Ex. 10(a) Acquisition Agreement
ACQUISITION AGREEMENT
by and between
SAFETY-KLEEN SERVICES, INC.,
as Seller,
and
CLEAN HARBORS, INC.,
as Purchaser
Dated as of February 22, 2002
TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE ASSETS...................................................................2
Section 1.1. Acquired Assets..............................................................2
Section 1.2. Excluded Assets..............................................................6
Section 1.3. Assumed Liabilities..........................................................8
Section 1.4. Amounts Due Under Executory Contracts and Unexpired
Leases; Cure Costs.........................................................9
Section 1.5. Excluded Liabilities.........................................................9
Section 1.6. Purchase Price...............................................................9
Section 1.7. Purchase Price Adjustment...................................................10
Section 1.8. Allocation of Cash Purchase Price for Tax Purposes..........................13
ARTICLE II
THE CLOSING...............................................................................13
Section 2.1. Closing.....................................................................13
Section 2.2. Deliveries at Closing.......................................................14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER..............................................16
Section 3.1. Organization................................................................16
Section 3.2. Capitalization of Transferred Subs..........................................17
Section 3.3. Authority Relative to this Agreement and the Ancillary
Agreements................................................................17
Section 3.4. Consents and Approvals......................................................18
Section 3.5. Financial Information.......................................................18
Section 3.6. No Violations...............................................................18
Section 3.7. No Default; Compliance with Applicable Laws; Permits........................19
Section 3.8. Title to Property...........................................................19
Section 3.9. Conduct of Business.........................................................20
Section 3.10. No Undisclosed Liabilities.................................................20
Section 3.11. Taxes......................................................................20
Section 3.12. Real Property Leases.......................................................21
Section 3.13. Brokers....................................................................21
Section 3.14. Ability to Conduct Business................................................21
Section 3.15. Employee Benefit Plans.....................................................21
Section 3.16. Labor Relations and Employment.............................................23
Section 3.17. Litigation.................................................................23
Section 3.18. Principal Customers........................................................23
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...........................................23
Section 4.1. Organization................................................................23
Section 4.2. Authority Relative to this Agreement and the Ancillary
Agreements................................................................24
Section 4.3. Consents and Approvals......................................................24
Section 4.4. No Violations...............................................................24
Section 4.5. Brokers.....................................................................25
Section 4.6. Financing; Solvency.........................................................25
ARTICLE V
COVENANTS.................................................................................25
Section 5.1. Bankruptcy Actions..........................................................25
Section 5.2. Bidding Procedures..........................................................26
Section 5.3. Conduct of Business by the Seller Pending the Closing.......................34
Section 5.4. Access and Information......................................................35
Section 5.5. Approvals and Consents; Cooperation; Notification...........................36
Section 5.6. Additional Matters..........................................................37
Section 5.7. Employment of Business Employees............................................37
Section 5.8. No Implied Representations or Warranties; Due Diligence.....................39
Section 5.9. Books and Records...........................................................39
Section 5.10. Financial Assurance Matters................................................40
Section 5.11. Real Estate Due Diligence..................................................40
Section 5.12. Notification of Motion to Reject Certain Contracts;
Additional Executory Contracts and Unexpired Leases.......................42
Section 5.13. Additional Financial Information...........................................43
Section 5.14. SEC Request................................................................43
Section 5.15. Covenant Not to Compete; Non-Solicitation..................................43
Section 5.16. Investment Canada Act......................................................46
Section 5.17. Schedule Amendments........................................................46
Section 5.18. Non-Domestic and Non-Canadian Operations...................................46
ARTICLE VI
CONDITIONS PRECEDENT......................................................................46
Section 6.1. Conditions Precedent to Obligation of the Seller and
the Purchaser.............................................................46
Section 6.2. Conditions Precedent to Obligation of the Seller............................47
Section 6.3. Conditions Precedent to Obligation of the Purchaser.........................48
ARTICLE VII
TERMINATION, AMENDMENT, AND WAIVER........................................................49
Section 7.1. Termination Events..........................................................49
Section 7.2. Effect of Termination and Abandonment.......................................51
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ARTICLE VIII
GENERAL PROVISIONS........................................................................52
Section 8.1. Indemnification.............................................................52
Section 8.2. Survival of Representations, Warranties, and Agreements.....................53
Section 8.3. Payment of Certain Taxes....................................................53
Section 8.4. Notices.....................................................................53
Section 8.5. Descriptive Headings; Rules of Construction.................................54
Section 8.6. Entire Agreement; Assignment................................................55
Section 8.7. Governing Law...............................................................55
Section 8.8. Expenses....................................................................55
Section 8.9. Amendment...................................................................55
Section 8.10. Waiver.....................................................................55
Section 8.11. Counterparts; Effectiveness................................................56
Section 8.12. Severability; Validity; Parties in Interest................................56
Section 8.13. Apportionment of Property Taxes............................................56
Section 8.14. No Section 338 Election....................................................56
Section 8.15. Taxes and Tax Returns......................................................56
Section 8.16. Tax Matters Involving Third Parties........................................57
ARTICLE IX
DEFINITIONS...............................................................................57
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TABLE OF SCHEDULES
Schedule 1.1(a) Transferred Subs
Schedule 1.1(b)(i) Accounts Receivable
Schedule 1.1(b)(ii)(A) Customer Contracts
Schedule 1.1(b)(ii)(B) Vendor and Service Contracts
Schedule 1.1(b)(ii)(D) Other Contracts
Schedule 1.1(b)(iii) Tangible Personal Property
Schedule 1.1(b)(iv) Intellectual Property
Schedule 1.1(b)(v) Excluded Claims, Rights and Causes of Actions
Schedule 1.1(b)(vi)(A) Owned Real Property
Schedule 1.1(b)(vi)(B) Real Property Leases
Schedule 1.1(b)(vii) Licenses, Permits, Authorizations and Approvals
Schedule 1.1(b)(viii) Bank Accounts and Lockbox Arrangements
Schedule 1.1(b)(ix) Prepaid Items and Deposits
Schedule 1.1(b)(xi) Other Acquired Assets
Schedule 1.1(d) Domestic Transferred Subs
Schedule 1.2(h) Pinewood Subsidiaries
Schedule 1.2(l) Other Excluded Assets
Schedule 1.7(a) Initial Working Capital Statement
Schedule 1.8 Allocation of Purchase Price
Schedule 3.1 Organization
Schedule 3.4 Certain Required Consents and Approvals
Schedule 3.5 Financial Statements
Schedule 3.7 Certain Defaults
Schedule 3.13 Brokers
Schedule 3.15(a) Employee Benefit Plans
Schedule 3.16 Labor Relations
Schedule 3.17 Litigation
Schedule 5.3 Conduct of Business
Schedule 5.7(a)(i) Excluded Employees
Schedule 5.7(a)(ii) Purchaser Severance Policy
Schedule 5.10(i) Covered Facilities
Schedule 5.10(ii) Participating States
Schedule 5.10(iii) Parallel Action States
Schedule 5.11(b) Material Properties
Schedule 5.15 Covenant-Not-To-Compete
Schedule 9.1 Selling Subs
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TABLE OF EXHIBITS
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Assignment and Assumption Agreement
Exhibit C Form of Disposal Agreement
Exhibit D Form of Bidding Procedures Order
Exhibit E Form of Section 363/365 Order
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, dated as of February 22, 2002
(the "Agreement"), is made by and between Safety-Kleen Services, Inc., a
Delaware corporation (the "Seller"), and Clean Harbors, Inc., a
Massachusetts corporation (the "Purchaser"). Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in Article IX.
WHEREAS, the Seller, through its Chemical Services
Division, is engaged in the business of providing hazardous and
non-hazardous waste collection, treatment and disposal services in the
United States and Canada through the operation of incinerators, landfills,
wastewater treatment facilities, service centers, deep injection xxxxx and
other facilities all as more fully described in Safety-Kleen Corp.'s most
recent Form 10-K filed with the SEC (as currently conducted by the Chemical
Services Division, the "Business");
WHEREAS, on June 9, 2000 the Seller, along with certain
of its Affiliates, filed voluntary petitions (the "Petitions") for relief
commencing cases (collectively, the "Chapter 11 Case") under chapter 11 of
title 11 of the United States Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"); and
WHEREAS, the Purchaser and the Purchasing Subs desire to
purchase and acquire and the Seller and the Selling Subs desire to sell,
convey, assign and transfer, or cause to be sold, conveyed, assigned and
transferred, to the Purchaser and the Purchasing Subs, the Acquired Assets
and the Purchaser and the Purchasing Subs are willing to assume, and the
Seller and the Selling Subs desire to assign and delegate to the Purchaser
and the Purchasing Subs, the Assumed Liabilities, all in the manner and
subject to the terms and conditions set forth herein and in accordance with
Sections 105, 363, 365 and 1141 of the Bankruptcy Code (the sale and
purchase of the Acquired Assets and the assignment and assumption of the
Assumed Liabilities is referred to as the "Acquisition").
