reasonably satisfactory to Safety-Kleen and
its special counsel);
(iv) Each Minority Shareholder shall execute and deliver to
Safety-Kleen and the Company a complete and unconditional mutual
release in the form of Exhibit B attached hereto (each, a " Minority
Shareholder Release") and a complete and unconditional release of
employment related claims, in form reasonably acceptable to
Safety-Kleen and the Company (each, an "Employment Release");
provided, however, that Minority Shareholders Xxxx X. Xxxxx, XX, Xxxxx
Xxxxx, Xxxxxxxxxxx Xxxxx and Xxxxxx Xxxx shall have been given at
least forty-five (45) days to consider the Employment Release, and
that, in the event that each of these Minority Shareholders executes
and delivers his or her Employment Release less than forty-five (45)
days from the date he or she receives it (the "Consideration Period"),
he or she acknowledges that he or she had sufficient time to consider
the Employment Release, that he or she expressly, voluntarily and
knowingly waives any additional time, and that his or her execution of
the Employment Release at the Closing shall not operate, nor be
construed, to nullify the Consideration Period;
(v) The Company shall execute and deliver to Safety-Kleen a
complete and unconditional release in the form of Exhibit C attached
hereto (the "Company Release");
(vi) Each Minority Shareholder shall execute and deliver to
the Company his or her resignation from his or her position as an
employee, officer and director of the Company, which resignation shall
be effective at the Closing;
(vii) The Company shall execute and deliver to the Purchaser
a xxxx of sale and assignment and such other instruments of assignment
as are
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required to transfer the Purchased Assets to the Purchaser (which
instruments shall be in form and substance reasonably satisfactory to
the Purchaser and its special counsel);
(viii) The Company and Safety-Kleen shall execute and
deliver to each Minority Shareholder a Minority Shareholder Release;
(ix) The Company and Safety-Kleen shall execute and deliver
to each other the Marketing Agreement;
(x) Each Minority Shareholder shall deliver to Safety-Kleen
certificates representing the number of Minority Shares set forth
opposite his or her name on Schedule 9B, each such certificate to be
duly and validly endorsed in favor of Safety-Kleen or accompanied by a
power of attorney duly and validly executed by such Minority
Shareholder and otherwise sufficient to vest in Safety-Kleen good and
marketable title to the Shares; and
(xi) Upon receipt of the funds specified in clause (i) of
this Section 1F and upon execution and delivery of the Minority
Shareholder Release and the Employment Release for each Minority
Shareholder who has complied with his or her obligations under this
Agreement and has satisfied his or her conditions to closing,
Safety-Kleen shall deliver by wire transfer of immediately available
funds to the account specified by such Minority Shareholder the amount
set forth opposite such Minority Shareholder's name on Schedule 9B.
1G. Additional Asset Purchase Price Pursuant to Strategic
Transaction.
(i) If, within one year after the Closing Date, the
Purchaser or any stockholder of the Purchaser as of the Closing Date,
or any Affiliate of the Purchaser or any stockholder of the Purchaser,
engages in, or agrees to engage in, a Strategic Transaction, the
Purchaser shall be obligated to pay to the Company in accordance with
the terms of this Section 1G an additional amount in cash equal to
75.78% of the Value realized in such Strategic Transaction (the
"Strategic Transaction Payment"). The Strategic Transaction Payment
shall be additional consideration for the purchase of the Purchased
Assets.
(ii) No later than 15 business days prior to the closing of
any Strategic Transaction, the Purchaser shall deliver to the Company
a notice describing the Strategic Transaction, and the Value to be
received in such transaction, including all the information used to
determine the Value. The Purchaser shall promptly deliver to the
Company any information it reasonably requests in order to determine
the Value realized from the Strategic Transaction. Concurrently with
the closing of the Strategic Transaction, the Purchaser shall pay to
the Company by wire transfer of
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immediately available funds to an account designated by the Company an
amount equal to 75.78% of the Value realized in such Strategic
Transaction.
1H. Allocation of Asset Purchase Price. The Asset Purchase Price
shall be allocated among the Purchased Assets as set forth on the Asset Purchase
Price Allocation Schedule, which shall be agreed to and attached prior to
Closing as Schedule 1H hereto for all Tax and accounting purposes, and each of
the Purchaser and the Company shall (i) timely file all forms (including
Internal Revenue Service Form 8594) and Tax Returns required to be filed in
connection with such allocation, (ii) be bound by such allocation for purposes
of determining Taxes, (iii) prepare and file, or cause to be prepared and filed,
its Tax Returns on a basis consistent with such allocation and (iv) take no
position, or cause no position to be taken, inconsistent with such allocation on
any applicable Tax Return, in any audit or proceeding before any Taxing
Authority, in any report made for Tax, financial accounting or any other
purposes, or otherwise.
Section 2. Conditions of the Obligations of the Purchaser at the closing.
The obligation of the Purchaser to consummate the Transactions at the Closing is
subject to the satisfaction as of the Closing of the following conditions:
2A. Representations and Warranties; Covenants. The representations
and warranties contained in Sections 6 and 7 hereof that are not made as of a
specific date and are subject to materiality qualifications shall be true and
correct in all respects at and as of the Closing and the representations and
warranties contained in Sections 6 and 7 hereof that are not made as of a
specific date and are not subject to materiality qualifications shall be true
and correct in all material respects at and as of the Closing, in each case as
though then made and as though the Closing Date was substituted for the date of
this Agreement throughout such representations and warranties (without taking
into account any disclosures made by the Company and/or Safety-Kleen to the
Purchaser pursuant to Section 5C below), and the Company and Safety-Kleen shall
have performed in all material respects all of the covenants required to be
performed by the Company and Safety-Kleen hereunder prior to the Closing.
2B. Entry of Sale Approval Order. The Bankruptcy Court shall have
entered the Sale Approval Order, and it shall have become a Final Order.
2C. Governmental Consents and Approvals. The Parties shall have
received or obtained all material governmental and regulatory consents and
approvals, if any, that are necessary for the consummation of the Transaction
(collectively, the "Governmental Approvals").
2D. Litigation. No suit, action or other proceeding shall be pending
or threatened before any court or governmental or regulatory official, body or
authority in which it is sought to restrain or prohibit the Transaction, and no
injunction, judgment, order, decree or ruling with respect thereto shall be in
effect.
2E. Filings. The Company shall have made all material filings
required to be made by the Company and shall have obtained all material permits
and other authorizations
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required to be obtained by the Company under all applicable laws to consummate
the Transaction in compliance with such laws.
2F. Closing Documents. At the Closing, all of the following
documents shall have been delivered to the Purchaser:
(i) a certificate of an officer of the Company, dated the
Closing Date, stating that the conditions specified in Paragraphs 2A
through 2E, inclusive, have been satisfied;
(ii) certified copies of the resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery and
performance of this Agreement and each of the other agreements
contemplated hereby, and the sale of the Purchased Assets and the
other transactions contemplated hereby and thereby, and ratifying the
actions of the Company's officers taken in furtherance of such
resolutions, and affirming, ratifying and approving past actions taken
in good faith by the Company's officers;
(iii) copies of all Governmental Approvals it obtained, if
any;
(iv) a good standing certificate of the Company from its
jurisdiction of incorporation, dated as of a recent date prior to the
Closing Date;
(v) a certificate of an officer of Safety-Kleen, dated the
Closing Date, stating that the condition specified in Paragraph 2A
(solely with respect to the representation and warranty in Paragraph
7D) has been satisfied;
(vi) Uniform Commercial Code Termination Statements (Form
UCC-3) executed by any Person who has filed a Uniform Commercial Code
Financing Statement (Form UCC-1) (which has not expired or been
terminated) with respect to any of the Purchased Assets to secure the
payment of an Excluded Liability; and
(vii) all documents and items deliverable by the Company to
the Purchaser at the Closing pursuant to Section 1F.
2G. LES Guarantee Release. The Purchaser shall have received a
release related to the LES Guarantee, executed by Toronto Dominion, in form and
substance acceptable to Purchaser in its reasonable discretion.
2H. No Material Adverse Change. Since the date hereof, there shall
have been no Material Adverse Change.
