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SECURITIES PURCHASE AGREEMENT
by and among
MANNER, INCORPORATED
and
KTI PLASTIC RECYCLING, INC. ("Buyer")
and
XXXXX XXXXXXX ("Seller")
and
XXXX XXXXXX ("Seller")
Dated as of November 25, 1996
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TABLE OF CONTENTS
OF
ASSET PURCHASE AGREEMENT
SECTION AND HEADING PAGE
------------------- ----
1 Purchase and Sale 1
1.1 Purchase and Sale of Assets 1
1.2 Method of Conveyance 1
1.3 No Assumed Obligations 2
2 Purchase Price and Closing 2
2.1 Purchase Price 2
3 Representations and Warranties of the Sellers 2
3.1 Authorization 2
3.2 No Intention to Sell 2
3.3 No Violation 2
3.4 Documentation 2
3.5 Leases 3
3.6 Taxes 3
3.7 Insurance 4
3.8 Employee Benefit Plans: Pension Plans 4
3.9 Brokers and Finders 5
3.10 Accuracy of representations and Documents 5
3.11 Projected Earnings 6
4 Representations and Warranties of Buyer 6
4.1 Corporate Organization, Etc. 6
4.2 Authorization, Etc. 6
4.3 No Violation 6
5 Certain Covenants and Agreements 6
5.1 Full Access 6
5.2 Notice of Claims and Investigations 6
5.3 Deposit for No Solicitation or Negotiation of Other Offers 7
5.4 Press Releases 7
5.5 Consummation of Transactions 7
5.6 Post-Closing Cooperation 7
5.7 Risk of Loss 7
5.8 Post-Closing Authority 7
6 (Intentionally Omitted) 8
7 Conditions to the Obligations of Sellers 8
7.1 Representations and Warranties True 8
7.2 No Proceeding, Litigation; Injunction 8
7.3 Organizational Documents 8
7.4 Employment Agreements 8
7.5 Covenants Not to Compete 8
7.6 Registration Rights Agreement 8
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SECTION AND HEADING PAGE
------------------- ----
8. Conditions to the Obligations of Buyer 8
8.1. Representations and Warranties True 9
8.2. Performance 9
8.3. No Proceeding, Litigation, Injunction 9
8.4. Additional Documents 9
8.5. Board of Directors Approval 9
8.6. Xxxx Xxxxx Xxxxxx 9
9. Survival of Representations and Warranties; Indemnification 9
9.1. Survival of Representations 9
9.2. Statements as Representations and Warranties 9
9.3. Remedies Cumulative 10
9.4. Buyer's Indemnity 10
9.5. Sellers' Indemnity 10
9.6. Indemnity Procedure 11
. 10. (Intentionally Omitted) 11
11. Operations-Post Closing 11
11.1. Stock Options 11
11.2. Banking Relationships 12
11.3. Board Composition 12
12. Miscellaneous Provisions 12
12.1. Amendment and Modification 12
12.2. Waiver of Compliance 12
12.3. Expenses 12
12.4. Notices 13
12.5. Binding Effect; Assignment 13
12.6. Governing Law 14
12.7. Counterparts 14
12.8. Headings 14
12.9. Entire Agreement 14
12.10. Third Parties 14
12.11. Severability 14
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SECURITIES PURCHASE AGREEMENT
THIS AGREEMENT dated as of November 25, 1996, by and among Manner Incorporated,
a Maryland corporation ("MRI"), doing business as Manner Resins, Xxxxx Xxxxxxx
("Xxxxxxx") and Xxxx Xxxxxx ("Xxxxxx" and together with Xxxxxxx referred to
herein as the "Sellers" and each is individually referred to herein as a
"Seller") and KTI Plastic Recycling, Inc., a Delaware corporation (the "Buyer").
The Buyer desires to purchase from Xxxxxxx and Xxxxxx, and Sellers desire to
sell, assign and transfer to the Buyer, all of Sellers' stock in MRI (the
"Securities") as more specifically described in Section 1.1 of the disclosure
schedule attached hereto (the "Disclosure Schedule"), all on the terms and
subject to the conditions hereinafter set forth.