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE ASSETS
Section 1.1. Acquired Assets. On the terms and subject to
the conditions set forth in this Agreement and subject to approval of the
Bankruptcy Court under Sections 105, 363, 365 and 1141 of the Bankruptcy
Code, at the Closing the Seller shall sell, assign, transfer, convey, and
deliver, and cause the Selling Subs to sell, assign, transfer, convey and
deliver to the Purchaser and the Purchasing Subs, free and clear of all
liens, claims, interests and encumbrances of any nature except for
Permitted Exceptions, and the Purchaser and the Purchasing Subs shall
purchase and accept from the Seller and the Selling Subs (collectively, the
assets set forth in Section 1.1(a), Section 1.1(b) and Section 1.1(c) are
referred to as "Acquired Assets"):
(a) all of the outstanding equity interests (the
"Interests") of the subsidiaries of the Seller set forth on Schedule 1.1(a)
(each a "Transferred Sub" and collectively the "Transferred Subs").
(b) all legal and beneficial right, title, and
interest of the Seller and of each Selling Sub in and to any and all assets
of every kind and description, whether tangible or intangible, real,
personal or mixed, wherever situated, owned, held or used by the Seller (or
any Selling Sub) or in which the Seller (or any Selling Sub) has any right,
title or interest that is owned, directly or indirectly, leased or
otherwise held primarily for use in the Business, except for the Excluded
Assets and except for any executory contracts and leases which are not
specifically listed on Schedules 1.1(b)(ii)(A), 1.1(b)(ii)(B),
1.1(b)(ii)(D) or 1.1(b)(vi)(B), and specifically including the following:
(i) all accounts receivable (which are
not excluded pursuant to Section 1.2(b)) arising out of the
operation of the Business existing on the date hereof including,
without limitation, those listed or described on Schedule
1.1(b)(i), or arising in the ordinary course under the Customer
Contracts after the date hereof (the "Accounts Receivable");
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(ii) all rights and incidents of
interest of the Seller and of each Selling Sub to:
(A) all of the waste
management services agreements between the Seller (or one of the
Selling Subs) and a customer primarily relating to the Business
(the "Customer Contracts") existing on the date hereof or arising
in the ordinary course after the date hereof and listed or
described on Schedule 1.1 (b)(ii)(A) (which Schedule will be
provided by Purchaser prior to the Due Diligence Expiration Date);
(B) the agreements, contracts
and arrangements between the Seller (or one of the Selling Subs)
and a vendor or other third party providing goods or services
primarily relating to the Business listed on Schedule
1.1(b)(ii)(B) (which Schedule will be provided by the Purchaser
prior to the Due Diligence Expiration Date);
(C) to the extent transferable
and exclusive of those which pertain to the Excluded Employees,
all of the rights of the Seller (or one of the Selling Subs)
regarding confidentiality, assignment of invention, and/or
non-competition with respect to the Transferred Employees and
former employees; and
(D) all other agreements,
contracts and arrangements that are listed or described on
Schedule 1.1(b)(ii)(D) (which Schedule will be provided by the
Purchaser prior to the Due Diligence Expiration Date);
(iii) all equipment, computers,
furniture, furnishings, fixtures, office supplies, vehicles and
all other tangible personal property currently owned by, or on
order to be delivered to, the Seller or a Selling Sub, that are
used primarily in the operation of the Business or are located on,
or to be delivered to, any Owned Real Property or premises subject
to the Real Property Leases (collectively, the "Tangible Personal
Property"), including without limitation, such of the foregoing as
are listed or described on Schedule 1.1(b)(iii);
(iv) to the extent transferable, all
U.S. and other letter patent, patents, patent applications, patent
licenses, software licenses and know-how licenses, trade names,
trademarks, registered copyrights, service marks, trademark
registrations and applications,
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service xxxx registrations and applications, copyright registrations
and applications, internet addresses and other internet related assets
used primarily in the operation of the Business, including without
limitation such of the foregoing as are listed or described on Schedule
1.1(b)(iv) (the "Intellectual Property"), provided that the Purchaser
(or one of the Purchasing Subs) shall, to the extent it can and without
cost (other than de minimis administrative costs) to the Purchaser
(or such Purchasing Sub), (A) grant to the Seller and the Selling
Subs a perpetual royalty-free and nontransferable license to use
the Intellectual Property for the operation of the Seller's and
the Selling Subs' businesses other than the Business after the
Closing or, (B)in the alternative, transfer all or any portion of
such Intellectual Property to the Seller and the Selling Subs;
(v) all rights and claims under all
warranties, representations and guarantees made by suppliers,
manufacturers and contractors in connection with the Acquired
Assets and all rights and claims relating to Assumed Liabilities
except those shown or described on Schedule 1.1(b)(v);
(vi) (A) the real property used
primarily in the operation of the Business that is listed and
described on Schedule 1.1(b)(vi)(A) (the "Owned Real Property")
and (B) the real property leases used primarily in the operation
of the Business that are listed or described in Schedule
1.1(b)(vi)(B) (the "Real Property Leases") (which Schedule will be
provided by the Seller prior to the Due Diligence Expiration
Date);
(vii) to the extent transferable, all
licenses, permits, authorizations and approvals issued to the
Seller or a Selling Sub by any Governmental Entity primarily
relating to the operation of the Business, including without
limitation, such of the foregoing as are listed or described on
Schedule 1.1(b)(vii);
(viii) the bank accounts and lockbox
arrangements primarily relating to the Business that are listed
or described on Schedule 1.1(b)(viii) (excluding all rights or
incidents of interest with respect to the cash or cash equivalents
in such bank accounts or lock box arrangements to the extent that
such cash is excluded in the calculation of Working Capital
pursuant to Section 1.7(b));
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(ix) all prepaid items and deposits
existing on the date hereof relating to the Business that are
listed or described on Schedule 1.1(b)(ix) or that relate
primarily to the Business arising in the ordinary course after the
date hereof;
(x) all books and records of the Seller
and the Selling Subs primarily relating to the operation of the
Business;
(xi) all of the rights, properties or
assets that are listed or described on Schedule 1.1(b)(xi);
(xii) all inventories of supplies and
spare parts of the Seller and the Selling Subs relating to the
operation of the Business;
(xiii) all goodwill primarily related
to the Business; and
(xiv) to the extent assignable, rights
of indemnification from all non-affiliated third parties for
liabilities and obligations relating to the Business or the
Acquired Assets.
(c) the company seal, minute books, charter
documents, stock or equity record books and such other books and records as
pertain to the organization, existence or capitalization of each
Transferred Sub as well as any other records or materials relating to each
Transferred Sub generally.
(d) Notwithstanding anything contained in this
Agreement to the contrary, if, at or prior to the Closing, the Seller shall
have obtained a Confirma tion Order authorizing the issuance to the
Purchaser of 100% of the reorganized equity interests of the Domestic
Transferred Subs listed on Schedule 1.1(d) outstanding immediately after
such issuance, on terms and conditions with respect to the assets of the
Domestic Transferred Subs substantially identical to those contained in the
Section 363/365 Order and unless the Purchaser shall inform the Seller that
it reasonably believes that the transfer of some or all of the reorganized
equity interests of the Domestic Transferred Subs shall result in a
material adverse tax consequence to the Purchaser (it being understood that
a material adverse tax consequence will be deemed to result if the
Purchaser would suffer more than $500,000 of tax or other economic
detriment), which belief shall be held based on a reasonable good-faith
determination of the Purchaser, the parties hereto intend and agree that
100% the reorganized equity
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interests of the Domestic Transferred Subs shall be transferred to the Purchaser
and the Purchasing Subs pursuant to such Confirmation Order.