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2I. Marketing Agreement. The Purchaser and Safety-Kleen shall have
executed and delivered a marketing agreement, dated as of the Closing Date,
reasonably acceptable to both the Purchaser and Safety-Kleen pursuant to which
Safety-Kleen will market certain of the Purchaser's services ("Marketing
Agreement").
2J. Financing. The Purchaser shall have obtained sufficient funds to
pay the cash portion of the Asset Purchase Price.
2K. Waiver. Any condition specified in this Section 2 may be waived
if consented to in writing by the Purchaser.
Section 3. Conditions of the Obligations of the Company at the closing.
The obligation of the Company to consummate the Transactions is subject to the
satisfaction as of the Closing of the following conditions:
3A. Representations and Warranties; Covenants. The representations
and warranties contained in Sections 8 and 9 hereof shall be true and correct in
all material respects at and as of the Closing as though then made and as though
the Closing Date was substituted for the date of this Agreement throughout such
representations and warranties (without taking into account any disclosures made
by the Purchaser or the Minority Shareholders pursuant to Section 5C below), and
the Purchaser and the Minority Shareholders shall have performed in all material
respects all of the covenants required to be performed by the Purchaser and the
Minority Shareholders hereunder prior to the Closing.
3B. Governmental Consents and Approvals. The Parties shall have
received or obtained all material Governmental Approvals that are required for
the consummation of the Transaction.
3C. Sale Approval Order. The Bankruptcy Court shall have entered the
Sale Approval Order, and it shall have become a Final Order.
3D. Litigation. No suit, action or other proceeding shall be pending
before any court or governmental or regulatory official, body or authority in
which it is sought to restrain or prohibit the transactions contemplated hereby,
and no injunction, judgment, order, decree or ruling with respect thereto shall
be in effect.
3E. Closing Documents. At the Closing, the Purchaser and the
Minority Shareholders, as applicable, shall have delivered to the Company all of
the following documents:
(i) a certificate of an officer of the Purchaser, dated the
Closing Date, stating that the conditions specified in Paragraphs 3A
through 3D, inclusive, have been satisfied;
(ii) certified copies of the resolutions duly adopted by the
Purchaser's board of directors and stockholders authorizing the
execution, delivery and performance of this Agreement and each of the
other agreements
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contemplated hereby, and the purchase of the Purchased Assets and
assumption of the Assumed Liabilities and the other transactions
contemplated hereby and thereby;
(iii) copies of all Governmental Approvals;
(iv) good standing certificates of the Purchaser from its
jurisdiction of incorporation and from the State of California, in
each case, dated as of a recent date prior to the Closing Date; and
(v) all documents and items deliverable to the Company by
the Purchaser or the Minority Shareholders at the Closing pursuant to
Xxxxxxx 0X.
0X. Waiver. Any condition specified in this Section 3 may be waived
if consented to in writing by the Company and Safety-Kleen. The Company may
waive compliance by the Minority Shareholders with the covenants to be performed
by them at or prior to the Closing and consummate the sale of the Purchased
Assets without prejudice to the rights of Safety-Kleen not to consummate the
purchase of the Minority Shares in accordance with the terms of this Agreement.
Section 4. Conditions of the Obligations of Safety-Kleen at the Closing.
The obligation of Safety-Kleen to consummate the Transactions is subject to the
satisfaction as of the Closing of the following conditions:
4A. Representations and Warranties; Covenants. The representations
and warranties contained in Section 9 hereof shall be true and correct in all
material respects at and as of the Closing as though then made and as though the
Closing Date was substituted for the date of this Agreement throughout such
representations and warranties (without taking into account any disclosures made
by the Company or the Minority Shareholders pursuant to Section 5C below), and
the Company and the Minority Shareholders shall have performed in all material
respects all of the covenants required to be performed by the Company and the
Minority Shareholders hereunder prior to the Closing.
4B. Closing Documents. At the Closing, each Minority Shareholder
shall have delivered to Safety-Kleen all of the following documents:
(i) A certificate signed by such Minority Shareholder, dated
the Closing Date stating that the conditions specified in Paragraph 4A
have been satisfied; and
(ii) All documents and items deliverable to Safety-Kleen or
the Company by such Minority Shareholder.
4C. Marketing Agreement. The Purchaser and Safety-Kleen shall have
executed and delivered the Marketing Agreement.
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4D. Waiver. Notwithstanding any waiver by the Company of a condition
to be fulfilled by a Minority Shareholder, Safety-Kleen may elect not to
consummate the purchase of any Minority Shares from a Minority Shareholder who
doesn't fulfill its conditions to closing.
Section 5. Pre-Closing Covenants and Agreements. Each of the Parties
agrees as follows with respect to the period between the date of this Agreement
and the Closing:
5A. General. Each of the Parties shall use commercially reasonable
efforts to take all actions and to do all things necessary, proper or advisable
in order to consummate and make effective the Transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the conditions set forth
in Sections 2, 3 and 4 above). Subject to satisfaction or waiver of the
conditions set forth in Sections 2, 3 and 4 above, at the Closing, the
applicable Parties shall execute and deliver the agreements and instruments
contemplated hereby to be executed and delivered at the Closing.
5B. Governmental Notices and Consents. Each of the Parties shall
give any notices to, make any filings with, and use commercially reasonable
efforts to obtain, any authorizations, consents and approvals of governments and
governmental agencies in connection with the matters contemplated by this
Agreement. The Company and Safety-Kleen shall file all applicable motions with
the Bankruptcy Court they deem necessary or desirable to obtain the Sale
Approval Order and shall use their commercially reasonable efforts to obtain the
Sale Approval Order in a timely fashion.
5C. Notice of Material Developments. Each Party shall give prompt
written notice to the other Parties of (i) any variances in any of its
representations or warranties contained in Sections 6, 7, 8 or 9 below, as the
case may be, (ii) any breach of any covenant hereunder by such Party and (iii)
any other material development affecting the ability of such Party to consummate
the Transaction.
5D. Access. Between the date of this Agreement and the Closing, the
Company shall (i) afford the Purchaser and its authorized representatives
reasonable access to all books, records, offices and other facilities of the
Company and (ii) permit the Purchaser to make such inspections and to make
copies of such books and records as it may reasonably require. The Purchaser and
its authorized representatives shall conduct all such inspections in a manner
that limits disruptions to the business and operations of the Company.
5E. Funding Commitments. The Purchaser shall regularly keep the
Company and Safety-Kleen advised of the status of discussions with, and identity
of, its financing sources.
5F. Assignment of Safety-Kleen Leases. Subject to (a) obtaining any
requisite consents, (b) obtaining a release of Safety-Kleen from its
obligations, and (c) the Purchaser providing any requisite cure payments and
assurances of adequate performance, Safety-Kleen shall use commercially
reasonable efforts to assign to the Purchaser those leases listed on Schedule 5F
attached hereto.
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5G. Transfer of Shares. Each Minority Shareholder shall neither
agree to nor sell, transfer, or otherwise dispose of his or her Minority Shares,
or any interest therein, other than pursuant to this Agreement.
Section 6. Representations and Warranties of the Company. As a material
inducement to the Purchaser to enter into this Agreement and purchase the
Purchased Assets hereunder, the Company hereby represents and warrants to the
Purchaser as follows:
6A. Organization, Corporate Power and Licenses. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California. The Company possesses all requisite corporate power
and authority necessary to carry out the Transactions.
6B. Authorization; Enforceability. The execution, delivery and
performance of this Agreement and all of the other agreements and instruments
contemplated hereby to which the Company is a party and the fulfillment of and
compliance with the respective terms hereof (including the sale of the Purchased
Assets hereunder) and thereof by the Company have been duly authorized by the
Company and by its stockholders. Subject only to the Sale Approval Order, this
Agreement constitutes a valid and binding obligation of the Company, enforceable
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
6 C. Assets.
(i) The Company has good title to, or a valid leasehold or
license interest in, all of the Purchased Assets, and at the Closing,
the Company will transfer to the Purchaser good title to, or a valid
leasehold or license interest in, all of the Purchased Assets,
sufficient for Purchaser's operation of the Business as conducted by
the Company immediately prior to the Closing, free and clear of all
Excluded Liabilities and Liens associated therewith.
