EXHIBIT 10.3
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AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
AND RELATED PERSONAL PROPERTY IN REGARD TO
THE EAGLE MOUNTAIN LANDFILL PROJECT
AND JOINT ESCROW INSTRUCTIONS
ESCROW NO.: ___________________
DATE OF OPENING ESCROW: __________________, 2000
Chicago Title Insurance Company ("Title Company")
Commerce Escrow Company ("Escrow Agent")
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxx, President
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND RELATED PERSONAL
PROPERTY IN REGARD TO THE EAGLE MOUNTAIN LANDFILL AND JOINT ESCROW INSTRUCTIONS
(this "Agreement") is made this 9/th/ day of August, 2000, by and between Mine
Reclamation, LLC ("Seller"), and County Xxxxxxxxxx Xxxxxxxx Xx. 0 xx Xxx Xxxxxxx
Xxxxxx ("Buyer"), a special district organized and existing pursuant to the
County Sanitation District Act, Health and Safety Code (S)(S)4700, et seq.
(collectively, the "Parties").
WHEREAS, Seller owns or controls through its Affiliates certain real
property, personal property, and intellectual property, as defined in this
paragraph ("Property") located in Riverside County that comprise the Eagle
Mountain Landfill Project (the "Project"), which includes various regulatory
permits and approvals ("Permits"). The real property is legally
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described in Exhibit "A" ("Real Property"), the personal property is scheduled
in Exhibit "B," the intellectual property is scheduled in Exhibit "C," (personal
and intellectual property to be referred to herein collectively as "Personal
Property") and the Permits are listed on Exhibit "D" to this Agreement.
WHEREAS, the Project is permitted for the development and operation of a
sanitary landfill that is permitted to accept waste from within Riverside County
and waste delivered by rail from sites outside of Riverside County, as more
fully described in that certain Development Agreement No. 64 approved by the
County of Riverside, dated September 9, 1997, and the Specific Plan Conditions
of Approval for the Project.
WHEREAS, Buyer operates sanitary landfills, materials recovery facilities,
and transfer stations in accordance with that certain Solid Waste Management
System Agreement, effective February 21, 1996, by and between Buyer and certain
other County Sanitation Districts of Los Angeles County ("System Agreement").
Buyer is exercising authority and acquiring the Project under the terms of the
System Agreement.
WHEREAS, Buyer and Seller desire by this Agreement to provide for the
transfer of all of the right, title, and interest of the Seller and its
Affiliates in the Project (except where certain easements and rights are to be
non-exclusive), including all Property and Permits necessary to operate and form
an integral part of the Project, to Buyer in exchange for the payment to Seller
of the consideration provided herein, so that Buyer will be able develop and
operate the Project under the terms of the existing Permits and other project
approvals in accordance with this Agreement and the System Agreement.
WHEREAS, this Agreement does not change the permitted operating conditions
of the Project and does not have a potential to result in a physical change in
the environment, directly
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or ultimately which is different from that which would occur if Seller were to
retain ownership of the Project and were to develop its permitted landfill
operations on the Property.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS.
This Agreement will be construed in accordance with the following
definitions:
"Affiliates" means Mine Reclamation Corporation, Xxxxxx Eagle Mountain
Inc., Kaiser Reclamation Corporation, and Kaiser Ventures Inc.
"Agreement" is defined in the preamble.
"Approved Exceptions" is defined in Section 10(a).
"Assignment" is defined in Section 10(b)(ii).
"Buyer" is defined in the preamble.
"CEQA" means the California Environmental Quality Act, Public
Resources Code (S)(S) 21000, et seq., the Guidelines for the Implementation
of the California Environmental Quality Act, Cal. Code of Regulations,
Title 14, Division 6, Chapter 3 (S)(S) 15000 et seq., including any laws,
regulations, or orders of any kind pertaining to protection of the
environment or environmental justice.
"Chief Engineer" means Buyer's Chief Engineer and General Manager or
his designee duly authorized to act on behalf of Buyer.
"Close of Escrow" is defined in Section 10(d).
"Closing Certificate" is defined in Section 13(h).
"Closing Date" is defined in Section 10(d).
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"Closing Documents" is defined in Section 5, and shall include the
documents described on Exhibit E.
"Closure Operations" shall mean those operations of Buyer that are
undertaken in regard to the closure of the Property as a sanitary landfill
as required by law, including without limitation, the California Integrated
Waste Management Act (Public Resources Code (S)(S)40000 et seq.) and as may
be deemed appropriate by Buyer.
"CLTA" is defined in Section 9 (a).
"CUP" is defined in Section 3(c).
"Deed" is defined in Section 10(b)(i).
"Deposit" is defined in Section 5.
"Disapproved Exception" is defined in Section 9(d).
"Due Diligence Period" means the period defined in Section 6.
"EPA" is defined in Section 13(a)(iv).
"Environmental Laws" means any federal, state or local statute,
ordinance, rule, regulation, order, consent decree, judgment or common-law
doctrine, and provisions and conditions of permits, licenses and other
operating authorizations relating to (i) pollution or protection of the
environment, including natural resources, (ii) exposure of persons,
including employees, to Hazardous Materials or other products, bio-hazards,
chemicals or other substances, (iii) protection of the public health or
welfare from the effects of by-products, wastes, emissions, discharges or
releases of chemical or biological substances from industrial or commercial
activities, or (iv) regulation of the manufacture, use or introduction into
commerce of chemical substances, including,
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without limitation, their manufacture, formulation, labeling, distribution,
transportation, handling, storage and disposal.
"Escrow" is defined in Section 5.
"Escrow Agent" is designated on the first page of this Agreement.
"Exception" is defined in Section 9(c).
"Final Payment" is defined in Section 3(b).
"Hazardous Substances" and "Hazardous Materials" as used in this
Agreement shall mean the same as those terms are defined within:
(a) The Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA") [42 USCS (S)(S) 9601 et seq.];
the Resource Conservation and Recovery Act of 1976 ("RCRA") [42
USCS (S)(S) 6901 et seq.]; the Clean Water Act, also known as the
Federal Water Pollution Control Act ("FWPCA") [33 USCS (S)(S)
1251 et seq.]; the Toxic Substances Control Act ("TSCA") [15 USCS
(S)(S) 2601 et seq.]; the Hazardous Materials Transportation Act
("HMTA") [49 USCS (S)(S) 1801 et seq.]; the Insecticide,
Fungicide, Rodenticide Act (7 USCS (S)(S) 136 et seq.]; the
Superfund Amendments and Re-authorization Act [42 USCS (S)(S)
6901 et seq.]; the Clean Air Act [42 USCS (S)(S) 7401 et seq.];
the Safe Drinking Water Act [42 USCS (S)(S) 3001 et seq.]; the
Solid Waste Disposal Act [42 USCS (S)(S) 6901 et seq.]; the
Surface Mining Control and Reclamation Act [30 USCS (S)(S) 1201
et seq.]; the Emergency Planning and Community Right to Know Act
[42 USCS (S)(S) 11001 et seq.]; the Occupational Safety and
Health Act [29 USCS (S)(S) 655 and
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657]; the California Underground Storage of Hazardous Substances
Act [Health and Safety Code (S)(S) 25280 et seq.]; the California
Hazardous Substances Account Act [Health and Safety Code (S)(S)
25300 et seq.]; the California Hazardous Waste Control Act
[Health and Safety Code (S)(S)25100 et seq.]; the California Safe
Drinking Water and Toxic Enforcement Act [Health and Safety Code
(S)(S) 24249.5 et seq.]; the Xxxxxx-Cologne Water Quality Act
[Water Code (S)(S) 13000 et seq.] together with any amendments of
or regulations promulgated under the statutes cited above and any
other federal, state, or local law, statute, ordinance, or
regulation now in effect that pertains to occupational health or
industrial hygiene, and only to the extent that the occupational
health or industrial hygiene laws, ordinances, or regulations
relate to Hazardous Substances and/or Hazardous Materials on,
under or about the Real Property, or the regulation or protection
of the environment, including ambient air, soil, soil vapor,
groundwater, surface water, or land use;
(b) Those substances listed in the United States Department of
Transportation Table [49 CFR 172.101], or by the EPA, or any
successor agency, as hazardous substances [40 CFR Part 302];
(c) Other substances, materials, and wastes that are regulated or
classified as hazardous or toxic under federal, state, or local
laws or regulations; and
(d) Any material, waste, or substance that is
(i) a petroleum or refined petroleum product,
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(ii) asbestos,
(iii) polychlorinated biphenyl,
(iv) designated as a hazardous substance pursuant to 33 USCS (S)
1321 or listed pursuant to 33 USCS (S) 1317,
(v) a flammable explosive, or
(vi) a radioactive material.