Section 1.2. Excluded Assets. Notwithstanding anything
contained in this Agreement to the contrary, the following rights,
properties and assets (collectively, the "Excluded Assets") will, to the
extent not included in the calculation of Working Capital, not be included
in the Acquired Assets:
(a) all cash, cash equivalents or
marketable securities of the Seller and the Selling Subs;
(b) all of the Accounts Receivable that
have been satisfied or discharged prior to the Closing or have
been written off or sent to collection prior to the Closing;
(c) all of the agreements, contracts
and arrangements that (i) have terminated or expired in accordance
with their terms prior to the Closing in the ordinary course or
(ii) as of the Closing Date, have been rejected or are the subject
of a motion to reject by the Seller or any Selling Sub in the
Chapter 11 Case;
(d) any agreement, contract, lease or
arrangement or portion thereof that is not part of the Assigned
Contracts and Leases;
(e) any claims, rights or causes of
action arising under Article 5 of the Bankruptcy Code;
(f) any claims, rights or causes of
action of Seller or any Business Sub (unasserted, contingent,
pending or otherwise) other than (except as set forth in Section
1.1(b)(v)) claims, rights or causes of actions relating to the
Assumed Liabilities;
(g) any right of the Seller or any
Selling Sub under this Agreement;
(h) any asset (including any rights to
the GSX Contribution Impairment Fund) or capital stock of any
direct or indirect subsidiary of Seller which owns and/or has
operated the landfill in Pinewood, South Carolina, which
subsidiaries are listed on Schedule 1.2(h);
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(i) any Tangible Personal Property
transferred or disposed of prior to the Closing in the ordinary
course;
(j) the company seal, minute books,
charter documents, stock or equity record books, Tax Returns and
records relating to Taxes and such other books and records as
pertain to the organization, existence or capitalization of the
Seller and each Selling Sub as well as any other records or
materials relating to the Seller or any Selling Sub generally and
not involving or related to the Acquired Assets or the operations
of the Business;
(k) all contracts of insurance, surety
bonds, collateral bonds, letters of credit, cash trusts, cash
deposits or the proceeds thereof, including, but not limited to,
any of the foregoing for Financial Assurance requirements or
performance bond requirements, whether or not required under
applicable Environmental Laws;
(l) any right, property or asset that
is listed or described on Schedule 1.2(l);
(m) the word and name "Safety-Kleen"
and the Seller's monograms, logos, trademarks, trade names or any
variations or combinations thereof including such word or name;
(n) any right the Seller or a Selling
Sub has with respect to Tax refunds, claims for Tax refunds and
Tax attributes other than any Tax attributes with respect to the
Transferred Subs;
(o) any of the equity interests
directly or indirectly owned by the Seller or any Selling Sub in
any of their respective subsidiaries, other than the Seller's or
any Selling Sub's equity interests in the Transferred Subs;
(p) any amounts owed the Business from
the Branch Sales and Services Division ("BSSD") of Safety-Kleen
Corp;
(q) all surety and performance bonds,
which surety and performance bonds are listed or described on
Schedule 1.2(q), or the proceeds thereof;
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(r) any of the real property listed on
Schedule 1.2(r) which has been transferred prior to the Closing or
is subject to an agreement to be transferred after the Closing;
(i) that certain promissory note from
Xxxxxxx-Xxxx LLC dated June 15, 2001; and
(s) except as otherwise required herein
with respect to the Transferred Employees, any Seller Plan.
Section 1.3. Assumed Liabilities. On the terms and
subject to the conditions set forth in this Agreement, at the Closing, the
Purchaser and the Purchasing Subs shall assume from the Seller and the
Selling Subs and thereafter pay, perform or otherwise discharge in
accordance with their terms, and shall indemnify the Seller, the Selling
Subs and their Affiliates from all of the liabilities and obligations (of
any nature or kind, and whether based in common Law or statute or arising
under written contract or otherwise, known or unknown, fixed or contingent,
accrued or unaccrued, liquidated or unliquidated, real or potential) of the
Seller and the Business Subs with respect to, arising out of or relating
to, the ownership, possession or use of the Acquired Assets and the
operation of the Business other than the Excluded Liabilities, but
including without limitation, other than the Excluded Liabilities the
following: (i) liabilities and obligations with respect to, arising out of
or relating to, the ownership, possession or use of the Acquired Assets and
the operation of the Business and arising after the Closing Date, (ii)
liabilities and obligations, whether arising before or after the Closing
Date, in connection with the Owned Real Property, the real property subject
to Real Property Leases, the real property owned or leased, directly or
indirectly, by any Transferred Sub or the operation of the Business
(including liabilities and obligations arising under Environmental Laws (or
other Laws) that relate to violations of Environmental Laws, including
imposing liabilities or obligations for, activities conducted at, from or
in connection with any of the foregoing, including exposure to the
migration of materials from the foregoing); (iii) liabilities and
obligations arising from any violation of Environmental Laws by the
Purchaser, the Purchasing Subs or the Transferred Subs first occurring on
or after the Closing Date; (iv) liabilities and obligations in respect of
the Assigned Contracts and Leases to the extent set forth in Section 1.4;
(v) liabilities and obligations in connection with or arising out of the
requirement on and after the Closing Date that Purchaser obtain Financial
Assurance that complies with the requirements of the Governmental Entities
with jurisdiction over the Owned Real Property or the real property subject
to Real Property Leases or the real property owned or leased by any
Transferred Sub or any subsidiary of any Transferred Sub; (vi) liabilities
which are included as part of the Working Capital; and (vii) the
liabilities as of the Closing Date of any Transferred Sub or any subsidiary
of any Transferred Sub (collectively, the
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liabilities and obligations that the Purchaser and the Purchasing Subs are
assuming pursuant to this Section 1.3 are referred to as the "Assumed
Liabilities"). All intercompany liabilities between the Business and the BSSD
will terminate immediately prior to the Closing except as provided in this
Agreement and the Ancillary Agreements.
Section 1.4. Amounts Due Under Executory Contracts and
Unexpired Leases; Cure Costs. The Seller and the Purchaser shall each pay
one-half of any and all pre-petition cure and reinstatement costs or
expenses ("Cure Costs"), incurred prior to the Closing Date, of or relating
to the assumption and assignment pursuant to this Agreement of the Assigned
Contracts and Leases until such costs and expenses equal Two Million
Dollars ($2,000,000). The Seller shall pay one-quarter and the Purchaser
shall pay three-quarters of any and all Cure Costs, incurred prior to the
Closing Date, of or relating to the assumption and assignment pursuant to
this Agreement of the Assigned Contracts and Leases, in excess of Two
Million Dollars ($2,000,000) until such costs and expenses equal Four
Million Dollars ($4,000,000) (the "Cure Costs Cap"). The Seller shall only
be obligated to pay a portion of the Cure Costs incurred prior to the
Closing Date up to the Cure Costs Cap to the extent that the Purchaser
assumes the Assigned Contracts and Leases pursuant to the contract terms of
such Assigned Contracts and Leases that were binding upon the Seller and
agree to abide by such terms for the remaining term of each such Assigned
Contract and Lease. The Purchaser shall pay any and all Cure Costs,
incurred prior to the Closing Date, of or relating to the assumption and
assignment of the Assigned Contracts and Leases pursuant to this Agreement
after the costs and expenses equal the Cure Cost Cap. From and after the
Closing Date, the Purchaser shall be obligated to pay any amounts which
become due under the Assigned Contracts and Leases and which pertain to
events occurring on or after the Closing Date and those which arise prior
to the Closing Date but are accrued for in the calculation of Working
Capital.
Section 1.5. Excluded Liabilities. Notwithstanding
anything to the contrary contained in this Agreement, the Purchaser shall
not assume or agree to pay, perform or otherwise discharge any of the
Excluded Liabilities or any other liabilities, obligations or expenses, if
any, of the Seller or any Selling Sub whatsoever other than the Assumed
Liabilities.
Section 1.6. Purchase Price.
(a) In consideration for the Acquired Assets,
the Purchaser shall, in addition to the assumption of the Assumed
Liabilities, pay (i) to the Seller at the Closing the sum of Forty-one
Million Two Hundred and Seventy Thousand Dollars ($41,270,000) and (ii) to
the Escrow Agent Five Million Dollars ($5,000,000) (such sum of clauses (i)
and (ii) being referred to as the "Unadjusted Cash Purchase Price") in cash
9
by wire transfer of immediately available funds to an account or accounts
designated by the Seller and the Escrow Agent, as the case may be. The
Unadjusted Cash Purchase Price, as it may be adjusted pursuant to Section
1.6(b) and Section 1.7, shall be referred to as the "Cash Purchase Price"
under this Agreement. The Escrow Agent shall, immediately upon the final
determination of the Working Capital Statement as determined in accordance
with Section 1.7(d), pay the funds to the Seller and/or the Purchaser as
set forth in the Escrow Agreement.
(b) In the event that the total proceeds
received or to be received from (i) any Tangible Personal Property which
was owned by the Seller, the Selling Subs or the Transferred Subs at August
31 ,2001 that has been transferred or disposed outside of the ordinary
course of business (i.e., Tangible Personal Property that was transferred
or disposed of pursuant to a Bankruptcy Court order or which should have
been transferred or disposed of pursuant to a Bankruptcy Court order) after
August 31, 2001 until the Closing Date and (ii) any real property owned by
the Seller, the Selling Subs or the Transferred Subs at August 31, 2001
that has been transferred or disposed of outside of the ordinary course of
business or that is subject to an agreement to be transferred outside of
the ordinary course (i.e., real property that was transferred or disposed
of or to be transferred or disposed of pursuant to a Bankruptcy Court order
or which should have been or should be transferred or disposed of pursuant
to a Bankruptcy Court order) after August 31, 2001 until the Closing Date,
are in excess of One Million Dollars ($1,000,000), the Unadjusted Cash
Purchase Price shall be reduced by such excess.