(ii) At the Closing, the Company will transfer to the
Purchaser all of its right, title and interest in and to the Purchased
Assets, free and clear of all Excluded Liabilities and Liens
associated therewith.
6D. Litigation, etc. There are no actions, suits, proceedings
(including any arbitration proceedings), orders, investigations or claims
pending or, to Company's knowledge, threatened in writing against or affecting
the Company in which it is sought to restrain or prohibit the transactions
contemplated hereby.
Section 7. REPRESENTATIONS AND WARRANTIES OF SAFETY-KLEEN. As a material
inducement to the Purchaser to enter into this Agreement and purchase the
Purchased Assets hereunder, Safety-Kleen hereby represents and warrants to the
Purchaser as follows:
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7A. Capacity; Power and Authority. Safety-Kleen is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Wisconsin. Safety-Kleen possesses all requisite power and authority
necessary to carry out the Transaction.
7B. Authorization; Enforceability. The execution, delivery and
performance of this Agreement and all of the other agreements and instruments
contemplated hereby to which Safety-Kleen is a party and the fulfillment of and
compliance with the respective terms hereof (including the sale of the Purchased
Assets hereunder) and thereof by the Safety-Kleen have been duly authorized by
Safety-Kleen. Subject only to the Sale Approval Order, this Agreement
constitutes a valid and binding obligation of Safety-Kleen, enforceable against
Safety-Kleen in accordance with its terms.
7C. Litigation, etc. There are no actions, suits, proceedings
(including any arbitration proceedings), orders, investigations or claims
pending or, to Safety-Kleen's knowledge, threatened in writing against or
affecting Safety-Kleen in which it is sought to restrain or prohibit with the
Transaction.
7D. No Knowledge of Other Excluded Liabilities. Other than the LES
Guarantee or as disclosed to the Purchaser, to the actual knowledge of the
officer of Safety-Kleen executing the certificate required in Section 2F(v), no
Company liabilities of the type described in Paragraph 1C(v) exist.
Section 8. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. As a material
inducement to the Company and Safety-Kleen to enter into this Agreement and take
the actions set forth in Section 1, the Purchaser hereby represents and warrants
to the Company and Safety-Kleen as follows:
8A. Organization, Power and Authority.The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Purchaser possesses all requisite power and authority
necessary to carry out the Transaction.
8B. Authorization; Enforceability. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby
(including without limitation, the Secured Note and each other agreement
contemplated thereby) to which the Purchaser is a party have been duly
authorized by the Purchaser and by its stockholders. Subject only to the Sale
Approval Order, this Agreement constitutes a valid and binding obligation of the
Purchaser, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
8C. Availability of Funds. The Purchaser will at the Closing have
sufficient immediately available funds, in cash, to pay the Asset Purchase Price
(less the amount of the Secured Note) and to pay any other amounts payable
pursuant to this Agreement and to effect the transactions contemplated hereby.
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8D. Investigation by the Purchaser; Company's Liability. The
Purchaser has conducted its own independent investigation, review and analysis
of the business, operations, assets, liabilities, results of operations,
financial condition, software, technology and prospects of the Company, which
investigation, review and analysis was done by the Purchaser and its Affiliates
and, to the extent the Purchaser deemed appropriate, by the Purchaser's
representatives. The Purchaser acknowledges that it and its representatives have
been provided adequate access to the personnel, properties, premises and records
of the Company for such purpose. In entering into this Agreement, the Purchaser
acknowledges that it has relied solely upon the aforementioned investigation,
review and analysis and not on any factual representations of the Company or
Safety-Kleen, or any of the agents, Affiliates or representatives (except the
specific representations and warranties set forth in Sections 6 and 7 of this
Agreement), and the Purchaser:
(i) represents and warrants that it is not aware of any
breach of the Company's representations and warranties contained in
Section 6 of this Agreement;
(ii) acknowledges that none of the Company, Safety-Kleen,
any of their respective Affiliates or any of their or their
Affiliates' respective directors, officers, shareholders, employees,
controlling persons, agents, advisors or representatives makes or has
made any representation or warranty, either express or implied, as to
the accuracy or completeness of any of the information provided or
made available to the Purchaser or its directors, officers, employees,
Affiliates, controlling persons, agents or representatives; and
(iii) agrees, to the fullest extent permitted by law, that
none of the Company, Safety-Kleen, any of their respective Affiliates
or any of their or their Affiliates' respective directors, officers,
employees, shareholders, controlling persons, agents, advisors or
representatives shall have any liability or responsibility whatsoever
to the Purchaser or its directors, officers, employees, Affiliates,
controlling persons, agents, representatives or lenders on any basis
(including in contract or tort, under federal or state securities laws
or otherwise) based upon any information provided or made available,
or statements made to the Purchaser or its directors, officers,
employees, Affiliates, controlling persons, advisors, agents,
representatives or lenders (or any omissions therefrom),
except that the foregoing clauses (ii) and (iii) shall not apply to the Company
or Safety-Kleen insofar as it makes specific representations and warranties set
forth in Sections 6 or 7 of this Agreement, but always subject to the
limitations and restrictions contained in Section 13.
8E. Solvency. The Purchaser has not filed any petition seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief relating to the Purchaser or any of
its property under any law relating to bankruptcy or
13
insolvency, nor has any such petition been filed against the Purchaser. No
general assignment of the Purchaser's property has been made for the benefit of
creditors, and no receiver, master, liquidator or trustee has been appointed for
the Purchaser or any of its property. The Purchaser is not insolvent and the
consummation of the transactions contemplated by this Agreement shall not render
the Purchaser insolvent.
Section 9. Representations and Warranties of the Minority Shareholders.
As a material inducement to the Company and Safety-Kleen to enter into this
Agreement, each of the Minority Shareholders hereby represents and warrants to
the Company and Safety-Kleen as follows:
9A. Legal Power; Authorization; Enforceability. Such Minority
Shareholder is competent and has all requisite power and authority necessary to
execute and deliver this Agreement and all of the other Agreements and
instruments contemplated to be executed or delivered by such Minority
Shareholder. The execution, delivery and performance of this Agreement and all
other agreements contemplated to be executed or delivered by such Minority
Shareholder have been duly authorized by such Minority Shareholder. This
Agreement and all other agreements contemplated to be executed or delivered by
such Minority Shareholder, when executed and delivered by such Minority
Stockholder in accordance with the terms hereof and thereof, shall constitute
valid and binding obligations of such Minority Shareholder, enforceable in
accordance with their respective terms.
9B. Title to Minority Shares. Such Minority Shareholder holds of
record and owns beneficially the number of Minority Shares set forth opposite
such Minority Shareholder's name in Schedule 9B hereto, free and clear of any
restrictions on transfer, claims, liens, encumbrances, security agreements,
equities, options, charges, restrictions, or other adverse interests. Such
Minority Shareholder is not a party to any option, warrant, purchase right, or
other contract or commitment that could require such Minority Shareholder to
sell, transfer, or otherwise dispose of the Minority Shares. Such Minority
Shareholder is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any of his or her Minority Shares.
The certificates evidencing such Minority Shareholder's Minority
Shares, and any stock powers, endorsements, assignments and other instruments
executed and delivered by such Minority Shareholder, are valid and binding
obligations of such Minority Shareholder, enforceable in accordance with their
respective terms, and will effectively vest in Safety-Kleen good, valid and
marketable title to all the Shares to be transferred to Safety-Kleen by such
Minority Shareholder pursuant to and as contemplated by this Agreement, free and
clear of all restrictions on transfer (other than restrictions on transfer under
the Shareholders Agreement, the Securities Act and state securities laws),
claims, liens, encumbrances, security agreements, equities, options, charges,
restrictions, or other adverse interests.
9C. Age; Date of Birth. Such Minority Shareholder represents and
warrants that his or her age and date of birth is as set forth opposite his or
her name on Schedule 9B.
9D. Payroll Taxes. To the best knowledge and belief of Xxxx X. Xxxxx
XX and Xxxxxx X. Xxxx:
14
(i) the Company has filed all Tax Returns and has paid all
Taxes required to be filed or paid regarding payroll or employment
Taxes, and is current in all its obligations to make deposits with
regard thereto;
(ii) the Company's capitalization is as set forth on
Schedule 9B and no Person has any right to acquire any capital stock
of the Company, whether pursuant to any option, warrant, convertible
security or otherwise; and
(iii) other than as set forth in Schedule 11, there are no
employee benefit plans of any kind maintained by the Company or for
the benefit of the Company's employees.