1. Purchase and Sale.
1.1 Purchase and Sale of Assets. On the terms and subject to the
conditions herein set forth, the Buyer shall purchase from the
Sellers all of the Securities, as of the Closing Date (as such
term is heretofore defined), owned by the Sellers or in which
any Seller has an interest.
1.2. Method of Conveyance.
(a) The sale, transfer, conveyance, assignment and delivery
by Sellers of the Securities to the Buyer in accordance
with Section 1.1 hereof shall be effected on the Closing
Date by Sellers' execution and delivery of the
Securities and the customary stock powers, duly
guaranteed (collectively, the "Instruments of
Conveyance") to the Buyer.
(b) At the Closing, good and valid title to all of the
Securities shall be transferred, conveyed, assigned and
delivered by the Sellers to the Buyer pursuant to this
Agreement and the Instruments of Conveyance, free and
clear of any and all Liens (as defined below). For the
purposes of this Agreement, the term "Lien" shall mean
any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind whatsoever.
(c) At the Closing, the Sellers shall cause MRI to provide
to the Buyer a estoppel certificate signed by each
creditor (excluding trade creditors) of MRI (the "Third
Party Funded Debt"), each certificate indicating the
balance due on the Third Party Funded Debt, including
any accrued and unpaid interest thereon, as of the end
of the preceding month, together with a per diem
interest rate during the month in which the Closing
occurs.
(d) At the Closing the Sellers shall cause MRI to provide to
the Buyer a certificate signed by MRI indicating the
balance of trade accounts payable ("Trade Accounts
Payable") due to third parties, including any accrued
and
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unpaid interest thereon, as of the end of the preceding
month, together with a per diem interest rate during the
month in which the Closing occurs.
1.3. No Assumed Obligations. Pursuant to this Agreement, the Buyer
does not assume any of the liabilities or obligations of MRI,
whether absolute, accrued, contingent or otherwise, whenever
incurred.
2. Purchase Price and Closing.
2.1. Purchase Price. The consideration for the Securities to be
sold, transferred and conveyed by the Sellers to the Buyer
pursuant to this Agreement shall be Sixty Five Thousand
(65,000) shares of KTI, Inc. common stock to be delivered at
the Closing. The stock shall be registered in the names of
Xxxxx Xxxxxxx and Xxxx Xxxxxx as tenants by the entirety and
not as tenants in common. The stock certificate evidencing
such shares shall bear a customary restrictive legend
indicating that such shares are unregistered. The
consideration set forth in this Section 2.1 is hereinafter
collectively referred to as the "Purchase Price". The parties
intend that the transaction contemplated shall be treated as a
tax free reorganization under Section 368 (a)(1)(B) under the
Internal Revenue Code of 1986, as amended.
3. Representations, Warranties and Agreements of the Sellers.
Sellers hereby represent, warrant and agree that:
3.1. Authorization. Each Seller has all requisite power and
authority to sell the Securities which he or she owns. This
Agreement is, and when executed and delivered, the Instruments
of Conveyance will be, the legal, valid and binding obligation
of Sellers, enforceable in accordance with their respective
terms.
3.2. No Intention to Sell. Neither Seller has any present intention
to sell any of the shares of KTI common stock to be received
under this Agreement.
3.3. No Violation. The execution and delivery of this Agreement by
the Sellers and the consummation of the transactions
contemplated hereby will not violate any statute or law or any
judgment, decree, order, regulation or rule of any domestic or
foreign court or governmental authority.
3.4. Documentation.
(a) The Sellers shall cause MRI to deliver a certificate
stating whether Section 3.4 (a) of the Disclosure
Schedule contains an accurate and complete list of all
Equity Securities, all Third Party Funded Debt and all
Trade Accounts Payable, indicating the balance due,
including accrued and unpaid interest thereon, as of the
close of the preceding month and a per diem interest
factor for the month of Closing. Estoppel or payoff
letters from each third party lender (excluding trade
creditors) shall be attached to such schedule.
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The Sellers shall cause MRI to deliver a list of all
accounts payable as of the close of the monthly
financial statement of MRI and its subsidiaries.
(b) Each Seller has and will have at the Closing, good and
valid title to the Securities being conveyed by him or
her hereunder.