Section 1.7. Purchase Price Adjustment. (a) Set forth on
Schedule 1.7(a) is the "Initial Working Capital Statement." The Initial
Working Capital Statement is unaudited and has been prepared by the finance
and accounting staff of the Business as of August 31, 2001 according to the
historical accounting policies and procedures of the Business. The
Business' accounts and records make up a portion of the consolidated
financial statements of Safety-Kleen Corp., which financial statements are
prepared in accordance with GAAP on a consistent basis. The Unadjusted Cash
Purchase Price shall be adjusted following the Closing as follows:
(i) if the amount of the Working
Capital of the Business (determined in accordance with Section
1.7(b)) as of the Closing Date is less than the Target Working
Capital, the Unadjusted Cash Purchase Price shall be decreased by
an amount equal to such difference (the "Working Capital
Deficiency") and the Unadjusted Cash Purchase Price, as so
adjusted, will be the Cash Purchase Price;
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(ii) if the amount of the Working
Capital of the Business (determined in accordance with this
Section 1.7(b)) as of the Closing Date is greater than the Target
Working Capital, the Unadjusted Cash Purchase Price shall be
increased by an amount equal to such difference (the "Working
Capital Surplus") and the Unadjusted Cash Purchase Price, as so
adjusted, will be the Cash Purchase Price; and
(iii) if the amount of the Working
Capital of the Business (determined in accordance with this
Section 1.7(b)) as of the Closing Date is equal to the Target
Working Capital, the Unadjusted Cash Purchase Price shall be equal
to the Cash Purchase Price.
The Purchaser shall pay to the Seller the amount of any Working Capital
Surplus. The Escrow Agent shall pay the Purchaser the amount of any Working
Capital Deficiency. If and to the extent that the Escrow Agent shall not be
holding enough funds in the Escrow Account, the Seller shall return to the
Purchaser the amount of any remaining Working Capital Deficiency. Any
amounts required to be paid or returned pursuant to this Section 1.7(a)
shall be paid by wire transfer of immediately available funds to the
account specified by the party to whom such payment is owed within five
business days after the amount of Working Capital of the Business as of the
Closing Date is agreed to by the Seller and the Purchaser or any remaining
disputed items are ultimately determined by the Accountants in accordance
with Section 1.7(d).
(b) As used herein, the term "Working Capital"
shall mean the sum of the asset accounts utilized in preparing the Initial
Working Capital Statement minus the sum of liability accounts utilized in
preparing the Initial Working Capital Statement (the liabilities of the
Canadian subsidiaries that normally would not be considered in a
calculation of working capital, to the extent such liabilities do not
reflect liabilities and obligations arising under Environmental Laws, will,
upon the mutual agreement of the Seller and the Purchaser within forty-five
(45) days of the date of this Agreement, be included in the calculation of
Working Capital). The term "Working Capital Statement" shall mean the
statement of Working Capital of the Business to be prepared by the Seller
as of the Closing Date in accordance with this Section 1.7(b) and to be
delivered to the Purchaser as promptly as practicable and in any event
within 120 days after the Closing Date which statement shall include as a
liability all collected and on-site waste (deferred revenue) and shall
utilize inventories conducted on the Closing Date of waste at all of the
Business' facilities. Such Working Capital Statement shall take into
account all relevant information available at the time such Working Capital
Statement is prepared. The unaudited Working Capital Statement shall be
prepared by the Seller using the same accounting principles, procedures,
policies and methods that were used to prepare the Initial Working Capital
Statement. All working papers and
11
back-up documents used in the preparation of the Working Capital Statement shall
be made available to the Purchaser within two (2) business days after delivery
to Purchaser of the Working Capital Statement, provided, however, that to the
extent the independent auditors of the Seller assist in the preparation of the
Working Capital Statement, the availability of working papers and back-up
documents used by such independent auditors will be subject to the policies and
procedures of such independent auditors.
(c) During the preparation of the Working
Capital Statement and the period of any dispute within the contemplation of
this Section 1.7, the Purchaser shall and shall cause the Transferred Subs
and any other Affiliates of the Purchaser to (i) provide the Seller and the
Seller's authorized representatives with full access to the books, records,
facilities and employees of the Business, (ii) provide the Seller as
promptly as practicable after the Closing Date (but in no event later than
60 business days after the Closing Date) with financial information
consistent with the Seller's existing tax and financial reporting
requirements for the Business for the period ending on the Closing Date and
(iii) cooperate fully with the Seller and the Seller's authorized
representatives, including the provision on a timely basis (consistent with
the condition of the Seller's records at the time of Closing) of all
information necessary or useful in preparing the Working Capital Statement.
(d) The Working Capital Statement shall be final
and binding on the parties unless, within 45 days after delivery to the
Purchaser, written notice is given by the Purchaser to the Seller of its
objection setting forth in reasonable detail the Purchaser's basis for
objection. The Purchaser may dispute items reflected on the Working Capital
Statement only on the basis that such items were not presented by the
Seller in conformity with GAAP or that the Working Capital Statement was
not prepared in accordance with Section 1.7(b). If notice of objection is
given, the parties shall consult with each other with respect to the
objection. The net amount that is not in dispute will promptly be paid by
the party obligated to make such payment hereunder to the party entitled to
receive such payment hereunder. If the parties are unable to reach
agreement within 20 days after the notice of objection has been given, the
dispute shall be submitted, as promptly as practicable, into binding
arbitration for resolution to an independent accounting firm of nationally
recognized standing mutually selected by the Seller and the Purchaser (the
"Accountants"), who shall act as the arbitrator. Each party agrees to
execute, if requested by the Accountants, a reasonable engagement letter.
If the Seller and the Purchaser do not promptly agree on the selection of
the Accoun tants, which shall occur no later than 10 days after the end of
the 20-day period referred to above, then each shall select an independent
accounting firm of nationally recognized standing and such two independent
accounting firms shall jointly select the Accountants pursuant to this
Section 1.7(d). The Accountants will make a determination, based solely on
presentations by the Seller and the Purchaser and not by independent
review,
12
as to (and only as to) each of the items in dispute, which determination will be
(i) in writing, (ii) furnished to each of the parties hereto as promptly as
practicable after the items in dispute have been referred to the Accountants,
(iii) made in accordance with this Agreement and (iv) conclusive and binding
upon each of the parties hereto. In connection with their determination of the
disputed items, the Accountants will be entitled to rely on the accounting
records and similar materials prepared in connection with the preparation of the
Working Capital Statement and the information provided by the Purchaser and the
fees and expenses of the Accountants shall be borne equally by the Purchaser,
and the Seller. Each of the Purchaser and the Seller will use reasonable
efforts to cause the Accountants to render their decision as soon as
reasonably practicable, including without limitation by promptly complying
with all reasonable requests by the Accountants for information, books,
records and similar items.
Section 1.8. Allocation of Cash Purchase Price for Tax
Purposes. The Seller and the Purchaser agree that, for all tax and other
reporting purposes, the allocation of the Cash Purchase Price and the
Assumed Liabilities to the Acquired Assets shall be as set forth on
Schedule 1.8, which Schedule 1.8 shall be completed within fifty-five (55)
days of the date of this Agreement and which, when completed, will have
been arrived at by arm's length negotiation in compliance with Section 1060
of the Internal Revenue Code of 1986, as amended. If there is any
adjustment to the Unadjusted Cash Purchase Price or the Assumed Liabilities
in accordance with this Agreement, the Seller and the Purchaser agree to
make appropriate adjustments to the allocation set forth in Schedule 1.8.
Each of the Purchaser and the Seller shall (i) timely file all forms
(including Internal Revenue Service Form 8594) and Tax Returns required to
be filed in connection with such allocation, (ii) be bound by such
allocation for purposes of determining Taxes, (iii) prepare and file, or
cause to be prepared and filed, its Tax Returns on a basis consistent with
such allocation and (iv) take no position, or cause no position to be
taken, inconsistent with such allocation on any applicable Tax Return, in
any audit or proceeding before any Taxing Authority, in any report made for
Tax, financial accounting or any other purposes, or otherwise. If the
allocation set forth on Schedule 1.8 is disputed by any Taxing Authority,
the party receiving notice of such dispute shall promptly notify the other
party hereto concerning the existence and resolution of such dispute.
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ARTICLE II
THE CLOSING
Section 2.1. Closing. The consummation of the
transactions contemplated by this Agreement (the "Closing") shall take
place at (i) the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois), 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 or, (ii) if
requested by the Purchaser at least two (2) business days prior to the
Closing, at the offices of Xxxxx, Xxxx & X'Xxxxxxxx, P.C., Xxx Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or the offices of counsel for the
Purchaser's principal lenders specified in the Refinancing Commitment, at
10:00 a.m. on the later of (A) the third business day after the conditions
set forth in Article VI shall have been satisfied or waived and (B) such
other time, date, and place as shall be fixed by agreement between the
parties (the date of the Closing being herein referred to as the "Closing
Date").
