INDEX TO EXHIBITS
EXHIBIT ITEM PAGE
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2.1 Purchase Agreement, dated June 1, 1995,
by and among Green Isle Environmental
Services, Inc. (now known as Xxxxxx
Manufacturing, Inc.), Waste Management Inc.
of Florida and U S West Financial Services, Inc.
Omitted from this Exhibit, as filed, are the
exhibits and schedules referenced in such
agreement. The Company will furnish supplementally
a copy of any such exhibits and schedules to
the Commission upon request. . . . . . . . . . . . . . .
2.2 Amendment No. 1 to Purchase Agreement, dated as of
June 1, 1995, by and among Xxxxxx Manufacturing, Inc.
(formerly known as Green Isle Environmental Services,
Inc.), Waste Management Inc. of Florida and U S West
Financial Services, Inc. . . . . . . . . . . . . . . . .
Purchase Agreement EXHIBIT 2.1
by and among
Green Isle Environmental Services, Inc.
as Seller
and
Waste Management Inc. of Florida
as Purchaser
and
U S WEST Financial Services, Inc.
June 1, 1995
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS. . . . . . . . . . . 9
SECTION 1.1 Definitions . . . . . . . . . . . . . 9
SECTION 1.2 Acknowledgement . . . . . . . . . . . 18
ARTICLE 2
PURCHASE AND SALE OF COMMON STOCK . . . . . 18
SECTION 2.1 Purchase and Sale . . . . . . . . . . 18
SECTION 2.2 Purchase Consideration. . . . . . . . 19
SECTION 2.3 The Closing . . . . . . . . . . . . . 20
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER. . . . 21
SECTION 3.1 Organization, Standing, Etc.. . . . . 21
SECTION 3.2 Ownership . . . . . . . . . . . . . . 21
SECTION 3.3 Subsidiaries. . . . . . . . . . . . . 22
SECTION 3.4 Authority and Approval of Agreement. .22
SECTION 3.5 No Violations . . . . . . . . . . . . 22
SECTION 3.6 Permits . . . . . . . . . . . . . . . 23
SECTION 3.7 Contracts and Loans to Individuals. . 23
SECTION 3.8 Indebtedness. . . . . . . . . . . . . 23
SECTION 3.9 Employees . . . . . . . . . . . . . . 24
SECTION 3.10 Tax Returns . . . . . . . . . . . . . 24
SECTION 3.11 Taxes . . . . . . . . . . . . . . . . 24
SECTION 3.12 Proceedings . . . . . . . . . . . . . 25
SECTION 3.13 Consents. . . . . . . . . . . . . . . 25
SECTION 3.14 Insurance . . . . . . . . . . . . . . 25
SECTION 3.15 Customers . . . . . . . . . . . . . . 25
SECTION 3.16 Real Property Owned or Leased . . . . 25
SECTION 3.17 Financial Statements. . . . . . . . . 26
SECTION 3.18 Books and Records . . . . . . . . . . 26
SECTION 3.19 Brokerage Fees. . . . . . . . . . . . 26
SECTION 3.20 Notice of Default . . . . . . . . . . 26
2
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . 27
SECTION 4.1 Organization, Standing, Etc.. . . . . 27
SECTION 4.2 Authority and Approval of Agreement. .27
SECTION 4.3 Investment. . . . . . . . . . . . . . 28
SECTION 4.4 Broker's Commission . . . . . . . . . 28
SECTION 4.5 Private Placement . . . . . . . . . . 28
SECTION 4.6 Authorizations. . . . . . . . . . . . 28
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF U S WEST . . . 29
SECTION 5.1 Organization, Standing, Etc.. . . . . 29
SECTION 5.2 Authority and Approval of Agreement. .29
SECTION 5.3 Broker's Commission . . . . . . . . . 29
SECTION 5.4 Bonds . . . . . . . . . . . . . . . . 30
ARTICLE 6
COVENANTS OF PURCHASER . . . . . . . . 30
SECTION 6.1 Access. . . . . . . . . . . . . . . . 30
SECTION 6.2 Contracts . . . . . . . . . . . . . . 31
SECTION 6.3 Ongoing Lawsuit . . . . . . . . . . . 31
SECTION 6.4 Central Contract. . . . . . . . . . . 32
SECTION 6.5 Stay Bonuses. . . . . . . . . . . . . 32
ARTICLE 7
COVENANTS OF SELLER. . . . . . . . . 33
SECTION 7.1 Organizational Documents. . . . . . . 33
SECTION 7.2 Common Stock. . . . . . . . . . . . . 33
SECTION 7.3 Books . . . . . . . . . . . . . . . . 34
SECTION 7.4 Resignation . . . . . . . . . . . . . 34
SECTION 7.5 Cancellation. . . . . . . . . . . . . 34
SECTION 7.6 Change in Information . . . . . . . . 34
SECTION 7.7 Conduct of Business . . . . . . . . . 34
SECTION 7.8 Write-Off of Assets; Sale of Assets . 35
SECTION 7.9 Non-Compete . . . . . . . . . . . . . 35
3
SECTION 7.10 Best Efforts After Closing. . . . . . 36
SECTION 7.11 Audited Financial Statement . . . . . 36
ARTICLE 8
COVENANTS OF PURCHASER, U S WEST AND SELLER. . . 36
SECTION 8.1 Reasonable Commercial Efforts . . . . 36
SECTION 8.2 Certain Filings . . . . . . . . . . . 36
SECTION 8.3 Employment Contract . . . . . . . . . 37
SECTION 8.4 Indebtedness. . . . . . . . . . . . . 37
SECTION 8.5 Ongoing Lawsuit . . . . . . . . . . . 37
SECTION 8.6 Release . . . . . . . . . . . . . . . 38
SECTION 8.7 Covenants . . . . . . . . . . . . . . 38
ARTICLE 9
TAX MATTERS. . . . . . . . . . . 38
SECTION 9.1 Tax Definitions . . . . . . . . . . . 38
SECTION 9.2 Tax Covenants and Elections . . . . . 39
SECTION 9.3 Cooperation on Tax Matters. . . . . . 41
SECTION 9.4 Real Estate Tax Indemnification . . . 41
SECTION 9.5 Transfer Taxes. . . . . . . . . . . . 43
ARTICLE 10
CONDITIONS PRECEDENT TO CLOSING. . . . . . 43
SECTION 10.1 Conditions Precedent to Obligations
of Purchaser . . . . . . . . . . . . . . . . . . 43
(a) Representations. . . . . . . . . . . . . . 43
(b) Compliance Certificates. . . . . . . . . . 44
(c) No Injunctions . . . . . . . . . . . . . . 44
(d) No Prohibition . . . . . . . . . . . . . . 44
(e) Inventory. . . . . . . . . . . . . . . . . 44
SECTION 10.2 Conditions Precedent to Obligations
of Seller and U S WEST. . . . . . . . .. . . . . 44
(a) Representations; Covenants . . . . . . . . 44
(b) Compliance Certificates. . . . . . . . . . 45
(c) Delivery of Purchase Price . . . . . . . . 45
(d) Other Transactions . . . . . . . . . . . . 45
4
(e) Other Documents and Transactions . . . . . 45
(f) No Injunctions . . . . . . . . . . . . . . 45
(g) Absence of Actions or Proceedings. . . . . 45
(h) No Prohibition . . . . . . . . . . . . . . 46
ARTICLE 11
LIMITATION OF LIABILITY. . . . . . . . 46
SECTION 11.1 Limitation of Liability among the
Parties. . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.2 Limitation of Liability -
Xx. Xxxxxxxxx. . . . . . . . . . . . . . . . . . 47
ARTICLE 12
RESTRICTIVE LEGEND . . . . . . . . . 47
SECTION 12.1 Restrictive Legend on Certificates. . 47
SECTION 12.2 Removal of Restrictive Legend . . . . 48
ARTICLE 13
TERMINATION. . . . . . . . . . . 48
SECTION 13.1 Expiration of Due Diligence Period. . 48
SECTION 13.2 Seller's or U S WEST's Default. . . . 49
SECTION 13.3 Purchaser's Default . . . . . . . . . 50
SECTION 13.4 Effect of Termination . . . . . . . . 51
SECTION 13.5 Return of Corporation Information . . 52
ARTICLE 14
MISCELLANEOUS . . . . . . . . . . 52
SECTION 14.1 Investigation by Purchaser. . . . . . 52
(a) Access to Project Information. . . . . . . 52
(b) Right to Enter Facilities. . . . . . . . . 52
(c) Cooperation. . . . . . . . . . . . . . . . 54
SECTION 14.2 Condition of Facilities . . . . . . . 54
SECTION 14.3 Notices . . . . . . . . . . . . . . . 56
SECTION 14.4 No Waivers; Amendments. . . . . . . . 58
SECTION 14.5 Confidentiality . . . . . . . . . . . 58
SECTION 14.6 Public Announcements. . . . . . . . . 59
SECTION 14.7 Prohibition of Recording. . . . . . . 60
5
SECTION 14.8 Arbitration . . . . . . . . . . . . . 60
SECTION 14.9 Time of the Essence . . . . . . . . . 61
SECTION 14.10 Successors and Assigns. . . . . . . . 62
SECTION 14.11 Governing Law . . . . . . . . . . . . 62
SECTION 14.12 Severability. . . . . . . . . . . . . 62
SECTION 14.13 Counterparts; Date Hereof;
Effectiveness. . . . . . . . . . . . . . . . . . 62
SECTION 14.14 Entire Agreement. . . . . . . . . . . 63
SECTION 14.15 Expenses. . . . . . . . . . . . . . . 63
SECTION 14.16 Survival of Representations
and Warranties . . . . . . . . . . . . . . . . . 63
SECTION 14.17 Indemnification . . . . . . . . . . . 63
SECTION 14.18 Third Party Beneficiary . . . . . . . 64
6
SCHEDULES
Schedule 3.3 - Subsidiaries
Schedule 3.6 - Permits
Schedule 3.7 - Contracts and Loans to Individuals
Schedule 3.12 - Proceedings
Schedule 3.13 - Consents
Schedule 3.14 - Insurance
Schedule 3.15 - Customers
Schedule 3.16 - Real Estate
Schedule 3.17 - Financial Statements
Schedule 4.6 - Authorizations
Schedule 6.5 - Individuals
7
EXHIBITS
Exhibit A - Form of Escrow Agreement
Exhibit B - Form of Ongoing Lawsuit Release
and Indemnification Agreement
Exhibit C - Form of Assignment of Excluded
Assets
Exhibit D - Form of Release and Cancellation
of Inter-Company Obligations
Agreement
Exhibit E - Letter from City of Pembroke Pines
Exhibit F - Form of Restated Central Contract
Exhibit G - Secretary's Certificate of Seller
Exhibit H - Secretary's Certificate of U S WEST
Exhibit I - Secretary's Certificate of Purchaser
Exhibit J - Form of Investor Letter
8
This PURCHASE AGREEMENT (the "AGREEMENT"), dated
as of June 1, 1995, is by and among Green Isle Environmental
Services, Inc., a Minnesota corporation ("SELLER"), Waste
Management Inc. of Florida, a Florida corporation ("PURCHASER"),
and U S WEST Financial Services, Inc., a Colorado corporation
("U S WEST").
W I T N E S S E T H:
WHEREAS, Seller owns 1,000 shares of $1.00 par
value common stock of Xxxxxx Recycling of Florida, Inc., a
Florida corporation (the "CORPORATION") which constitutes
all the issued and outstanding stock of the Corporation;
WHEREAS, the Corporation is in the business of
operating a compost, recycling and transfer station in
Pembroke Pines, Florida (the "BUSINESS");
WHEREAS, the Corporation is indebted to U S WEST
under the Bonds (as hereinafter defined) and certain other
indebtedness secured by the Existing Mortgage (as
hereinafter defined) (collectively, the "INDEBTEDNESS"); and
WHEREAS, subject to the terms and conditions set
forth herein, Purchaser or its designee desires to purchase
the Common Stock (as hereinafter defined) from Seller and
the Indebtedness from U S WEST and Seller desires to sell
the Common Stock, and U S WEST desires to sell the
Indebtedness, to Purchaser or its designee;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein and for other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and affirmed, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS. In addition to the
terms defined elsewhere herein, when used in this Agreement,
the following terms have the meanings indicated:
9
"AAA" means the American Arbitration Association.
"ACCOUNTS RECEIVABLE" has the meaning specified in
the definition of Adjustment Amount.
"ADJUSTMENT AMOUNT" means an amount equal to the
difference between: (1) the balance of all cash and cash
equivalents (including, without limitation, cash and cash
equivalents that are pledged or that otherwise collateralize
letter of credit obligations) and all of the accounts
receivable of the Corporation on the Closing Date (such
cash, cash equivalents and accounts are hereinafter
collectively referred to as the "ACCOUNTS RECEIVABLE"); and
(2) the sum of: (a) trade payables of the Corporation on the
Closing Date (excluding (i) any payments and/or obligations
due from the Corporation to Seller including, without
limitation, payments and/or obligations due under the
Management Agreement and (ii) any Ad Valorem Taxes), (b) any
and all amounts due to Xxxxxxxx in respect of transportation
and disposal obligations to Xxxxxxxx under the Xxxxxxxx
Contract on the Closing Date plus (c) any host fees which
are due from the Corporation to the City of Pembroke Pines,
Florida on the Closing Date (collectively, the "PAYABLES").
The foregoing determinations shall be made in accordance
with generally accepted accounting principles consistently
applied.
"AD VALOREM TAXES" means all Florida ad valorem
Taxes (including real and personal property Taxes) and any
interest or penalty incurred in respect thereof in respect
of the Facilities that are incurred during the period from
January 1, 1993 through the Closing Date.
"AFFILIATE" means, as to any Person, any other
Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under
common control with, the specified Person including, without
limitation, past and/or current officers, directors and
employees of the specified Person; and in addition, with
respect to Seller, the term "Affiliate" includes, without
limitation, the Corporation and past and/or current
officers, directors and individuals working at the
Corporation.
"AGREEMENT" has the meaning specified in the first
paragraph of this Agreement.
10
"ASSIGNMENT OF EXCLUDED ASSETS" means that certain
assignment agreement in respect of the Excluded Assets,
dated as of the Closing Date, by and between the Corporation
and U S WEST, the form of which is attached hereto as
EXHIBIT C.
"BONDS" means approximately $25 million City of
Pembroke Pines, Florida Adjustable Tender Solid Waste
Industrial Development Revenue Bonds, Series 1993 (Xxxxxx
Recycling of Florida, Inc. Project) and any and all
documents or instruments related thereto.
"BUSINESS" has the meaning specified in the
recitals of this Agreement.
"BUSINESS DAY" means a day other than a Saturday,
Sunday, or other day on which commercial banks in Florida
are authorized or required by law to close.
"CENTRAL CONTRACT" means that certain agreement,
dated as of December 16, 1991, by and between Central
Sanitary Landfill and Recycling Center, a division of
Purchaser, and the Corporation.
"XXXXXXXX" means Xxxxxxxx Waste Systems of
Florida, Inc.
"XXXXXXXX CONTRACT" means the Transfer Station
Agreement, dated June 30, 1993, between the Corporation and
Xxxxxxxx.
"CLOSING" has the meaning specified in Section 2.3
of this Agreement.
"CLOSING DATE" has the meaning specified in
Section 2.3 of this Agreement.
"CLOSING DATE ADJUSTMENT STATEMENT" has the
meaning specified in Section 2.2(b) of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute
thereto.
"COMMISSION" means the Securities and Exchange
Commission.
11
"COMMON STOCK" means 1,000 shares of $1.00 par
value common stock of the Corporation.
"CONSENT" means any consent, approval, order or
authorization of, or any declaration, filing or registration
with, or any application or report to, or any waiver by, or
any other action (whether similar or dissimilar to any of
the foregoing) of, by or with, any Person, which is
necessary in order to take specified action or actions, in a
specified manner and/or to achieve a specific result.