3.5. Leases.
(a) Section 3.5 (a) of the Disclosure Schedule constitutes a
complete and accurate list of all real and personal
property leases, subleases, conditional sales agreements
or other title retention agreements (collectively the
"Leases" and individually a "Lease") to which MRI is a
party, as lessee.
(b) All Leases are valid and binding on all parties thereto
and enforceable against such parties in accordance with
their terms, and are in full force and effect; and with
respect to each such Lease, there are no existing
defaults thereunder (whether or not waived by lessor)
and no event has occurred which (whether with or without
notice, lapse of time or both, or the happening of any
other event) would constitute default thereunder.
(c) Each lessor shall provide an estoppel certificate or
payoff letter satisfactory in form and substance to the
Buyer.
3.6. Taxes. Except as set forth in Section 3.6 of the Disclosure
Schedule:
(a) The Sellers shall cause MRI to deliver a certificate
stating whether MRI has duly and accurately filed or
caused to be filed all tax reports and returns
(including information returns) required to be filed in
connection with its business for all periods ending on
the date hereof and will make all such filings required
to be made prior to the Closing Date. The certificate
shall further state whether MRI has duly paid, or
provided for in accordance with generally accepted
accounting principles, consistently applied, all taxes
and other charges due or claimed to be due from it to
any federal, state, local or foreign taxing authority
(including, without limitation, those due in respect of
properties, income, franchises, licenses, sales or
payrolls), except for taxes being contested in good
faith.
(b) The Sellers shall cause MRI to deliver complete copies
of all of its tax returns, both income tax and
otherwise, for all tax years.
(c) The Sellers shall cause MRI to advise the Buyer whether
there are any
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3.7. Insurance.
(a) Section 3.7 of the Disclosure Schedule. The Sellers
shall cause MRI to deliver a certificate containing an
accurate and complete list of all policies of fire,
disability, workers' compensation, products liability,
and other forms of insurance owned or held by or
beneficially for MRI which relate to or provide coverage
for the business of MRI. The Sellers will cause MRI to
deliver a copy of each such policy to the Buyer not less
than 5 business days prior to the Closing.
(b) The Sellers shall cause MRI to deliver a certificate
stating whether all such policies are in full force and
effect, all premiums with respect thereto covering all
periods through the Closing have been or will be paid by
MRI, and no notice of cancellation or termination has
been received with respect to any such policy.
(c) The Sellers shall cause MRI to deliver a certificate
stating whether such policies are sufficient for
compliance with all requirements of law and of all
agreements to which MRI is a party; are valid,
outstanding and enforceable policies; provide adequate
insurance coverage for the assets and operations of
MRI's business; and, with respect to periods prior to
the Closing will not in any way be affected by, or
terminate or lapse by reason of, the transactions
contemplated by this Agreement.
3.8. Employee Benefit Plans: Pension Plans.
(a) The Sellers shall cause MRI to deliver a certificate
stating whether, except as set forth on Section 3.8 of
the Disclosure Schedule, MRI has any bonus, deferred
compensation, pension, profit-sharing, retirement, stock
purchase, stock option, phantom stock, medical,
post-retirement medical or any other employee benefit
plan, arrangement or practice, whether written or
unwritten (an "Employee Benefit Plan"). The Sellers
shall cause MRI to deliver true copies of each written
Employee Benefit Plan and an accurate and complete
written description of each oral Employee Benefit Plan
to Buyer. The Sellers shall cause MRI to deliver a
certificate stating whether Section 3.8 of the
Disclosure Schedule sets forth the annual amounts paid
or accrued in connection with each Employee Benefit Plan
as of December 31, 1995, and an estimate of the amounts
payable or accruable in connection therewith through
September 30, 1996, to the extent such amounts are
presently fixed or determinable.