Section 2.2. Deliveries at Closing. (a) At the Closing,
the Seller shall deliver and cause the Selling Subs to deliver to the
Purchaser and the Purchasing Subs:
(i) duly executed instruments or other
evidence sufficient to transfer to the Purchaser and the
Purchasing Subs the Interests;
(ii) duly executed bills of sale,
substantially in the form of Exhibit A attached hereto,
transferring the Acquired Assets to the Purchaser and the
Purchasing Subs;
(iii) all other conveyance documents
reasonably necessary to transfer to the Purchaser and the
Purchasing Subs the Acquired Assets, including special warranty
deeds regarding the Owned Real Property purchased by the Purchaser
and the Purchasing Subs;
(iv) the Acquired Assets, by making the
Acquired Assets available to the Purchaser and the Purchasing Subs
at their locations as of the Closing Date;
(v) an assignment and assumption
agreement (the "Assignment and Assumption Agreement")
substantially in the form of Exhibit B attached hereto, evidencing
the assignment and assumption by the Purchaser of the Assumed
Liabilities, duly executed by the Seller and the Selling Subs;
14
(vi) a transition services agreement to
be entered into between the Seller and the Purchaser (the
"Transition Services Agreement") in form and substance reasonably
acceptable to the Purchaser and the Seller and to be agreed upon
within fifty (50) days after the date of this Agreement;
(vii) a disposal agreement to be
entered into between the Seller and the Purchaser (the "Disposal
Agreement"), substantially in the form of Exhibit C attached
hereto, duly executed by Seller;
(viii) a sales agency agreement to be
entered into between the Seller and the Purchaser (the "Sales
Agency Agreement"), in form and substance reasonably acceptable
to the Purchaser and the Seller and to be agreed upon within fifty
(50) days after the date of this Agreement;
(ix) an escrow agreement to be entered
into among the Seller, the Purchaser and the Escrow Agent (the
"Escrow Agreement"), in form and substance reasonably acceptable
to the Purchaser and the Seller and to be agreed upon within fifty
(50) days after the date of this Agreement;
(x) a certified copy of the Bidding
Procedures Order;
(xi) a certified copy of the Section
363/365 Order and, if applicable, the Confirmation Order;
(xii) customary instruments of
assignment or transfer, in form suitable for recording in the
applicable office or bureau, with respect to each trademark,
copyright, or other item of Intellectual Property requiring such
an assignment and transferred to the Purchaser and the Purchasing
Subs hereunder;
(xiii) certificates of tax and legal
good standing (to the extent available in the Transferred Subs'
jurisdiction of organization) and releases from secured lenders
evidencing that the non-domestic Transferred Subs are in good
standing (if appropriate) and that the secured lenders of the
non-domestic Transferred Subs have released their
15
security interests on the assets of such Transferred Subs and on the
issued and outstanding equity interests of such Transferred Subs;
(xiv) opinions of the Seller's Canadian
counsel with respect to this Agreement and the Transferred Subs in
form and substance reasonably acceptable to the Purchaser and its
counsel; and
(xv) all other previously undelivered
certificates and other documents required to be delivered by the
Seller to the Purchaser at or prior to the Closing Date in
connection with the Acquisition.
(b) At the Closing, the Purchaser shall deliver
to the Seller:
(i) the Unadjusted Cash Purchase Price
by wire transfer in immediately available funds to an account or
accounts designated by the Seller;
(ii) the Assignment and Assumption
Agreement duly executed by the Purchaser;
(iii) the Transition Services Agreement
duly executed by the Purchaser;
(iv) the Disposal Agreement duly
executed by the Purchaser;
(v) the Sales Agency Agreement duly
executed by the Purchaser;
(vi) the Escrow Agreement duly executed
by the Purchaser; and
(vii) all other previously undelivered
certificates and other documents required to be delivered by the
Purchaser to the Seller at or prior to the Closing Date in
connection with the Acquisition.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as disclosed in the written statement delivered by
the Seller to the Purchaser at or prior to the execution of this Agreement
(the "Seller Disclosure Schedule"), the Seller hereby represents and
warrants to the Purchaser as follows:
Section 3.1. Organization. The Seller and each Business
Sub is validly existing and in good standing (or its equivalent) under the
Laws of the jurisdiction of its incorporation or organization and has the
requisite power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted, except where the
failure to be so existing and in good standing or to have such power and
authority would not have a Material Adverse Effect. The jurisdiction of
incorporation or organization of each Transferred Sub and each direct and
indirect subsidiary, if any, of each Transferred Sub is set forth on
Schedule 3.1. The Seller and each Selling Sub is duly qualified or licensed
to do business as a foreign corporation and is in good standing in each
jurisdiction listed on Schedule 3.1. The Seller has heretofore made
available to the Purchaser a complete and correct copy of the
organizational documents of the Seller and each Business Sub, as currently
in effect.
Section 3.2. Capitalization of Transferred Subs. The
authorized and outstanding equity interests of each Transferred Sub and
each direct and indirect subsidiary, if any, of each Transferred Sub are
set forth on Schedule 1.1(a). All of the equity interests of each
Transferred Sub and each direct and indirect subsidiary, if any, of each
Transferred Sub are owned beneficially and of record as set forth on
Schedule 1.1(a). There are no existing (i) options, warrants, calls,
subscriptions or other rights, convertible securities, agreements or
commitments of any character obligating a Transferred Sub or any direct or
indirect subsidiary, if any, of a Transferred Sub to issue, transfer or
sell any equity interests in such Transferred Sub or such direct or
indirect subsidiary, if any, of such Transferred Sub or securities
convertible into or exchangeable for such equity interests, (ii)
contractual obligations of a Transferred Sub or any direct or indirect
subsidiary, if any, of a Transferred Sub to repurchase, redeem or otherwise
acquire any equity interests in such Transferred Sub or such direct or
indirect subsidiary, if any, of such Transferred Sub or (iii) voting trusts
or similar agreements to which a Transferred Sub or any direct or indirect
subsidiary, if any, of a Transferred Sub is a party with respect to the
voting of equity interests in such Transferred Sub or such direct or
indirect subsidiary, if any, of such Transferred Sub. At the Closing,
except as set forth on Schedule 1.1(a), none of the Transferred Subs or any
direct or indirect subsidiary, if any, of a Transferred Sub will hold any
equity interest in any other entity.
17
Section 3.3. Authority Relative to this Agreement and the
Ancillary Agreements. Subject to the entry of the Section 363/365 Order
and, if applicable, the Confirmation Order, the Seller has the corporate
power and authority to enter into this Agreement and the Ancillary
Agreements and to carry out its obligations hereunder and thereunder. The
execution, delivery, and performance of this Agreement and the Ancillary
Agreements by the Seller and the consummation by the Seller of the
transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action. This Agreement has, and the Ancillary
Agreements upon the Closing will have, been duly and validly executed and
delivered by the Seller, and upon the entry of the Section 363/365 Order
and, if applicable, the Confirmation Order (assuming this Agreement and the
Ancillary Agreements each constitute a valid and binding obligation of the
Purchaser), will each constitute a valid and binding agreement of the
Seller, enforceable against the Seller in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium
and other Laws affecting creditors' rights generally from time to time in
effect and to general equitable principles.
Section 3.4. Consents and Approvals. Upon the entry of
the Section 363/365 Order and, if applicable, the Confirmation Order, no
consent, approval, or authorization of, or declaration, filing, or
registration with, any Governmental Entity will be required to be made or
obtained by the Seller in connection with the execution, delivery, and
performance of this Agreement or the Ancillary Agreements and the
consummation of the transactions contemplated hereby or thereby, except for
(a) consents, approvals, or authorizations of, or declarations or filings
with, the Bankruptcy Court, (b) filings pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and
pursuant to equivalent legislation in any other applicable jurisdiction,
(c) those already obtained, (d) consents and approvals from the EPA and
certain states, as more fully described on Schedule 3.4 and (e) consents,
approvals, authorizations, declarations, filings, or registrations, which,
if not obtained, would not have a Material Adverse Effect.
Section 3.5. Financial Information. Schedule 3.5 contains
an unaudited Balance Sheet and income statement prepared by the finance and
accounting staff of the Business as of August 31, 2001, with the intention
that they be according to GAAP (the "Financial Statements"). The Financial
Statements and the projections set forth in the Confidential Information
Memorandum of the Business dated September 2001 were prepared by the
management of the Seller in good faith.
Section 3.6. No Violations. Upon the entry of the Section
363/365 Order and, if applicable, the Confirmation Order, assuming that the
consents, approvals, authorizations, declarations, and filings referred to
in Section 3.4 have been made or obtained and shall remain in full force
and effect and the conditions set forth in Article
18
VI shall have been satisfied or waived, at the Closing neither the execution,
delivery, or performance of this Agreement or the Ancillary Agreements by the
Seller, nor the consummation by the Seller and the transactions contemplated
hereby and thereby, nor compliance by the Seller with any of the provisions
hereof and thereof will (a) conflict with or result in any breach of any
provisions of the certificate of incorporation or bylaws of the Seller, (b)
result in a violation, or breach of, or constitute (with or without due
notice or lapse of time) a default (or give rise to any right of
termination, cancellation, vesting, payment, exercise, acceleration,
suspension or revocation) under any of the terms, conditions or provisions
of any contract, agreement or arrangement that is included as an Acquired
Asset or any material note, bond, mortgage, deed of trust, security
interest, indenture, license, contract, agreement, plan or other instrument
or obligation to which the Seller or any Business Sub is a party or by
which the properties or assets related to the Business may be bound or
affected or (c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the Seller, the Business Subs or the Acquired
Assets, except in the case of clauses (b) or (c) for violations, breaches,
defaults, terminations, cancellations, accelerations, creations,
impositions, suspensions or revocations that (i) would not be reasonably
likely to have a Material Adverse Effect or (ii) are excused by or
unenforceable as a result of the filing of the Petitions or as a result of
the entry of the Section 363/365 Order or, if applicable, the Confirmation
Order.