"CONTRACT" means any written or oral contract,
agreement, order or commitment of any nature whatsoever,
including, without limitation, any sales order, purchase
order, lease, sublease, license agreement, sublicense
agreement, loan agreement, security agreement, guarantee,
management contract, employment agreement, consulting
agreement, partnership agreement, buy-sell agreement,
option, warrant, subscription, call or put.
"CORPORATION" has the meaning specified in the
recitals of this Agreement.
"CORPORATION BALANCE SHEET" has the meaning
specified in Section 3.17 of this Agreement.
"CORPORATION INCOME STATEMENT" has the meaning
specified in Section 3.17 of this Agreement.
"CORPORATION INFORMATION" has the meaning
specified in Section 14.1(a) of this Agreement.
"DUE DILIGENCE EXPIRATION DATE" has the meaning
specified in Section 13.1 of this Agreement.
"XXXXXXX MONEY" has the meaning specified in
Section 2.1(a) of this Agreement.
"EMPLOYMENT CONTRACT" means that certain
employment agreement, dated as of October 1994, between the
Corporation and Total Employee Leasing Services, L.P.
12
"ENCUMBRANCE" means any lien, security interest,
pledge, mortgage, easement, leasehold, assessment, covenant,
restriction, reservation, conditional sale, prior
assignment, or any other encumbrance, claim, burden or
charge of any nature whatsoever.
"ERISA" has the meaning specified in Section 3.9
of this Agreement.
"ESCROW AGENT" means the Escrow Agent named in the
Escrow Agreement.
"ESCROW AGREEMENT" means that certain escrow
agreement, dated as of the date hereof, by and among
Purchaser, Seller, U S WEST and the Escrow Agent, the form
of which is attached hereto as EXHIBIT A.
"ESTIMATED ADJUSTMENT AMOUNT" has the meaning
specified in Section 2.2(a) of this Agreement.
"EXCLUDED ASSETS" means a chose in action which
the Corporation has against Buhler, Inc., and which will be
assigned to U S WEST at or prior to Closing.
"EXCLUDED EVENTS" has the meaning specified in the
definition of Material Adverse Effect.
"EXISTING MORTGAGE" means that certain Mortgage
and Security Agreement, dated as of March 1, 1990, between
the Corporation as mortgagor and U S WEST as mortgagee,
recorded in Official Records Books 17236, on page 507 of the
Public Records of Broward County, Florida and a related
receipt for future advances under mortgage providing for
future advances, dated as of November 25, 1992, between the
Corporation and U S WEST, recorded in Official Records Book
2127, page 550 of the Public Records of Broward County,
Florida, the indebtedness secured thereby, and any and all
documents and instruments related thereto.
"FACILITIES" has the meaning specified in Section
14.1(b) of this Agreement.
"FOUR CITIES" means the cities in the State of
Florida known as Pompano Beach, Pembroke Pines, Hallandale
and Dania.
13
"FOUR CITIES CONTRACT" means that certain Waste
Disposal Agreement, dated February 15, 1988, between the
Corporation and the Four Cities, as amended by Consent and
Agreement, dated February 1, 1990, among the Corporation,
Four Cities and U S WEST.
"GOVERNMENTAL AUTHORITY" means any nation or
government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"INCOME TAX" has the meaning specified in Section
9.1 of this Agreement.
"INDEBTEDNESS" means the Bonds and the Existing
Mortgage.
"INVESTIGATIONS" has the meaning specified in
Section 14.1(b) of this Agreement.
"JUDGMENT" means any order, writ, injunction,
fine, citation, award, decree or any other judgment of any
nature whatsoever of any foreign, federal, state or local
court, any governmental, administrative or regulatory
authority, or any arbitration tribunal.
"KNOWLEDGE" means the actual knowledge of a
Responsible Officer of the applicable Person.
"LAW" means any provision of any law, statute,
ordinance, constitution, charter, treaty, rule or regulation
of any foreign, federal, state or local governmental,
administrative or regulatory authority.
"MANAGEMENT AGREEMENT" means that certain
Management Agreement, dated November 1, 1992, between Seller
and the Corporation.
"MATERIAL ADVERSE EFFECT" means a material adverse
effect on or material adverse change in (a) the liabilities
or financial condition of the Corporation; or (b) the
ability of the Corporation to perform its obligations under
14
this Agreement; PROVIDED, HOWEVER, that a Material Adverse
Effect shall not include or arise as a result of (i) a write
down of the carrying value or market value of the assets of
the Corporation or the Corporation's assignment of the
Excluded Assets to U S WEST, (ii) the Facilities' not being
operational as a composting or a recycling facility, (iii)
any change in the condition or impairment of any of the
assets of the Corporation that constitute property, plant,
fixtures, equipment or inventory, or (iv) any action or
claim that is threatened, asserted, initiated or prosecuted
by or on behalf of any Governmental Authority (collectively,
(i), (ii, (iii) and (iv) are hereinafter referred to as
"EXCLUDED EVENTS"). For purposes of this Agreement and
notwithstanding anything to the contrary contained in this
Agreement, no Excluded Event or occurrence or omission which
with the passage of time could become an Excluded Event
shall be deemed to be a Material Adverse Effect and no other
event, change or breach will be deemed material unless it
involves, individually or in the aggregate with other events
or changes (other than events and changes arising from or in
connection with Excluded Events), an amount in excess of
$1,000,000. Further, and notwithstanding anything to the
contrary contained in this Agreement, the threat, assertion,
initiation or prosecution of any action or claim by
Xxxxxxxx, with respect to the Xxxxxxxx Contract, shall not
be deemed to be a Material Adverse Effect unless Xxxxxxxx
obtains an injunction that prevents the Closing and the
threat, assertion, initiation or prosecution of any action
or claim by the Four Cities against the Corporation or
Purchaser shall not be deemed to be a Material Adverse
Effect unless the Four Cities obtain an injunction that
prevents the Closing.
"ONGOING LAWSUIT" means Purchaser's lawsuit
pending against the Corporation and U S WEST captioned WASTE
MANAGEMENT INC. OF FLORIDA X. XXXXXX RECYCLING OF FLORIDA,
INC. AND U S WEST FINANCIAL SERVICES, INC., Case No.
93-22318(12), filed in the Circuit Court of Broward County,
Florida.
"ONGOING LAWSUIT CONTINUATION EVENTS" has the
meaning specified in Section 6.3 of this Agreement.
"ONGOING LAWSUIT RELEASE AND INDEMNIFICATION
AGREEMENT" means a release and indemnification agreement
substantially in the form attached hereto as EXHIBIT B,
pursuant to which Purchaser (a) dismisses the Ongoing
Lawsuit with prejudice and (b) releases all claims with
respect to the Ongoing Lawsuit.
15
"PAYABLES" has the meaning specified in the
definition of Adjustment Amount.
"PERMIT" means the permits listed on SCHEDULE 3.6.
"PERSON" means any natural person, corporation,
limited partnership, general partnership, joint stock
company, joint venture, limited liability company, limited
liability partnership, association, firm, company, trust,
bank, trust company, land trust, business trust,
Governmental Authority or other organization, whether or not
a legal entity.
"POST-CLOSING TAX PERIOD" has the meaning
specified in Section 9.1 of this Agreement.
"PRE-CLOSING TAX PERIOD" has the meaning specified
in Section 9.1 of this Agreement.
"PROCEEDING" means any demand, claim, suit,
action, litigation, investigation, arbitration,
administrative hearing notice or any other proceeding of any
nature whatsoever.
"PURCHASE PRICE" has the meaning specified in
Section 2.2 of this Agreement.
"PURCHASER" has the meaning specified in the first
paragraph of this Agreement, its nominees or assigns.
"PURCHASER'S TERMINATION NOTICE" has the meaning
specified in Section 13.1 of this Agreement.
"RELATED DOCUMENTS" means (i) the Ongoing Lawsuit
Release and Indemnification Agreement, (ii) the Escrow
Agreement and (iii) the Release and Cancellation of Inter-
Company Obligations.
"RELATED PARTIES" means, as to any Person, the
past and current officers, directors, shareholders,
employees, agents, servants and Affiliates of the specified
Person.
16
"RELEASE AND CANCELLATION OF INTER-COMPANY
OBLIGATIONS" means that certain release and cancellation
agreement, dated as of the Closing Date, by and between
Seller and the Corporation, the form of which is attached
hereto as EXHIBIT D.
"RESPONSIBLE OFFICER" means the chief executive
officer, the president or any vice president or general
partner of the applicable Person (including, with respect to
the Corporation, and solely in his capacity as President of
the Corporation, Xxxxx X. Xxxxxx and solely in his capacity
as Vice President of the Corporation, Xxxxx X. Xxxxxxxxx).
"RESTATED CENTRAL CONTRACT" has the meaning
specified in Section 6.4 of this Agreement.
"RESTRICTION" has the meaning specified in Section
12.2 of this Agreement.
"RETURN" has the meaning specified in Section 9.1
of this Agreement.
"SECURITIES ACT" means the Securities Act of 1933,
as amended, or any similar federal statute, and the rules
and regulations of the Commission thereunder, all as the
same shall be in effect at the applicable time.
"SELLER" has the meaning specified in the first
paragraph of this Agreement.
"SETTLEMENT AGREEMENTS" has the meaning specified
in Section 9.2(b) of this Agreement.
"SUBSIDIARY" means, as to any Person, (i) any
corporation or other entity a majority of the capital stock
of which having ordinary voting power to elect a majority of
the board of directors (or other Persons performing similar
functions) is at the time owned, directly or indirectly,
through one or more Subsidiaries, by such Person or (ii) a
partnership in which such Person or a Subsidiary of such
Person is a general partner.
"SUPPLEMENTAL CLOSING" has the meaning specified
in Section 2.2(b) of this Agreement.
17
"SURVIVING OBLIGATIONS" means the obligations that
are set forth in Article 1, Sections 6.3 (to the extent set
forth therein) and 6.4, Article 11, Article 13, Sections
14.1(b), 14.3, 14.4, 14.5, 14.6, 14.7, 14.8, 14.10, 14.11,
14.12, 14.13, 14.14, and 14.15 of this Agreement, and the
Restated Central Contract, which survive termination of this
Agreement.
"TAX" or "TAXES" has the meaning specified in
Section 9.1, and with respect to a particular tax, includes
the tax together with all governmental fees, assessments,
charges, interest, penalties, fines and additions thereto.
"TAX ASSET" has the meaning specified in Section
9.1 of this Agreement.
"TAXING AUTHORITY" has the meaning specified in
Section 9.1 of this Agreement.
"TAX INDEMNITY PAYMENT" means any indemnification
payment or payment of Ad Valorem Taxes paid by U S WEST
pursuant to Section 9.4 of this Agreement.
"TAX LITIGATION" means the Ad Valorem Tax
challenges being conducted by the Corporation with respect
to Ad Valorem Taxes.
"TRANSFER TAXES" has the meaning specified in
Section 2.3(b) of this Agreement.
"U S WEST" has the meaning specified in the first
paragraph of this Agreement.
SECTION 1.2 ACKNOWLEDGEMENT. The parties to
this Agreement hereby acknowledge that: (i) indications of
interest to purchase the Common Stock and the Bonds have
been received from a number of third parties, (ii) if no
Cancellation Notice is received by the Cancellation Date, on
the Cancellation Date, Seller will cease actively pursuing
any such negotiations with third parties until the earlier
of the Closing or a termination of this Agreement and (iii)
concurrently with the Closing, U S WEST shall release Seller
and its Related Parties and the Corporation from any
liability to U S WEST arising from the Indebtedness and the
Business.
18
ARTICLE 2
PURCHASE AND SALE OF COMMON STOCK
SECTION 2.1 PURCHASE AND SALE. At Closing,
subject to the terms and conditions set forth in this
Agreement, Seller agrees to sell the Common Stock to
Purchaser or its designee, and simultaneous therewith, U S
WEST agrees to convey the Indebtedness to Purchaser or its
designee, and Purchaser or its designee agrees to pay the
Purchase Price to U S WEST. U S WEST and Seller agree that
payment of the Purchase Price to U S WEST as Seller's
designee constitutes valid consideration to both Seller and
U S WEST under this Agreement. The Purchase Price shall be
payable as follows:
(a) Upon execution of this Agreement by all
parties hereto, delivery to the Escrow Agent of a deposit of
the sum of $2,000,000 in immediately available funds (the
"XXXXXXX MONEY") to be held in an interest-bearing trust
account until applied to the Purchase Price at the Closing
or until distributed in whole or in part to Purchaser or U S
WEST in accordance with Section 13.4 of this Agreement and
the Escrow Agreement; and
(b) At the Closing, delivery to U S WEST of the
balance of the Purchase Price.
SECTION 2.2 PURCHASE CONSIDERATION.
(a) The "PURCHASE PRICE" shall be (i) the sum of
Eighteen Million Two Hundred Fifty Thousand Dollars
($18,250,000) plus an amount equal to the dollar amount of
the Adjustment Amount (if the Accounts Receivable exceed the
Payables) or less an amount equal to the Adjustment Amount
(if the Payables exceed the Accounts Receivable) and (ii)
Purchaser's assignment of any property interest of any
nature it may have (whether vested, contingent, residual or
reversionary) to the Excluded Assets in accordance with the
terms of the Assignment of Excluded Assets, a form of which
is attached hereto as EXHIBIT C. The parties hereto agree
that at Closing they shall use their best efforts to agree
upon a good faith estimate of the Adjustment Amount (the
"ESTIMATED ADJUSTMENT AMOUNT") and that at Closing, the
Purchase Price shall be adjusted by the Estimated Adjustment
Amount as provided in the foregoing sentence, subject,
however, to final adjustment as provided in subsection
2.2(b) below.
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(b) The Purchase Price shall be further adjusted
in the manner provided in this Section 2.2(b).
(i) Within 30 days after the Closing Date,
Seller shall cause a consolidated statement of the
Adjustment Amount (the "CLOSING DATE ADJUSTMENT STATEMENT")
prepared in accordance with generally accepted accounting
principles and certified to be true and correct in all
material respects by Coopers & Xxxxxxx to be delivered to
Purchaser and U S WEST. During such period from the Closing
Date until the date of delivery of the Closing Date
Adjustment Statement, Purchaser shall give Seller, U S WEST
and their representatives and agents such assistance and
access to the books and records of the Corporation as Seller
or U S WEST shall request in order to provide for the
preparation of the Closing Date Adjustment Statement. The
fees and expenses of Seller and U S WEST in connection with
the preparation of the Closing Date Adjustment Statement
shall be paid by Purchaser.
(ii) Purchaser shall have a period of
ten days after delivery of the Closing Date Adjustment
Statement to present in writing to Seller and U S WEST any
objections Purchaser may have to any of the matters set
forth therein, which objections shall be specified in
reasonable detail. If no objections are raised within such
ten-day period, the Closing Date Adjustment Statement shall
be deemed approved and accepted by Purchaser and a
supplemental closing (the "SUPPLEMENTAL CLOSING") shall take
place five Business Days following the expiration of such
ten-day period, or on such other date as may be mutually
agreed upon in writing by Seller, U S WEST and Purchaser.
At the Supplemental Closing, Purchaser shall pay to U S
WEST, as the designee of Seller, or U S WEST, as the
designee of Seller, shall pay to Purchaser, as the case may
be, such amount as is necessary to adjust the Purchase Price
based on the Closing Date Adjustment Statement. If
Purchaser, Seller or U S WEST raises any objections within
the ten-day period, Purchaser, Seller and U S WEST shall
attempt to resolve the matter or matters in dispute and, if
resolved, the Supplemental Closing shall take place five
Business Days following such resolution. If such dispute
cannot be resolved within 30 days after the delivery of the
Closing Date Adjustment Statement, then the specific matters
in dispute shall be submitted to arbitration in accordance
with Section 14.8 of this Agreement. In that event, the
Supplemental Closing shall take place five Business Days
after the receipt by Seller, U S WEST and Purchaser of a
written determination of the dispute by the arbitrators
pursuant to Section 14.8 of this Agreement.