Section 10. POST-CLOSING COVENANTS AND OTHER AGREEMENTS.
10A. Press Release and Announcements. Unless required by law (in
which case each Party agrees to consult with the other Parties prior to any such
disclosure as to the form and content of such disclosure), no press releases or
other public releases of information related to this Agreement or the
transactions contemplated hereby will be issued or released prior to the Closing
without the prior written consent of the Parties.
10B. Trade Names of the Business. Except as is expressly provided
for in the Marketing Agreement, neither the Company nor Safety-Kleen shall use,
or permit any of their Affiliates to use, the names, trade names, trademarks or
service marks set forth on Schedule 10B hereto, or any names confusingly similar
thereto in any manner or at any place. Within ten business days after the
Closing, the Company shall change its name accordingly. Except as is expressly
provided for in the Marketing Agreement, the Purchaser shall not use, and shall
not permit any of its Affiliates to use, the names, trade names, trademarks or
service marks of Safety-Kleen or any of its Affiliates (other than those set
forth on Schedule 10B), or any names confusingly similar thereto in any manner
or at any place.
10C. Employment Offers. The Purchaser shall offer employment to each
of the individuals employed by the Company, effective as of the Closing Date;
provided, however, that this Section 10C shall not restrict the Purchaser from
subsequently terminating or modifying the terms and conditions of employment of
any such individual employee who accepts employment with the Purchaser (each
such employee, a "Transferred Employee"). The Purchaser shall indemnify and hold
harmless the Company, Safety-Kleen, and their Affiliates from and against any
and all claims, losses, damages, expenses, obligations and liabilities
(including cost of collection, attorneys' fees and other costs of defense)
relating to each Transferred Employee, whether arising prior to, on, or after
the Closing Date. Where an employee of the Company does not accept the
Purchaser's offer of employment (each such employee, a "Non-Transferred
Employee"), the Purchaser shall be responsible for, and indemnify the Company,
Safety-Kleen and their Affiliates in connection with, any and all costs arising
from such Non-Transferred Employee's termination of employment from the Company,
including final wages, vacation pay, severance costs and related payments, and
COBRA continuation coverage.
15
10D. Company Plans. Effective as of the Closing Date, the Purchaser
shall assume sponsorship of all Company Plans and the Parties shall take such
steps as may be necessary or appropriate to effect the transfer of sponsorship
of the Company Plans from the Company to the Purchaser. The Purchaser shall
recognize all service with the Company by each Transferred Employee for purposes
of vesting, eligibility and accrual of benefits under the Company Plans, any
pension, welfare benefit or similar plan, arrangement, contract or policy
established, maintained or contributed to by the Purchaser for the benefit of
such employees, including those relating to severance and flexible time off,
vacation time, sick time, and personal or family leave. The Purchaser shall
recognize, honor, and assume liability for each such Transferred Employee's
accrued, but unused, vacation and sick time with the Company which has accrued
as of the Closing Date.
10E. Intellectual Property Rights Protection. The Company and
Safety-Kleen shall provide, at the Purchaser's sole cost and expense, the
Purchaser and its legal representatives reasonable cooperation and assistance in
the protection of all Intellectual Property Rights included amongst the
Purchased Assets against any claims or demands of invalidity or
unenforceability, and in the prosecution or defense of any interference,
opposition, reexamination, reissue, infringement or other proceeding that may
arise in connection with the Purchaser's right, title and interest in and to
such Intellectual Property Rights, including execution and delivery of any and
all affidavits, testimonies, declarations, oaths, exhibits, assignments, powers
of attorney or other documentation as may be reasonably required.
10F. WARN Act Indemnification. The Purchaser shall indemnify and
hold harmless the Company, Safety-Kleen and their Affiliates from and against
any and all claims, losses, damages, expenses, obligation and liabilities
(including cost of collection, attorneys' fees and other costs of defense) which
the Company, Safety-Kleen and/or their Affiliates may incur in connection with
any suit or claim or violation brought against the Company, Safety-Kleen and/or
their Affiliates under the Worker Adjustment and Retraining Notification Act of
1988, 29 U.S.C. ss. 2101 et seq. ("WARN Act") or any similar national, state, or
local law solely with respect to actions taken by the Company prior to or upon
the Closing or the Purchaser following the Closing.
10G. Filing of Employee W-2 Statements. On or after the Closing
Date, the Company shall transfer to the Purchaser any records (including, but
not limited to, Internal Revenue Service Forms W-4 and California Employee
Withholding Allowance Certificates) relating to withholding and payment of
Federal, state, and local income, disability, unemployment, FICA and similar
taxes ("Payroll Taxes") with respect to wages paid by the Company during the
2002 calendar year to each Transferred Employee in accordance with Revenue
Procedure 96-60 and comparable state and local payroll tax laws. The Purchaser
agrees to provide each Transferred Employee with Forms W-2 and wage and Tax
statements for the 2002 calendar year setting forth the aggregate amount of
wages paid to, and Payroll Taxes withheld in respect thereof, each Transferred
Employee for the 2002 calendar year by the Company and the Purchaser as
predecessor and successor employers, respectively, as defined in Rev. Proc.
96-60, and the Company agrees to fully cooperate with the Purchaser in
connection therewith.
16
10H. Preparation and Filing of Tax Returns; Payment of Taxes.
(i) Except as provided in Section 10H(ii) below, to the
extent not filed prior to the Closing Date, the Purchaser shall
prepare (or cause to be prepared), at its own cost and expense, all
Tax Returns required to be filed by or with respect to the Company.
Not less than fifteen (15) business days prior to the date on which
each such Tax Return is due to be filed (taking into account any
applicable extensions), the Purchaser shall deliver a draft of each
such Tax Return to Safety-Kleen for its review and consent, which
consent will not be unreasonably withheld. Except as provided in
Section 10H(ii) below, and subject to the preceding sentence, the
Purchaser shall timely file (or cause to be timely filed) each such
Tax Return and shall timely pay any amount due with each such Tax
Return to the appropriate Taxing Authority.
(ii) Either Safety-Kleen or the Company shall prepare (or
cause to be prepared), at its own cost and expense, all Tax Returns of
the Company for which the Purchaser has not assumed liability for
Taxes pursuant to Section 1C. Safety-Kleen or the Company shall pay or
cause the appropriate Person to pay all Taxes shown on such Tax
Returns as due and payable.
(iii) Upon written request from Safety-Kleen containing
sufficient information upon which the computation is based for
Purchaser to properly evaluate the amount, Purchaser shall promptly
pay to Safety-Kleen an amount equal to the amount Purchaser would have
been required to pay if all the state income and franchise Taxes
attributable to the Company, other than California income and
California franchise Taxes, were Assumed Liabilities, but not to
exceed $75,000 in the aggregate.
10I. Transfer Taxes. The Purchaser shall pay all sales, use,
transfer gains, transfer, conveyance, filing, recording, ad valorem and other
similar Taxes which may be payable in connection with the Transaction. The
Purchaser shall prepare and file, or cause to be prepared and filed, all Tax
Returns and other documentation required with respect to such Taxes and, if
required by applicable law, the Company shall join in the execution of any such
Tax Returns and other documentation as reasonably requested by the Purchaser.
The Purchaser shall not withhold any amount from the Asset Purchase Price in
connection with any liability for such Taxes. The Purchaser shall indemnify and
hold harmless the Company from and against any liability resulting from the
Purchaser's failure to pay any Taxes or fees which the Purchaser is required to
pay pursuant to this Section 10I or the Purchaser's failure to timely file
required reports or Tax Returns in connection therewith. Each Minority
Shareholder shall pay all taxes, if any, imposed on or in connection with the
purchase, sale or transfer of his or her Minority Shares at the time such taxes
are due.
