Exhibit 10.2
AMENDMENT TO STOCK PURCHASE AGREEMENT
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This Amendment to Stock Purchase Agreement ("Amendment") is made and
entered into on February 12, 1998, by and between Eastern Environmental
Services, Inc., a Delaware corporation ("Purchaser") on one part and United
Waste Systems, Inc., a Delaware corporation ("Seller"), on the other part.
RECITALS
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Purchaser and Seller entered into a Stock Purchase Agreement dated November
19, 1997 ("Agreement"). The parties wishing to resolve certain issues raised
between them in connection with consummating the transaction set forth in the
Agreement have entered into this Amendment. The parties have entered into this
Amendment with the intent and purpose of inducing each other to consummate the
transaction under the Agreement.
NOW, THEREFORE, intending to be legally bound hereby and in exchange for
the mutual benefits and burdens set forth in this Amendment, the parties have
agreed as follows:
1. DEFINITIONS AND INCORPORATION. All terms defined in the Agreement and
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not specifically defined in this Amendment shall have the meanings given to the
terms set forth in the Agreement. This Amendment shall be incorporated into the
Agreement and shall form part of the Agreement. The representations,
warranties, covenants and obligations of the parties, as set forth in this
Amendment, shall be deemed to be representations, warranties, covenants and
obligations of the Agreement, as fully as though they were set forth in the
Agreement.
2. VIOLATIONS. Seller agrees that it shall pay all fines and penalties
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levied in connection with the violation of Environmental Law, which violation
occurred prior to the Closing Date (the "Pre-Closing Violation"). Seller
shall take any action needed to be taken to correct a Pre-Closing Violation to
the satisfaction of the PADEP and, if applicable, the Allegheny County Health
Department ("AHD") ("Corrective Actions"). Seller shall be responsible for
paying the cost of any Corrective Actions up to an amount not to exceed
$150,000. All Pre-Closing Violations and fines levied in connection with Pre-
Closing Violations shall be corrected and paid by Seller prior to the fine or
violation having any negative impact on the Company or the Company's business
operations.
3. BALANCE SHEET AND WORKING CAPITAL. On January 28, 1998, Seller
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submitted to Purchaser updated Schedules to the Agreement. One of the updated
Schedules was a Balance Sheet and Statement of Operations for the periods ended
December 31, 1995, December 31, 1996 and December 31, 1997 ("Updated Financial
Statements"). Another Schedule submitted by Seller to Purchaser on January 28,
1998 was a summary of working capital as of December 31, 1997 ("Summary of
Working Capital"). The December 31, 1997 Balance Sheet forming a part of the
Updated Financial Statements has a negative cash balance of One Hundred Eleven
Thousand One Hundred Thirty Dollars ($111,130). Seller agrees that as of
Closing the Company shall not have a negative cash balance or if the Company
does have a negative cash balance, Seller will solely be responsible for paying
any loans, advances or outstanding checks which caused the negative cash
balance. The updated Financial Statements reflect that as of December 31, 1997
there were Inter-Company Accounts Receivable and Accounts Payable in the total
amount of $23,951,597.00. Seller represents and warrants that the Inter-Company
Liability is a liability of the Company currently owed to its corporate parent,
United Waste Systems, Inc., and/or USA Waste Services, Inc. and that such
liability will be contributed as equity to the Company prior to Closing and will
not be assumed by the Purchaser. As of the date of the Closing there shall be
no Inter-Company Account Receivable or Account Payable owed by the Company.
Purchaser and Seller agree that notwithstanding the submission of the Summary of
Working Capital, Section 3.9(d) of the Agreement shall remain in
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full force and effect and that Purchaser shall prepare a working capital
calculation as of the date of Closing within 90 days of the Closing and payment
shall be made based on the calculation as set forth in Section 3.9(d).