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SECTION 2.3 THE CLOSING.
(a) The closing (the "CLOSING") of the
transactions provided for in this Agreement will take place
at 10:00 a.m. (New York City Time) as soon as practicable
following (i) the Due Diligence Expiration Date; (ii) the
receipt of all requisite regulatory approvals; and (iii) the
satisfaction or waiver of the conditions precedent set forth
in Article 10 of this Agreement, but in any event no later
than the date that is 150 days after the date hereof;
provided that if such day is not a Business Day, the Closing
shall take place no later than the next Business Day
thereafter, or such earlier date as the parties hereto may
agree upon, at the offices of Weil, Gotshal & Xxxxxx, 000
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx or at such other
place and time as the parties may agree to in writing. The
date and time of Closing is referred to herein as the
"CLOSING DATE."
(b) All transfer, documentary, stamp (including
Florida documentary stamp Taxes) and registration Taxes
(including any penalties and interest) (collectively,
"TRANSFER TAXES") incurred pursuant to the closing of the
sale and transfer of the Common Stock under this Agreement
shall be borne and paid by Purchaser, and Seller will file
all necessary Transfer Tax returns and other documentation
with respect to all such Transfer Taxes, and, if required by
applicable law, Purchaser will, and will cause its
Affiliates to, join in the execution of any such Transfer
Tax returns and other documentation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to
Purchaser, to its Knowledge, after reasonable inquiry, (i)
as of the date hereof and (ii) on the Closing Date, which
representations and warranties shall survive in accordance
with Section 14.16 of this Agreement, as follows:
SECTION 3.1 ORGANIZATION, STANDING, ETC. The
Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Florida. The Corporation has all requisite corporate power
and authority to own and operate its properties and to carry
on its Business as presently conducted and is in good
standing as a foreign corporation and licensed or qualified
to transact business in each jurisdiction in which the nature of the
21
properties owned or leased by it or the
Business transacted by it requires it to be so qualified,
except those jurisdictions, if any, in which the failure to
so qualify would not have a Material Adverse Effect. The
Corporation has not and does not engage in any material
business line other than the operation of the compost,
recycling and transfer station in Pembroke Pines, Florida.
SECTION 3.2 OWNERSHIP. The authorized capital
stock of the Corporation consists of ten thousand (10,000)
shares of $1.00 par value common stock, One Thousand (1,000)
shares of which are issued and outstanding. All the issued
and outstanding Common Stock of the Corporation is duly
authorized, validly issued, fully paid and nonassessable,
and, except with respect to the transfer of shares
contemplated hereby, all Taxes related to the issuance or
transfer of such shares have been timely paid. No person
other than Seller owns or has any legal or beneficial
interest in the Common Stock, except for a conditional, non-
vested beneficial interest to the extent that the Common
Stock is pledged to U S WEST as security for the
Indebtedness. At the Closing, the Common Stock shall
constitute one hundred percent (100%) of the issued and
outstanding capital stock of the Corporation and, upon the
payment of the Purchase Price in immediately available funds
to U S WEST, legal and beneficial ownership of the Common
Stock shall be transferred to and vested in Purchaser free
and clear of all Encumbrances. There are no Contracts
(including, but not limited to, any option, warrant, call or
commitment) to which Seller or the Corporation is a party or
by which either of them may be bound which relate to the
issuance, sale, redemption, pledge or other disposition of
any capital stock of the Corporation or any other securities
of the Corporation.
SECTION 3.3 SUBSIDIARIES. Except as disclosed
on SCHEDULE 3.3 with respect to Subsidiaries and SCHEDULE
3.7 with respect to loans, the Corporation has no
Subsidiaries and does not own any material percentage of
equity securities of any Person or have any material
investment in, loans or advances to, or other interest in,
directly or indirectly, any Person.
SECTION 3.4 AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement
and any other documents, instruments and agreements executed
by or on behalf of Seller in connection herewith and the
performance of Seller's obligations hereunder and thereunder
have been duly authorized and approved by all requisite
corporate action on the part of Seller pursuant to
applicable Law (other than under the
22
HSR Act). Seller has the power and authority to execute and
deliver this Agreement and any other documents, instruments and
agreements executed in connection herewith and to perform
all its obligations hereunder and thereunder (other than
under the HSR Act).
(b) This Agreement and each of the other
documents, instruments and agreements executed by Seller in
connection herewith constitute valid and legally binding
agreements of Seller, enforceable against it in accordance
with their respective terms, except to the extent that
enforceability thereof may be limited by: (i) applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the
enforcement of the rights and remedies of creditors; and
(ii) general principles of equity.
SECTION 3.5 NO VIOLATIONS. Except with
respect to the Four Cities Contract and the Xxxxxxxx
Contract as to which no representations or warranties,
either express or implied, are made at any time, neither the
execution, delivery or performance of this Agreement or any
other documents, instruments or agreements executed by
Seller in connection herewith, nor the consummation of the
transactions contemplated hereby and thereby:
(i) constitutes a violation of or default under (either
immediately, upon notice or after lapse of time) the
Articles of Incorporation or Bylaws of Seller, or to the
best of Seller's Knowledge, a material violation of or
default under any mortgage, indenture, agreement, Contract,
commitment, lease, plan, Permit or other instrument,
document or agreement, oral or written, to which Seller or
the Corporation is a party or by which the Corporation may
be bound, or to the best of Seller's Knowledge gives any
party with rights thereunder the right to terminate, modify,
accelerate or otherwise change the existing rights or
obligations of the Corporation thereunder in any material
respect, or any material Judgment or any material Law
applicable to Seller; or (ii) will result in the creation or
imposition of any material Encumbrance upon, or give to any
third person any interest in or right to the Common Stock or
any material interest in or right to any of the assets of
the Corporation (other than under or in connection with the
HSR Act). The Corporation is in material compliance with
all applicable Laws.
SECTION 3.6 PERMITS. SCHEDULE 3.6 hereto
lists all material Permits held by the Corporation. Except
as specified in SCHEDULE 3.6, all such Permits are in
effect. To the best of Seller's Knowledge, the Corporation
has not received any notice of any claim of default or any
other notice with respect to any such Permit except as
disclosed on SCHEDULE 3.6.
23
SECTION 3.7 CONTRACTS AND LOANS TO
INDIVIDUALS. Except with respect to certain loans to
individuals disclosed on SCHEDULE 3.7, to the best of
Seller's Knowledge, attached as SCHEDULE 3.7 hereto is a
correct and complete listing of all written Contracts or
other written agreements that the Corporation is a party to
that are material to the operation of the Facilities in the
manner presently operated by the Corporation. To the best
of Seller's Knowledge, except for the Contracts or other
written agreements listed on SCHEDULE 3.7, the Corporation
is not a party to any material written or oral contract. To
the best of Seller's Knowledge, each Contract listed on
SCHEDULE 3.7 hereto is enforceable against it except to the
extent that enforceability thereof may be limited by (i)
applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting
the rights and remedies of creditors and (ii) general
principles of equity.
SECTION 3.8 INDEBTEDNESS. To the best of
Seller's Knowledge, the Indebtedness and any and all
documents related thereto to which the Corporation is a
party constitute valid and legally binding agreements of the
Corporation enforceable against the Corporation in
accordance with their respective terms except to the extent
that enforceability thereof may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the rights and
remedies of creditors and (ii) equitable principles.
SECTION 3.9 EMPLOYEES. To the best of
Seller's Knowledge, all persons working for the Corporation
are employed under the Employment Contract. Seller
covenants and agrees that it shall not terminate the
Employment Contract prior to the Closing Date. No persons
who are employed under the Employment Contract participate
in any employee benefit plan, as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974
("ERISA") of the Corporation, nor in any other retirement,
profit-sharing, deferred compensation, bonus, stock option,
stock purchase or employee benefit plan or arrangement of
the Corporation. The Corporation is not a member of a
controlled group of corporations of which any member has
terminated, or will terminate before the Closing Date, any
plan subject to Title IV of ERISA. The Corporation does not
contribute to any "multi-employer plan," as defined in
section 414(f) of the Code or section 3(37) of ERISA, and
has not made a complete or partial withdrawal from any
multi-employer plan so as to incur withdrawal liability
under section 4201 of ERISA (without regard to subsequent
reduction or waiver of such liability under section 4207 or
4208 or ERISA).
24
SECTION 3.10 TAX RETURNS. The Corporation has
filed with the appropriate Taxing Authority all material
Returns required by applicable Law to be filed by it, and
all such Returns have been accurately prepared and properly
completed in all material respects. All material Taxes,
including, without limitation, those which are called for by
the Returns, have been accrued or paid.
SECTION 3.11 TAXES. Except for the assessment
challenge that is pending which relates to Ad Valorem Taxes,
no claim for any Tax due from or assessed against the
Corporation is being contested by the Corporation. None of
the Corporation's Returns is currently being audited by a
Tax Authority, and except with respect to Ad Valorem Taxes,
the Corporation has not received any notice of deficiency or
other adjustment from a Taxing Authority that is
unsatisfied. To the best of Seller's Knowledge, the
Corporation has not received written notice of any pending
Tax examinations or Tax claims, including, but not limited
to, withholding claims asserted against the Corporation or
any of its assets or properties, there are no material Tax
liens on any of the assets or properties of the Corporation,
there are no material agreements, waivers or other
arrangements providing an extension of time with respect to
the assessment of any Tax against the Corporation, nor are
there any Tax proceedings now pending or, to the best of
Seller's Knowledge, threatened against the Corporation. To
the best of Seller's Knowledge, there is no basis for any
additional assessment of any material Taxes.
SECTION 3.12 PROCEEDINGS. The Corporation is
not a party to any Proceeding, except as set forth in
SCHEDULE 3.12. The Corporation is not contemplating the
institution of any Proceeding. Neither Seller nor the
Corporation is a party to or subject to any provisions or
Judgment which materially and adversely affects the Common
Stock, the Business operations of the Corporation as
presently conducted, or the assets or properties of the
Corporation.
SECTION 3.13 CONSENTS. Except (i) as set forth
on SCHEDULE 3.13 hereto and (ii) with respect to the Four
Cities Contract and the Xxxxxxxx Contract, as to which no
representation is made, the execution, delivery and
performance by Seller of this Agreement and the consummation
by Seller of the transactions contemplated hereby do not
require any Consent that has not been received (other than
under the HSR Act).
SECTION 3.14 INSURANCE. Attached as SCHEDULE
3.14 hereto is a list of all policies of insurance in effect
on the date of execution of this Agreement
25
that are owned or carried by the Corporation and insurance
agents and/or brokers providing such insurance coverage and of all
performance bonds and letters of credit that are in effect
on the date of execution of this Agreement securing any
obligations of the Corporation maintained by the Corporation
in the conduct of its Business.
SECTION 3.15 CUSTOMERS. To the best of
Seller's Knowledge, attached as SCHEDULE 3.15 is a list
which states, as to the Corporation, the name and address of
each customer it serves which provides more than 1% of its
revenues (either directly or indirectly). To the best of
Seller's Knowledge, such SCHEDULE 3.15 is complete and
correct.
SECTION 3.16 REAL PROPERTY OWNED OR LEASED. To
the best of Seller's Knowledge, SCHEDULE 3.16 hereto is an
accurate, current and complete list and description of all
real property owned by the Corporation and each lease or
sublease of real property to which the Corporation is a
party or by which the Corporation may be bound. To the best
of Seller's Knowledge, none of the real properties owned or
used by the Corporation, nor the occupancy, maintenance or
operation thereof is in material violation of any
restrictive covenant, Contract or Law. No written notice
from any lessor, sublessor or governmental agency has been
served upon the Corporation or upon any such real property
claiming any violation of any Law or requiring or calling
attention to the need for any work, repairs, construction,
alterations or installations on or in connection with any
such real property.
SECTION 3.17 FINANCIAL STATEMENTS. Attached
hereto as SCHEDULE 3.17 are the balance sheets of the
Corporation dated November 30, 1994 (the "CORPORATION
BALANCE SHEET"), the statement of income, profit and loss of
the Corporation for the year ended November 30, 1994 (the
"CORPORATION INCOME STATEMENT"), together with the related
notes and schedules attached thereto, all of which, to the
best of Seller's Knowledge and except as described in
SCHEDULE 3.17:
(a) have been prepared in accordance with the
books of account and records of the Corporation;
(b) fairly present and are materially true,
correct and complete statements of the Corporation's
financial condition and the results of its operations as at
and for the period therein specified;
26
(c) have been prepared in accordance with
generally accepted accounting principles consistently
applied; and
(d) do not include or omit to state any fact
which renders such financial statements materially
misleading; and all of which have been certified by the
General Manager and Vice President of the Corporation to the
effect set forth in the foregoing clauses (a) through (d).
SECTION 3.18 BOOKS AND RECORDS. The books and
records pertaining to the Corporation delivered or made
available to Purchaser and its Affiliates for review are, to
the best of Seller's Knowledge, true, complete and correct
in all material respects.
SECTION 3.19 BROKERAGE FEES. There is no
Person acting on behalf of Seller who is entitled to or has
any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement or the
consummation of the transactions contemplated hereby.
SECTION 3.20 NOTICE OF DEFAULT. Except for the
letter from the City of Pembroke Pines, a copy of which is
attached hereto as EXHIBIT E, Seller has no Knowledge that a
written notice of default has been received by the
Corporation under either the Xxxxxxxx Contract or the Four
Cities Contract. Seller will use its best efforts to cause
the Corporation to notify Purchaser if, to Seller's
Knowledge, the Corporation receives any written notice of
default under the Xxxxxxxx Contract or the Four Cities
Contract prior to the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller and
US WEST (i) as of the date hereof and (ii) on the Closing
Date as follows:
SECTION 4.1 ORGANIZATION, STANDING, ETC.
Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida.
SECTION 4.2 AUTHORITY AND APPROVAL OF
AGREEMENT.
27
(a) The execution and delivery of this
Agreement and any other documents, instruments and
agreements executed by Purchaser in connection herewith and
the performance of its obligations hereunder and thereunder
have been duly authorized and approved by all requisite
corporate action on the part of such party pursuant to
applicable Law (other than under the HSR Act or any
substantially equivalent provision of Florida law).
Purchaser has the power and authority to execute and deliver
this Agreement and any other documents, instruments and
agreements executed in connection herewith and to perform
all its obligations hereunder and thereunder (other than
under the HSR Act or any substantially equivalent provision
of Florida law).
(b) This Agreement and each of the other
documents, instruments and agreements executed by Purchaser
in connection herewith constitute the valid and legally
binding agreements of Purchaser, enforceable against it in
accordance with their respective terms, except to the extent
that enforceability thereof may be limited by: (i)
applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting
the enforcement of the rights and remedies of creditors; and
(ii) general principles of equity.
SECTION 4.3 INVESTMENT.
(a) Purchaser understands that neither the
Common Stock, nor the Indebtedness have been registered
under the Securities Act and may not be sold except pursuant
to an effective registration statement, or pursuant to a
duly available exemption from such registration
requirements. The Common Stock and the Indebtedness to be
acquired by Purchaser pursuant to this Agreement are being
acquired for Purchaser's own account and without a view to
the distribution or resale of such Common Stock or
Indebtedness.
(b) Purchaser has such experience in
financial matters as to be capable of evaluating the risks
and merits of investment in the Common Stock and the
Indebtedness, and Purchaser can afford the loss of its
entire investment in the Common Stock and the Indebtedness.
Purchaser acknowledges that it has received, or has had
access to, all information which it considers necessary or
advisable to enable it to make a decision concerning its
purchase of the Common Stock and the Indebtedness.
28
(c) Purchaser is an "accredited investor" as
defined under Regulation D under the Securities Act.