"Initial Payment" is defined in Section 3(a).
"Permits" are defined in the recitals, and are listed on Exhibit "D."
"Personal Property" is defined in the recitals. In addition to the
items set forth in Exhibit "B," Personal Property shall be deemed to
include all licenses, entitlements, specifications, maps, drawings and
other renderings related to the Property as well as all warranty claims
which relate to the Personal Property, all contracts and other rights
(except financial assurances of or on behalf of Seller) relating to or
benefitting the Property, including intangible rights, goodwill, claims, or
awards. Personal Property also shall include all appurtenances presently
existing as a part of the Project and required for the operation and
maintenance of the sanitary landfill and other operations conducted at the
Project site, including, but not limited to, stationary equipment,
computers, tools, fences and trailers, and shall also include all files and
plans related to all Permits that have been issued in respect to the
Project or the Property and to the operation, maintenance, design,
monitoring, history, geotechnical and geological studies related to the
Real Property.
"Preliminary Report" is defined in Section 9(a).
"Prevailing Party" is defined in Section 21.
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"Project" means the Eagle Mountain Landfill Project as contemplated
and described in Development Agreement No. 64 approved by the County of
Riverside, dated September 9, 1997, and the Specific Plan Conditions of
Approval for the Project. The Project does not include the existing Eagle
Mountain town site.
"Property" is defined in the recitals. In addition to the Real
Property legally described in Exhibit "A," Property shall include, but not
be limited to, all buildings and, to the extent of the interests therein of
Seller or its Affiliates, rail facilities, irrigation systems, water,
electrical, and drainage systems and structures, roads and other utilities
located on or serving the Real Property or developed, constructed, or
acquired for the operation of the Project, subject to and except for such
rights, reservations, easements, exclusions, property and other items as
may be mutually agreed upon by the Parties prior to Close of Escrow.
"Purchase Price" is defined in Section 3.
"Real Property" is defined in the recitals, and legally described in
Exhibit A.
"Section" means sections of this Agreement.
"Seller" is defined in the preamble.
"Seller's Parties" is defined in Section 8.
"Specified Operations" is defined in Section 3(c).
"Survey" is defined in Section 9(b).
"System Agreement" is defined in the recitals.
"Title Company" is defined in the preamble.
"Title Policy" is defined in Section 10(a).
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1. PURCHASE AND SALE.
Upon the terms provided herein, Seller agrees to sell, assign, and transfer
to Buyer all of Seller's right, title, and interest in the Project, including
the rights of Affiliates that will be acquired by Seller and transferred to
Buyer pursuant to this Agreement, including all of the Property and Permits that
comprise the Project, and Buyer agrees to purchase the Project and assume all of
the duties and obligations of Seller and its Affiliates in and to the Project.
2. PURCHASE PRICE.
Buyer and Seller agree that the Purchase Price shall be $41 million
("Purchase Price"), and shall be payable to Seller in two payments as described
below:
(a) Prior to Close of Escrow, Buyer shall deposit the Purchase Price (less
the Deposit) in Escrow. Upon Close of Escrow, Escrow Agent shall place
the sum of $39 million (the "Initial Payment") into an interest-
earning escrow account to be selected by the Parties, which sum shall
be held and disbursed as provided in Section 13 (d). If Close of
Escrow fails to occur on or before January 1, 2001, and Seller has
satisfied all conditions of closing as set forth in Section 7 of this
Agreement, the Initial Payment shall be increased by the amount of
interest earned on such sum by Buyer in the Pooled Surplus Investment
Fund of the County of Los Angeles from January 1, 2001, until Close of
Escrow.
(b) Upon Close of Escrow, the Escrow Agent shall place the sum of $2
million into a separate escrow account to be selected by the Parties
and to be invested at the direction of Seller from a list of approved
investments supplied by Buyer, and held and disbursed in accordance
with Section 3(c) (the "Final Payment").
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(c) The Final Payment shall be held in the escrow account and paid to
Seller only in the event that the County of Los Angeles issues to
Buyer a Conditional Use Permit for the Xxxxxx Hills Landfill ("CUP")
that authorizes continued landfill operations after November 3, 2003,
until the remaining capacity of the Xxxxxx Hills Landfill has been
fully utilized at a permitted weekly waste acceptance rate of at least
72,000 tons representing an operating life of approximately ten years,
or such lesser amount as otherwise approved by Buyer's Board of
Directors at the time that a final environmental impact report for the
continued operation of the Xxxxxx Hills Landfill is approved and
certified ("the Specified Operations"). Buyer, at its expense, shall
undertake all reasonable efforts to promptly and diligently pursue
obtaining a CUP providing for the Specified Operations and all
reasonable efforts to defend against legal or administrative challenge
to the CUP and related environmental and use approvals. In the event
the County of Los Angeles issues a CUP that provides for the Specified
Operations, the Final Payment plus accrued interest shall be paid to
Seller at the time the CUP becomes final. For the purposes of this
section, the CUP shall become final upon the expiration of any appeal
periods without the filing of an appeal or the conclusion, by final
judgment, dismissal, settlement, or otherwise, of any and all legal
proceedings, including any appeals, by writ or otherwise, involving
the CUP or compliance with CEQA, so that the CUP for the Xxxxxx Hills
Landfill is no longer subject to legal challenge. In the event that
the County issues two conditional use permits with terms that
cumulatively and continuously provide
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for the Specified Operations, the Final Payment plus accrued interest
shall be paid to Seller at the time the later permit that provides for
such operations becomes final. In the event that the County of Los
Angeles does not issue a CUP for the continued operation of the Xxxxxx
Hills Landfill, or issues a CUP that does not provide for the
Specified Operations, then the Final Payment plus accrued interest
shall not be part of the Purchase Price and such amount will be
released from the escrow account to Buyer. In the event that a CUP is
issued with waste acceptance rates that have been reduced for the
primary purpose of causing Seller not to receive the Final Payment,
Seller shall nonetheless be entitled to receive the Final Payment.
3. TRANSFER OF PERSONAL PROPERTY.
As a part of the Purchase Price, Seller agrees to sell to Buyer and Buyer
agrees to purchase from Seller those items of tangible personal property,
including mobile equipment, detailed in Exhibit "B." Prior to the Close of
Escrow, Seller shall deposit in Escrow bills of sale and endorsed certificates
of title in favor of Buyer with respect to all items of Personal Property,
including all items of equipment and vehicles, listed on Exhibit B, together
with appropriate instruments of transfer. Any sales tax incurred by reason of
this transaction shall be paid by Seller outside Escrow.
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4 ESCROW.