10J. Access to Books and Records. On and after the Closing Date, the
Purchaser, the Company and Safety-Kleen will cooperate with each other and will
permit each other and their representatives during normal business hours to have
reasonable access to and examine and make copies of any files, books or records
(including correspondence, memoranda, books of account and the like) relating to
the activities, transactions and events of the Company prior to the Closing that
are in such party's possession to enable them to prepare financial
17
statements or Tax Returns or deal with Tax audits. After the Closing Date, each
of Safety-Kleen, the Purchaser and the Company agrees to retain and not to
destroy any files, books or records relating to activities of the Company prior
to the Closing without giving reasonable notice to the others and within 30 days
of receipt of such notice, any noticed party may request, and the party giving
notice shall cause to be delivered to it the files, books or records intended to
be destroyed, at the expense of the requesting party.
10K. Restriction on Use of Competitively Sensitive Information.
(i) As a material inducement to Purchaser to enter into this
Agreement and so that Purchaser's reasonable expectations with respect
to its business reputation, relations with customers, suppliers,
referral sources and business prospects will not be materially
impaired, the Company and Safety-Kleen covenant and agree that for a
period of thirty-six (36) months subsequent to the Closing (the
"Restrictive Period"), and except as otherwise permitted by the
Marketing Agreement, neither the Company, Safety-Kleen nor any entity
controlled by Safety-Kleen Corp., a Delaware corporation (including
the emerging entities under a Plan of Reorganization for Safety-Kleen)
(each, a "Restricted Person") shall:
(a) engage in any business activity that directly competes
with any part of the Company Business (I) over the internet or
through other telephonic, electronic or data transmission media; or
(II) by any means in any state or province in the United States or
Canada in which the Company engages in the Company Business
immediately prior to the Closing;
(b) intentionally induce a customer of 3E as of the date
hereof to reduce the number of service orders that such customer
places with the Purchaser for services within the definition of
Company Business; or
(c) (use or disclose or authorize the use or disclosure of
any trade secrets of Purchaser.
For the avoidance of doubt, the covenants in clauses (a)
and (b) above shall not be applicable to any Person (other than a
Restricted Person) that acquires any of the assets, operations or
stock of a Restricted Person (each such Person, an "Acquirer").
Notwithstanding anything to the contrary in this Agreement, the
covenants in clauses (a) and (b) above shall terminate as to a
Restricted Person if, and at such time as, an Acquirer acquires
control of such Restricted Person; provided, that if an Acquirer
acquires control of a Restricted Person prior to the first
anniversary of the Closing Date, such covenants shall terminate on
the first anniversary of the Closing Date with respect to such
Restricted Person.
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(ii) The Company and Safety-Kleen acknowledge the trade
secrets and the goodwill of the Company are vital to the value of the
assets purchased by Purchaser, including without limitation, the
customers, suppliers and referral sources of Company, and accordingly,
that the restrictive covenants above are fair, reasonable and
necessary to protect and maintain the goodwill of Purchaser. The
Company and Safety-Kleen acknowledge and agree that the remedy at law
for any breach of these covenants by Company or Safety-Kleen will be
inadequate and Purchaser shall, in addition to all other available
remedies be entitled to injunctive relief without being required to
post bond or other security and without having to prove the inadequacy
of the available remedies at law.
(iii) If the covenants contained in this Paragraph 10K are
construed to be invalid or unenforceable, in whole or in part, by an
arbitrator or court of competent jurisdiction, such determination
shall not affect the remainder of the covenant or covenants, which
shall be given full effect without regard to the invalid portions. If
the covenants contained in this Paragraph 10K are construed to be
invalid or unenforceable, in whole or in part, because of the duration
of such provision or the geographic area covered thereby, the parties
agree that the arbitrator or court making such determination shall
have the power to reduce the duration and/or geographic area of such
provision and, in its reduced form, such provision shall then be
enforceable.
10L. Insurance. Upon written request from Safety-Kleen containing
sufficient information upon which the computation is based for Purchaser to
properly evaluate the amount, Purchaser shall promptly pay Purchaser's
Deductible Share to Safety-Kleen.
10M. Further Assurances. The Parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
provisions of this Agreement and the documents referred to in this Agreement.
Section 11. DEFINITIONS. For the purposes of this Agreement, the following
terms have the meanings set forth below:
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.
"Agreement" shall have the meaning ascribed to it in the Preamble.
"Amended and Restated Credit Agreement" shall have the meaning
ascribed to it in Section 1C(v).
19
"Asset Purchase Price" shall have the meaning ascribed to it in
Section 1E(i).
"Assumed Liabilities" means all Liabilities relating to agreements,
facts, conduct, conditions or circumstances in existence on or before the
Closing Date other than the Excluded Liabilities.
"Bankruptcy Case" shall have the meaning ascribed to it in the
Recitals.
"Bankruptcy Code" means Title 11 and applicable portions of Titles
18 and 28 of the United States Code, as amended from time to time.
"Bankruptcy Court" shall have the meaning ascribed to it in the
Recitals.
"Business" shall have the meaning ascribed to it in the Recitals.
"Closing" shall have the meaning ascribed to it in Section 1F.
"Closing Date" shall have the meaning ascribed to it in Section 1F.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, or any successor thereto.
"Company" shall have the meaning ascribed to it in the Preamble.
"Company Business" means providing informational services related
to: (i) MSDS management and distribution; (ii) live and interactive internet
computer based training services related to hazardous material; and (iii) live
and interactive internet assistance related to the proper packaging and shipment
procedures for hazardous materials (excluding hazardous waste).
"Company Plans" means the employee benefit plans and programs set
forth on the attached "Schedule of Company Plans."
"Company Release" shall have the meaning ascribed to it in Section
1F(vi).
"Company Stock" shall have the meaning ascribed to it in the
Recitals.
"Consideration Period" shall have the meaning ascribed to it in
Section 1F.
"Damages" means all losses, liabilities, damages, judgments,
settlements, Taxes and expenses (including reasonable attorneys' fees and
expenses incurred in the investigation or defense of any of the same).
"Employment Release" shall have the meaning ascribed to it in
Section 1F(v).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor thereto.
20
"ERISA Liabilities" means all Liabilities arising under Title IV of
ERISA or COBRA by reason of the Company and Safety-Kleen or any of
Safety-Kleen's current or former Affiliates being deemed a "single employer"
within the meaning of Section 4001(b) of ERISA, but not including for this
purpose any Liabilities under the Company Plans or COBRA obligations assumed by
the Purchaser pursuant to Paragraph 10C.
"Excluded Assets" means: (i) income Tax refunds, Tax attributes, Tax
Returns and records relating to Taxes of the Company (except for the foregoing
items to the extent they are associated with Assumed Liabilities); (ii) the
corporate charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications, taxpayer
and other identification numbers, seals, minute books, stock transfer books,
blank stock certificates and other documents relating solely to the
organization, maintenance and existence of the Company as a corporation; (iii)
any rights of the Company under this Agreement (or under any amendment hereto or
side agreement between the Company, on the one hand, and the Purchaser, on the
other hand, entered into on or after the date of this Agreement); and (iv) any
equity or ownership interest in any other entity that could constitute "control"
for any purposes.
"Excluded Liabilities" shall have the meaning ascribed to it in
Section 1C.
"Financing Commitments" shall have the meaning ascribed to it in
Section 8D.
"Final Order" means a Sale Approval Order which (a) has not been
reversed or stayed and as to which the time to appeal has expired and as to
which no appeal or petition for review, rehearing or certiorari is pending; or
(b) with respect to which any appeal has been finally decided and no further
appeal or petition for certiorari can be taken or granted.
"GAAP" means United States generally accepted accounting principles.
"Governmental Approvals" shall have the meaning ascribed to it in
Section 2C.
"indemnified party" shall have the meaning ascribed to it in Section
13G.
"indemnifying party" shall have the meaning ascribed to it in
Section 13G.
"Insured Claim" means any post-Closing Date claim made on or
asserted against the Company based on the occurrence of an event prior to the
Closing Date which, if all insurance policies held by Safety-Kleen or any of its
Affiliates as of July 1, 2002, remained in force, are determined by the relevant
insurance provider to be a covered loss on the date the claim is made or
asserted. If the relevant insurance provider's initial determination is that the
claim would not be a covered loss, then Safety-Kleen shall cooperate with the
Purchaser, at Purchaser's sole cost, in submitting information and discussing
the claim with the relevant insurance provider, who may then change its initial
determination.
"Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) Internet domain names,
trademarks, service marks, trade dress,
21
trade names, logos and corporate names (including "3E," "3E, Inc." and "3E
Company") and registrations and applications for registration thereof together
with all of the goodwill associated therewith, (iii) copyrights (registered or
unregistered) and copyrightable works and registrations and applications for
registration thereof, (iv) mask works and registrations and applications for
registration thereof, (v) computer software, data, data bases and documentation
thereof, (vi) trade secrets and other confidential information (including ideas,
formulas, compositions, inventions (whether patentable or unpatentable and
whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).
"LES Guarantee" shall have the meaning ascribed to it in Section
1C(v).
"Liabilities" means all of the Company's liabilities, mortgages,
indentures, claims, Liens, expenses and obligations, whether actual or
contingent, accrued or unaccrued, matured or unmatured.
"Lien" or "Liens" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind.
"Marketing Agreement" shall have the meaning ascribed to it in
Section 2I.
"Material Adverse Change" means the death or total disability of
Xxxx Xxxxx or Xxx Xxxx or any material adverse change in, or material adverse
effect on, the business, financial condition or operations of the Company;
provided, however, that the effects of changes that are generally applicable to
(a) the industries and markets in which the Company operates, (b) the United
States economy or (c) the United States securities markets shall be excluded
from the determination of Material Adverse Change.
"Minority Shareholders" means Xxxx X. Xxxxx, XX, Xxxxx Xxxxx,
Xxxxxxxxxxx Xxxxx, Xxxxxx X. Xxxx and Xxxxxx Xxxxxx.
"Minority Shareholder Release" shall have the meaning ascribed to it
in Section 1F(v).
"Minority Shares" shall have the meaning ascribed to it in the
Recitals.
"Non-Transferred Employee" shall have the meaning ascribed to it in
Section 10C.
"Notice of Claim" shall have the meaning ascribed to it in Section
13G.
"Party" or "Parties" shall have the meaning ascribed to it in the
Preamble.
"Payroll Taxes" shall have the meaning ascribed to it in Section
10G.
22
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Purchased Assets" means all assets and rights of the Company as of
the Closing (other than the Excluded Assets) (whether tangible or intangible,
personal or real, and wherever located), including (for the avoidance of doubt)
the following:
(i) the lease of real property at 0000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Business Real Property");
(ii) all equipment and furniture;
(iii) all inventories;
(iv) all cash and cash equivalents;
(v) all trade and other accounts receivable and all
prepaid expenses;
(vi) all rights existing under Company contracts;
(vii) all deposits (x) made by the Company (i) with
respect to the Business Real Property and (ii) to vendors and (y)
all deposits made to the Company by its customers and/or clients;
(viii) all books, records, ledgers, files, documents,
correspondence, lists, drawings and specifications, creative
materials, advertising and promotional materials, studies, reports
and other printed or written materials;
(ix) all Intellectual Property Rights, including
trademarks, trade names, trade secrets, confidential information,
know-how and inventions, computer software, goodwill, licenses and
sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to
protection of interests therein under applicable law; and
(x) all permits, licenses, certifications and approvals
from all permitting, licensing, accrediting and certifying agencies,
and the rights to all data and records held by such permitting,
licensing and certifying agencies ("Permits").
provided, however, that the Purchased Assets shall not include any Excluded
Assets.
"Purchaser" shall have the meaning ascribed to it in the Preamble.
23
"Purchaser's Deductible Share" means, with respect to each unique
policy each time recovery in respect of an Insured Claim is made, an amount
equal to the lesser of:
(i) the actual costs (inclusive of any deductibles)
incurred by Safety-Kleen and any of its Affiliates with respect to
such Insured Claim; or
(ii) if the deductible relating to said Insured Claim is
or would have been:
(a) $50,000 or less, the entire deductible;
(b) greater than $50,000 but less than or equal to
$200,000, $50,000 plus 50% of the deductible in excess of $50,000;
and
(c) greater than $200,000, $100,000 plus 50% of the
deductible in excess of $200,000.
"Sale Approval Order" means an order entered by the Bankruptcy Court
after a hearing conducted with notice given in accordance with law, which order
shall be substantially in the form of Exhibit D attached hereto.
"Secured Note" shall have the meaning ascribed to it in Section
1E(i).
"Shareholders Agreement" means the agreement entered into by the
Minority Shareholders and the Company on May 22, 1996, as amended on October 14,
1997 and November 4, 1999.
"Stock Purchase Price" shall have the meaning ascribed to it in
Section 1E(ii).
"Strategic Transaction" means any sale, transfer or other
disposition of more than 25% of the assets (determined by value) or operations
of the Purchaser, or any sale, transfer or other disposition of the Purchaser's
equity securities by the holders thereof that represent a 50% or greater
interest (by vote or value) in the Purchaser, whether directly or indirectly,
whether through a merger, consolidation, sale or exchange of shares, sale of
assets, business combination, joint venture, recapitalization, restructuring or
otherwise, and whether in a single transaction or series of transactions.
"Strategic Transaction Payment" shall have the meaning ascribed to
it in Section 1G(i).
"Tax" or "Taxes" means (i) federal, state, county, local, foreign or
other income, gross receipts, ad valorem, franchise, profits, sales or use,
transfer, registration, excise, utility, environmental, communications, real or
personal property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including
deficiencies, penalties, additions to tax, and interest attributable thereto)
whether disputed or not, and (ii) liability for the payment of any amounts of
the type described in clause (i) above as a result of
24
any express or implied obligation to indemnify or otherwise assume or succeed to
the liability of any other Person.
"Taxing Authority" means any governmental entity responsible for the
imposition or collection of any Taxes.
"Tax Returns" means any and all federal, state, provincial, local or
foreign returns, reports, elections, claims for refund filings, information
returns, statements or declarations (including any amendments thereto) relating
to Taxes filed or required to be filed with any Taxing Authority.
"Transferred Employee" shall have the meaning ascribed to it in
Section 10C.
"Transaction" shall have the meaning ascribed to it in the Recitals.
"Value" means, with respect to any Strategic Transaction, the excess
of the aggregate amount of cash paid or payable, directly or indirectly, in such
Strategic Transaction, the fair market value of any securities or other property
received as consideration in such Strategic Transaction plus the amount of any
liabilities assumed, repaid or taken subject to in such Strategic Transaction,
in each case, net of reasonable and documented out of pocket costs incurred by
the transferor over the value of such assets as set forth on Schedule 1H hereto,
in the case of the Purchaser, or the purchase price paid by a stockholder for
the stock disposed of, as applicable.
"WARN Act" shall have the meaning ascribed to it in Section 10F.
Section 12. TERMINATION.
12A. Conditions of Termination. This Agreement may be terminated at
any time prior to the Closing:
(i) by the mutual written consent of the Company,
Safety-Kleen and the Purchaser;
(ii) by the Purchaser if there has been a material
misrepresentation, material breach of warranty or material breach of a
covenant by the Company or Safety-Kleen in the representations and
warranties or covenants set forth in this Agreement, which in the case
of any breach of covenant has not been cured within ten days after
written notification thereof by the Purchaser to the Company and
Safety-Kleen;
(iii) by the Company or Safety-Kleen if there has been a
material misrepresentation, material breach of warranty or material
breach of covenant by the Purchaser in the representations and
warranties or covenants set forth in this Agreement, which in the case
of any breach of covenant has
25
not been cured within ten days after written notification thereof by
the Company or Safety-Kleen to the Purchaser;
(iv) by the Company or Safety-Kleen if there has been a
material misrepresentation, material breach of warranty or material
breach of covenant by a Minority Shareholder in the representations
and warranties or covenants set forth in this Agreement, which in the
case of any breach of covenant has not been cured within ten days
after written notification thereof by the Company or Safety-Kleen to
the Minority Shareholder;
(v) by the Purchaser if (A) the Sale Approval Order shall
not have been entered on or before August 30, 2002 or (B) the Sale
Approval Order shall not have become a Final Order on or before
September 10, 2002;
(vi) by the Purchaser, the Company or Safety-Kleen if the
Closing shall not have occurred by September 23, 2002; or
(vii) by Safety-Kleen, in its sole discretion;
provided that the Party or Parties electing termination pursuant to clause (vi)
of this Section 12A is not in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement. In the event of
termination by any Party or Parties pursuant to this Section 12A, written notice
thereof (describing in reasonable detail the basis therefor) shall forthwith be
delivered to the other Parties.