(b) The Sellers shall cause MRI to deliver a certificate
stating whether Section 3.8 of the Disclosure Schedule
is a list of each "employee pension benefit plan" in the
meaning of the Employee Retirement Income Security Act
of 1974 and the regulations thereunder ("ERISA"),
maintained or contributed to by either Seller (the
"Pension Plans") and, except as noted thereon, no
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Pension Plan is a "multi-employer plan" within the
meaning of ERISA. The Sellers shall cause MRI to deliver
a certificate stating whether there have been any
"prohibited transaction," to which MRI has been a party,
within the meaning of Section 4975 of the Internal
Revenue Code of 1986 (the "Code"), or Section 406 of
ERISA, with respect to any Pension Plan which might
subject any such plan or related trust, or any trustee
or administrator thereof, or Seller to the tax or
penalty imposed by Section 4975 of the Code or to a
civil penalty imposed by Section 502 of ERISA. Except as
set forth in Section 3.8(b) of the Disclosure Schedule,
each of the Pension Plans is and has been in material
compliance with the applicable provisions of ERISA and
the Code.
The present value of all accrued benefits, whether
vested or not, under the Pension Plans subject to Title
IV of ERISA do not exceed the value of the assets of
such plans allocable to such accrued benefits. Except as
set forth in Section 3.8(c) of the Disclosure Schedule,
none of the Pension Plans subject to Title IV of ERISA
has, since December 31, 1995, been completely or
partially terminated, nor has there been any "reportable
event," as such term is defined in Section 4043(b) of
ERISA, with respect to any such plan since the effective
date of said Section 4043(b). None of the Pension Plans
or trusts have incurred any "accumulated funding
deficiency," as such term is defined in Section 412 of
the Code, whether or not waived, since the effective
date of said Section 412.
(c) The Sellers shall cause MRI to deliver a certificate
stating whether Section 3.8 (c) of the Disclosure
Schedule is a list of all "employee welfare benefit
plans," within the meaning of ERISA, whether or not
insured, maintained by MRI ("Welfare Plans"). Except as
set forth in Section 3.8 (c) of the Disclosure Schedule,
each Welfare Plan is and has been in material compliance
with the applicable provisions of ERISA and the Code.
The Sellers shall cause MRI to deliver a certificate
stating whether MRI has complied in all material
respects with all of its obligations, if any, including
the making of all required contributions, under each of
the Welfare Plans.
3.9. Brokers and Finders. No person has been authorized by the
Sellers, or by anyone acting on their behalf, to act as a
broker, finder or in any other similar capacity in connection
with the transactions contemplated by this Agreement.
3.10 Accuracy of Representations and Documents. No representation
or warranty made by Sellers in this Agreement or in the
Disclosure Schedule hereto (which is an integral part hereof)
nor any statement, certificate or other document furnished as
an exhibit hereto, or any other document furnished by Sellers
to Buyer or any of their representatives in connection with
this Agreement is, or will be when so furnished, false or
misleading in any material respect or contains any material
misstatement of fact or omits to state any fact necessary to
be stated make the statements made in any such representation
or warranty false or misleading in any material respect.
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3.11 Projected Earnings Before Taxes. The Projected Earnings before
Taxes were prepared in good faith and, subject to the
limitations and uncertainties inherit in trying to project
future economic and business trends or results, represent the
good faith opinion of MRI and its senior management and have a
reasonably basis.
4. Representations and Warranties of Buyer.
Buyer represents and warrants to Sellers as follows:
4.1. Corporate Organization. Etc. Buyer is a corporation duly
formed, validly existing and in good standing under the laws
of the State of Delaware and has all requisite power and
authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and
assets as and in the places where such business is now
conducted and where such properties and assets are now owned,
leased or operated.
4.2. Authorization Etc. Buyer has all requisite power and authority
to execute, deliver and perform its obligations under this
Agreement. This Agreement is valid and binding upon Buyer,
enforceable in accordance with its terms.
4.3. No Violation. Neither the execution and delivery of this
Agreement by Buyer nor the consummation of the transactions
contemplated hereby by Buyer will violate any provisions of
the Certificate of Incorporation of Buyer, or be in conflict
with, or constitute a default (or an event which, with or
without notice, lapse of time or both, would constitute a
default) under, or result in the termination or invalidity of,
or accelerate the performance required by, or cause the
acceleration of the maturity of any debt or obligation
pursuant to, any agreement or commitment to which Buyer is a
party or by which Buyer is bound, or violate any statute or
law or any judgment, decree, order, regulation or rule of any
court or governmental authority.