SECTION 4.4 BROKER'S COMMISSION. There is no
Person acting on behalf of Purchaser who is entitled to or
has any claim for any brokerage or finder's fee or
commission in connection with the execution of this
Agreement or the consummation of the transactions
contemplated hereby.
SECTION 4.5 PRIVATE PLACEMENT. Purchaser
covenants to and agrees with Seller and U S WEST that (i)
the offering and sale of the Common Stock and the
Indebtedness is intended to be exempt from registration
under the Securities Act, (ii) there is no existing public
or other market for the Common Stock or the Indebtedness and
(iii) there can be no assurance that Purchaser will be able
to sell or dispose of any of the Common Stock or the
Indebtedness.
SECTION 4.6 AUTHORIZATIONS. The execution and
delivery of this Agreement and the purchase of the Common
Stock and the Indebtedness by Purchaser do not, and the
consummation by Purchaser of the transactions contemplated
hereby will not, require Purchaser to obtain any
authorization, consent, approval or waiver from, or to make
any filing with, any Governmental Authority or any other
Person, except pursuant to the requirements of the HSR Act
or any substantially equivalent provision of Florida law and
except as set forth on SCHEDULE 4.6 to this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF U S WEST
U S WEST represents and warrants to Purchaser (i)
as of the date hereof and (ii) on the Closing Date, as
follows:
SECTION 5.1 ORGANIZATION, STANDING, ETC. U S
WEST is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado.
29
SECTION 5.2 AUTHORITY AND APPROVAL OF
AGREEMENT.
(a) The execution and delivery of this
Agreement and any other documents, instruments and
agreements executed by U S WEST in connection herewith and
the performance of its obligations hereunder have been duly
authorized and approved by all requisite corporate action on
the part of such party pursuant to applicable Law.
(b) This Agreement and each of the other
documents, instruments and agreements executed by U S WEST
in connection herewith constitute the valid and legally
binding agreements of U S WEST, enforceable against it in
accordance with its terms, except to the extent that
enforceability thereof may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the
enforcement of the rights and remedies of creditors; and
(ii) general principles of equity.
SECTION 5.3 BROKER'S COMMISSION. There is no
Person acting on behalf of U S WEST, to its Knowledge, who
is entitled to or has any claim for any brokerage or
finder's fee or commission in connection with the execution
of this Agreement or the consummation of the transaction
contemplated hereby other than Bank of Tokyo. To the extent
any fee or commission is payable to Bank of Tokyo in
connection with this Agreement, U S WEST shall be solely
responsible for paying such fee or commission.
SECTION 5.4 BONDS. U S WEST is the sole
holder of all of the issued and outstanding Indebtedness.
US WEST owns the Indebtedness free and clear of all
Encumbrances. Consistent with Section 1.2 of this
Agreement, concurrently with the Closing, U S WEST shall
release Seller and its Related Parties and the Corporation
from any liability to U S WEST arising from the Indebtedness
and the Business.
ARTICLE 6
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller and U S
WEST that:
30
SECTION 6.1 ACCESS.
(a) Purchaser, upon receipt of reasonable
written notice from Seller, will cause the Corporation, on
and after the Closing Date for a period of five (5) years
after the Closing Date, to afford to Seller and its
Affiliates and its agents and designees, reasonable access
during regular business hours to the Corporation's business
offices, properties, books, records, employees and auditors
to the extent necessary to permit Seller to determine any
matter relating to (i) its rights and obligations under this
Agreement, (ii) the business of the Corporation for any
period prior to the Closing Date, (iii) any pending or
threatened litigation to which Seller expects to be made a
party, or (iv) any Tax or compensation obligations of
Seller. Seller shall have the right to make copies of any
information relevant to the foregoing at its sole cost and
expense.
(b) Purchaser, upon receipt of reasonable notice
from U S XXXX, xxxx cause the Corporation, on and after the
Closing Date for a period of five (5) years after the
Closing Date, to afford to U S WEST and its Affiliates and
its agents and designees access during regular business
hours to their business offices, properties, books, records,
employees and auditors to the extent necessary to permit U S
WEST to determine any matter relating to (i) its rights and
obligations hereunder, (ii) the business of the Corporation
for any period prior to the Closing Date, (iii) any pending
or threatened litigation against or involving U S WEST or
any other litigation to which U S WEST expects to be made a
party, or (iv) any Tax or compensation obligations of U S
WEST. U S WEST shall have the right to make copies of any
non-privileged information relevant to the foregoing at its
sole cost and expense.
SECTION 6.2 CONTRACTS. (a) From and after the
Closing Date, Purchaser shall cause the Corporation to pay
and perform all of the Corporation's obligations that arise
under or in connection with the Xxxxxxxx Contract and the
Four Cities Contract; and (b) Purchaser hereby agrees to
indemnify and hold harmless Seller and U S WEST and each of
their respective Related Parties from and against any and
all claims, damages, losses, liabilities, costs or expenses
whatsoever (including, but not limited to, reasonable
attorneys' fees and expenses, including those incurred at
trial or on appeal, or in other indirect or administrative
proceedings) which Seller, U S WEST or any of their Related
Parties may incur (or which may be claimed against Seller, U
S WEST or any of their Related Parties) by reason of, under,
arising out of, related to, or in connection with any breach
or alleged breach or default by the Corporation or
31
Purchaser under the terms of either the Xxxxxxxx Contract or
the Four Cities Contract, including, without limitation, breaches or
alleged breaches first occurring or alleged to have occurred
as a result of the entering into or consummation of the
transactions contemplated by this Agreement and any breaches
or alleged breaches by the Corporation or Purchaser under
the Four Cities Contract of any provision(s) respecting
(i) transfers and assignments thereof, (ii) any right of
first refusal to acquire assets of the Corporation or (iii)
any required Consents.
SECTION 6.3 ONGOING LAWSUIT. Concurrently
with the execution and delivery of this Agreement, Purchaser
shall cause to be executed and delivered to the Escrow Agent
the Ongoing Lawsuit Release and Indemnification Agreement,
which the Escrow Agent shall cause to be filed with the 17th
Circuit Court in Broward County, Florida, within five (5)
Business Days after the Closing Date; PROVIDED, HOWEVER,
that except as otherwise specified in the last sentence of
this Section 6.3, the Ongoing Lawsuit shall not be dismissed
if the Closing does not occur (a) pursuant to Section
10.2(g), (b) because of Seller's or U S WEST's material
breach of or a material failure to satisfy one or more of
the following: (i) Seller's and/or U S WEST's obligations
under Section 8.1 of this Agreement; (ii) Seller's
obligation to deliver the Common Stock pursuant to Section
7.2 of this Agreement; and (iii) U S WEST's obligation to
deliver the Bonds and release its lien on and security
interest in the Common Stock and all other collateral for
the Bonds pursuant to Sections 8.4 and 8.6 of this
Agreement, (c) because a Material Adverse Effect has
occurred during and is continuing at the expiration of the
150-day period referred to in Section 2.3(a) of this
Agreement or (d) because of a breach by Seller or U S WEST
of representations, warranties and covenants which results
in a Material Adverse Effect which occurs during and is
continuing at the expiration of the 150-day period referred
to in Section 2.3(a) of this Agreement (collectively, (a),
(b), (c) and (d), as modified by the last sentence of this
Section 6.3, are referred to in this Agreement as the
"ONGOING LAWSUIT CONTINUATION EVENTS"). Notwithstanding the
foregoing, (x) except as expressly provided otherwise in
subsection (y) of this Section 6.3, if Seller and U S WEST
are not materially in default of their obligations under
this Agreement and the Closing does not occur solely because
of a material default by Purchaser of any of its obligations
under this Agreement, the Ongoing Lawsuit shall be dismissed
with prejudice pursuant to and in accordance with the terms
of the Ongoing Lawsuit Release and Indemnification
Agreement, and (y) (i) if the Closing does not occur because
of an injunction or Purchaser's failure to obtain all
requisite HSR Act approvals and substantially equivalent
approvals under state law or (ii) in the
32
event that an Ongoing Lawsuit Continuation Event has occurred
and is continuing and Purchaser is in material default under
Section 8.1 of this Agreement, upon U S WEST's tender of
$500,000 to Purchaser in accordance with the terms of the
Ongoing Lawsuit Release and Indemnification Agreement, the
Ongoing Lawsuit shall be dismissed with prejudice pursuant
to and in accordance with the terms of the Ongoing Lawsuit
Release and Indemnification Agreement.
SECTION 6.4 CENTRAL CONTRACT. The parties to
this Agreement hereby acknowledge that contemporaneously
with the execution and delivery of this Agreement, Purchaser
shall cause the parties to the Central Contract to execute
and deliver an amended and restated Central Contract (the
"RESTATED CENTRAL CONTRACT") in the form attached hereto as
EXHIBIT F.
SECTION 6.5 STAY BONUSES. Purchaser shall
offer to Total Employee Leasing Services, L.P. the following
stay bonus arrangements for the seven (7) individuals listed
on SCHEDULE 6.5 to this Agreement: each such individual
shall be offered (i) a guarantee of employment by Total
Employee Leasing Services, L.P. for sixty (60) days at the
Facility (provided that to remain eligible for such
guarantee, the applicable individual must comply with the
rules and guidelines generally applicable to employees under
the Employment Contract, including, without limitation,
working normal business hours of at least thirty-five (35)
hours per week and providing customary services in good
faith) from and after the Closing Date and (ii) two (2)
weeks' severance pay if the applicable individual (i)
complies with such rules and regulations and (ii) is given
notice that he or she will be terminated on or before the
sixtieth day.
ARTICLE 7
COVENANTS OF SELLER
Seller covenants to and agrees with Purchaser and
U S WEST that:
SECTION 7.1 ORGANIZATIONAL DOCUMENTS. Seller,
on the Closing Date, shall deliver to Purchaser:
(a) A certified copy of Certificate of
Incorporation of the Corporation with all amendments thereto
issued by the Secretary of State of the
33
State of Florida which shall be certified by its corporate secretary
as being true and correct;
(b) Good standing certificates from the
respective offices of the Secretary of State of the
applicable states of incorporation, dated as close to the
date of to Closing as is reasonably practicable, for both
Seller and the Corporation, respectively;
(c) Copies of the Corporation's Bylaws (with all
amendments thereto) certified as of the Closing Date by its
corporate secretary;
(d) Resolutions of its Board of Directors, in
form and substance reasonably satisfactory to Purchaser,
approving and authorizing (i) the execution, delivery and
performance by Seller of this Agreement and all agreements,
instruments and certificates contemplated hereby, and (ii)
the other transactions contemplated hereby, certified as of
the Closing Date by an appropriate corporate officer as
being true and correct and in full force and effect; and
(e) Signature and incumbency certificates of its
respective officers executing this Agreement and any other
certificates or instruments executed in connection herewith.
SECTION 7.2 COMMON STOCK. At Closing, Seller
shall deliver to Purchaser certificates representing the
shares of Common Stock (a) duly endorsed for transfer to
Purchaser or its designee without any representation or
warranty, express or implied, other than good and legal
title thereto or (b) with duly executed stock powers. In
any event, such instruments shall transfer the same free and
clear of all Encumbrances (including, but not limited to,
any liens or security interests of U S WEST). At Closing,
US WEST shall release and cancel the Indebtedness.
SECTION 7.3 BOOKS. At Closing and concurrent
with the consummation of the transactions contemplated
hereby, Seller shall deliver to Purchaser the corporate
books and records of the Corporation that are in its
possession, the complete minute books of the Corporation
containing all records with respect to meetings,
proceedings, consents and actions of the shareholders and
directors of the Corporation, together with the complete
stock issuance and transfer books of the Corporation setting
forth all issuance and transfers of stock
34
of the Corporation, certified as true and correct by the Secretary
of the Corporation.
SECTION 7.4 RESIGNATION. At Closing, Seller
shall deliver to Purchaser resignations from each member of
the Board of Directors and each officer of the Corporation.
SECTION 7.5 CANCELLATION. At Closing, Seller
shall cancel the Management Agreement and any Indebtedness
or liability from the Corporation to Seller, and Seller
shall execute and exchange general releases with (a) the
Corporation and its Affiliates and (b) U S WEST and its
Affiliates.
SECTION 7.6 CHANGE IN INFORMATION. At all
times until the Closing has occurred, Seller will promptly
disclose to Purchaser in writing if, to the Knowledge of
Seller, after reasonable inquiry, any material information
contained in Seller's representations and warranties or the
Schedules hereto becomes materially incomplete or is no
longer materially correct on or as of the Closing Date,
because of an event occurring or failing to occur after the
date hereof.
SECTION 7.7 CONDUCT OF BUSINESS. At all times
until the Closing has occurred, Seller shall use reasonable
commercial efforts to cause the Corporation to conduct its
Business in the ordinary course consistent with past
practice. Further, at all times prior to the Closing,
Seller shall use reasonable commercial efforts to cause the
Corporation to maintain the Corporation's relationships with
customers, representatives, creditors and suppliers. Except
as contemplated by Section 7.8, Seller will not cause or
permit the Corporation to (a) declare or make any payments
of dividends or other distributions, (b) lend, advance or
pay any monies to or on behalf of Seller in connection with
the transactions contemplated by this Agreement or
otherwise, (c) purchase or redeem any shares of capital
stock of the Corporation or evidences of indebtedness, (d)
sell or otherwise dispose of any shares of capital stock of
the Corporation or other securities of the Corporation or
rights therein, (e) merge or consolidate with any other
business, (f) change its present telephone number, (g)
increase the compensation of any officer or key employee,
(h) amend its articles of incorporation or bylaws or (i)
knowingly cause any of the representations and warranties
made by Seller in this Agreement not to be true and correct
in any material respect as of the Closing Date; provided
that notwithstanding the foregoing, the Corporation shall
assign and transfer the Excluded Assets to U S WEST or U S
WEST's designee prior to the Closing Date. Seller shall use
35
reasonable commercial efforts to cause all of the conditions
precedent listed in Section 10.1 of this Agreement to be
satisfied on or before the Closing Date.
SECTION 7.8 WRITE-OFF OF ASSETS; SALE OF
ASSETS. Purchaser acknowledges and agrees that the
Corporation will be writing down the fixed assets of the
Corporation as shown on the Financial Statements as set
forth on SCHEDULE 3.17 hereto to reflect a fair market value
of $3,000,000 and Seller agrees to use reasonable commercial
efforts to cause the Corporation to record such write down
of the value of the assets of the Corporation prior to
Closing. The Corporation will not sell any of its assets
except in the ordinary course of business; provided that
prior to Closing the Corporation shall assign the Excluded
Assets to U S WEST.
SECTION 7.9 NON-COMPETE.
(a) For a period of five (5) years from and
after the Closing Date, Seller shall not engage (as a
stockholder, trustee, partner, financier, agent or
representative of any Person) or have any interest, direct
or indirect, in any business in competition with the
Business of the Corporation as that Business is conducted on
the Closing Date (whether or not such Business is
subsequently carried on by the Corporation, by any successor
or successors to such Business or by Purchaser) in any area
within a 50-mile radius of the principal place of business
of the Corporation and any other business facility of the
Corporation; provided that this Section 7.9 shall not
prevent Seller from acquiring and holding from time to time
up to two percent (2%) of the outstanding shares of or
equity interests in any Person engaged in such a competitive
business if such shares and/or interests are available to
the general public on a national securities exchange and,
provided further, this Section 7.9 shall not prevent Seller
from acquiring and holding from time to time debt
instruments of any Person engaged in such a competitive
business and provided further that nothing in this Section
7.9 shall be deemed to apply to or restrict any future
employment of any persons working at the Facilities who are
employed under the Employment Contract.
(b) In the event of a breach of any covenant
contained in this Section 7.9, Purchaser shall be entitled
to an injunction against Seller restraining Seller from such
breach in addition to any other remedies provided by law or
equity.