12B. Effect of Termination. In the event of termination of this
Agreement by either the Purchaser or the Company and Safety-Kleen as provided
above, this Agreement shall forthwith become void and of no further force and
effect, except that the covenants and agreements set forth in Sections 10A, 12A,
12B and 14 shall survive such termination indefinitely, and except that nothing
in Section 12A or this Section 12B shall be deemed to release any Party from any
liability for any breach of any representation, warranty or covenant in this
Agreement by such Party prior to such termination or to impair the right of the
Purchaser to compel specific performance by the Company of its obligations under
this Agreement; provided, that the representations and warranties in Paragraph
6C(i) shall not survive any such termination and the Purchaser's sole and
exclusive remedy for breach of such representations and warranties shall be
termination of this Agreement subject to Paragraph 12A(ii).
Section 13. INDEMNIFICATION.
13A. Survival of Representations and Warranties. All representations,
warranties, covenants, and obligations in this Agreement will survive until the
third anniversary of the Closing Date; provided that the representations and
warranties in Paragraph 6C(i) shall not survive and shall terminate upon the
earlier to occur of (x) termination of this Agreement and (y) the Closing.
26
13B. Indemnification by the Company and Safety-Kleen. Subject to the
limitations set forth in this Section 13, the Company and Safety-Kleen, jointly
and severally, will indemnify and hold harmless the Purchaser from and against
any and all Damages arising from: (i) the Excluded Liabilities; (ii) any breach
of any representation or warranty made by the Company in Section 6 of this
Agreement or Safety-Kleen in Section 7 of this Agreement; and (iii) any breach
by the Company or Safety-Kleen of any covenant or obligation of the Company or
Safety-Kleen in this Agreement.
13C. Indemnification by the Purchaser. The Purchaser will indemnify
and hold harmless the Company and Safety-Kleen from and against any and all
Damages arising from: (i) the Assumed Liabilities; (ii) Purchaser's Deductible
Share for each Insured Claim; (iii) any breach of any representation or warranty
made by the Purchaser in Section 8 of this Agreement; and (iv) any breach by the
Purchaser of any covenant or obligation in this Agreement.
13D. Indemnification by the Minority Shareholders. Subject to the
limitations set forth in this Section 13, each Minority Shareholder, severally
but not jointly, will indemnify and hold harmless Safety-Kleen from and against
any and all Damages arising from: (i) any breach of any representation or
warranty made by such Minority Shareholder in Section 9 of this Agreement; and
(ii) any breach by such Minority Shareholder of any covenant or obligation in
this Agreement.
13E. Limitations.
(i) The sole and exclusive remedy for indemnification claims
in respect of matters addressed in clauses (ii) and (iii) of Section
13B (but for avoidance of doubt, not in respect of matters addressed
in clause (i) of Section 13B) shall be set-off against amounts
otherwise payable under the Secured Note, and the aggregate amount of
Damages payable by the Company and Safety-Kleen shall be limited to
the amount outstanding under the Secured Note.
(ii) The aggregate indemnification obligation of the Company
and Safety-Kleen with respect to Excluded Liabilities described in
Section 1C(v) shall not exceed $12,000,000, less the aggregate amount
with respect to which the Purchaser has exercised the rights of
set-off against the Secured Note pursuant to Section 13F.
(iii) Neither the Company nor Safety-Kleen shall be
obligated to make any payment to the Purchaser unless and until the
Purchaser's rights of set-off pursuant to Section 13F have been fully
exhausted.
(iv) The indemnification obligations of the Minority
Shareholders shall be limited to the price paid to each respective
Minority Shareholder for his or her Minority Shares and shall not
extend beyond three years after Closing.
27
(v) Except as provided in Sections 10H(iii) and 10L, and except for
injunctive relief and specific performance, the sole and exclusive
remedy for the breach of any of the representations, warranties
and covenants in this Agreement shall be the indemnification
rights under this Section 13.
(vi) Nothing in this Agreement shall prevent any Party from seeking
specific performance or other equitable relief.
13F. Right of Set-Off.
(i) Upon notice to the Company and Safety-Kleen specifying
in reasonable detail the basis therefor, the Purchaser may set-off any
amount to which it may be entitled under this Section 13, the
Marketing Agreement or any other agreement pursuant to which the
Purchaser performs services for Safety-Kleen, against amounts
otherwise payable under the Secured Note.
(ii) Upon notice to the Purchaser specifying in reasonable
detail the basis therefor, Safety-Kleen may set-off any amount to
which it may be entitled under this Section 13 against amounts
otherwise payable by Safety-Kleen or its Affiliates to the Purchaser
under the Marketing Agreement or under any other agreement pursuant to
which Safety-Kleen or its Affiliates then have a payment obligation to
the Purchaser.
13G. Procedure for Indemnification - Third Party Claims. Promptly
after receipt by an indemnified party under Section 13B, 13C or 13D (an
"indemnified party") of notice of commencement of any third-party claim that may
give rise to an indemnification obligation under Section 13, such indemnified
party will give notice to each party against whom indemnity may be sought (an
"indemnifying party") in writing of the commencement of such claim together with
the estimated amount of such claim (if known), and the indemnifying party or
parties shall have the right to assume the defense (at the indemnifying party or
parties' expense) of any such claim through counsel of the indemnifying party or
parties own choosing by so notifying the indemnified party within 30 days of the
first receipt by any indemnifying party of such notice from the indemnified
party. Failure to give notice of commencement of a claim shall not affect the
indemnification obligations hereunder except to the extent of actual prejudice.
The indemnifying party or parties shall be liable for the fees and expenses of
counsel employed by the indemnified party for any period during which the
indemnifying party or parties have not assumed the defense of any such
third-party claim. If the indemnifying party or parties assume such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ counsel, at its own expense, separate from the counsel employed by the
indemnifying party or parties, it being understood that the indemnifying party
or parties shall control such defense. Without the consent of the indemnified
party, the indemnifying party or parties shall not consent to, and the
indemnified party shall not be required to agree to, the entry of any judgment
or enter into any settlement unless such judgment or settlement (i) includes as
an unconditional term thereof the giving of a release from all liability with
respect to such claim by each claimant or plaintiff to each indemnified party
that is the subject of such third-party claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure
28
to act, by or on behalf of an indemnified party. If notice is given to an
indemnifying party of the commencement of a claim and the indemnifying party
does not, within 30 days after the indemnified party's notice is given, give
notice to the indemnified party of its election to assume the defense of such
claim, the indemnifying party will be bound by any determination made in such
claim or any compromise or settlement effected by the indemnified party.
13H. Establishment and Contesting of Indemnification Liability. To be
effective, any claim for indemnification by an indemnified party must be made by
a written notice (a "Notice of Claim") to the indemnifying party or parties,
given in accordance with the provisions of Section 14K hereof. Furthermore, any
claim for indemnification by an indemnified party must be made by no later than
the third anniversary of the Closing Date. If the indemnifying party or parties
contest a Notice of Claim, the indemnified party and the indemnifying party or
parties shall thereafter attempt in good faith to resolve their dispute by
mutual agreement. If they are unable to so resolve their dispute, the
indemnified party may pursue legal action. Upon final determination of the
amount of the Damages that is the subject of an indemnification claim (whether
such determination is the result of the indemnifying party's or parties'
acceptance of a Notice of Claim, or a resolution of any dispute with respect
thereto by agreement of the parties or otherwise), the indemnifying party or
parties shall be obligated to pay the amount of such Damages to the Purchaser
within five (5) business days of such final determination of the amount of the
Damages due by the indemnifying party or parties. The Company and Safety-Kleen
acknowledge and agree that nothing in that certain confidentiality agreement
between Safety-Kleen on the one hand and the Purchaser and certain of the
Minority Shareholders, on the other hand, shall prohibit Purchaser or a Minority
Shareholder from disclosing said information to the entity adjudicating a
dispute to the extent that such disclosure is necessary in connection with the
attempted enforcement of the Purchaser's indemnification rights hereunder;
provided, that the Purchaser or such Minority Shareholder, as the case may be,
will furnish only that portion of the information which is necessary to be
disclosed and will exercise reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded the information; and provided, further,
that disclosure in compliance with this paragraph will not relieve the Purchaser
or such Minority Shareholder of any liability it may have for other disclosures
not permitted hereby, and except as modified hereby, such confidentiality
agreement shall remain in full force and effect. Purchaser shall cause Summit
Accelerator Fund, L.P., and Mission Ventures to deliver at or prior to the
Closing Date an acknowledgement in a form reasonably acceptable to Safety-Kleen
that except as modified hereby, their respective confidentiality agreements
shall remain in full force and effect.