Section 3.7. No Default; Compliance with Applicable Laws;
Permits.
(a) Except as set forth in Schedule 3.7, neither
the Seller nor any Business Sub is in default or violation of any term,
condition or provision of (i) its articles of incorporation, bylaws or
other organizational documents or (ii) any statute, law, rule, regulation,
judgment, decree, order, arbitration award, concession, grant, franchise,
permit or license or other governmental authorization or approval
applicable to the Seller or a Business Sub, including applicable federal,
state, local and foreign Laws and regulations relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata), but excluding from the foregoing clause (ii), defaults
or violations (A) which would not be reasonably likely to have a Material
Adverse Effect, (B) as a result of any acts or omissions by, or the status
of any facts pertaining to, the Purchaser or (C) which are excused by or
unenforceable as a result of the filing of the Petitions or as a result of
the Section 363/365 Order or, if applicable, the Confirmation Order.
(b) Except as set forth in Schedule 3.7, and
except as would not be reasonably likely to have a Material Adverse Effect,
each of the Seller and each Business Sub currently holds all permits,
licenses, authorizations, certificates,
19
exemptions and approvals of Governmental Entities (collectively, "Permits")
necessary or proper for the current use, occupancy and operation of the Acquired
Assets held by the Seller or a Selling Sub (or in the case of the Transferred
Subs, the assets held by the Transferred Subs) and the conduct of the Business,
and all such Permits are in full force and effect. Schedule 1.1(b)(vii) contains
a true and complete listing of all material Permits. Except as would not be
reasonably likely to have a Material Adverse Effect, as of the date hereof,
neither the Seller nor any Business Sub has received any written notice
from any Governmental Entity revoking, modifying or refusing to renew any
Permit or providing notice of violations under any Permit.
Section 3.8. Title to Property. Upon the entry of the
Section 363/365 Order and, if applicable, the Confirmation Order, at the
Closing the Seller and each of the Selling Subs will sell, assign,
transfer, convey and deliver, as the case may be, to the Purchaser and the
Purchasing Subs the Acquired Assets, and the Acquired Assets and the assets
held by the Domestic Transferred Subs will be free and clear of all liens,
claims, encumbrances and security interests other than Permitted
Exceptions.
Section 3.9. Conduct of Business. From August 31, 2001 to
the date hereof, the Seller has not taken any action that, if taken after
the date hereof, would violate Section 5.3 hereof.
Section 3.10. No Undisclosed Liabilities. Except for (a)
liabilities and obligations incurred in the ordinary course after August
31, 2001; (b) liabilities and obligations disclosed, reflected or provided
for in the Financial Statements; and (c) liabilities and obligations
incurred in connection with the transactions contemplated hereby or
otherwise as contemplated by this Agreement, from August 31, 2001 to the
date hereof, no Transferred Sub has incurred any liabilities or obligations
that would both (i) be required to be reflected or provided for in a
Balance Sheet prepared in accordance with the policies, procedures and
methods used to prepare the Financial Statements and (ii) be reasonably
likely to have a Material Adverse Effect.
Section 3.11. Taxes. (a) Except as prohibited or excused
by the filing of the Petitions, each Transferred Sub has (i) timely filed
(or will timely file) all material Tax Returns required to be filed by such
Transferred Sub through the Closing Date (taking into account applicable
extensions) and (ii) paid or accrued (in accordance with generally accepted
accounting principles in the applicable jurisdiction) all material Taxes
shown to be due on such Tax Returns other than such Taxes as are being
contested in good faith by the Seller. The Seller shall be responsible for
the payment of all Taxes arising out of or pertaining to any period or
partial period ending prior to the Closing Date, except as provided by
Section 8.13 or to the extent that such Taxes are
20
otherwise resolved by the Section 363/365 Order or, if applicable, the
Confirmation Order.
(b) To the actual knowledge (not constructive or
implied) of the Chief Executive Officer or the Chief Financial Officer of
the Seller, there are no Tax liens other than the Permitted Exceptions that
will not be released pursuant to the Section 363/365 Order or, if
applicable, the Confirmation Order upon the Acquired Assets or the assets
of the Transferred Subs and their subsidiaries.
(c) "Taxes" shall mean any and all taxes, fees,
levies or other assessments, including, without limitation, federal, state,
local, or foreign income, gross receipts, excise, real or personal
property, sales, withholding, social security, occupation, use, service,
value added, license, net worth, health, workers' compensation, payroll,
franchise or similar taxes, imposed by any Taxing Authority together with
any interest, penalties or additions to tax and additional amounts imposed
with respect thereto. "Taxing Authority" shall mean any Governmental Entity
responsible for the imposition or collection of any Taxes. "Tax Return"
shall mean any report, return, document, declaration or other information
or filing required to be supplied to any Taxing Authority or jurisdiction
(foreign or domestic) with respect to Taxes.
Section 3.12. Real Property Leases. Upon the entry of the
Section 363/365 Order and, if applicable, the Confirmation Order, the
Seller and the Selling Subs will sell, transfer and assign to the Purchaser
a valid leasehold interest with respect to each of the Real Property Leases
which is a lease (as opposed to a sublease) and a valid subleasehold
interest with respect to each of the Real Property Leases which is a
sublease, in each case, free and clear of all liens, claims, encumbrances
and security interests other than Permitted Exceptions. Schedule
1.1(b)(vi)(B) identifies instruments through which the Seller and the
Selling Subs derive their leasehold interest in the Real Property Leases
(including all amendments thereto). Complete and correct copies of the Real
Property Leases have been delivered to, or made available for inspection
by, the Purchaser and none of the Real Property Leases have been modified
in any material respect except to the extent that such modifications are
disclosed by the copies delivered to or made available for inspection by
the Purchaser.
Section 3.13. Brokers. Except for Lazard Freres & Co.,
LLC and those brokers set forth on Schedule 3.13, no Person is entitled or
may be entitled to any brokerage, financial advisory, finder's or similar
fee or commission payable by the Seller in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of the Seller. The Seller agrees to be responsible for the payment of any
such fee or commission.
21
Section 3.14. Ability to Conduct Business. The (i)
Acquired Assets, (ii) Excluded Assets, (iii) tangible and intangible assets
currently leased or owned directly or indirectly by the Transferred Subs
and (iv) the assets and rights made available pursuant to the Transition
Services Agreement, taken together constitute substantially all of the
tangible and intangible assets that are required to conduct the Business as
of the date hereof (it being understood and agreed that nothing set forth
in this Section 3.14 constitutes a representation or warranty that the
Business can or will be operated at the existing performance levels
following the Closing Date) or are otherwise used primarily in the
Business.
Section 3.15. Employee Benefit Plans.
(a) Schedule 3.15(a) contains a true and
complete list of each Seller Plan (as defined in Section 5.7(b) below).
With respect to each Seller Plan, the Seller has heretofore delivered or
made available to the Purchaser true and complete copies of the Seller Plan
and any amendments thereto (or if the Seller Plan is not a written plan, a
description thereof), any related trust or other funding vehicle, any
reports or summaries required under ERISA or the Code and the most recent
deter mination letter received from the Internal Revenue Service with
respect to each Seller Plan intended to qualify under section 401 of the
Internal Revenue Code of 1986, as amended (the "Code").
(b) No liability under Title IV or section 302
of ERISA has been incurred by the Seller or any trade or business, whether
or not incorporated, that together with the Seller would be deemed a
"single employer" within the meaning of section 4001(b) of ERISA (an "ERISA
Affiliate") that has not been satisfied in full, and no condition exists
that presents a material risk to the Seller or any ERISA Affiliate of
incurring any such liability, other than liability for premiums due the
Pension Benefit Guaranty Corporation (which premiums have been paid when
due).
(c) Each Seller Plan has been operated and
administered in all material respects in accordance with its terms and
applicable law, including but not limited to ERISA and the Code, and each
Seller Plan intended to be "qualified" within the meaning of section 401(a)
of the Code is qualified and the trust maintained thereunder is exempt from
taxation under section 501(a) of the Code.
(d) No Seller Plan provides medical, surgical,
hospitalization, death or similar benefits (whether or not insured) for
employees or former employees of the Seller or any ERISA Affiliate for
periods extending beyond their retirement or other termination of service,
other than (i) coverage mandated by applicable law, (ii)
22
death benefits under any "pension plan," or (iii) benefits the full cost of
which is borne by the current or former employee (or his beneficiary).
(e) The consummation of the transactions
contemplated by this Agreement will not, either alone or in combination
with another event, (i) entitle any current or former employee of the
Seller or any Business Sub to severance pay, unemployment compensation or
any other payment, except as expressly provided in this Agreement, or (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee.
(f) There are no pending, or to the knowledge of
the Seller, threatened or anticipated material claims by or on behalf of
any Seller Plan, by any employee or beneficiary covered under any such
Seller Plan, or otherwise involving any such Seller Plan (other than
routine claims for benefits).