Within three (3) business days following approval of this Agreement by the
Seller's and Buyer's respective boards of directors, the Parties shall establish
escrow ("Escrow") with Escrow Agent, subject to the provisions of the standard
conditions for acceptance of escrow as may be reasonably approved by Buyer and
Seller, but only to the extent that the standard conditions are consistent with
this Agreement, impose no additional liabilities or obligations between the
Parties, and are specifically subject to the terms and conditions of this
Agreement, the latter to control in the case of conflict. A signed counterpart
of this Agreement is to be delivered as joint escrow instructions to Escrow
Agent. Prior to the Closing Date, all other documents required to complete the
closing (collectively, the "Closing Documents") shall be deposited into Escrow.
The Closing Documents shall contain closing conditions provided herein, and
include the documents listed on Exhibit E of this Agreement. Within five (5)
business days following the opening of Escrow, Buyer shall deposit with Escrow
Agent the sum of fifty thousand dollars ($50,000.00) to be applied to the
initial payment of the Purchase Price at the Close of Escrow ("Deposit"). The
Escrow Agent shall place the Deposit in a state or federally chartered bank in
an interest bearing account as selected by the Parties whose term is appropriate
and consistent with the timing requirements of this transaction. The interest
therefrom shall accrue to the benefit of Buyer, whose Federal Tax Identification
Number is 00-0000000. Escrow Agent is hereby authorized and instructed to
conduct the Escrow in accordance with this Agreement.
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5. DUE DILIGENCE.
(1) Within ninety (90) days following the opening of Escrow (the "Due
Diligence Period"), Buyer will, at its sole cost and expense, complete
its due diligence examination of the Project, during which, among
other things, Buyer will, with Seller's cooperation and assistance at
Seller's sole cost and expense:
(1) investigate the validity and sufficiency of the Permits,
consents, and approvals for the Project, and arrange for the
transfer or assignment of such Permits at Close of Escrow, or,
with the written consent of the Chief Engineer, after Close of
Escrow, and obtain any required consents and approvals for
Buyer's ownership and operation of the Project upon Close of
Escrow;
(2) conduct any environmental audits, geological investigations, and
operational assessments of the site and private rail line and
review title to the Real Property, including an ALTA survey at
Buyer's election and expense;
(3) make such inquiries as Buyer deems reasonably appropriate of
Seller's contractors, consultants, and/or regulators in regard to
the Project and Buyer shall keep Seller reasonably informed of
all such inquiries during the Due Diligence Period;
(4) examine all books, records and files relating to the Project,
except for those books, records, and files that are privileged,
or are privileged from disclosure under the attorney work product
doctrine.
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(2) During the Due Diligence Period, Seller shall provide Buyer with
full and complete access to the Real and Personal Property, and
all documents and records requested by Buyer to complete its due
diligence, except for those books, records and files that are
privileged or privileged from disclosure under the attorney work
product doctrine. It is not intended that an assertion of
privilege will prevent the Buyer from obtaining any factual,
scientific, or technical information of importance to the
acquisition, permitting and/or operation of the Project.
(c) Upon completion of its due diligence and its acceptance of the
Project, Buyer will provide a Certificate of Acceptance of the
Project to Seller and Escrow Agent. At the Close of Escrow, the
Escrow Agent will deliver the initial payment, less any
prorations, to Seller under Section 3 (a), and record, as
necessary, and deliver the Closing Documents to Buyer.
(d) Seller grants to Buyer, its agents and employees, a license to
enter upon any portion of the Real Property and rights of access
to all Personal Property for purposes of conducting engineering
tests, investigations, or other studies reasonably necessary to
evaluate the condition of the Property in accordance with Section
8 hereunder. Seller shall provide Buyer, its agents and
employees, with reasonable access to water and utilities in
connection with any such tests, investigations, or studies,
provided that Buyer shall restore the Property to its pre-
existing condition upon completion of any tests or investigation.
(e) Within thirty (30) days following the opening of Escrow under
this Agreement by the Parties, Seller shall make available to
Buyer for inspection all
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architectural, engineering, and technical plans, surveys,
specifications and other documents pertaining to the physical,
geological or environmental condition of the Real Property, or
which pertain to the zoning of and/or entitlements to the Real
Property, or otherwise relate to the feasibility of conducting a
Class III sanitary landfill operation on the Real Property, that
are owned by or in the possession of Seller or its attorneys or
consultants (which can be copied at Seller's expense), except
communications that are subject to the attorney-client privilege
or are privileged from disclosure under the attorney-work product
doctrine. In the event that Escrow fails to close, Buyer shall
deliver to Seller copies of all of Buyer's tests, studies or
reports developed during the Due Diligence Period.
(f) If Buyer requires additional time to determine the existence and
extent of any Hazardous Substance on the Property or other
matters subject to Buyer's due diligence, except the presently-
pending federal litigation, Buyer shall have the right,
exercisable by delivering a written notice executed by the Chief
Engineer to Seller prior to the expiration of the Due Diligence
Period, to extend the Due Diligence Period for an additional
period of up to forty-five (45) days to complete its examination
of the Project.
(g) If the Chief Engineer disapproves the results of Buyer's
examination of the Project, or in his sole and absolute
discretion, determines that, because of environmental or economic
factors or because of zoning matters, it is infeasible in his
judgment for Buyer to conduct a Class III sanitary landfill
operation on the Real Property or import solid waste from Los
Angeles County in
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economically viable quantities, the Chief Engineer may elect, prior to
the last day of the Due Diligence Period, to terminate this Agreement
on behalf of Buyer, giving to Seller written notification of his
decision prior to the last day of the Due Diligence Period, in which
event the Deposit together with all interest shall be returned to
Buyer and the rights and duties of the Parties shall be as set forth
in Section 9(d)(ii) and all plans, documents and information
previously furnished shall be promptly returned to Seller together
with all Buyer's investigatory studies and reports. If Buyer fails to
notify Seller of its intent to terminate this Agreement within the Due
Diligence Period, Buyer shall be deemed to be satisfied with the
results of the inspection and review and shall be deemed to have
waived its right to terminate this Agreement pursuant to this
provision.
6. CONDITIONS TO BUYER'S PERFORMANCE.
Buyer's obligation to perform under this Agreement is subject to the
satisfaction or written waiver in whole or in part by the Chief Engineer of the
following conditions within the Due Diligence Period:
(a) The Chief Engineer's approval of the conditions of the Permits and
governmental approvals for the Project and the Real Property and
Personal Property as provided in Section 6.
(b) Buyer's obtaining by the Close of Escrow all necessary approvals and
consents including such approvals and consents as may be necessary to
have all of the Permits assigned to Buyer. With regard to existing
Permits held by Seller that
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may legally be transferred to Buyer, such Permits will be deemed to
have been obtained upon securing the consent to the transfer of the
permitting authority.
(c) Pursuant to Health and Safety Code (S)4741 and Public Resources Code
(S)49400, any required consent of the Board of Supervisors of the
County of Riverside by resolution or otherwise to the acquisition of
the Property by Buyer for a refuse disposal facility, and to the
operation of said facility by Buyer.
(d) Seller's representations and warranties in this Agreement being
correct as of the date of this Agreement and as of the Close of Escrow
in all material respects.
(e) Seller's performance of all obligations under this Agreement.
(f) Title Company is prepared to issue, as stated in writing in an updated
preliminary report, the Title Policy on the Close of Escrow, subject
only to the Approved Exceptions.
(g) Escrow Agent is prepared to deliver to Buyer the instruments in favor
of or accruing to Buyer pursuant to this Agreement.