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SECTION 7.10 BEST EFFORTS AFTER CLOSING.
Seller shall, at Purchaser's sole cost and expense, use its
best efforts to cooperate with Purchaser after the Closing
Date in the investigation and defense of any claim or action
against the Corporation, Purchaser or any of its Affiliates
predicated in whole or in part upon the acts or omissions of
the Corporation, its directors, officers, employees or
agents, prior to the Closing Date.
SECTION 7.11 AUDITED FINANCIAL STATEMENT.
Seller shall cause the Corporation to provide to Purchaser
the Corporation's financial statement, audited as of
December 31, 1994, within 30 days after the date of the
execution of this Agreement.
ARTICLE 8
COVENANTS OF PURCHASER, U S WEST AND SELLER
Each of Purchaser, Seller and U S WEST, severally
and for itself only, covenants and agrees as follows:
SECTION 8.1 REASONABLE COMMERCIAL EFFORTS.
Except as otherwise expressly provided in this Agreement,
each of Purchaser and Seller, severally and for itself only,
shall use its reasonable commercial efforts to take, or
cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable
Permits and Laws, including compliance with all applicable
requirements of the HSR Act, to consummate the transactions
contemplated by this Agreement; provided that U S WEST shall
have no obligations under or with respect to the HSR Act as
a result of the transactions that are contemplated by this
Agreement. Except as otherwise expressly provided in this
Agreement, U S WEST shall use its reasonable commercial
efforts to discharge its obligations under this Agreement.
SECTION 8.2 CERTAIN FILINGS. Seller and
Purchaser shall use reasonable commercial efforts (i) to
determine whether any action by or in respect of, or filing
with, any Governmental Authority is required, or any
actions, Consents, approvals or waivers are required to be
obtained from any Person, in connection with the
consummation of the transactions contemplated by this
Agreement and (ii) in making any such filings, furnishing
information required in connection therewith and seeking in
a timely manner to obtain any such Consents
37
of any Governmental Authorities. Notwithstanding the foregoing,
Purchaser shall use reasonable commercial efforts to make
all filings required to be made by Purchaser under the HSR
Act no later that ten (10) Business Days after the date of
execution of this Agreement.
SECTION 8.3 EMPLOYMENT CONTRACT. Seller
agrees with Purchaser not to terminate the Employment
Contract prior to the Closing and the Employment Contract
shall be a continuing obligation of the Corporation after
Closing.
SECTION 8.4 INDEBTEDNESS. At Closing,
Purchaser may elect in writing (at its option) that either
(i) U S WEST shall deliver to Purchaser or its designee the
original instruments that evidence the Bonds and the
Existing Mortgage accompanied by valid instruments of
assignment from U S WEST to Purchaser or its designee, duly
executed without recourse, representation or warranty,
either express or implied, by U S WEST (other than that U S
WEST is transferring good title to the Indebtedness to
Purchaser free and clear of all Encumbrances), or (ii) all
or any portion of the Indebtedness shall be written down
and, if so requested, U S WEST shall write down such
Indebtedness and, at Closing, the balance of such
Indebtedness shall be transferred to Purchaser, or its
designee(s). At Closing, U S WEST and Seller shall cancel
any other Indebtedness or liabilities of the Corporation
that are then due and owing to U S WEST and Seller.
SECTION 8.5 ONGOING LAWSUIT.
(a) From and after the date of execution of this
Agreement, each of the parties to this Agreement agrees to
use its best efforts to cause the prosecution of the Ongoing
Lawsuit to be suspended until after the earlier of the
Closing or termination of this Agreement.
(b) Each of the parties to this Agreement agrees
that after the Closing Date, if for any reason the Ongoing
Lawsuit Release and Indemnification Agreement is ineffective
to fully dismiss the Ongoing Lawsuit in respect of a Person
that is not a party to or otherwise bound by this Agreement,
such party shall not prosecute or pursue any cause of action
or claim that is the subject of the Ongoing Lawsuit or
related thereto against any other party to this Agreement
except to the extent (i) required by a non-appealable court
order or (ii) that an action must be taken to avoid such
party's being materially prejudiced with
38
respect to actions taken by a Person that is not a party to this
Agreement. For purposes of this Section 8.5(b), the Corporation and its
Affiliates are deemed to be bound hereby.
SECTION 8.6 RELEASE. At Closing, U S WEST
shall release its lien on and security interest in the
Common Stock and all other collateral of U S WEST with
respect to which U S WEST has a lien on assets of the
Corporation.
SECTION 8.7 COVENANTS. U S WEST has performed
and complied in all material respects with U S WEST's
covenants which are contained in this Agreement, which are
expressly required to be performed and complied with by U S
WEST on the Closing Date.
ARTICLE 9
TAX MATTERS
SECTION 9.1 TAX DEFINITIONS. The following
terms, as used herein, have the following meanings:
"INCOME TAX" means (i) federal income taxes
imposed by Subtitle A of Title 26 of the United States Code;
and (ii) any state or local exaction generally referred to
as "tax," provided that such tax (a) is imposed generally on
all corporations organized under the laws of or doing
business within such state or locality and (b) is imposed on
or measured by net income, meaning thereby that deductions
attributable to the realization of gross income are
allowable in computing the tax base. The term Income Tax
shall include any tax regardless of nomenclature, such as an
income tax, franchise tax, privilege tax, net worth tax,
earned surplus tax, license tax, business or occupation tax
or otherwise so long as such tax is described in the
preceding sentence. The term Income Tax shall not include
any tax, including, without limitation, any sales, use or ad
valorem real or personal property tax or capital franchise
or net worth tax that is based upon the valuation of assets
or the gross receipts from one or more transactions. Income
Tax includes any interest or penalty, additions to tax or
additional amounts and penalties and additions to such tax
thereon for failure to file a Return, imposed by any Taxing
Authority and any liability of the Corporation for the
payment of any amounts of the type described in this
sentence as a result of being a member
39
of an affiliated, consolidated, combined or unitary group with
any other corporation at any time on or prior to the Closing Date.
"POST-CLOSING TAX PERIOD" means any Tax period (or
portion thereof) ending after the close of business on the
Closing Date.
"PRE-CLOSING TAX PERIOD" means any Tax period (or
portion thereof) ending on or before the close of business
on the Closing Date.
"RETURN" means any return, statement, report or
form required to be filed with any Taxing Authority in
connection with any Tax.
"TAX" (and, with correlative meaning, "TAXES" and
"TAXABLE") means (i) any and all exactions generally
referred to as a "tax" including, without limitation, net
income, alternative, add-on minimum tax, excise, gross
receipts, ad valorem, personal property, profits, gains,
property, sales, transfer, use, payroll, employment,
capital, capital stock, business and occupation, severance,
withholding or franchise tax, together with any interest or
any penalty, addition to tax or additional amount, and
penalties and additions to tax thereon for failure to file a
Return, imposed by any Governmental Authority (a "TAXING
AUTHORITY") responsible for the imposition or collection of
any such tax (domestic or foreign) and (ii) any liability of
the Corporation for the payment of any amounts of the type
described in (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group with any other
corporation at any time on or prior to the Closing Date.
"TAX ASSET" means any net operating loss, net
capital loss, charitable deduction, investment tax credit,
foreign tax credit, or any other credit which could reduce
Taxes and which arises in a Pre-Closing Tax Period and is
carried over unused to a Post-Closing Tax Period.
SECTION 9.2 TAX COVENANTS AND ELECTIONS.
(a) As the common parent of the consolidated
federal income tax group which includes the Corporation,
Seller shall prepare and file any Income Tax Returns
relating to the Corporation for the Pre-Closing Tax Period,
which Income Tax Returns shall include all income realized
and deductions incurred by the Corporation in such Pre-
Closing Tax Period. Seller may reduce
40
the Tax attributes of the Corporation in accordance with
Section 108(b) and 1017 of the Code to reflect an amount
equal to the discharge of indebtedness income excluded under
Section 108 of the Code. Seller agrees that it will not make a
Section 108(b)(5) election in connection with such reduction.
Purchaser shall prepare and file any Income Tax Returns relating to the
Corporation for the Post-Closing Tax Period, which Income
Tax Returns shall include all income realized and deductions
incurred by the Corporation in such Post-Closing Tax Period,
and Purchaser shall be liable for any Income Tax identified
thereon or that is otherwise attributable to the Post-
Closing Tax Period. Within thirty (30) days after the
filing of any Income Tax Return for the Pre-Closing Tax
Period, Seller shall prepare on a hypothetical separate
Return basis, and deliver to Purchaser, an Income Tax Return
of the Corporation for the Pre-Closing Tax Period. Seller
shall be responsible for and pay any Taxes due or owing in
respect of such Pre-Closing Tax Period, except as otherwise
expressly provided in Section 9.4 of this Agreement in
respect of Ad Valorem Taxes.
(b) Purchaser covenants that it will not and
will not cause or permit the Corporation or any Affiliate of
Purchaser (i) to take any action on the Closing Date other
than (x) in the ordinary course of business or (y) as is
otherwise permitted by the terms of this Agreement or with
respect to the cancellation of Indebtedness contemplated
hereby, including, but not limited to, the distribution of
any dividend or the effectuation of any redemption, that
could reasonably be expected to give rise to any Tax
liability of Seller or any liability, cost, expense
(including, without limitation, reasonable expenses or
investigation and attorneys' fees and expenses), loss,
damage, assessment, settlement or judgment against Seller;
or (ii) except as required by Law, regulation, ruling or
other administrative pronouncement and except as expressly
provided in this Agreement, to make or change any tax
election, amend any Return or take any tax position on any
Return that in each case results in any increased Tax
liability or reduction of any Tax Asset of Seller or any
Affiliate of Seller in respect of any Pre-Closing Tax
Period. Purchaser covenants and agrees that Seller is to
have no liability for any Tax resulting from any action of
the Corporation, Purchaser or any Affiliate of Purchaser on
or after the Closing Date which is prohibited by the
preceding sentence, and agrees to indemnify and hold
harmless Seller and its Affiliates against any such Tax.
Seller covenants and agrees to give prompt notice to
Purchaser of the assertion of any claim, or the commencement
of any action or proceeding, in respect of which indemnity
may be sought under this Section 9.2(b). Purchaser may
participate in and assume the defense of any such suit,
action or proceeding at its own expense. If Purchaser
assumes such defense,
41
Seller shall have the right (but not the duty) to participate in
the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by Purchaser. Whether or not Seller
chooses to defend or prosecute any claim, Purchaser and
Seller shall cooperate in the defense or prosecution
thereof. All tax settlement and tax sharing agreements,
arrangements, policies and guidelines, formal or informal,
express or implied, that may exist and to which the
Corporation is a party ("SETTLEMENT AGREEMENTS") and all
obligations thereunder shall terminate prior to the Closing.
After the Closing Date, the Corporation shall not be bound
by such Settlement Agreements or have any liability
thereunder for amounts due in respect of periods prior to
the Closing Date.
SECTION 9.3 COOPERATION ON TAX MATTERS. Each
of Purchaser and Seller, severally and for itself only,
covenants and agrees to furnish or cause to be furnished to
each other during regular business hours at the furnishing
party's principal place of business, upon reasonable written
request, as promptly as practicable, such information
(including access to books and records) and assistance
relating to the Corporation as is reasonably necessary for
the preparation and filing of any Return (including, without
limitation, Seller's preparation and filing of any Income
Tax Returns relating to the Corporation for the Pre-Closing
Tax Period), the making of any permitted election, the
preparation for any audit, responding to the requests or
inquiries of any Taxing Authority and the prosecution or
defense of any claim, suit or proceeding relating to any
proposed adjustment. Each of Purchaser and Seller,
severally and for itself only, covenants and agrees to
retain or cause to be retained all books and records
pertinent to the Corporation until the applicable period for
assessment under applicable law (giving effect to any and
all extensions or waivers) has expired, and to abide by, or
cause the abidance with, all record retention agreements
entered into with any Taxing Authority. Purchaser or
Seller, as applicable, covenants and agrees to give the
other party (and U S WEST) reasonable notice prior to
transferring, discharging or destroying any such books and
records relating to Tax matters and, if the other so
requests, the discarding party shall allow the other party
to take possession of such books and records. Purchaser and
Seller shall cooperate with each other in the conduct of any
audit or other proceedings involving the Corporation for any
Tax purposes and each shall execute and deliver such powers
of attorney and other documents as are necessary to carry
out the intent of this Section 9.3.
42
SECTION 9.4 REAL ESTATE TAX INDEMNIFICATION.
(a) From and after the Closing Date, U S WEST
hereby agrees to indemnify Purchaser against and agrees to
hold Purchaser harmless from the payment of Ad Valorem
Taxes; PROVIDED, HOWEVER, U S WEST shall be entitled to any
recoveries, remittances, refunds and/or rebates arising with
respect to any Ad Valorem Taxes (including, without
limitation, any interest or penalty) so paid, which amounts,
if received by Purchaser or the Corporation, shall be deemed
to be held in trust for the benefit of U S WEST and shall be
paid immediately upon receipt thereof to U S WEST.
Purchaser shall, upon the request of U S WEST, appeal or
protest any Ad Valorem Taxes assessed for the period from
January 1, 1995 through the Closing Date which are not as of
the date hereof the subject of an appeal or protest. U S
WEST and Purchaser agree to jointly cooperate in any such
appeal or protest for the 1995 tax year and to allocate
expenses between them on a pro rata basis. Seller shall
have no obligation to indemnify Purchaser pursuant to this
Section 9.4(a).
(b) If a lien for Ad Valorem Taxes attaches to
the Facilities, Purchaser may, after the delivery of a
written notice to U S WEST that describes the lien (and
specifies the amount thereof) that Purchaser proposes to
discharge at least five (5) Business Days in advance of any
such payment, discharge such lien in the event that U S WEST
fails to do so and to the extent Purchaser makes such
payment, U S WEST shall, upon receipt of written notice
thereof (such notice to be accompanied by all documentation
in respect thereof that is requested by U S WEST), reimburse
Purchaser for the amount actually paid by Purchaser to
discharge such lien; provided that notwithstanding the
foregoing, if any such lien is being contested, Purchaser
may only discharge such lien under protest and, in
accordance with the terms set forth above, U S WEST shall be
entitled to any recoveries, remittances, refunds and/or
rebates arising with respect to any such Taxes and any
penalty or interest so paid. Notwithstanding the foregoing,
Purchaser shall have no obligation to discharge any such
lien under protest if, based upon written advice of counsel,
such discharge would materially and adversely affect
Purchaser's business; PROVIDED, HOWEVER, in such event,
Purchaser shall notify U S WEST of such written advice of
counsel within three (3) Business Days of Purchaser's
receipt of such advice and, if U S WEST, in its sole and
absolute discretion, directs Purchaser to discharge such
lien under protest, Purchaser shall promptly discharge such
lien under protest and U S WEST shall reimburse Purchaser
for Purchaser's out-of-pocket fees and expenses actually
incurred in respect thereof.
43
(c) Any payment by U S WEST pursuant to and in
accordance with this Section 9.4 shall be made or caused to
be made either (i) to the applicable Governmental Authority
or (ii) no later than two (2) Business Days after receipt by
U S WEST of written notice from Purchaser stating that such
taxes have actually been paid by the Corporation, Purchaser,
or any of their Affiliates, to the entity specified in such
written notice.
(d) The Corporation shall issue an irrevocable
power of attorney or otherwise authorize professionals and
counsel selected by U S WEST from time to time in U S WEST's
sole and absolute discretion to represent the Corporation
with respect to causes of action relating to periods prior
to the Closing Date. Seller and Purchaser shall fully
cooperate in the defense or prosecution thereof. If U S
WEST receives written notice from Purchaser requesting Tax
Indemnity Payment and U S WEST previously exercised its
right to participate in the defense of the Tax Litigation
pursuant to this Section 9.4, U S WEST shall pay or cause to
be paid to Purchaser, subject to the terms of this Agreement
and the limitations in Section 9.4(a) and (b) above, the Tax
Indemnity Payment no later than two (2) Business Days after
receipt by U S WEST of written notice from Purchaser
identifying the amount of the Tax Indemnity Payment to be
paid by Purchaser and requested by Purchaser. If U S WEST
exercises such right, it shall be entitled to any
recoveries, remittances, refunds and/or rebates arising
therefrom.