4. SEWER CONNECTION FEE. The Company is subject to a Consent Decree
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dated March 13, 1996 entered in the matter of Commonwealth of Pennsylvania
Department of Environmental Protection vs. Xxxxx Run Sanitation, Inc., No. 356
M.D. 1995 ("Consent Decree"). Pursuant to the Consent Decree the Company is
obligated to dispose of its leachate and ground water into the Forward Township
sanitary sewer system as soon as an intercept and sewer line were constructed
connecting the Company's Landfill into the Forward Township sanitary sewer
system. The interceptor has been constructed and the Company may connect into
it upon paying a tap in fee and connection fee totaling approximately $766,505
("Interceptor Fee"). Seller acknowledges that the Interceptor Fee shall be
treated as a current liability of the Company as of the date of Closing, for
purposes of calculating the amount of working capital and whether Purchaser owes
a payment to Seller or Seller owes a payment to Purchaser under the provisions
of Section 3.9(c) and 3.9(d) of the Agreement.
5. AMOUNT OF CONSTRUCTION COST. Section 1.3 of the Agreement provides
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that Purchaser shall reimburse Seller for all reasonable expenditures incurred
by Seller or Company from September 1, 1997 for construction of Phase III
airspace at the Landfill to the extent such capacity constructed is not consumed
as of the Closing Date ("Construction Costs"). The parties agree that the
amount of Construction Costs to be reimbursed to Seller by Purchaser for third
party costs and expenses and internal cost allocations is $410,784.80 in total.
6. PHASE II CLOSURE. Section 1.3 of the Agreement provides that the
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Purchaser shall
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reimburse the Seller for the Construction Costs and a $250,000 payment made to
Forward Township which was delivered by the Company on November 14, 1997 in
connection with the Consent Decree ("Reimbursement Payment"). The Agreement also
provides in Section 5.13 that Seller is responsible, at its own cost and
expense, to properly close the Phase II area required by the Phase II permit and
PADEP with the synthetic cap to be in place by July 1, 1998 and the closure
completed on or before September 30, 1998 ("Phase II Closure"). Notwithstanding
anything contrary to the Agreement, to secure Seller's performance under the
Agreement, as amended by the Amendment, the parties agree that the Reimbursement
Payment shall not be paid by Purchaser to Seller until such time as the Phase II
Closure has been substantially completed with all completed work paid for by
Seller. In order to expedite the Phase II Closure, Seller agrees to hire and pay
for a Project Manager who will be located at the Company's landfill and will be
in charge of all aspects of the Phase II Closure, on behalf of Seller. The
Project Manager hired by Seller shall coordinate the Phase II Closure with the
Company so that the Phase II Closure is conducted so as to minimize, to the
extent reasonably possible, any negative impact on the operations of the
Company's Landfill. If Seller requests that Purchaser's or Company's employees
perform any Phase II Closure work, Seller shall reimburse the Company for the
Company's or Purchaser's internal costs of its employees, equipment and
materials used in the Phase II Closure. The final cover soil for the Phase II
Closure shall be taken from (i) the area of the landfill which is being
excavated for the construction of a disposal cell, if at the time the cover soil
for the Phase II Closure is needed a disposal cell is being excavated, or (ii)
the Landfill's soil borrow area, if at the time the cover soil for the Phase II
Closure is needed a disposal cell is not being excavated.
7. HIGHWAY PERMIT. Seller represents and warrants to Purchaser that it
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has all
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necessary highway permits required for the Company and its customers to use the
highways around the landfill for the transport of waste to the landfill for
disposal at the rate of 1,250 tons per day.
8. NO OTHER AMENDMENTS. Except as set forth in this Amendment, there are
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no Amendments to the Agreement and the Agreement, as modified by this Amendment,
is in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
EASTERN ENVIRONMENTAL SERVICES, INC.
BY: /S/ XXXXXX X. XXXXXX
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XXXXXX X. XXXXXX, EXECUTIVE VICE PRESIDENT
UNITED WASTE SYSTEMS, INC.
BY: /S/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX, VICE PRESIDENT & TREASURER
GUARANTEE
USA Waste Services, Inc. joins this Amendment for the purposes of
financially guaranteeing Seller's obligations under the Amendment and the
Agreement.
USA WASTE SERVICES, INC.
BY: /S/ XXXXXXX X. XXXXXX
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XXXXXXX X. XXXXXX, REGIONAL VICE PRESIDENT
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