13I. Remedies. The Company and Safety-Kleen acknowledge and agree
that the Purchaser would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, the Company and Safety-Kleen each
agrees that the Purchaser shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
the Bankruptcy Court or the United States District Court for Delaware.
29
13J. Tax Effect of Indemnification Payments. Except as provided in
the following sentence, the Parties agree to cooperate and to characterize
consistently with one another for all Tax purposes all indemnity payments made
pursuant to this Agreement. In the event that the Parties do not agree upon the
appropriate Tax characterization of any indemnity payment made pursuant to this
Agreement, such payment shall be treated for all Tax purposes as an adjustment
to the Purchase Price.
13K. Effect of Bankruptcy Case. Sums payable by Safety-Kleen under
this Section 13 shall be a post-petition claim and shall be treated as
administrative expenses of Safety-Kleen pursuant to Sections 503(b) and 507(a)
of the Bankruptcy Code during the pendency of the Bankruptcy Case. Should a
claim under this Section 13 arise after the Bankruptcy Case is no longer pending
for any reason, including without limitation the confirmation of a Chapter 11
Plan of Reorganization in the Bankruptcy Case, such a claim shall be assertable
against the Company, Safety-Kleen and the emerging entities under a Plan of
Reorganization for Safety-Kleen.
Section 14. MISCELLANEOUS.
14A. Fees and Expenses. The Purchaser shall pay all costs and fees
incurred by the Escrow Agent. Each Party shall be responsible for its own fees
and expenses (including, but not limited to legal fees and accounting fees);
provided, that pursuant to Paragraph 1B, the Purchaser shall assume all of the
Company's fees and expenses and provided, further that if this Agreement is
entered into by all Parties on or prior to August 27, 2002, the Company shall
reimburse the Purchaser for the Purchaser's reasonable and documented
out-of-pocket expenses, not to exceed $50,000, to be paid out of the Company's
proceeds at the Closing.
14B. Consent to Amendments. This Agreement may be amended, or any
provision of this Agreement may be waived; provided that any such amendment or
waiver shall be binding upon a Party only if set forth in a writing executed by
such Party (and, in the case of the Company, by Safety-Kleen), which writing
refers specifically to the provision alleged to have been amended or waived. No
course of dealing between or among any of the Parties shall be deemed effective
to modify, amend or discharge any part of this Agreement or any rights or
obligations of any Party under or by reason of this Agreement.
14C. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the Parties shall bind and inure to the benefit of the respective
successors and assigns of the Parties whether so expressed or not; provided,
however, that neither this Agreement nor any of the rights, duties or
obligations hereunder may be assigned by the Purchaser without the prior written
consent of the Company and Safety-Kleen.
14D. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application of any
such provision to any Person or circumstance shall be held to be prohibited by,
illegal or unenforceable under applicable law in any respect by a court of
competent jurisdiction, such provision shall be ineffective only to the
30
extent of such prohibition or illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
14E. Counterparts. This Agreement may be executed simultaneously in
counterparts (including by means of telecopied signature pages), any one of
which need not contain the signatures of more than one Party, but all such
counterparts taken together shall constitute one and the same Agreement.
14F. Descriptive Headings; Interpretation. The headings and captions
used in this Agreement and the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized terms used in any Schedule or
Exhibit attached hereto and not otherwise defined therein shall have the
meanings set forth in this Agreement. The use of the word "including" herein
shall mean "including without limitation." The Parties intend that each
representation, warranty and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty or covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty or covenant.
14G. Entire Agreement. This Agreement and the agreements and
documents referred to herein contain the entire agreement and understanding
between the Parties with respect to the subject matter hereof and supersede all
prior agreements and understandings (including that certain letter agreement,
dated June 3, 2002, by and among the Purchaser, the Company, Safety-Kleen, Xxxxx
and Xxxx), whether written or oral, relating to such subject matter in any way.
14H. No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the Parties and their permitted successors and assigns and nothing
herein expressed or implied shall give or be construed to give any Person, other
than the Parties and such permitted successors and assigns, any legal or
equitable rights hereunder.
14I. Schedules and Exhibits. All Schedules and Exhibits attached
hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein.
14J. Governing Law. This Agreement shall be governed by and
construed in accordance with the Internal Laws of the State of New York,
including, without limitation, Section 5-1401 and 5-1402 of the New York General
Obligations Law and Rule 327(b) of the New York Civil Practice Laws and Rules.
During the pendency of the Seller's chapter 11 proceedings, the Parties hereby
irrevocably submit to the concurrent jurisdiction of the Bankruptcy Court and
irrevocably accept jurisdiction of the Bankruptcy Court. The Parties hereby
irrevocably submit to the jurisdiction of any New York court sitting in the
borough of Manhattan in the city of New York or any federal court sitting in the
borough of Manhattan in the city of New York in respect of any suit, action or
proceeding arising out of or relating to this agreement, and irrevocably accept
jurisdiction of the aforesaid courts. The Parties irrevocably
31
waive, to the fullest extent they may effectively do so under applicable law,
any objection which they may now or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in any such court and any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.
14K. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in riting and shall be deemed to have been given when delivered personally to
the recipient, one day after being sent to the recipient by reputable overnight
courier service (charges prepaid), upon machine-generated acknowledgment of
receipt after transmittal by facsimile or five days after being mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
Parties at their respective addresses indicated below or to such other address
or to the attention of such other person as the recipient Party has specified by
prior written notice to the sending Party:
if to Safety-Kleen or the Company, to:
-------------------------------------
Safety-Kleen Systems, Inc.
and
3E Company Environmental, Ecological and Engineering
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Contact Person: Xxxxx X. Xxxxxxxxx
with copies to:
--------------
Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
and:
---
Pillsbury Winthrop LLP
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: K. Xxxxxxx Xxxxxxx, Esq.
32
if to the Purchaser or the Minority Shareholders, to:
----------------------------------------------------
New 3E Company Acquisition Corporation
c/o 3E Company Environmental, Ecological and Engineering
0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Contact Person: Xxxx X. Xxxxx, XX
with copies to:
--------------
Duckor Xxxxxxxxx & Xxxxxxx
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Pillsbury Winthrop LLP
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: K. Xxxxxxx Xxxxxxx, Esq.
14L. No Strict Construction. The Parties have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties, and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement.
14M. Termination of Shareholders Agreement and Marketing Services
Agreement. Effective upon the Closing Date and without further action by any of
the Parties, the Shareholders Agreement and that certain Marketing Services
Agreement, dated as of December 31, 2001, by and between the Company and
Safety-Kleen, shall terminate and be null and void and of no further force or
effect and none of the Parties shall have any right, duty, responsibility or
Liability in respect thereof.
* * * * *
33
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first written above.
3E COMPANY ENVIRONMENTAL,
ECOLOGICAL AND ENGINEERING
By: /s/Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Its: President & CEO
-----------------------------------
SAFETY-KLEEN SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------------
Its: Director
-----------------------------------
NEW 3E COMPANY ACQUISITION
CORPORATION
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
-----------------------------------
Its: President & CEO
-----------------------------------
/s/ Jss X. Xxxxx, XX
-----------------------------------------
XXXX X. XXXXX, XX
/s/ Xxxxx Xxxxx
-----------------------------------------
XXXXX XXXXX
/s/ Xxxxxxxxxxx Xxxxx
-----------------------------------------
XXXXXXXXXXX XXXXX
/s/ Xxxxxx X. Xxxx
-----------------------------------------
XXXXXX X. XXXX
/s/ Xxxxxx Xxxxxx
-----------------------------------------
XXXXXX XXXXXX