7. ACCESS.
(3) Access to Seller's documents, records and other information during the
Due Diligence Period shall be given to Buyer during normal business
hours upon at least one (1) business day's notice to Seller. Access
to the Property during the Due Diligence Period shall be given to
Buyer upon at least one (1) business day's notice to Seller. Buyer
agrees to indemnify, defend and hold harmless Seller and its
Affiliates, and their past, current, and future respective officers,
directors, employees, and agents (collectively "the Seller's Parties")
from all
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claims, losses, costs, liabilities, expenses, damages, or other
injuries, including, without limitation, attorneys' fees and expenses,
to the fullest extent not prohibited by applicable law, and all other
costs and expenses incurred by reason of or in any manner resulting
from Buyer's inspection and investigation of the Property; provided,
however, that Buyer's obligation to indemnify, defend, and hold
harmless the Seller's Parties shall not apply to claims, demands,
causes of action, expenses, fees, costs or damages to the extent
caused by the negligence or willful misconduct of the Seller's
Parties. The provisions of this Section shall survive the Close of
Escrow.
(4) Buyer and its contractors and consultants shall have the right, upon
one day's prior notice, from the date of this Agreement until the
Closing Date, to enter onto the Real Property, at their own cost and
risk, for any purposes, including, but not limited to, inspecting the
Property, taking samples of the soil, and conducting an environmental
audit (including an investigation of past and current uses of the
Property). Seller shall have the right to accompany Buyer or any of
Buyer's employees, contractors, or consultants on any inspection of
the Real Property. In the event Buyer or any party on behalf of Buyer
takes samples, such sampling and testing shall be in accordance with
agreed upon protocols between Seller and Buyer's Chief Engineer, which
shall include the right to split samples. Buyer shall provide Seller
with the results of any sampling it undertakes, including any draft
and final reports. In addition, Buyer shall have the right to contact
any federal, state, or local governmental authority or agency to
investigate any matters relating to the Property, and shall kept
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Seller reasonably informed of all such contacts during the Due
Diligence Period. Seller agrees to cooperate reasonably with Buyer in
the inspection of the Property and agrees to deliver to Buyer all non-
privileged information in Seller's possession or control pertaining to
the condition of the Property, including engineering and environmental
reports, studies, tests, monitoring results, and related
documentation.
8. TITLE.
(a) Within fifteen (15) days of the date of execution of this Agreement by
the Parties, Seller shall cause Title Company to issue to Buyer (with
a copy to Seller) a preliminary report for a California Land Title
Association ("CLTA") Standard Owner's Policy of Title Insurance, or at
Buyer's option and additional prorated expense, a 1970 ALTA Form
Owner's Policy for the Real Property, setting forth all record liens,
encumbrances, easements, restrictions, conditions, pending litigation,
judgments, administrative proceedings, and other matters affecting
Seller's title to the Property ("Preliminary Report"), together with
copies of all documents relating to title exceptions referred to in
the Preliminary Report.
(b) Promptly following the full execution of this Agreement by the
Parties, Buyer may cause, at its sole cost and expense, an ALTA survey
of the Real Property to be prepared by a registered surveyor or
professional engineer ("Survey"). If the Buyer conducts the Survey,
Seller shall be provided at Seller's expense for the copying costs
with two complete copies of the Survey. Seller agrees to
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deliver to Buyer, promptly following the full execution and delivery
of this Agreement, copies of any survey or survey information
pertaining to the Real Property in the possession of Seller, its
Affiliates, or its consultants.
(c) The Chief Engineer shall reasonably approve or disapprove each
exception shown on the Preliminary Report and each encroachment,
overlap, or boundary line dispute, or any other matter that materially
and adversely affects title to the Real Property or that violates any
law, rule, or regulation reflected on the Survey (each an "Exception")
within fourteen (14) days following the receipt of the Preliminary
Report or Survey, if Survey is made, whichever is later. The Chief
Engineer's failure to approve within the fourteen (14) day period
shall be deemed to be a disapproval of the Exceptions.
(d) If any Exception is disapproved or deemed disapproved (each a
"Disapproved Exception"), Seller shall within thirty (30) days
following expiration of the fourteen (14) day period provided under
Section 9 (c) above, use all reasonable efforts to cause each
Disapproved Exception (except money claims that can be paid through
Escrow upon Close of Escrow, as provided below) to be discharged,
satisfied, released, or terminated, as the case may be, of record, or
arrange for Title Company to insure against any loss due to such
exception, and in a form that is reasonably satisfactory to the Chief
Engineer, all at Seller's sole cost and expense. Seller shall not be
obligated to expend an amount estimated to exceed $250,000 on a
cumulative basis to remove Disapproved Exceptions. Seller authorizes
Escrow Agent to disburse from proceeds otherwise distributable to
Seller upon Close of Escrow the sum sufficient to
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discharge any Disapproved Exception that may be discharged only by the
payment of money, not to exceed $250,000. If Seller is unable to
obtain a discharge, satisfaction, release, or termination within the
period or monetary limits specified above, the Chief Engineer shall
have the right to:
(i) waive any Disapproved Exceptions and proceed with Closing,
accepting title to the Real Property subject to the Disapproved
Exceptions;
(ii) terminate this Agreement, in which event Seller shall pay all
charges of Escrow Agent in connection with this transaction;
both Buyer and Seller shall be relieved of all further
obligation and liability to each other under this Agreement,
except Buyer's duty to restore the Real Property under Section 6
(d), and all the funds and documents deposited with Escrow Agent
shall be promptly refunded or returned, as the case may be, by
Escrow Agent to the depositing party; or
(iii) Upon agreement of the Chief Engineer and the President of
Seller, the Close of Escrow may be deferred until any
Disapproved Exceptions are removed.
9. CLOSE OF ESCROW.
(a) Title. Simultaneously with the Close of Escrow, at Seller's expense,
-----
Title Company shall issue a CLTA Standard Owner's Policy of Title
Insurance, or at Buyer's option and its additional prorated expense, a
1970 ALTA Owner's Policy of Title Insurance ("Title Policy") to Buyer
in the amount of the Purchase Price subject only to the following
matters ("Approved Exceptions"):
21
(i) exceptions approved by the Chief Engineer in accordance with
Section 9 (c), or (ii) waived under Section 9 (d) (i), or exceptions
for matters that may be mutually agreed upon by Seller and Buyer's
Chief Engineer, such as easements, reservations, and licenses for such
things as access and utilities for properties retained by Seller's
Affiliates.
(b) Seller's Deposits In Escrow. Seller shall deposit with Escrow Agent
---------------------------
on or prior to Close of Escrow, the following documents in a form
reasonably acceptable to Seller and Buyer's Chief Engineer:
(i) A grant deed executed and acknowledged in recordable form by
Seller conveying to Buyer fee title to the Real Property,
subject only to the Approved Exceptions ("Deed");
(ii) An assignment executed by Seller assigning to Buyer all of
Seller's right, title and interest in all personal, tangible and
intangible property comprising the Property ("Assignment").
(iii) Certified copies of any and all resolutions as may be required
by Buyer to confirm Seller's authority to enter into or carry
out this Agreement.
(iv) The various Bills of Sale and other instruments of transfer
referred to in Section 4.
(v) Such additional documents as the Chief Engineer may reasonably
require in order to assure Seller's compliance with the
conditions specified in Section 7.
22
(c) Buyer's Deposits into Escrow. Buyer shall deposit with Escrow
----------------------------
Agent, on or prior to the Close of Escrow, the balance of the
Initial Payment of the Purchase Price in accordance with Section
3(a), together with its share of the closing costs and a
Certificate of Acceptance. Buyer shall deposit into an Escrow
Account, the Final Payment of the Purchase Price to be held in
accordance with Section 3 (c) on or prior to the Close of Escrow.