Section 3.16. Labor Relations and Employment. Except to
the extent set forth in Schedule 3.16, (i) there is no labor strike,
dispute, slowdown, stoppage or lockout actual or pending, or to the
knowledge of the Seller, threatened against or affecting the Business and
during the past three years there has not been any such action; (ii) to
knowledge of the Seller, no union or bargaining agent claims to represent
the employees of the Seller or any Business Sub; and (iii) neither the
Seller nor any Business Sub has applied to be certified as the bargaining
agent of the Seller's or the Business Sub's employees or is a party to or
bound by any collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor
organization or employee association applicable to employees of the Seller
or any Business Sub.
Section 3.17. Litigation. Except as described on Schedule
3.17, there are no actions, suits or proceedings at law or in equity by or
before any Governmental Entity now pending or, to the best knowledge of the
Seller's management, threatened against or filed by or affecting the Seller
or any Business Sub with respect to the Business, which might reasonably be
expected to have a Material Adverse Effect.
Section 3.18. Principal Customers. Since August 31, 2001
until the date of this Agreement, Seller has not received any written
notice terminating or materially and adversely modifying the relationship
from any of its top twenty customers (the "Principal Customers") of the
Business, based upon dollar volume of sales, for the fiscal year ended
August 31, 2001.
EXCEPT FOR SPECIFIC REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, THE ACQUIRED ASSETS
23
AND INTERESTS ARE BEING SOLD ON AN "AS IS," "WHERE IS" BASIS AND
NEITHER SELLER NOR ANY SELLING SUB MAKES ANY WARRANTIES, EXPRESS OR
IMPLIED, OF MERCHANTABILITY, FITNESS OR OTHERWISE WITH RESPECT TO THE
ACQUIRED ASSETS AND INTERESTS WHICH EXTEND BEYOND THE AFORESAID
SPECIFIC REPRESENTATIONS AND WARRANTIES.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller as
follows:
Section 4.1. Organization. The Purchaser is, and each
Purchasing Sub upon the Closing will be, a corporation validly existing and
in good standing under the Laws of its jurisdiction of incorporation and
has, or will then have, the corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being, or will then be, conducted. The
Purchaser and each Purchasing Sub will upon the Closing be duly qualified
as a foreign corporation to do business, and in good standing, in each
jurisdiction where the character of its properties owned or held under
lease or the nature of its activities make such qualification necessary,
except where the failure to be so duly qualified, licensed and in good
standing would not have a material adverse effect on the Purchaser or
Purchasing Sub, as applicable.
Section 4.2. Authority Relative to this Agreement and the
Ancillary Agreements. The Purchaser has the corporate power and authority
to enter into this Agreement and the Ancillary Agreements and to carry out
its obligations hereunder and thereunder. The execution, delivery, and
performance of this Agreement and the Ancillary Agreements by the Purchaser
and the consummation by the Purchaser of the transactions contemplated
hereby and thereby have been duly authorized by all requisite corporate
actions. This Agreement has, and the Ancillary Agreements upon the Closing
will have, been duly and validly executed and delivered by the Purchaser
and each constitute a valid and binding agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other
Laws affecting creditors' rights generally from time to time in effect and
to general equitable principles.
Section 4.3. Consents and Approvals. Except for consents,
approvals, authorizations, declarations, filings or registrations which may
be required (i) under the HSR Act and under equivalent legislation in any
other applicable jurisdiction and (ii)
24
from the EPA, Participating States and/or Parallel Action States, no consent,
approval or authorization of, or declaration, filing or registration with, any
Governmental Entity is required to be made or obtained by the Purchaser in
connection with the execution, delivery and performance of this Agreement and
the Ancillary Agreements and the consummation of the transactions contemplated
hereby and thereby.
Section 4.4. No Violations. Neither the execution,
delivery or performance of this Agreement and the Ancillary Agreements by
the Purchaser, nor the consummation by the Purchaser of the transactions
contemplated hereby and thereby, nor compliance by the Purchaser with any
of the provisions hereof and thereof, will (a) conflict with or result in
any breach of any provisions of the articles or certificate of
incorporation, as the case may be, or bylaws of the Purchaser, (b) result
in a violation or breach of, or constitute (with or without due notice or
lapse of time) a default (or give rise to any right of termination,
cancellation, acceleration, vesting, payment, exercise, suspension, or
revocation) under any of the terms, conditions or provisions of any note,
bond, mortgage, deed of trust, security interest, indenture, license,
contract, agreement, plan or other instrument or obligation to which the
Purchaser is a party or by which the Purchaser or the Purchaser's
properties or assets may be bound or affected (other than the Purchaser's
current financing documents which will be either replaced or modified upon
the Closing in accordance with the Refinancing Commitment), (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
the Purchaser, the Purchasing Subs or the Purchaser's properties or assets,
(d) result in the creation or imposition of any encumbrance on any asset of
the Purchaser or (e) cause the suspension or revocation of any permit,
license, governmental authorization, consent or approval necessary for the
Purchaser to conduct its business as currently conducted, except in the
case of clauses (b), (c), (d) and (e) for violations, breaches, defaults,
terminations, cancellations, accelerations, creations, impositions,
suspensions or revocations that would not individually or in the aggregate
have a material adverse effect on the Purchaser.
Section 4.5. Brokers. Except for Deutsche Bank Alex.
Xxxxx, no Person is entitled to any brokerage, financial advisory, finder's
or similar fee or commission payable by the Purchaser in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser. The Purchaser agrees to be
responsible for the payment of any such fee or commission.
Section 4.6. Financing; Solvency. As of the date when the
condition specified in Section 6.3(d) is satisfied or waived and on the
Closing Date the Purchaser will have sufficient funds available to deliver
the Unadjusted Cash Purchase Price to the Seller and consummate the
transactions contemplated by this Agreement. Upon the consummation of the
transactions contemplated by this Agreement, (i) the Purchaser
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will not be insolvent, (ii) the Purchaser will not be left with unreasonably
small capital, (iii) the Purchaser will not have incurred debts beyond its
ability to pay such debts as they mature and (iv) the capital of the
Purchaser will not be impaired.
ARTICLE V
COVENANTS
Section 5.1. Bankruptcy Actions.
(a) Within three (3) days following the
execution of this Agreement, the Seller shall file or cause to be filed
(such filing date referred to as the "363/365 Filing Date") with the
Bankruptcy Court, the Section 363/365 Motion and all necessary supporting
papers, seeking, inter alia, (i) entry of an order substantially in the
form of Exhibit D hereto approving the terms of Section 5.2 of this
Agreement, including, without limitation the procedures relating to
alternative offers and the payment of the Termination Fee and Expense
Reimbursement (the "Bidding Procedures Order"), and (ii) entry of the
Section 363/365 Order substantially in the form of Exhibit E hereto,
approving this Agreement, the Seller's performance hereunder, and the sale
of the Acquired Assets and assumption of the Assumed Liabilities, free and
clear of all liens, claims (as defined by Section 101(5) of the Bankruptcy
Code), interests, and encumbrances (except for Permitted Exceptions).
(b) The Seller shall use reasonable best efforts
to cause (i) entry of the Bidding Procedures Order on the March 2002
omnibus hearing date scheduled in the Seller's Chapter 11 Case after the
execution of this Agreement, but in any event on or before the 25th day
after the 363/365 Filing Date and (ii) the entry of the Section 363/365
Order on or before June 20, 2002.
(c) The Seller shall comply (or obtain an order
from the Bankruptcy Court waiving compliance) with all requirements under
the Bankruptcy Code and Federal Rules of Bankruptcy Procedure in connection
with obtaining approval of the sale of the Acquired Assets under this
Agreement. Notice of the 363/365 Sale Motion, the Sale Hearing and the
objection deadline shall be served by the Seller in accordance with Rules
2002, 6004, 6006 and 9014 of the Federal Rules of Bankruptcy Procedure, the
Bidding Procedures Order or other orders of the Bankruptcy Court, and any
applicable local rules of the Bankruptcy Court, on all Persons required to
receive notice in the Chapter 11 Case under such orders and rules.
Section 5.2. Bidding Procedures. Set forth below are the
bidding procedures (the "Bidding Procedures") to be employed with respect
to this Agreement
26
and the sale of the Acquired Assets to the Purchaser and Purchasing Subs. The
Bidding Procedures are designed to compensate the Purchaser for its efforts,
agreements and expenses to date and to facilitate a full and fair process (the
"Bidding Process") designed to maximize the value of the Acquired Assets for the
benefit of the Seller's creditors, shareholders and bankruptcy estate.