5. Certain Covenants and Agreements.
5.1. Full Access. The Sellers agree to cause MRI, without in any
way detracting from their representations, warranties and
agreements set forth in this Agreement, to afford Buyer and
its counsel, accountants and other representatives, after the
date hereof, full access during normal business hours to MRI's
plants, offices, warehouses, properties, employees, counsel,
accountants and other representatives, books and records,
including accountant's workpapers, in order that Buyer may
have full opportunity to make such investigations as it shall
desire to make of the affairs of MRI.
5.2. Notice of Claims and Investigations. Each party will
immediately give notice to the other of, and confer with the
other with respect to, any claims, investigations by
governmental authorities or threatened litigation relating to
the transactions contemplated by this Agreement.
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5.3. No Solicitation or Negotiation of Other Offers. Each Seller
agrees that from the date hereof through the Closing Date he
and she will not pursue, encourage or solicit any inquiries or
proposals by, or engage in any discussions or negotiations
with, any person, any sale of the Securities by any of the
Sellers, or any other exchange, or disposition involving the
Securities.
5.4. Press Releases. Without the written consent of the other
parties, which shall not be unreasonably withheld, each of the
parties hereto agrees not to make any public announcements or
press releases regarding the transactions contemplated hereby
until such transactions are consummated, unless otherwise
required by law.
5.5. Consummation of Transactions. Each of the parties agrees to
use its best efforts to bring about the satisfaction of the
conditions required to be performed, fulfilled or complied
with by it hereunder and to take or cause to be taken, all
action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this Agreement as expeditiously as practicable. In case at any
time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, the
appropriate party will take all such necessary action,
including without limitation, the execution and delivery of
such further instruments and documents as may be reasonably
requested by the other party or parties for such purposes or
otherwise to complete or perfect the transactions contemplated
hereby.
5.6. Post-Closing Cooperation. After the Closing, Buyer and Sellers
shall cooperate fully with each other and shall make available
to each other all information, records or documents reasonably
requested in connection with matters involved in the sale of
the Securities.
5.7. Risk of Loss. Prior to the Closing, the risk of loss on the
Securities shall remain with the Sellers.
5.8. Post-Closing Authority.
(a) Each Seller agrees that, unless duly authorized in
writing by Buyer, or required by law, he or she will not
at any time reveal, divulge or make known to any person
(other than Buyer or any affiliate of Buyer) any
confidential or proprietary data or information relating
to MRI's business.
(b) If any of the covenants contained in this Section is
held to be invalid or unenforceable because of the
duration of such provision or the area covered thereby,
the parties agree that the court making such
determination shall have the power to reduce the
duration or area of such provision to the extent
necessary to render such provision valid and enforceable
and, in its reduced form, said provision shall then be
valid and enforceable.
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6. (Intentionally Omitted.)
7. Conditions to the Obligations of Sellers.
Each and every obligation of Buyer under this Agreement to be performed
on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived
in writing by Sellers.
7.1. Representations and Warranties True. The representations and
warranties of Buyer contained in this Agreement shall be true,
complete and accurate in all material respects as of the date
when made and at and as of the Closing as though such
representations and warranties were being made at and as of
the Closing Date, and except for changes expressly permitted
or contemplated by the terms of this Agreement.
7.2. No Proceeding. Litigation: Injunction. No suit, action,
investigation, inquiry or other proceeding by any governmental
body or other person shall have been instituted which arises
out of or relates to this Agreement or the transactions
contemplated hereby or seeks to obtain substantial damages in
respect thereof, and, on the Closing Date, there shall be no
effective permanent or preliminary injunction, writ, temporary
restraining order or any order of any nature issued by a court
of competent jurisdiction directing that the transactions
provided for herein not be consummated as so provided.
7.3 Organizational Documents. Buyer shall have furnished Sellers
with (i) a copy of its Certificate of Incorporation, certified
by the Secretary of State of Delaware, (ii) certified copies
of minutes of action taken by the Board of Directors of Buyer
approving the execution and delivery of this Agreement and
related documents and the consummation of the transaction
contemplated hereunder; and (iii) a Certificate of Incumbency
setting forth the officers of the Buyer.
7.4 Employment Agreements. Both of Xxxxx Xxxxxxx and Xxxx Xxxxxx
shall have executed and delivered Employment Agreements in the
form of Exhibits 7.4 a and 7.4 b hereto.