(d) Closing Date. The conveyance of the Property and transfer of
------------
Permits to Buyer and the closing of this transaction ("Close of
Escrow" or "Closing") shall take place within ninety (90) days
following the full execution and delivery of this Agreement by
the Parties, or December 31, 2000, whichever is earlier ("Closing
Date"), unless the Closing Date is extended by written agreement
of the Chief Engineer and the President of Seller; provided
however, the Chief Engineer may extend the Closing Date up to
forty-five (45) days in order to obtain satisfaction of any of
the conditions to Buyer's performance as set forth in Section 7
or to reflect any extensions of the Due Diligence Period under
Section 6 (f). The Chief Engineer may in his sole and absolute
discretion extend the Closing Date as necessary, but no later
than March 31, 2001, to obtain any needed consents and approvals,
the issuance of which are reasonably foreseeable, and Buyer and
Seller have proceeded in good faith to have any such consents and
approvals for the Project issued or assigned to Buyer.
On the Closing Date, Escrow Agent shall Close Escrow, as follows:
23
(A) Record the Deed (marked for return to Buyer) and Certificate
of Acceptance with the County Recorder of Riverside County
(which shall be deemed delivery of the Real Property to
Buyer).
(B) Cause the Title Company to issue the Title Policy.
(C) Prorate taxes, assessments, rents, and other charges as
provided in Section 10 (e), if applicable, pursuant to
California Government Code (S) 6103.
(4) Disburse the balance of the Purchase Price for the Project
that is payable at Close of Escrow pursuant to Sections 3
(c) and 13 (d), less prorated amounts and charges and
expenses to be paid by or on behalf of Seller.
(A) Charge Buyer for those costs and expenses to be paid by
Buyer pursuant to this Agreement and disburse to Buyer any
net funds remaining after the preceding disbursements.
(B) Prepare and deliver to both Buyer and Seller one (1) signed
copy of Escrow Agent's closing statement showing all
receipts and disbursements of the Escrow.
(C) Record with the County Recorder of Riverside County and
distribute in accordance with the directions of the Parties any
recordable documents of transfer or agreements for easements and
reservations that may be created between the Parties.
If Escrow Agent is unable to perform simultaneously all of the
instructions set forth above, Escrow Agent shall notify Buyer and
Seller
24
and retain all funds and documents pending receipt of further
instructions jointly issued by Buyer and Seller.
(5) Prorations. Escrow Agent shall prorate from the Purchase Price the
----------
following costs at the Close of Escrow:
(i) Seller shall pay:
(A) All governmental conveyancing fees and taxes due upon
transfer of the Property, if applicable, pursuant to
California Government Code (S) 6103;
(B) All charges in connection with the issuance of a California
Land Title Association ("CLTA") Standard Owner's Policy of
Title Insurance in the amount of the Purchase Price; and
(C) One-half of the escrow fee charged by Escrow Agent.
(ii) Buyer shall pay:
(A) The recording charges in connection with recordation of the
deed, if applicable, pursuant to California Government Code
(S) 6103;
(B) That portion of the premium for the Title Policy in excess
of the premium for a CLTA Standard Policy of Title
Insurance; and
(C) One-half of the escrow fee charged by Escrow Agent.
(iii) All other costs of Escrow not otherwise specifically allocated
by this Agreement shall be apportioned between the Parties in a
manner consistent with the custom and usage in Los Angeles
County, California.
25
(f) Bonds and Assessments. All installments of any bond or assessment
---------------------
that constitutes a lien on the Property and/or Personal Property at
the Close of Escrow shall be paid by Seller.
11 POSSESSION.
Possession of the Real Property and Personal Property shall be delivered to
Buyer at the Close of Escrow.
12. DAMAGE AND DESTRUCTION.
(a) In the event of damage or destruction of the Property or any portion
of the Property prior to Close of Escrow in an amount not exceeding
$100,000.00, Buyer and Seller shall consummate this Agreement without
change in the Purchase Price provided that Seller shall assign to
Buyer Seller's rights under any insurance policy covering the damage
or destruction and shall indemnify and guaranty Buyer with respect to
any costs incurred by Buyer in repairing and restoring the Property
that are not paid by insurance up to the amount of $100,000.00.
(b) In the event of damage or destruction of the Property, or any portion
of the Property, prior to the Close of Escrow that impairs in any
material manner the ability of Buyer to fully carry out the Project at
its maximum capacity, the Chief Engineer may elect either to terminate
this Agreement upon written notice to Seller and Escrow Agent, or to
consummate this Agreement, in which event Seller shall assign to Buyer
Seller's rights under any insurance policy covering
26
the damage or destruction, but without the indemnity and guaranty
provided in subsection (a) above. If the Chief Engineer elects to
terminate this Agreement pursuant to this provision, Escrow Agent
shall within fifteen (15) days following receipt of the Chief
Engineer's notice return the Deposit together with accrued interest to
Buyer. Upon termination, neither party shall have any further
obligations under this Agreement except as otherwise provided in this
Agreement.
(1) In the event of damage or destruction of the Property, or any portion
of the Property, prior to Close of Escrow in an amount in excess of
$100,000.00, but that does not impair the Project as described above,
Seller and the Chief Engineer shall negotiate an appropriate
reduction in the Purchase Price.
13. SELLER'S WARRANTIES.
Seller represents, warrants and covenants to Buyer that except as otherwise
disclosed to Buyer in writing, to the best of its knowledge as of the date of
this Agreement, and to the best of its knowledge after reasonable inquiry as of
the Close of Escrow:
(a) Hazardous Substances:
--------------------
(i) Except as kept and used under currently-valid permits, the Real
Property is free and has always been free from Hazardous
Substances and is not and has never been in violation of any
Environmental Law;
(ii) There are no buried or partially buried storage tanks located on
the Real Property;
27
(iii) Seller has received no notice, warning, notice of violation,
administrative complaint, judicial complaint, or other formal or
informal notice alleging that conditions on the Real Property
are or have been in violation of any Environmental Law, or
informing Seller that the Real Property is subject to
investigation or inquiry regarding Hazardous Substances on the
Real Property or the potential violation of any Environmental
Law;
(iv) There is no monitoring program required by the U.S.
Environmental Protection Agency ("EPA") or any similar state
agency concerning the Real Property, except for a monitoring
program required by the Regional Water Quality Control Board;
(v) The Real Property has been used by predecessors of Kaiser
Ventures, Inc., for decades to mine iron ore and for associated
reclamation activities.
(vi) No Hazardous Substances of any kind have ever been spilled,
disposed of, or stored on, under or at the Real Property whether
by accident, burying, drainage, or storage in containers, tanks,
or holding areas, or by any other means that would require
remediation under currently applicable law.
(vii) Seller will make available to Buyer all information, records,
and studies maintained by Seller in connection with the Property
concerning Hazardous Substances.
28
(b) Violation of Law.
----------------
No condition on the Real Property currently violates any health,
safety, fire, environmental, sewage, building, or other federal,
state, or local law, code, ordinance, or regulation.
(c) Leases.
------
No leases, licenses, or other agreements allowing any third party
rights to use the Property are or will be in force, except as set
forth on Exhibit F.
(d) Litigation.
----------
Except as provided in this Section, there is no pending or threatened
litigation, administrative proceeding, or other legal or governmental
action with respect to the Real Property, the Personal Property, or
Permits for the Project. At the election of the Chief Engineer, Close
of Escrow shall be postponed until any pending litigation concerning
the Real Property, Personal Property or Permits for the Project have
been successfully concluded, except as follows.
(i) There are currently two civil actions involving the Project
pending in the United States District Court for the Eastern
District of California, Riverside Division, (the "District
Court") entitled Xxxxx Xxxxxxxx et al. v. United States
Department of the Interior, et al., Case No. 99-0454 RT (MCx) and
National Parks and Conservation Association v. Bureau of Land
Management, etc., et al. Case No. 00-0041 RT (MCx) (the "Federal
Litigation").