(e) Neither Seller nor U S WEST, as applicable,
shall be liable under this Section 9.4 for any settlements
or judgments effected without the Consent of U S WEST, which
Consent may be withheld by U S WEST in its sole and absolute
discretion, or resulting from any claim, suit, action,
litigation or proceeding in which U S WEST was not permitted
an opportunity to assume the defense thereof.
SECTION 9.5 TRANSFER TAXES. Purchaser shall
be responsible for all Transfer Tax and similar Taxes
assessed or payable in connection with the transfer of the
Common Stock (or deemed transfer of assets by reason of an
actual or deemed election under Section 338 of the Code) and
all of the other transactions contemplated pursuant to the
terms of this Agreement (including, but not limited to, any
and all Florida documentary stamp Taxes).
44
ARTICLE 10
CONDITIONS PRECEDENT TO CLOSING
SECTION 10.1 CONDITIONS PRECEDENT TO
OBLIGATIONS OF PURCHASER. The obligations of Purchaser to
purchase the Common Stock and Indebtedness and consummate
the transactions contemplated by this Agreement and the
Related Documents (except in respect of Section 6.3 of this
Agreement and the Restated Central Contract) are subject, at
the Closing Date, to the satisfaction or waiver in writing
by Purchaser of the following conditions during the
applicable time periods:
(a) REPRESENTATIONS. No breach of any
representation or warranty contained in Articles 3 and 5 of
this Agreement which could reasonably be expected to have a
Material Adverse Effect shall have occurred. Seller and U S
WEST shall have performed and complied in all material
respects with the covenants contained herein required to be
performed and complied with by them prior to or on the
Closing Date; PROVIDED, HOWEVER, that Seller and U S WEST
shall be deemed to be in compliance with such covenants if
no breach thereof shall have occurred that caused a Material
Adverse Effect.
(b) COMPLIANCE CERTIFICATES. Each of Seller and
U S WEST shall have delivered to Purchaser a certificate
executed on behalf of Seller and U S WEST, respectively, by
one of its Responsible Officers, dated the Closing Date, in
the form attached hereto as EXHIBIT G and EXHIBIT H,
respectively.
(c) NO INJUNCTIONS. On the Closing Date, the
sale of the Common Stock and the consummation of the
transactions contemplated hereunder shall not be prohibited
by any law, claim or governmental regulation or enjoined
from closing by any Governmental Authority past the 150-day
period provided in Section 2.3(a) of this Agreement.
(d) NO PROHIBITION. All waiting periods under
any applicable statute, rule, legislation or regulation or
order of any court or any administrative agency, including,
without limitation, under the HSR Act with respect to Seller
and Purchaser, to restrain, prohibit or otherwise challenge
the consummation of any or all of the transactions
contemplated herein or otherwise affecting Purchaser's
ability to consummate the transactions contemplated herein shall have
45
expired or terminated within 150 days after the
date of execution of this Agreement.
(e) INVENTORY. Purchaser shall have received a
list of the Corporation's inventory that sets forth, to the
best of Seller's Knowledge, all material personal property
of the Corporation (identified as owned or leased).
SECTION 10.2 CONDITIONS PRECEDENT TO
OBLIGATIONS OF SELLER AND U S WEST. The obligations of
Seller to sell the Common Stock and U S WEST to transfer the
Indebtedness to Purchaser or its designee pursuant to this
Agreement and to consummate the transactions contemplated by
this Agreement and the Related Documents (except in respect
of Section 6.3 of this Agreement and the Restated Central
Contract) are subject, at the Closing Date, to the
satisfaction or waiver by Seller and U S WEST of the
following conditions:
(a) REPRESENTATIONS; COVENANTS. All
representations and warranties made by Purchaser in this
Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same effect as if
such representations and warranties had been made on and as
of the Closing Date. Purchaser shall have performed and
complied in all material respects with the covenants
contained herein required to be performed and complied with
by it prior to or on the Closing Date.
(b) COMPLIANCE CERTIFICATES. Purchaser shall
have delivered to Seller and U S WEST a certificate executed
on behalf of Purchaser by one of its Responsible Officers,
dated the Closing Date, in the form attached hereto as
EXHIBIT I.
(c) DELIVERY OF PURCHASE PRICE. U S WEST shall
have received and collected the Purchase Price, including
the Xxxxxxx Money.
(d) OTHER TRANSACTIONS. If Purchaser elects to
purchase the Bonds, Purchaser shall have executed and
delivered to the City of Pembroke Pines and First Union
National Bank of Florida, as Trustee (the "TRUSTEE") under
that certain Trust Indenture dated as of March 1, 1993
between the City of Pembroke Pines, Florida and the Trustee,
an Investor Letter substantially in the form attached hereto
as EXHIBIT J, duly executed by Purchaser as transferee of
the Bonds.
46
(e) OTHER DOCUMENTS AND TRANSACTIONS.
Concurrently with the execution and delivery of this
Agreement, (i) Purchaser shall have caused to be executed
and delivered to the Escrow Agent the Ongoing Lawsuit
Release and Indemnification Agreement and (ii) Purchaser
shall have caused the Escrow Agreement to be executed and
delivered to Seller, U S WEST and the Escrow Agent.
(f) NO INJUNCTIONS. On the Closing Date, the
sale of the Common Stock and the consummation of the
transactions contemplated hereunder shall not be prohibited
by any law, claim or governmental regulation or enjoined
from closing by any Governmental Authority.
(g) ABSENCE OF ACTIONS OR PROCEEDINGS. There
shall be no pending material litigation, action or
proceeding by or before any court, other governmental body
or arbitration tribunal which shall seek to restrain,
prohibit or invalidate the transaction(s) contemplated by
this Agreement or which could materially and adversely
affect either Seller or U S WEST, except that the absence of
an action or proceeding by the Four Cities or Xxxxxxxx shall
not be a condition to Closing, except to the extent such
action or proceeding gives rise to an injunction.
(h) NO PROHIBITION. All waiting periods under
any applicable statute, rule, legislation or regulation or
order of any court or any administrative agency, including,
without limitation, under the HSR Act and substantially
equivalent provisions of Florida law with respect to Seller
and Purchaser, to restrain, prohibit or otherwise challenge
the consummation of any or all of the transactions
contemplated herein or otherwise affecting Seller's or U S
WEST's ability to consummate the transactions contemplated
herein shall have expired or terminated within 150 days
after the date of execution of this Agreement.
ARTICLE 11
LIMITATION OF LIABILITY
SECTION 11.1 LIMITATION OF LIABILITY AMONG THE
PARTIES. Notwithstanding anything to the contrary contained
in this Agreement, at law or in equity, the liability of U S
WEST, Seller and their Affiliates to Purchaser under this
Agreement (including, without limitation, any liability of
either party (and
47
their Affiliates) arising pursuant to or
in connection with (i) the representations and warranties of
such party hereunder or (ii) the obligations of such parties
under the Related Documents) shall in no event exceed
$500,000 in the aggregate in respect of the breach of any
representation, warranty or covenant contained in this
Agreement and/or the Related Documents if the Closing
occurs. Further, if the Closing occurs, U S WEST shall
remain liable for (a) the Adjustment Amount, if any, payable
by U S WEST pursuant to the Closing Date Adjustment
Statement in accordance with Section 2.2 and (b) the Tax
Indemnity Payment, if any, and Seller shall remain liable
for Taxes due or owing in respect of the Pre-Closing Tax
Period in accordance with Section 9.2 of this Agreement. In
addition, consistent with the provisions of this Article 11,
from and after the Closing Date, Purchaser covenants and
agrees not to bring or prosecute any action or initiate any
Proceeding (including, without limitation, any arbitration
proceeding) against Seller, U S WEST and/or their Affiliates
for or in respect of any claim or cause of action of any
nature whatsoever including, without limitation, breach of
contract, misrepresentation, fraud, intentional
misrepresentation, causes of action related to the Bonds or
any other claim or cause of action at law or in equity,
whether or not accrued, except (i) causes of action in
respect of the Restated Central Contract that arise from a
breach thereof that first occurs after the date of execution
of this Agreement (that has nothing to do with an act or
omission that took place or occurred prior to the date of
execution of this Agreement) and (ii) the Ongoing Lawsuit,
to the extent that the Ongoing Lawsuit is not dismissed
pursuant to Section 6.3 of this Agreement. Further, if the
Closing shall occur hereunder, Purchaser waives any right it
may have at law, equity or under this Agreement to make a
claim against Seller, U S WEST and/or their Affiliates for
damages that Purchaser may incur as a result of any
representations or warranties being untrue, inaccurate or
incorrect if (i) Purchaser knew that such representation or
warranty was untrue, inaccurate or incorrect at the time of
Closing and Purchaser elected, nevertheless, to close the
transactions contemplated hereunder or (ii) if the
Corporation Information contained information which
disclosed that such representation or warranty was untrue,
inaccurate or incorrect and Purchaser elected, nevertheless,
to close hereunder, irrespective of whether Purchaser had
Knowledge of such information contained in the Corporation
Information.
48
SECTION 11.2 LIMITATION OF LIABILITY - XX.
XXXXXXXXX. Purchaser covenants and agrees not to bring or
prosecute any action or initiate any Proceeding (including,
without limitation, any arbitration proceeding) against
Xxxxx X. Xxxxxxxxx for or in respect of any claim or cause
of action of any nature whatsoever including, without
limitation, breach of contract, misrepresentation, fraud,
intentional misrepresentation, causes of action related to
this Agreement or any other claim or cause of action at law
or in equity, whether or not accrued. Further, Purchaser
waives any right it may have at law, equity or under this
Agreement to make a claim against Xxxxx X. Xxxxxxxxx for
damages that Purchaser may incur as a result of any
representations or warranties being untrue, inaccurate or
incorrect.
ARTICLE 12
RESTRICTIVE LEGEND
SECTION 12.1 RESTRICTIVE LEGEND ON
CERTIFICATES. Each certificate for Common Stock delivered
to Purchaser by Seller or to a subsequent transferee shall
include a legend in substantially the following form:
THE INTERESTS EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY
NOT BE OFFERED, SOLD, HYPOTHECATED OR OTHERWISE
TRANSFERRED UNLESS IT HAS BEEN REGISTERED UNDER
THE SECURITIES ACT OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE (AND, IN SUCH CASE, A
FAVORABLE OPINION OF COUNSEL HAS BEEN DELIVERED TO
THE CORPORATION TO THE EFFECT THAT SUCH TRANSFER
IS NOT REQUIRED TO BE REGISTERED UNDER THE
SECURITIES ACT).
Purchaser agrees that it will obtain appropriate investment
representations relating to any transfer for which an
opinion is required under the foregoing legend.
49
SECTION 12.2 REMOVAL OF RESTRICTIVE LEGEND.
The restriction on transfer of shares of Common Stock set
forth in Section 12.1 relating to compliance with the
Securities Act (a "RESTRICTION") shall cease and terminate
as to any particular shares of Common Stock when, in the
written opinion of counsel satisfactory to the Corporation,
such Restriction is no longer required. To the extent that
the foregoing requirements are satisfied, whenever any
Restriction shall cease and terminate as to any shares of
Common Stock, the holder thereof shall be entitled to
receive from the Corporation without expense to such holder,
new certificate(s) not bearing a legend stating such
Restriction.
ARTICLE 13
TERMINATION
SECTION 13.1 EXPIRATION OF DUE DILIGENCE
PERIOD. Except as provided in this Section 13.1 and the
Surviving Obligations, Purchaser shall have the right to
elect to terminate this Agreement by giving written notice
("PURCHASER'S TERMINATION NOTICE") of such election to
Seller and U S WEST at any time prior to 5:00 p.m., Eastern
Standard Time, on the date which is thirty (30) days after
the date hereof ("DUE DILIGENCE EXPIRATION DATE") as a
result of the occurrence of a Material Adverse Effect caused
by a breach of a representation or warranty contained in
Articles 3 and 5 of this Agreement; PROVIDED, HOWEVER,
notwithstanding anything in this Agreement, at law or in
equity to the contrary, Purchaser shall not have any right
to terminate this Agreement as a result of (i) any
litigation that may arise out of or with respect to the
Xxxxxxxx Contract or the Four Cities Contract at any time
after the execution and delivery of this Agreement or (ii)
any attempt to terminate, the termination of or a breach of
the Xxxxxxxx Contract or the Four Cities Contract. If for
any reason whatsoever Seller and U S WEST shall not have
received Purchaser's Termination Notice prior to the Due
Diligence Expiration Date (in accordance with the foregoing
provisions), Purchaser shall be deemed to have irrevocably
waived the right of termination granted under this Section
13.1, and such right of termination may no longer be
exercised.
SECTION 13.2 SELLER'S OR U S WEST'S DEFAULT.
(a) Provided that Purchaser has not elected to
terminate this Agreement by delivering the Purchaser's
Termination Notice on or before the
50
Due Diligence Expiration Date, in the event of a material
default hereunder by Seller including, without limitation,
any intentional misrepresentation, or if the Closing
fails to occur by reason of Seller's failure or refusal
to perform its obligations under this Agreement, then Purchaser,
as its sole remedy therefor, may (i) terminate this Agreement,
except for the Surviving Obligations (including, without
limitation, Section 6.3 of this Agreement, except in the
event of the occurrence and continuance of one or more of
the Ongoing Lawsuit Continuation Events in accordance with
the terms of Section 6.3 of this Agreement), by written
notice to Seller and U S WEST and (ii) subject to and in
accordance with the terms and limitations set forth in this
Agreement, including, without limitation, Article 11 and
Section 14.8, seek specific performance.
(b) Provided that Purchaser has not elected to
terminate this Agreement by delivering the Purchaser's
Termination Notice on or before the Due Diligence Expiration
Date, in the event of a material default hereunder by U S
WEST including, without limitation, any intentional
misrepresentation, or if the Closing fails to occur by
reason of U S WEST's failure or refusal to perform its
obligations under this Agreement, then Purchaser, as its
sole remedy therefor, may (i) terminate this Agreement,
except for the Surviving Obligations (including, without
limitation, Section 6.3 of this Agreement, except in the
event of the occurrence and continuance of one or more of
the Ongoing Lawsuit Continuation Events in accordance with
the terms of Section 6.3 of this Agreement), by written
notice to Seller and U S WEST and (ii) subject to and in
accordance with the terms and limitations set forth in this
Agreement, including, without limitation, Article 11 and
Section 14.8, seek specific performance.
(c) Notwithstanding anything to the contrary
contained in this Agreement, the Related Documents, at law
or in equity or otherwise, the liability of U S WEST and
Seller to Purchaser under this Agreement and the Related
Documents, including, without limitation, any liability of
either of them under this Section 13.2, shall not exceed, in
the aggregate, $500,000 if the Closing has occurred;
provided that notwithstanding the foregoing, if the Closing
does not occur, unless an Ongoing Lawsuit Continuation Event
has occurred and is continuing, Purchaser shall be entitled
to a payment of $500,000 as a condition precedent to
dismissing the Ongoing Lawsuit, except as specified
otherwise in Section 6.3 of this Agreement and in the Escrow
Agreement. If the Closing occurs, however, U S WEST shall
also remain liable for the Adjustment Amount, if any,
payable by U S WEST pursuant to the Closing Date Adjustment
Statement and the Tax Indemnity Payment, if any, and Seller
shall remain liable for any
51
Taxes due and owing in respect of the Pre-Closing Tax
Period in accordance with Section 9.2 of this Agreement.