7.5 Covenants not to Compete. Each of the other employees of MRI
shall have signed covenants not to compete in form acceptable
to the Buyer.
7.6 Registration Rights Agreement. The Seller shall have executed
and delivered a Registration Rights Agreement to the Sellers
in the form of Exhibit 7.6 hereto.
8. Conditions to the Obligations of Buyer.
Each and every obligation of the Sellers under this Agreement to be
performed on or before the Closing shall be subject to the
satisfaction, on or before the Closing, of each of the following
conditions, unless waived in writing by the Buyer.
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8.1. Representations and Warranties True. The representations and
warranties of Sellers contained in this Agreement including
the Disclosure Schedule attached hereto, shall be true,
complete and accurate in all material respects as of the date
when made and at and as of the Closing Date as though such
representations and warranties were being made at and as of
the Closing Date (except that representations and warranties
which refer to conditions existing on a specific date, such as
representations and warranties regarding the Financial
Statements, shall continue to refer to that date) and except
for changes expressly permitted or contemplated by the terms
of this Agreement.
8.2. Performance. Sellers shall have performed, fulfilled and
complied in all material respects with all agreements,
obligations and conditions required by this Agreement to be
performed, fulfilled or complied with by them on or prior to
the Closing, including delivery to Buyer of all of the Assets.
8.3. No Proceeding. Litigation. Injunction. No suit, action,
investigation, inquiry or other proceeding by any governmental
body or other person shall have been instituted or threatened
which arises out of or relates to this Agreement or the
transactions contemplated hereby or seeks to obtain
substantial damages in respect thereof, and, on the Closing
Date, there shall be no effective permanent or preliminary
injunction, writ, temporary restraining order or any order of
any nature issued by a court of competent jurisdiction
directing that the transactions provided for herein not be
consummated as so provided.
8.4. Additional Documents. Sellers shall have delivered to Buyer
such other documents, instruments and certificates as shall be
reasonably requested by Buyer for the purpose of effecting the
transactions provided for and contemplated by this Agreement.
8.5 Board of Directors Approval. Buyer shall have received the
approval of its Board of Directors prior to Closing.
8.6 Xxxx-Xxxxx-Xxxxxx. Buyer shall have received on or prior to
the closing, evidence to its satisfaction that the transaction
is exempt from the rules issued by the Federal Trade
Commission under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976.
9. Survival of Representations and Warranties; Indemnification.
9.1. Survival of Representations. Notwithstanding any investigation
at any time made by or on behalf of any party hereto, all
representations and warranties contained in this Agreement
shall survive the Closing until April 15, 1998.
9.2. Statements as Representations and Warranties. All statements
contained herein, in the Disclosure Schedule, or in any other
schedule, certificate, list or other document delivered or to
be delivered pursuant to this Agreement shall be deemed
representations and warranties as such terms are used in this
Agreement and any
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material misstatement or omission in any thereof shall be
deemed a breach of a representation or warranty hereunder.
9.3. Remedies Cumulative. The remedies provided herein shall be
cumulative and shall not preclude assertion by any party of
any other rights or the seeking of any other remedies against
any other party .
9.4. Buyer's Indemnity. The Buyer agrees to defend, indemnify and
hold harmless the Sellers from, against and in respect of any
and all demands, claims, actions or causes of action, losses,
liabilities, damages, assessments, deficiencies, taxes, costs
and expenses, including without limitation, interest,
penalties and reasonable attorneys' fees and expenses,
asserted against, imposed upon or paid, incurred or suffered
by Sellers as a result of, arising from, in connection with or
incident to (i) any breach or inaccuracy of any representation
or warranty of Buyer contained in this Agreement or (ii) any
breach of any covenant or agreement of Buyer contained in this
Agreement. Until such time as Xxxxx Xxxxxxx is released from
her personal guarantee of the lease for the Rental Property,
MRI and KTIPR shall indemnify her for any money which Xxxxx
Xxxxxxx may pay as the result of such guarantee.