(ii) In the event that the Federal Litigation is pending at Close of
Escrow, the initial payment of $39 million shall be paid into an
interest-earning
29
escrow account ("Primary Account") to be selected by the Parties
with the investments to be selected by Seller from Buyer's list
of approved investments. In the event that the Final Payment
becomes payable to Seller under Section 3 (c) prior to the
distribution of the Primary Account, the Final Payment, plus
accrued interest, shall be added to the Primary Account. The
principal portions of the payments shall thereafter be retained
in the escrow account until the Federal Litigation becomes
final. For the purposes of this Section, the Federal Litigation
shall be considered to be final when the NEPA compliance for the
EIS for the Project is no longer subject to legal challenge (a
final decision on the merits of the Federal Litigation), and the
federal land exchange for the Project is no longer subject to
being set aside.
(iii) In the event that the District Court enters any appealable
judgments, rulings, or orders, in both actions in the Federal
Litigation that uphold the decision of the Bureau of Land
Management and the Interior Board of Land Appeals, the interest
accrued on the payments in the escrow account shall be released
to Seller, and shall thereafter continue to be released to
Seller on a quarterly basis until the Federal Litigation is
considered final, or until four (4) years from Close of Escrow,
whichever occurs first. Thereafter, interest shall be retained
in the Primary Account and shall continue to accrue for the
benefit of the Party ultimately entitled to receive the
principal, or as otherwise provided in this Section.
30
(iv) If the District Court issues an order, over the opposition of the
Buyer, preventing the Buyer from proceeding with development and
operation of the Project, and such order remains in effect on the
date which is the later of seven (7) years after Close of Escrow
or one (1) year after the first issuance of such court order, the
Buyer shall have the option for a period of thirty (30) days
thereafter to receive the principal, plus accrued interest, from
the Primary Account, and reconvey and reassign its right, title,
and interest to Seller in the Project, the Property, and
everything conveyed or transferred by Seller to Buyer as a part
of the transaction contemplated by this Agreement.
(v) If Buyer proceeds with the development and operation of the
Project during the pendency of the Federal Litigation, free of
any injunctive relief, interest shall accrue and be released
quarterly to Seller.
(vi) In the event that the Seller can obtain an insurance policy or
other financial assurance that to the satisfaction of the Chief
Engineer reasonably protects the Buyer from the risk of loss in
the Federal Litigation, the Buyer may agree to release the escrow
account to Seller, less any applicable deductible.
(e) Condition of Property.
---------------------
There are no natural or artificial conditions upon the Real Property,
or any part of the Real Property, that are known to Seller after
reasonable inquiry to present a substantial risk of a material and
adverse change in the condition of the Real Property.
31
(f) Disclosure.
----------
Any information that Seller has delivered to Buyer, either directly or
through Buyer's agents, is accurate or was accurate in all material
respects at the time of the preparation of the information and Seller
has disclosed all material facts known to Seller with respect to the
Real Property and the Personal Property.
(g) Third Party Approvals.
---------------------
Except as disclosed to Buyer in writing or set forth on Exhibit G, no
consents or waivers of or by any third party are necessary to permit
Seller to consummate the transactions contemplated pursuant to this
Agreement.
(h) Zoning and Building Ordinance Compliance.
----------------------------------------
At the Close of Escrow, the Project, as appropriate to its present
state of development and implementation, will be in full compliance
with all zoning ordinances, development requirements, and conditions
of approval issued for the Project by the County of Riverside.
(i) Permits:
--------
(i) The Permits for the Project are valid and in good standing;
(ii) The Permits for the Project constitute all of the material
federal, state, and local approvals required for Buyer to proceed
with development and operation of the Project, subject to
obtaining local building or construction permits.
32
Seller shall notify Buyer of any facts that would cause any of the
representations, warranties and covenants contained in this Agreement to be
untrue in any material respect as of Close of Escrow and shall deliver to Buyer
at the Close of Escrow a certificate ("Closing Certificate") confirming that the
representations contained in this Agreement continue to be true as of the Close
of Escrow. The obligations of Buyer to consummate the transaction contemplated
are conditioned upon the delivery by Seller of the Closing Certificate. If the
Chief Engineer reasonably concludes prior to Close of Escrow that a fact
materially adversely affects the Property or the operation of the Project, which
cannot be promptly cured by Seller, he shall have the option to terminate this
Agreement by delivering written notice to Seller and Escrow Agent. If the Chief
Engineer terminates this Agreement pursuant to this Section, Escrow Agent shall,
within ten (10) days following receipt of the Chief Engineer's notice to
terminate, return to Buyer the Deposit and all accrued interest, and cancel the
Escrow.
14 SELLER'S COVENANTS.
Commencing with the full execution of this Agreement by the Parties and
until the Close of Escrow:
(a) After Buyer approves the Exceptions, Seller shall not permit any new
liens, encumbrances, or easements to be placed on the Real Property or
Personal Property, other than the Approved Exceptions, nor shall
Seller enter into any agreement regarding the sale, rental,
management, repair, improvement, or any other matter affecting the
Real Property or Personal Property that would be binding on Buyer, the
Real Property, or Personal Property after the Close of Escrow without
the prior written consent of the Chief Engineer.
33
(b) Seller shall not permit any act of waste or act that would tend to
diminish the value of the Real Property or Personal Property for any
reason, except that caused by ordinary wear and tear.
(c) Seller shall maintain the Real Property in its current condition as a
proposed sanitary landfill until Close of Escrow.
(d) Commencing with the full execution of this Agreement by the Parties
and continuing thereafter through the Closure operations of Buyer and
for so long thereafter as Buyer may have any legal responsibilities
in respect to the Property, other than those nominal responsibilities
associated with any easements, licenses, and other similar agreements
or instruments that Seller may otherwise have with respect to the
Real Property, Seller shall take no action that diminishes the use or
availability of the Property for the purposes of fully implementing
the Project.
15. RELEASE AND INDEMNIFICATION.
(a) Release and Indemnification by Seller.
-------------------------------------
Seller agrees to release and to indemnify, defend, and hold harmless
Buyer and all other County Sanitation Districts of Los Angeles
County, their officers, agents and employees, from all claims,
losses, costs, liabilities, expenses, damages or other injuries,
whether foreseeable or unforeseeable, including without limitation,
attorneys' fees and expenses incurred by reason of or in any manner
resulting from any of the following:
(i) the condition of the Property prior to the Close of Escrow;
34
(ii) the use of the Property prior to the Close of Escrow by Seller
or others including, but not limited to, the past use of the
Property as an iron ore mine;
(iii) any fact or circumstance with respect to the Property that
occurred prior to the Close of Escrow or that then existed; or
(iv) from breach of any warranties and representations set forth in
Section 13.
(v) the litigation currently pending in Federal Court concerning
the Project or any lawsuits challenging the transfer of the
Project to Buyer.
(b) Assignment of Indemnification Rights from Kaiser.
------------------------------------------------
In addition, Seller will assign and transfer to Buyer at Close of
Escrow its rights to indemnification and defense under its lease with
Kaiser Ventures Inc., and any other agreements relating to the
Project or the Real Property for all claims and liabilities
associated with the former uses and activities on the Real Property
conducted by Kaiser Ventures Inc., or any of its predecessors in
interest.
(c) Release and Indemnification by District.