The $500,000 amount specified in the fifth line of
this Section 13.2(c) shall constitute liquidated damages
for all loss, damage and expenses suffered by Purchaser
that do not arise under or in connection with a Surviving
Obligation, it being agreed that Purchaser's damages that
do not arise under or in connection with a Surviving
Obligation are impossible to ascertain, and
except as otherwise expressly provided in this Agreement in
respect of Seller, Purchaser hereby expressly waives,
relinquishes and releases any other right or remedy
available to it at law, in equity or otherwise by reason of
Seller's or U S WEST's failure to perform its obligations
under this Agreement that do not arise under or in
connection with a Surviving Obligation, INCLUDING, WITHOUT
LIMITATION, THE RIGHT TO RECOVER CONSEQUENTIAL, PUNITIVE,
STATUTORY OR ANY OTHER DAMAGES. Purchaser expressly
represents and affirms that based on numerous factors
including, without limitation, the negotiations, the unique
nature of the Facilities and uncertain market conditions
that make it impossible or extremely difficult to fix the
actual damages suffered by Purchaser on account of any
default by Seller or U S WEST under this Agreement that do
not arise under or in connection with a Surviving
Obligation, the foregoing liquidated damages clause is a
reasonable and enforceable provision of this Agreement.
SECTION 13.3 PURCHASER'S DEFAULT. In the event
of a material default hereunder by Purchaser or if the
Closing fails to occur by reason of Purchaser's failure or
refusal to perform its obligations hereunder, then Seller
and/or U S WEST may (i) terminate this Agreement, except for
the Surviving Obligations, by written notice to Purchaser
and (ii) subject to and in accordance with the terms and
limitations set forth in Section 14.8 this Agreement,
initiate and prosecute actions for specific performance. If
Seller and/or U S WEST elects to terminate this Agreement
pursuant to and in accordance with this Section 13.3 then
this Agreement (other than the Surviving Obligations) shall
be terminated and neither party shall have any further
rights, obligations or liabilities hereunder, except in
respect of the Surviving Obligations; PROVIDED, HOWEVER,
that except for the Surviving Obligations, if this Agreement
is terminated, U S WEST is then entitled to the then
outstanding balance of the Xxxxxxx Money, which shall
constitute liquidated damages for all loss, damage and
expenses suffered by Seller and U S WEST that do not arise
under or in connection with a Surviving Obligation, it being
agreed that Seller's and U S WEST's damages that do not
arise under or in connection with a Surviving Obligation are
impossible to ascertain, and except as otherwise expressly
provided in this Agreement, Seller
52
and U S WEST hereby expressly waive, relinquish and
release any other right or remedy available to either
of them at law, in equity or otherwise by reason of
Purchaser's failure to perform its obligations under
this Agreement that do not arise under or in connection
with a Surviving Obligation, INCLUDING, WITHOUT
LIMITATION, THE RIGHT TO RECOVER CONSEQUENTIAL,
PUNITIVE, STATUTORY OR ANY OTHER DAMAGES. Seller and U S
WEST expressly represent and affirm that based on numerous
factors, including, without limitation, the negotiations,
the unique nature of the Facilities and uncertain market
conditions, that make it impossible or extremely difficult
to fix the actual damages suffered by Seller and U S WEST on
account of any default by Purchaser under this Agreement
that do not arise under or in connection with a Surviving
Obligation, the foregoing liquidated damages clause is a
reasonable and enforceable provision of this Agreement. In
no event shall Purchaser be entitled to any grace period or
notice respecting the requirement on the part of Purchaser
to close the transactions contemplated under this Agreement
on the Closing Date. Notwithstanding anything to the
contrary in this Section 13.3, the Ongoing Lawsuit shall be
dismissed in accordance with Section 6.3 of this Agreement.
SECTION 13.4 EFFECT OF TERMINATION. If this
Agreement is terminated by Purchaser as a result of (a) the
failure to obtain the requisite approvals and/or applicable
termination of waiting periods under the HSR Act within 150
days after the date of execution of this Agreement, (b) an
injunction that prevents Purchaser from Closing, (c) a
termination of this Agreement by Seller or U S WEST pursuant
to Section 10.2(g), (d) the occurrence of a Material Adverse
Effect which occurs during and is continuing on the
expiration of the 150-day period referred to in Section
2.3(a) of this Agreement or (e) a breach by Seller or U S
WEST of the representations, warranties and covenants which
results in a Material Adverse Effect which occurs during and
is continuing on the expiration of the 150-day period
referred to in Section 2.3(a) of this Agreement, which, with
respect to (d) and (e), Purchaser shall certify in writing
to U S WEST and Seller, Purchaser shall be entitled to the
then outstanding balance of the Xxxxxxx Money. If this
Agreement is terminated for any other reason, U S WEST shall
then be entitled to the then outstanding balance of the
Xxxxxxx Money.
SECTION 13.5 RETURN OF CORPORATION INFORMATION.
If this Agreement is terminated for any reason, Purchaser,
its officers, directors, employees, agents and other
representatives, shall promptly return to Seller at no cost,
charge or expense to Seller (a) all agreements, documents, contracts,
53
instruments and other books and records and
Corporation Information provided by Seller, its Affiliates
or U S WEST or their representatives or agents in connection
with the transactions contemplated under this Agreement, and
all copies thereof, and (b) all surveys, title reports and
commitments, environmental studies and reports, and
engineering reports and studies secured by or at the
direction of Purchaser and its Affiliates or agents, and all
copies thereof.
ARTICLE 14
MISCELLANEOUS
SECTION 14.1 INVESTIGATION BY PURCHASER. In
connection with Purchaser's inspections prior to Closing,
the parties agree that from the date hereof until any
termination of this Agreement prior to Closing:
(a) ACCESS TO PROJECT INFORMATION. Purchaser
and its representatives shall have full access to examine
and inspect any books, records, architectural and
engineering plans, drawings, records surveys, title
insurance policies (and any notes related thereto), all
papers or files pertaining to the Corporation or its assets,
liabilities or operations to the extent they are in the
physical possession of Seller or its Affiliates (all of the
foregoing information and documents being sometimes
collectively referred to herein as the "CORPORATION
INFORMATION"). Purchaser shall have the right to make
copies of the Corporate Information at the sole cost and
expense of Purchaser. Purchaser shall keep the Corporation
Information in strict confidence in accordance with the
provisions of this Agreement. Notwithstanding the
foregoing, Corporate Information shall not include, and
Purchaser shall have no right to examine or inspect, the
internal records of Seller or its Affiliates, or any other
information, in each case which is of a confidential nature
and subject to an attorney/client, work-product or similar
privilege.
(b) RIGHT TO ENTER FACILITIES. Purchaser and
its representatives shall have the right to enter upon the
solid waste disposal facility operated by Seller in Broward
County, Florida (the "FACILITIES") for the purpose of
inspecting the Facilities and making surveys, soil borings,
engineering tests and other investigations, inspections and
tests (collectively, "INVESTIGATIONS"); provided, that (i)
Purchaser shall give prior notice to Seller and the
Corporation before such entry and (ii) such notice shall
include sufficient information to permit Seller and
54
the Corporation to review the scope of the proposed
Investigations. Any entry upon the Facilities and all
Investigations shall be during the normal business hours of
the Corporation, at the sole risk and expense of Purchaser
and its representatives, and shall not substantially
interfere with or disrupt the activities on or about the
Facilities. Purchaser shall:
(i) promptly repair any damage caused by
Purchaser or its representatives to the Facilities resulting
from any such Investigations and regrade any holes and cap
any xxxxx made in, or excavations of, any portion of the
Facilities used for such Investigations so that the
Facilities shall be in substantially the same condition that
it existed prior to such Investigations;
(ii) fully comply with all Laws applicable
to the Investigations and all other activities undertaken in
connection therewith;
(iii) permit Seller or the Corporation
to have one or more representatives present during all
Investigations undertaken hereunder;
(iv) take reasonable actions and implement
reasonable protections necessary to ensure that all actions
taken in connection with the Investigations, and the
equipment, materials and substances generated, used or
brought onto the Facilities pose no threat to the safety or
health of Persons or the environment, and cause no
unnecessary damage to the Facilities or other assets of the
Corporation, Seller or other Persons;
(v) furnish to Seller, at no cost or
expense to Seller, copies of all surveys, soil test results,
engineering, asbestos, environmental and other studies and
reports relating to the Investigations which Purchaser shall
deliver promptly to Seller after Purchaser's receipt of
same;
(vi) not allow the Investigations or any
other activities undertaken by Purchaser or its
representatives to result in any Encumbrances being filed or
recorded against the Facilities or the Corporation or Seller
and notwithstanding the foregoing, Purchaser shall, at its
sole cost and expense, promptly discharge of record any such
Encumbrances that are so filed or recorded (including,
without limitation, Encumbrances for services, labor or
materials furnished); and
55
(vii) indemnify, defend and hold
harmless Seller, the Corporation, U S WEST and their
Affiliates from and against any claims, losses, damages,
liabilities, fines, fees, penalties or expenses (including,
but not limited to, reasonable counsel and paralegal fees
and other costs incurred in connection therewith through and
including all appeals and appellate costs relating thereto)
suffered or incurred by Seller, the Corporation, U S WEST or
their respective Affiliates arising out of or in connection
with (i) Purchaser's and/or its representatives' entry upon
the Facilities and any Investigations or other activities
conducted thereon by Purchaser or its representatives which
results in physical damage to the Facilities or otherwise
causes personal or physical injury or damage or (ii) any
Liens filed or recorded against the Facilities, the
Corporation or Seller as a consequence of the
Investigations.
(c) COOPERATION. The parties hereby agree to
execute such further documents and to perform such further
acts consistent with the intent and purposes of this
Agreement in order to effectuate the terms and provisions of
this Agreement.
SECTION 14.2 CONDITION OF FACILITIES.
Purchaser's failure, for any reason whatsoever, to elect to
terminate this Agreement prior to the Due Diligence
Expiration Date pursuant to Section 13.1 shall be deemed an
acknowledgment by Purchaser that Purchaser has inspected the
Facilities, is thoroughly acquainted with and accepts their
condition and has reviewed, to the extent necessary in its
discretion, all of the Corporation Information. Anything to
the contrary contained in this Agreement notwithstanding,
neither Seller nor U S WEST nor any of their respective
Affiliates have made and do not make any representations,
warranties (express or implied), guarantees, promises,
statements, inducements or information as to the Facilities
or any part thereof, or as to the physical condition,
expenses, operation, maintenance, profit, rents, loss or use
to which the Facilities, or any part thereof, may be put, or
any other matter or thing affecting or pertaining to the
Facilities and the other assets of the Corporation except as
expressly set forth in this Agreement (including the
Schedules hereto and the other documents that are
contemplated hereby and executed at the Closing). Further,
Purchaser acknowledges that it has, or will cause to have,
prior to the Due Diligence Expiration Date, independently
investigated, analyzed and appraised the value and potential
profitability of the Corporation. Neither Seller nor U S
WEST nor any of their respective Affiliates shall be liable
or bound in any manner by any verbal or written agreements,
representations, "set-ups" or information pertaining to the
operation, lay-out, expenses, condition, income,
56
profits or loss furnished by any broker, agent, employee,
consultant or servant of Seller or U S WEST or any other Person,
unless the same are specifically set forth in this Agreement or
the Corporate Information. Without limiting the generality of
the foregoing, Purchaser has not relied on any
representations or warranties, and neither Seller, nor U S
WEST, nor any of their respective Affiliates or agents or
representatives has or is willing to make any
representations or warranties, express or implied (other
than as may be expressly set forth in this Agreement or as
provided in the Closing documents), as to (i) the status of
title to the Facilities, (ii) the current or future real
estate tax liability, assessment or valuation of the
Facilities, (iii) the potential qualification of the
Facilities for any and all benefits conferred by any laws
whether for subsidies, special real estate tax treatment,
insurance, mortgages or any other benefits, whether similar
or dissimilar to those enumerated, (iv) the present or
future condition and operating state of any of the
Facilities and the present and future structural,
non-structural and other condition of any improvements in
respect of the Facilities, (v) the compliance of the
Facilities in their current or any future state with
applicable laws, rules or regulations or any violations
thereof, including, without limitation, those relating to
environmental laws, access by the handicapped, zoning laws
and the ability to obtain a change in the zoning or a
variance with respect to the Facilities, non-compliance, if
any, with zoning laws, (vi) the nature and extent of any
right-of-way, lease, possession, lien, encumbrance, license,
reservation, condition or otherwise in respect of the
Facilities, (vii) the availability of any financing for the
alteration, rehabilitation or operation of the Facilities
from any source, including, without limitation, any
Governmental Authority or any lender, (viii) the current or
future use of the Facilities, including, without limitation,
the Facilities, use as a solid waste facility within the
meaning of Chapter 159, Part II, Florida Statutes, as
amended, or as a solid waste disposal facility within the
meaning of Section 142(a) (6) of the Code, (ix) the actual
or projected income or operating expenses of the Facilities,
(x) the absence of environmentally hazardous, toxic or
dangerous substances, or any other conditions (whether
patent, latent or otherwise) affecting the Facilities, (xi)
the enforceability of the Bonds or any of the documents,
instruments or agreements executed in connection therewith,
or the lien or priority or value of any collateral directly
or indirectly securing the same, or (xii) whether interest
thereon is includable in the gross income of the holder
thereof for federal income tax purposes. Purchaser
acknowledges that the due diligence period will afford
Purchaser the opportunity for full and complete
investigations, examinations and inspections of the
Facilities and all Corporation Information. Except as
expressly set forth in this Agreement or as specified in the
Closing documents, Purchaser
57
acknowledges and agrees that (A) the Corporation Information
delivered or made available to Purchaser and Purchaser's
representatives by Seller or Seller's Affiliates, or any of
their agents or representatives may have been prepared by
third parties and may not be the work product of Seller or
of any of Seller's Affiliates; (B) neither Seller nor any of
Seller's Affiliates nor U S WEST has made any independent
investigation or verification of, or has any Knowledge of,
the accuracy or completeness of, the Corporation
Information; (C) the Corporation Information delivered or
made available to Purchaser and Purchaser's representatives
is furnished to each of them at the request, and for the
convenience of, Purchaser; (D) Purchaser is relying solely
on its own investigations, examinations and inspections of
the Facilities and those of Purchaser's representatives and
is not relying in any way on the Corporation Information
furnished by Seller or any of Seller's Affiliates or U S
WEST, or any of their agents or representatives; and (E)
Seller expressly disclaims any representations or warranties
with respect to the accuracy or completeness of the
Corporation Information and Purchaser releases Seller and
Seller's Affiliates and U S WEST and its Affiliates, and
their respective agents and representatives, from any and
all liability with respect thereto. SELLER AND U S WEST DO
HEREBY DISCLAIM ANY AND ALL WARRANTIES OF MERCHANTABILITY
AND FITNESS THAT MAY BE DUE FROM SELLER OR U S WEST TO
PURCHASER WHETHER IN REGARD TO THE FACILITIES OR THE
PERSONAL PROPERTY USED IN CONNECTION WITH THE FACILITIES.
Notwithstanding anything else to the contrary herein, no
casualty loss or condemnation (whether partial or total) of
the Facilities on or prior to the Closing shall in any way
or manner affect the obligations of the parties as set forth
herein, except, however, if, prior to the Closing, all or
any portion of the Facilities are damaged by fire,
vandalism, acts of God or other casualty or cause which
results in damage to the Facilities of $500,000 or greater
from a risk not fully covered by insurance (exclusive of any
deductible), Purchaser shall have the option to terminate
this Agreement in which event the parties hereto shall be
released from all further obligations and liabilities
hereunder, except for the Surviving Obligations. Purchaser
shall exercise its right to terminate in writing no later
than ten days after the damage is incurred or Purchaser
shall conclusively be deemed to have waived this right to
terminate.