9.5. Sellers' Indemnity.
(a) The Sellers agree to defend, indemnify and hold harmless
Buyer from, against and in respect of any and all
demands, claims, actions or causes of action, losses,
liabilities, damages, assessments, deficiencies, taxes,
costs and expenses, including without limitation,
interest, penalties and reasonable attorneys' fees and
expenses, asserted against, imposed upon or paid,
incurred or suffered by Buyer:
(i) as a result of, arising from, in connection
with or incident to (A) any material breach or
inaccuracy of any representation or warranty of
any Seller in this Agreement or in any
Instrument of Conveyance, or (B) any breach of
any covenant or agreement of any Seller
contained in this Agreement or in any
Instrument of Conveyance; and/or
(ii) as a result of, or with respect to, any and all
material obligations or liabilities of any
Seller, whether known or unknown, asserted or
unasserted, contingent or otherwise (For
purposes of this subsection, "material" shall
mean any amount in excess of $10,000
individually or in aggregate.); and/or
(iii) arising out of any acts, events or
circumstances by any Seller prior to Closing
Date.
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9.6. Indemnity Procedure.
(a) A party agreeing to indemnify against any matter
pursuant to this Agreement is referred to herein as the
"Indemnifying Party" and the other party claiming
indemnity is referred to herein as the "Indemnified
Party".
(b) An Indemnified Party under this Agreement shall give
prompt written notice to the Indemnifying Party of any
liability which might give rise to a claim for indemnity
under this Agreement. As to any claim, action, suit or
proceeding by a third party, the Indemnifying Party
shall have the right, exercisable by notifying the
Indemnified Party within twenty days after receipt of
such notice from the Indemnified Party, to assume the
entire control of the defense, compromise or settlement
thereof, all at the Indemnifying Party's expense
including employment of counsel, and in connection
therewith the Indemnified Party shall cooperate fully to
make available to the Indemnifying Party all pertinent
information under its control. The Indemnified Party may
at its expense, if it so elects, designate its own
counsel to participate with counsel designated by the
Indemnifying Party in the conduct of any such defense.
If the defense of any such matter is tendered to the
Indemnifying Party by notice as set forth above and the
Indemnified Party is entitled to indemnification
pursuant hereto with respect to such matter, and the
Indemnifying Party declines or otherwise fails to (1)
promptly pay or settle the same, or (2) vigorously
investigate and defend the same, the Indemnified Party
may investigate and defend the same and the Indemnifying
Party will reimburse the Indemnified Party for all
judgments, settlement payments and reasonable expenses,
including reasonable attorneys' fees, incurred and paid
by it in connection therewith.
(c) An Indemnified Party shall not make any settlement of
any claim without the written consent of the
Indemnifying Party, which consent shall not be
unreasonably withheld.
(d) Except as set forth in subsection (b) in the event of
any litigation brought by either party hereto to seek
indemnity under this Agreement, the prevailing party
shall be entitled to recover attorneys' fees upon final
judgment on the merits.
10. (Intentionally Omitted)
11. Operations - Post Closings.
11.1 Stock Options - Employees. Stock Options will be granted to
the following employees of MRI:
Xxx Xxxxxxx 500 shares
Xxxxxxxxx Xxxxxx 3,000 shares
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Xxxxxxxxx Xxxxx 500 shares
Xxxxx Xxxxxx 1,000 shares
These options will be exercisable at the closing sale price
per share on the date of Closing and will vest at the rate of
25% on the first and subsequent anniversaries of the date of
Closing. These employees will receive bonuses on the first
four anniversaries of the date of Closing, equal to the
exercise price of the option then vesting, if (a) such
individual has continually been in the employment of MRI; (b)
such bonus is used to exercise the portion of the option then
vesting; and (c) the employee contributes, or otherwise
provides, sufficient funds to MRI for any withholding due on
such bonuses.
11.2 Banking Relationships. MRI has a line of credit with Annapolis
National Bank (the "Bank") for $50,000.00. Said line is
guaranteed by Xxxxx Xxxxxxx and Xxxx Xxxxxx personally. KTIPR
will use all reasonable efforts to have such line increased
from $50,000 to $125,000 and to replace the guarantee by Xxxxx
Xxxxxxx and Xxxx Xxxxxx with a guarantee by KTIPR or KTI. If
the Bank is unwilling to comply with such requests, KTIPR
shall use all reasonable efforts to find another bank, willing
to accede to such requests. MRI will be permitted to maintain
separate bank accounts post closing. Until such time as Xxxxx
Xxxxxxx and Xxxx Xxxxxx are released from their personal
guarantees, MRI and KTIPR shall indemnify them for any money
which Xxxxx Xxxxxxx and Xxxx Xxxxxx may pay as the result of
such guarantee.