---------------------------------------
Except as to matters attributable to Seller's use of or
responsibility for the Property which materially restricts the use of
the Project and such other matters described in this Agreement, Buyer
agrees to release and to indemnify, defend, and hold harmless Seller,
its officers, agents and employees, from all claims, losses, costs,
liabilities, expenses, damages or other injuries, including without
limitation, attorneys' fees and expenses incurred by reason of or in
any manner resulting from any of the following:
35
(i) any condition of the Property arising after Close of Escrow,
unless such condition can conclusively be demonstrated to have
been adversely affected by use of the Property prior to the
Close of Escrow by Seller or others including, but not limited
to, the past use of the Property as an iron ore mine;
(ii) the use of the Property after the Close of Escrow by Buyer or
others including, but not limited to, use of the Property to
carry out the Project; or
(iii) any fact or circumstance with respect to the Property that
arises after the Close of Escrow.
(d) Scope of Releases and Indemnities.
---------------------------------
The foregoing releases and indemnities shall extend to but not be
limited to Hazardous Substances and Hazardous Materials as warranted
by Seller in Section 13. The foregoing releases and indemnifications
shall survive the Close of Escrow. The Parties are familiar with
Section 1542 of the Civil Code of the State of California which
provides that "A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the Debtor." The Parties intend the
foregoing releases to be effective as a full and final accord of the
matters to which they pertain, to apply to all claims known or
unknown, suspected or unsuspected, and hereby waive and relinquish any
rights and benefits that they may have under Section 1542 as to such
matters.
36
(e) Defense of Claims.
-----------------
(1) If a claim subject to this Section is made by either Party
against the other Party, the potential indemnitee shall give
written notice to the potential indemnitor as soon as
practicable after becoming aware of any fact, condition, or
event that gives rise to a claim for which indemnification may
be sought under this Agreement. If a claim subject to this
Section by a third party is received by either Party, written
notice of such claim shall be given to the potential indemnitor
as promptly as practicable and in any event within fifteen (15)
days after service of any summons. The failure of an indemnitee
to give timely notice hereunder shall not affect rights to
indemnification under this Agreement, except to the extent that
the indemnitor demonstrates actual damages caused by such
failure.
(2) The indemnitor shall be obliged to defend any claim subject to
this Section; provided that, if the indemnitor fails to
undertake a defense of the claim, the indemnitee shall have the
right to assume the defense of the claim and receive
reimbursement from the indemnitor. The indemnitor shall keep
the indemnitee reasonably informed of the progress of any
defense, compromise, or settlement. The indemnitor shall be
liable for any settlement of any claim effected pursuant to and
in acordance with this subsection and for any final judgment
(subject to any right to appeal), and the indemnitor agrees to
indemnify and hold harmless the indemnitee from and against any
damages by reason of such settlement or judgment.
37
16. FAILURE TO CLOSE.
(2) In the event of any default by Seller and as a consequence thereof
the transaction contemplated hereby fails to close, Buyer shall be
entitled to pursue any remedy at law or equity including, without
limitation, specific performance. In the event of any default by
Buyer and as a consequence thereof the transaction contemplated
hereby fails to close, Seller shall be entitled to damages for breach
of contract.
(3) Upon failure to close Escrow, Buyer agrees not to directly or
indirectly interfere with the permitting, development, construction
and operation of the Project, and agrees to return to Seller, or
otherwise keep confidential as provided in Section 24, all
confidential information provided by Seller. Buyer, however, shall
not be prohibited from responding to legitimate requests for
information by regulatory or permitting agencies concerning the site
developed by the Buyer during its examination of the Project.
17. CONDEMNATION.
38
(a) If any portion of the Property is taken by condemnation or eminent
domain or is the subject of a threatened or pending condemnation or
eminent domain proceeding that has not been consummated prior to the
Close of Escrow resulting in a decrease in the value of the Property
in an amount not exceeding $100,000.00, Buyer and Seller shall
consummate this Agreement without change in the Purchase Price,
provided that Seller shall assign to Buyer Seller's rights to all
awards for the condemnation or taking and shall indemnify and
guarantee Buyer with respect to any costs incurred by Buyer in
repairing and restoring the Property that are not paid by the awards
up to the amount of $100,000.00.
(2) If any portion of the Property is taken by condemnation or eminent
domain or is the subject of a threatened or pending condemnation or
eminent domain proceeding that has not been consummated prior to the
Close of Escrow that impairs in any material manner the ability of
Buyer to fully carry out the Project at its maximum capacity,, the
Chief Engineer may elect either to terminate this Agreement upon
written notice to Seller and Escrow Agent or to consummate this
Agreement, in which event Seller shall assign to Buyer Seller's rights
to all awards for the condemnation or taking, but without the
indemnity and guarantee provided in subsection (a) above. If the
Chief Engineer elects to terminate this Agreement pursuant to this
provision, Escrow Agent shall, within fifteen (15) days following
receipt of the Chief Engineer's notice, return the Deposit, together
with accrued interest, to Buyer. Upon termination, neither party
shall
39
have any further obligations under this Agreement except as otherwise
provided in this Agreement.
(3) If any portion of the Property is taken by condemnation or eminent
domain or is subject of a threatened or pending condemnation or
eminent domain proceeding that has not been consummated prior to Close
of Escrow, resulting in a decrease in the value of the Property in an
amount in excess of $100,000.00, but that does not impair the Project
as described above, Seller and the Chief Engineer shall negotiate an
appropriate reduction in the Purchase Price.
18. AUTHORITY OF PARTIES.
(a) Seller warrants that this Agreement and all other documents delivered
prior to or at the Close of Escrow:
(i) Have been authorized, executed, and delivered by Seller;
(ii) Are binding obligations of Seller;
(iii) Are collectively sufficient to transfer all of Seller's rights
in the Project, including the Real Property and Personal
Property;
(iv) Do not violate the provisions of any agreement to which Seller
is a party or which affects the Real Property or Personal
Property nor to Seller's knowledge violate any law to which
Seller is subject (it is understood that certain consents and
approvals will be necessary for the transfer of the Permits and
other Property); and
(v) Seller further warrants that it is a limited liability company
organized and existing under the laws of the State of
California.
40
(b) Buyer warrants that this Agreement and all documents delivered prior
to or on the Close of Escrow:
(i) Have been authorized, executed, and delivered by Buyer;
(ii) Are binding obligations of Buyer;
(iii) Do not violate either the provisions of any agreement to which
the Buyer is a party nor any law to which Buyer is subject; and
(iv) Buyer further represents that it is a county sanitation
district formed and exercising its authority pursuant to the
County Sanitation District Act (Health and Safety Code
(S)(S)4700 et seq.)
(c) The Parties each warrant that the persons executing this Agreement on
their behalf are authorized to do so.
19. BROKERS.
Each party warrants and represents to the other party to this Agreement
that no brokers have been retained or consulted by it in connection with this
transaction. Each party agrees to defend, indemnify and hold harmless the other
party from any claims, expenses, costs, or liabilities resulting from a fee or
commission claim by a broker or finder claiming through one of the Parties,
which shall become the indemnifying party.
20. ASSIGNMENT.
Buyer shall have the right to assign all rights and liabilities under this
Agreement to any party that has the financial capability to perform the
Agreement.
41
21. ATTORNEYS' FEES.
If litigation is commenced between the Parties, the Prevailing Party in
that litigation shall be entitled to recover from the non-prevailing party or
parties all reasonable attorneys' fees and costs. "Prevailing Party" shall
include, without limitation, a party who dismisses an action in exchange for
sums allegedly due; the party who receives performance from the other party for
an alleged breach of contract or a desired remedy where the performance is
substantially equal to the relief sought in the action; or the party determined
to be the prevailing party by a court of law.