SECTION 14.3 NOTICES. Except as provided in
the Escrow Agreement, all notices, demands and other
communications to any party
58
hereunder shall be in writing and shall be sufficient in all
respects if in writing and delivered personally or certified
mail, return receipt requested or telecopied (and such
telecopy is confirmed), or mailed by national overnight
courier service,
if to Seller, at
Green Isle Environmental Services, Inc.
000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, President and CEO
Telecopy Number: (000) 000-0000
with a copy to
Xxxxxxxxxxx Xxxxx & Xxxxxxxx
3400 Plaza VII Building
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy Number: (000) 000-0000
if to U S WEST, at
U S WEST Financial Services, Inc.
Millennium Building
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Post, President
Telecopy Number: (000) 000-0000
with a copy to
Weil, Gotshal & Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
59
if to Purchaser at
c/o Waste Management, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopy Number: (000) 000-0000
with a copy to:
Waste Management Inc. of Florida
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
or such other address or telecopier number as such party may
hereinafter specified by notice to the other parties hereto.
Each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified above; (ii) if
given by mail or overnight courier service the first day
after mailing or when delivered to such courier; or (iii) if
given by any other means, when delivered at the address
specified in this Section 14.3.
SECTION 14.4 NO WAIVERS; AMENDMENTS. (a) No
failure or delay on the part of Seller, U S WEST or
Purchaser in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any
other right, power or remedy.
(a) Any provision of this Agreement may be
amended, if, but only if, such amendment is in writing, and
is executed by each of Seller, U S WEST and Purchaser.
SECTION 14.5 CONFIDENTIALITY.
(a) Unless and until the consummation of the
Closing of the transactions contemplated hereby, and except
as provided in Section 14.6 of this Agreement, Purchaser
will refrain, and will cause its officers, directors, employees,
60
agents and other representatives to refrain from
disclosing to any other Person any confidential documents or
confidential information concerning the Corporation, the
Facilities, Seller or its Affiliates or U S WEST furnished
to it in connection with this Agreement or the transactions
contemplated hereby, including, without limitation, the
Corporation Information, unless (i) such disclosure is
compelled by judicial or administrative process or by other
requirements of law and notice of such disclosure is
furnished to Seller and U S WEST; (ii) Purchaser deems it
advisable (upon written advice of Purchaser's legal counsel
delivered to Seller and U S WEST) to disclose any such
confidential documents or information in connection with the
requirements of any federal or state securities law; or
(iii) such confidential documents or information can be
shown to have been (x) previously known by Purchaser, (y) in
the public domain through no fault of Purchaser, or (z)
later acquired by Purchaser from other public sources.
(b) Unless and until the consummation of the
Closing of the transactions contemplated hereby, Seller and
U S WEST will refrain, and will cause their respective
officers, directors, employees, agents and other
representatives to refrain from disclosing to any other
Person any confidential documents or confidential
information concerning Purchaser or its Affiliates furnished
to them in connection with this Agreement or the
transactions contemplated hereby, unless (i) such disclosure
is compelled by judicial or administrative process or by
other requirements of law and notice of such disclosure is
furnished to Purchaser; (ii) Seller or U S WEST deems it
advisable (upon written advice of Seller's or U S WEST's
legal counsel delivered to Purchaser) to disclose any such
confidential documents or information in connection with the
requirements of any federal or state securities law; or
(iii) such confidential documents or information can be
shown to have been (x) previously known by Seller or U S
WEST, (y) in the public domain through no fault of Seller
and U S WEST, or (z) later acquired by Seller or U S WEST
from other public sources.
SECTION 14.6 PUBLIC ANNOUNCEMENTS. At all
times at or before the Closing, Seller, Purchaser and U S
WEST will each consult with the others before issuing or
making any reports, statements or releases to the public
with respect to this Agreement or the transactions
contemplated hereby and will use good faith efforts to agree
on the text of any such report, statement or release;
provided that (i) the parties hereto agree that upon
execution of this Agreement, Purchaser, Seller, the
Corporation and U S WEST may disclose that the Agreement has been
61
been executed and that the parties hereto are proceeding to
consummate the transactions contemplated by this Agreement;
(ii) Seller, the Corporation and U S West may disclose to
the Four Cities that this Agreement has been executed and
have further communication with the Four Cities to the
extent they view such communication as necessary or
desirable in respect of the transactions contemplated
hereby; (iii) on or after the Closing Date, the parties
hereto may issue a press release in form and substance
acceptable to the parties hereto disclosing the consummation
of the transactions contemplated by this Agreement; and (iv)
Seller, the Corporation and U S WEST may also disclose that
the transactions contemplated by this Agreement have been
consummated. If Seller, Purchaser and U S WEST are unable
to agree on or approve any other public report, statement,
or release, then such report, statement or release may not
be issued or made, unless and except to the extent that such
report, statement or release is, in the written opinion of
legal counsel to a party, required by law to be made at such
time, in which case the legally required report, statement
or release may be made; PROVIDED, HOWEVER, that any party
releasing such a legally required report, statement or
release shall use its best efforts to obtain and maintain
the confidentiality of such report, statement or release,
unless the other parties agree otherwise. Purchaser shall
have the right to disclose that it has entered into an
agreement to purchase the Common Stock and Indebtedness in
connection with its due diligence.
SECTION 14.7 PROHIBITION OF RECORDING. Any
attempt to record this Agreement or any memorandum thereof
or any reference hereto by Purchaser or any agent or
representative of Purchaser prior to the Closing Date shall
constitute a material default by Purchaser. Purchaser
hereby indemnifies and exonerates and agrees to hold Seller
and U S WEST and their Affiliates harmless from all loss,
liability, damage, cost or expense (including, but not
limited to, reasonable counsel and paralegal fees and other
costs incurred in connection therewith through and including
all appeals and appellate costs relating thereto) arising
out of or in connection with the improper or unauthorized
recordation of this Agreement or any memorandum thereof or
any reference hereto by Purchaser or any agent or
representative of Purchaser in any document recorded by
Purchaser other than a lis pendens which may be filed by
Purchaser in connection with any action to xxx for specific
performance of this Agreement to the extent such action is
expressly permitted by the terms of this Agreement.
62
SECTION 14.8 ARBITRATION.
(a) Subject to the limitations set forth in this
Agreement, any claim, controversy or dispute, whether
sounding in contract, statute, tort, fraud,
misrepresentation or other legal theory, between or among
any of the parties to this Agreement or between or among one
or more of the parties to this Agreement and any of the
employees, agents, officers, directors or affiliated
businesses of another party, shall be resolved by
arbitration as prescribed in this Section 14.8. The Federal
Arbitration Act, 9 U.S.C. Sections 1-15, not state law,
shall govern the arbitrability of all claims.
(b) A single arbitrator engaged in the practice
of law, who is knowledgeable about the subject matter of
this Agreement, shall conduct the arbitration under the then
current rules of the AAA, unless otherwise provided herein.
The arbitrator shall be selected in accordance with AAA
procedures from a list of qualified people maintained by
AAA. The arbitration shall be conducted in the regional AAA
office closest to where the claim arose, and all expedited
procedures prescribed by the AAA rules shall apply.
(c) The arbitrator shall only have authority to
award compensatory damages and specific performance and
shall not have authority to award punitive damages, other
non-compensatory damages or any other form of relief; the
parties hereby waive all rights to and claims for relief
except for (i) compensatory damages and (ii) specific
performance; provided that the parties do not waive any
right to injunctive or other equitable relief in respect of
a breach by any other party of the terms and provisions of
Section 6.3 of this Agreement. Each party shall bear its
own costs and attorneys' fees, and the parties shall share
equally the fees and expenses of the arbitrator. The
arbitrator's decision and award shall be final and binding,
and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.
(d) If any party files a judicial or
administrative action asserting claims subject to
arbitration, as prescribed therein, and another party
successfully stays such action and/or compels arbitration of
said claims, the party filing said action shall pay the
other party's costs and expenses incurred in seeking such
stay and/or compelling arbitration, including reasonable
attorneys' fees.
(e) In the event of any proceedings involving
claims, controversies or disputes asserted by Persons that
are not a party to this
63
Agreement, any claims, controversies or disputes asserted in
connection therewith which are to be determined between
or among parties to this Agreement shall be subject to
arbitration in accordance with this Section 14.8.
SECTION 14.9 TIME OF THE ESSENCE. The parties
agree that, if wherever this Agreement provides that Seller,
U S WEST or Purchaser must send or give any notice, make an
election or take some other action with a specific time
period in order to exercise a right or remedy it may have
hereunder, time shall be of the essence with respect to the
taking of such action.
SECTION 14.10 SUCCESSORS AND ASSIGNS. No party
hereto shall assign its rights or obligations under this
Agreement without the prior written consent of the other
parties hereto, except (a) Purchaser may, without consent,
assign its rights to a wholly-owned subsidiary of Purchaser
and (b) Purchaser may assign its rights to a Governmental
Authority; provided that with respect to any such
assignment(s), (x) Purchaser shall remain liable for all
obligations arising hereunder or under any other documents,
agreements or instruments relating hereto and (y) any
consideration received for the sale of the Corporation,
derived directly or indirectly by Purchaser as a result of
such assignment(s), in excess of: (i) $18,250,000 (ii) plus
an amount equal to the dollar amount of the Adjustment
Amount (if the Accounts Receivable exceed the Payables) or
less an amount equal to the Adjustment Amount (if the
Payables exceed the Accounts Receivable) (iii) less the
aggregate amount of any tax benefit derived directly or
indirectly by Purchaser with respect to Purchaser's interest
in the Corporation, shall immediately be paid to U S WEST.
This Agreement shall be binding upon Purchaser, U S WEST and
Seller and their respective permitted successors and
assigns.
SECTION 14.11 GOVERNING LAW. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT IN RESPECT OF
ARBITRATION, THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION,
THE INTERPRETATION, CONSTRUCTION, VALIDITY AND
ENFORCEABILITY THEREOF, SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, EXCLUDING
ANY CONFLICT OF LAWS RULES THEREOF. VENUE SHALL BE IN
BROWARD COUNTY, FLORIDA. THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY WILL BE DEEMED TO HAVE BEEN
CONSUMMATED IN THE STATE OF FLORIDA.
64
SECTION 14.12 SEVERABILITY. If any term,
provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 14.13 COUNTERPARTS; DATE HEREOF;
EFFECTIVENESS. This Agreement may be executed in any number
of counterparts each of which shall be an original with the
same effect as if the signatures thereto and hereto were
upon the same instrument. Any such counterpart may be
executed by facsimile signature with only verbal
confirmation, and when so executed and delivered shall be
deemed an original and such counterpart(s) together shall
constitute only one original. The term "date hereof", "date
of the execution of this Agreement" or similar words shall
mean the last day this Agreement has been executed and
delivered by U S WEST, Seller and Purchaser.
SECTION 14.14 ENTIRE AGREEMENT. This Agreement
supersedes and replaces all prior agreements and
understandings, whether written or oral, among the parties
hereto with respect to the subject matter hereof and, from
and after the date hereof, any and all such prior agreements
and understandings shall be null and void and of no further
force or effect without any further action on the part of
any party hereto being required.
SECTION 14.15 EXPENSES. Except as expressly set
forth in this Agreement, Purchaser, on the one hand, and U S
WEST and Seller, on the other hand, shall be responsible for
payment of their own costs and expenses incurred in
connection with this Agreement and the transactions
contemplated hereby, including, without limitation, any fees
and expenses related to compliance with all applicable
requirements of the HSR Act.
SECTION 14.16 SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. The representations and warranties of Seller as
set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7,
3.8, 3.9, 3.10, 3.11, 3.15, 3.16, 3.17, 3.18 and 3.19 of
this Agreement and the representations and warranties of U S
WEST as set forth in Sections 5.1, 5.2, 5.3, and 5.4 of this
Agreement and the representations and warranties of
Purchaser as set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5,
and 4.6 of this Agreement shall survive the Closing for a
period of one (1) year. No other representations or
warranties shall survive the Closing Date.
65
SECTION 14.17 INDEMNIFICATION. From and after
the Closing Date, Purchaser hereby agrees to indemnify and
hold harmless Seller, the Corporation and U S WEST and each
of their Related Parties from and against any and all
claims, damages, losses, liabilities, costs or expenses
whatsoever (including, but not limited to, reasonable
attorneys' fees and expenses, including those incurred at
trial or on appeal, or in other indirect or administrative
proceedings) which Seller, the Corporation and/or U S WEST
and/or any of their Related Parties may incur (or which may
be claimed against Seller, the Corporation and/or U S WEST
and/or any of their Related Parties) by reason of, under,
arising out of, related to, or in connection with (a) any
material breach or material default by Purchaser of any
representation, warranty, covenant or other obligation
contained in this Agreement or (b) any material breach or
material default under or in respect of the terms of either
the Xxxxxxxx Contract or the Four Cities Contract resulting
from the entering into or consummation of the transactions
contemplated by this Agreement.
SECTION 14.18 THIRD PARTY BENEFICIARY. The
parties hereto recognize that Xxxxx X. Xxxxxxxxx is a third
party beneficiary of Article 11 hereof, but nothing herein,
express or implied, is intended to confer on any person
other than Xx. Xxxxxxxxx and the parties hereto, rights and
remedies under or by reason of this Agreement.
66
IN WITNESS WHEREOF, the parties hereto have duly
executed this Purchase Agreement, or caused this Purchase
Agreement to be duly executed by their respective authorized
officers, as of the date first above written.
WASTE MANAGEMENT INC. OF FLORIDA
By:/s/ XXXXX X. XXXXXX
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
U S WEST FINANCIAL SERVICES, INC.
By:/s/ XXXXXXX X. POST
--------------------------------
Name: Xxxxxxx X. Post
Title: President
00
XXXXX XXXX XXXXXXXXXXXXX SERVICES, INC.
By:/s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
ACKNOWLEDGED AND AGREED on behalf of
the Corporation and its Affiliates,
including specifically for purposes
of Section 8.5 of this Agreement:
XXXXXX RECYCLING OF FLORIDA, INC.
By:/s/ XXXXX X. XXXXXX
------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
68
[Not a part of agreement]
EXHIBITS AND SCHEDULES TO
PURCHASE AGREEMENT,
DATED JUNE 1, 1995, BY AND AMONG
GREEN ISLE ENVIRONMENTAL SERVICES, INC.
(NOW KNOWN AS XXXXXX MANUFACTURING, INC.),
WASTE MANAGEMENT INC. OF FLORIDA AND
U S WEST FINANCIAL SERVICES, INC.
EXHIBIT OR SCHEDULE SUBJECT REFERENCE IN AGREEMENT
Schedule 3.3 Subsidiaries Section 3.3
Schedule 3.6 Permits Section 3.6
Schedule 3.7 Contracts and Loans to Section 3.7
Individuals
Schedule 3.12 Proceedings Section 3.12
Schedule 3.13 Consents Section 3.13
Schedule 3.14 Insurance Section 3.14
Schedule 3.15 Customers Section 3.15
Schedule 3.16 Real Estate Section 3.16
Schedule 3.17 Financial Statements Section 3.17
Schedule 4.6 Authorizations Section 4.6
Schedule 6.5 Individuals Section 6.5
Exhibit A Form of Escrow Agreement Section 1.1
Exhibit B Form of Ongoing Lawsuit Section 1.1
Release and Indemnification
Agreement
Exhibit C Form of Assignment of Sections 1.1 and 2.2(a)
Excluded Assets
Exhibit D Form of Release and Section 1.1
Cancellation of
Inter-Company Obligations
Agreement
Exhibit E Letter from City of Section 3.20
Pembroke Pines
Exhibit F Form of Restated Central Section 6.4
Contract
Exhibit G Secretary's Certificate Section 10.1(b)
of Seller
Exhibit H Secretary's Certificate Section 10.1(b)
of U S WEST
Exhibit I Secretary's Certificate Section 10.2(b)
of Purchaser
Exhibit J Form of Investor Letter Section 10.2(d)