11.3 Board Composition. The Board of Directors will have five
directors postclosing, two of whom shall be Xxxxx Xxxxxxx and
Xxxx Xxxxxx. The remaining three directors will be appointed
by KTIPR.
12. Miscellaneous Provisions.
12.1. Amendment and Modification. This Agreement may be amended,
modified and supplemented by the parties hereto only by
written instrument signed by or on behalf of the party to be
charged thereunder.
12.2. Waiver of Compliance. Any failure of Sellers, on the one hand,
or Buyer on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be expressly
waived in writing by an authorized officer of the other party,
but such waiver or failure to insist upon strict compliance
with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to any
subsequent or other failure.
12.3. Expenses. Each of the parties hereto agrees to pay all of the
respective expenses incurred by it in connection with the
negotiation, preparation, execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated hereby, except that, if the transactions
contemplated hereby close, the Buyer shall reimburse the
Sellers for up to $5,000.00 in legal fees and expenses.
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12.4. Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail,
with postage prepaid as follows:
If to Sellers: Xxxxx Xxxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone:(000) 000-0000
Fax: (000) 000-0000
Xxxx Xxxxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone:(000) 000-0000
Fax: (000) 000-0000
with a copy to: West & Xxxxxxxx, P.C.
Suite 775N
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone:(000) 000-0000
Fax: (000) 000-0000
If to Buyer: KTI Plastic Recycling, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone:(000) 000-0000
Fax: (000) 000-0000
with a copy to: Xxxxxxx X. XxxXxx, Esq.
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
or to such other person or address as Buyer shall furnish to
Sellers in writing.
12.5. Binding Effect: Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs,
administrators, executors, legal representatives, such
successors and assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior
written consent of the other parties; provided, however, that
Buyer may freely assign this Agreement
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or all or any rights it may have hereunder to any of its
subsidiaries or affiliated companies, but no such assignment
shall relieve Buyer of its obligations hereunder.
12.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
12.7. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together shall constitute the same instrument.
12.8. Headings. The headings of the sections and articles of this
Agreement are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or
interpretation of this Agreement.
12.9. Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties hereto in respect
of the subject matter contained herein, and supersedes all
prior-agreements, promises, letters of intent, covenants,
arrangements, communications, representations or warranties,
whether oral or written, by any party hereto or by any Related
Person of any party hereto. All Exhibits attached hereto, the
Disclosure Schedule, any exhibits thereto and all
certificates, documents and other instruments delivered or to
be delivered pursuant to the terms hereof are hereby expressly
made a part of this Agreement as fully as though set forth
herein, and all references herein to the terms "this
Agreement", "hereunder", "herein", "hereby" or "hereto" shall
be deemed to refer to this Agreement and to all such writings.
12.10. Third Parties. Except as specifically set forth or referred to
herein, nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon or give to any
person, firm, partnership, corporation or other entity other
than the parties hereto and their successors or permitted
assigns, any rights or remedies under or by reason of this
Agreement.
12.11. Severability. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections or subsections contained
in this Agreement shall not affect the enforceability of the
remaining portions of this Agreement or any part hereof, all
of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words,
phrases, sentences, clauses, sections or subsections contained
in this Agreement shall be declared invalid by a court of
competent jurisdiction, this Agreement shall be construed as
if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, section or sections, or
subsection or subsections had not been inserted.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
/s/ Xxxxx Xxxxxxx /s/ Xxxx Xxxxxx
------------------------- ---------------------
Xxxxx Xxxxxxx Xxxx Xxxxxx
KTI Plastic Recycling, Inc. Manner, Incorporated
By: /s/ Xxxxxx X. Xxxxx By: Xxxxx Xxxxxxx
------------------------- ---------------------
Title: President Title: President