22. NOTICES.
All notices to be given under this Agreement shall be in writing and sent
by:
(a) Certified mail, return receipt requested, in which case notice shall
be deemed delivered two (2) business days after deposit, postage
prepaid in the United States Mail;
(b) Personal delivery or by a nationally recognized overnight courier, in
which case notice shall be deemed delivered one (1) business day after
deposit with that courier provided that it was deposited for timely
processing by the courier for next day delivery; or
(c) Facsimile or similar means if a copy of the notice is also sent by
United States certified mail, in which case notice shall be deemed
delivered on receipt by facsimile or other similar means, provided
that the transmission was received between the hours of 8:00 a.m. and
5:00 p.m. Pacific Standard Time on a
42
business day and a transmission report is generated reflecting the
accurate transmission of the notices as follows:
BUYER: Xx. Xxxxx X. Xxxxx
Chief Engineer and General Manager
County Sanitation Districts of Los Angeles County
0000 Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000-0000
Xxxx Xxxxxx Xxx 0000
Xxxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Copy to:
B. Xxxxxxx Xxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
Knapp, Marsh, Xxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
SELLER: Xx. Xxxxxxx X. Xxxxxxx
Chairman and CEO
Mine Reclamation, LLC
00-000 Xxxxxxxx Xxxxxx, Xxxxx X
Xxxx Xxxxxx, XX 00000
Copy to:
Xx. Xxxx Xxxxxxxx
President and Chief Executive Officer
Kaiser Ventures, Inc.
0000 Xxxx Xxxxxx Xxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Xxxxx X. Xxxx, Esq.
General Counsel
Kaiser Ventures, Inc.
0000 Xxxx Xxxxxx Xxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx X. Xxxxxxx
43
Munger, Tolles, & Xxxxx, LLP
000 Xxxxx Xxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
If the facsimile or other transmission is not received between the
hours specified above, it shall be deemed to have been given as of the
next business day.
23. COSTS AND EXPENSES.
Each Party will bear its own costs and expenses in connection with
negotiating and preparing the Closing Documents, completing due diligence, and
closing the sale.
24. CONFIDENTIALITY.
All communications between the Parties regarding the sale of the Project
will be maintained strictly confidential and will not be disclosed without the
other Party's prior approval, which shall not be unreasonably withheld, or
unless required to do so:
(a) in connection with Buyer's efforts to obtain the required board of
director's approval to execute this Agreement;
(b) pursuant to court order, subpoenas, and requests for documents made
by administrative agencies, such as the Securities and Exchange
Commission having jurisdiction over the Parties (each Party shall
have the right to resist such requests);
(c) as required by law (including disclosures that may be required to be
given by Kaiser Ventures, Inc. under applicable Securities and
Exchange Commission laws, rules, and regulations.).
44
(1) as required to obtain any needed consents and approvals for the
Parties to perform their obligations under this Agreement.
25. TRANSFER OF INFORMATION.
At Close of Escrow, Seller shall deliver to Buyer all stored information
including, but not limited to, all records, files, plans, maps, electronic
files, permits, samples, data sheets, audio and video tapes, slides,
photographs, compact discs, and all other information stored in any manner in
Seller's possession or control with respect to the Project, but excluding those
privileged materials that do not contain factual or technical information
pertinent to the Project, its Permits, or permit compliance. Buyer shall have
access to all such information upon Buyer's reasonable request. Seller shall
provide Buyer with a stored information index that contains a summary of all
stored information and its location. Also, prior to the Close of Escrow, Seller
shall also deliver to Buyer an obligation summary in a form acceptable to the
Buyer. The obligation summary shall contain a summary of all of the contractual
and permit obligations of the Project owner and operator, together with its good
faith estimate of implementation schedules and costs.
26. ENTIRE AGREEMENT.
This Agreement and any documents referred to or contemplated herein and any
exhibit hereto contains the entire agreement between the Parties and shall not
be modified in any manner except by an instrument in writing executed by the
Parties or their respective successors in interest.
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27. SEVERABILITY.
If any term or provision of this Agreement shall, to any extent, be held
invalid or unenforceable, the remainder of this Agreement shall not be affected.
28. WAIVERS.
A waiver of a breach of a covenant or provision in this Agreement shall not
be deemed a waiver of any other covenant or provision in this Agreement, and no
waiver shall be valid unless in writing and executed by the waiving party. An
extension of time for performance of any obligation or act shall not be deemed
an extension of time for performance of any other obligation or act.
28. CONSTRUCTION.
The section headings and captions of this Agreement are, and the
arrangement of this instrument is, for the sole convenience of the Parties. The
section headings, captions, and arrangement of this instrument do not in any way
affect, limit, amplify, or modify the terms and provisions of this Agreement.
The singular form shall include plural, and vice versa. This Agreement shall
not be construed as if it had been prepared by one of the parties, but rather as
if both parties have prepared it. Any provision thereof that is found by a
court of proper jurisdiction to be ambiguous or inconsistent, either internally
or in relation to other provisions contained herein, shall be construed in
accordance with a fair and ordinary meaning so as to effectuate the intent of
the parties to this Agreement. Unless otherwise indicated, all references to
sections are to this Agreement. All exhibits referred to in this Agreement are
46
attached to it and incorporated in it by this reference. The preamble and all
recitals to this Agreement are also incorporated herein.
30. MERGER.
All of the terms, provisions, representations, warranties, and covenants of
the Parties shall survive the Close of Escrow and shall not be merged in the
Deed or other documents.
31. DUPLICATE ORIGINALS.
This Agreement shall be executed with duplicate originals to be retained by
each party.
32. TIME OF THE ESSENCE.
Time is of the essence in this Agreement.
33. SUCCESSORS.
This Agreement shall inure to the benefit of and shall be binding upon the
Parties and their respective successors and assigns.
34. GOVERNING LAW.
This Agreement shall be governed and construed in accordance with
California law.
35. CHIEF ENGINEER'S AUTHORITY.
The Chief Engineer is hereby authorized to execute on behalf of the Buyer
any documents, or to take related actions necessary to effectuate this
Agreement.
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36. FURTHER ASSURANCES.
Each Party agrees to execute and deliver any instruments and to perform any
actions that may be necessary, or reasonably requested, in order to give full
effect to this Agreement. Each party will use all reasonable efforts to provide
such information, execute such further instruments and documents, and take such
action as may be reasonably requested by the other Party not inconsistent with
the provisions of this Agreement and not involving the assumption of obligations
other than those provided for in this Agreement to carry out the intent of this
Agreement.
37. VENUE.
Venue for all purposes arising out of this Agreement will be in the County
of Los Angeles, California, unless prohibited by law.
38. COMPUTATION OF TIME.
As used in this Agreement, time for an act to be done shall be computed in
calendar days unless otherwise provided, shall exclude the first day and include
the last, and if the last day falls on a Saturday, Sunday, or Federal or State
of California holiday, shall be extended to the next day, which is not a
Saturday, Sunday or Federal or State of California holiday.
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The Parties have executed this Agreement as of the date first written
above.
ATTEST: XXXXXX XXXXXXXXXX XXXXXXXX XX. 0 XX XXX
XXXXXXX XXXXXX
By: /s/ M. Xxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------- ---------------------------------
Secretary Chairperson, Board of Directors
Approved as to form:
KNAPP, MARSH, XXXXX & XXXXX, L.L.P.
By: /s/ Xxxxxx X. Xxxx
-------------------------
District Counsel
ATTEST: MINE RECLAMATION, LLC
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------- ---------------------------------
Approved as to form:
By____________________________________
VOTING AGREEMENT
----------------
Kaiser Ventures, Inc. agrees that it will vote or cause to be voted its
ownership interest in Mine Reclamation Corporation in favor of the sale of the
Project to the District.
KAISER VENTURES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
Vice President of the Board
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Exhibits Available Upon the Written
-----------------------------------
Request of the
--------------
Securities and Exchange Commission
----------------------------------
50