(a) Qualified Bidders. Unless otherwise ordered
by the Bankruptcy Court, for cause shown, or as otherwise determined by the
Seller, in order to participate in the Bidding Process, each Person other
than the Purchaser (a "Potential Bidder") must deliver (unless previously
delivered) to the Seller:
(i) An executed confidentiality
agreement customary for transactions of this type, in form and
substance satisfac tory to the Seller;
(ii) Current audited financial
statements of the Potential Bidder, or, if the Potential Bidder is
an entity formed for the purpose of acquiring the Acquired Assets
and the Business, current audited financial statements of the
equity holders of the Potential Bidder who shall guarantee the
obligations of the Potential Bidder, or such other form of
financial disclosure and credit-quality support or enhancement
acceptable to the Seller and its financial advisors; and
(iii) A preliminary (non-binding)
proposal regarding (a) the purchase price range, (b) any assets
and/or equity interests expected to be excluded, (c) the structure
and financing of the transaction (including, but not limited to,
the sources of financing for the Cash Purchase Price and the
requisite Financial Assurance), (d) any anticipated regulatory
approvals required to close the transaction, the anticipated time
frame and any anticipated impediments for obtaining such
approvals, (e) any conditions to closing that it may wish to
impose in addition to those set forth in this Agreement, and (f)
the nature and extent of additional due diligence it may wish to
conduct and the date by which such due diligence will be
completed.
A Potential Bidder that delivers the documents described
in subparagraphs (i), (ii) and (iii) above and whose financial information
and credit-quality support or enhancement demonstrate the financial
capability of the Potential Bidder to consummate the sale, if selected as a
successful bidder, and that the Seller determines is likely (based on
availability of financing, experience and other considerations) to be able
to consummate the sale within the time frame provided by this Agreement
shall be
27
deemed a "Qualified Bidder." Notwithstanding the foregoing, the Purchaser shall
be deemed a Qualified Bidder for purposes of the Bidding Process.
As promptly as practicable after a Potential Bidder
delivers all of the materials required by subparagraphs (i), (ii) and (iii)
above, the Seller shall determine, and shall notify the Potential Bidder in
writing, whether the Potential Bidder is a Qualified Bidder. At the same
time that the Seller notifies the Potential Bidder that it is a Qualified
Bidder, the Seller shall allow the Qualified Bidder to begin to conduct due
diligence with respect to the Acquired Assets and the Business as provided
in subsection (b) below.
(b) Due Diligence. The Seller shall afford each
Qualified Bidder due diligence access to the Acquired Assets and the
Business. Due diligence access may include management presentations as may
be scheduled by the Seller, access to data rooms, on site inspections and
such other matters which a Qualified Bidder may request and as to which the
Seller, in its sole discretion, may agree to. The Seller shall designate an
employee or other representative to coordinate all reasonable requests for
additional information and due diligence access from Qualified Bidders. Any
additional due diligence shall not continue after the Bid Deadline (as
defined herein). The Seller may, in its discretion, coordinate diligence
efforts such that multiple Qualified Bidders have simultaneous access to
due diligence materials and/or simultaneous attendance at management
presentations or site inspections. Neither the Seller nor any of its
Affiliates (or any of their respective representatives) shall be obligated
to furnish any information relating to the Acquired Assets and the Business
to any Person other than to Qualified Bidders who make an acceptable
preliminary proposal.
(c) Bid Deadline. A Qualified Bidder that
desires to make a bid shall deliver written copies of its bid to: (i)
Lazard Freres & Co. LLC, 00 Xxxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(Attn: Xxxxx Xxxxxx); (ii) Safety-Kleen Services, Inc., 0000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxx Xxxxxxxx 00000 (Attn: Xxxxxx X.
Xxxxxxxxxxx), (iii) Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), 000
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 (Attn: Xxxxx X.
Xxxxx and Xxxxxxx X. Xxxxxx) and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Attn: X. Xxxxxxx St. Clair),
(iv) Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(Attn: Xxxxxx X. Xxxxxx), (v) The Blackstone Group, 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000 (Attn: Xxxxxx Xxxxx); (vi) Milbank, Tweed,
Xxxxxx & XxXxxx, 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000
(Attn: Xxxxxxx Xxxxxxxxx), and (vii) Xxxxxx Capital Partners LLC, 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Attn: Xxxxx Xxxxx),
not later than 5:00 p.m. (Eastern Time) on May 20, 2002 (the "Bid ---
Deadline").
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(d) Bid Requirements. A bid is a letter from a
Qualified Bidder (other than the Purchaser, whose participation as a
Qualified Bidder shall be on the terms set forth in this Agreement) stating
that (i) the Qualified Bidder offers to purchase some or all of the
Acquired Assets and assume some or all of the Assumed Liabilities upon the
terms and conditions set forth in a copy of this Agreement attached to such
letter, marked to show those amendments and modifications to the Agreement,
including, but not limited to, price, terms, and assets to be acquired, and
liabilities to be assumed, that the Qualified Bidder proposes (a "Marked
Agreement") and (ii) the Qualified Bidder's offer is irrevocable until 48
hours after the closing of the sale or sales of the Acquired Assets. A
Qualified Bidder (other than the Purchaser) shall accompany its bid with
(i) a deposit in a form of a certified check payable to the order of Lazard
Freres & Co. LLC, as agent for the Seller, or other immediately available
funds, in an amount equal to ten percent (10%) of the cash component of the
purchase price proposed in such bid, Three Million Dollars ($3,000,000)
(the "Good Faith Deposit"), and (ii) written evidence of a commitment for
financing or other evidence of financial ability to consummate the
transaction (including evidence of the ability to provide the requisite
Financial Assurance).
(e) Qualified Bids. The Seller shall consider a
bid only if the bid is a "Qualified Bid." Except as otherwise provided in
the Bidding Procedures Order or further order of the Bankruptcy Court, to
be a Qualified Bid, in addition to the requirements of subsection (d)
above, the bid must:
(i) be received by the Bid Deadline
provided, however, the Seller may, at its sole discretion, extend
the Bid Deadline for such period or periods as it determines
appropriate;
(ii) propose a transaction that the
Seller determines, in the good faith opinion of its Board of
Directors, after consultation with its financial advisors, is not
materially more burdensome or conditional than the terms of this
Agreement and has a value, either individually or, when evaluated
in conjunction with any other Qualified Bid, greater than or equal
to the sum of the Purchase Price plus the maximum amount of the
Termination Fee plus (x) in the case of the initial Qualified Bid,
$250,000, and (y) in the case of any subsequent Qualified Bids,
$1,000,000 over the immediately preceding highest Qualified Bid;
(iii) not be conditioned on obtaining
financing (including the requisite Financial Assurance required by
appropriate
29
Governmental Entities) or on the outcome of unperformed due diligence
by the Qualified Bidder with respect to the assets and/or equity
interests sought to be acquired or the liabilities to be assumed;
(iv) not request or entitle the
Qualified Bidder to any break-up fee, termination fee, expense
reimbursement or similar type of payment;
(v) include a commitment to consummate
the sale of some or all of the Acquired Assets (including the
receipt of any required governmental or regulatory approvals)
within not more than 15 days after entry of an order by the
Bankruptcy Court approving such sale, subject to receipt of any
governmental or regulatory approvals which must be obtained within
60 days after entry of such order; and
(vi) contain an acknowledgment and
representation by the Qualified Bidder that it (x) has had an
opportunity to inspect and examine the Acquired Assets and the
Business and to conduct any and all due diligence with respect
thereto prior to making its offer, (y) has relied solely upon its
own independent review, investigation and/or inspection of any
documents in making its bid, and (z) did not rely upon any written
or oral statements, representations, promises, warranties or
guaranties whatsoever, whether express, implied, by operation of
law or otherwise, regarding the Acquired Assets or the Business,
or the completeness of any information provided in connection with
the Bidding Process, except as expressly stated in the Agreement
or a Marked Agreement.
A bid received from a Qualified Bidder that meets the above requirements is
a Qualified Bid. A Qualified Bid will be valued based upon factors such as
the net value provided by such bid and the likelihood and timing of
consummating such transaction. For purposes of the Bidding Process, this
Agreement shall constitute a Qualified Bid.
(f) Auction. If the Seller receives at least one
Qualified Bid or combination of Qualified Bids which the Seller determines
is or are higher or otherwise better than the bid of the Purchaser set
forth in this Agreement, the Seller shall conduct an auction (the
"Auction") of the Acquired Assets and the Business upon notice to all
Qualified Bidders who have submitted Qualified Bids at 10:00 a.m. (Eastern
Time) on or before the tenth (10th) business day following the expiration
of the Bid Deadline at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx,
Four Times Square, New York, New York 10036-6522 or such later time or
other place as the Seller shall notify the
30
Purchaser and all other Qualified Bidders who have submitted Qualified Bids
(but in no event later than the second (2nd) business day prior to the Sale
Hearing), in accordance with the following procedures:
(i) Only the Seller, the Purchaser,
counsel for the Seller's secured lenders, counsel for the Official
Committee of Unsecured Creditors in the Chapter 11 Case and any
Qualified Bidders who have timely submitted Qualified Bids shall
be entitled to attend the Auction, and only the Purchaser and such
Qualified Bidders shall be entitled to make any additional bids
("Subsequent Bids") at the Auction;
(ii) At least two (2) business days
prior to the Auction, each Qualified Bidder who has timely
submitted a Qualified Bid must inform the Seller whether it
intends to participate in the Auction and at least one (1)
business day prior to the Auction, the Seller shall provide copies
of the Qualified Bid or combination of Qualified Bids which the
Seller believes is the highest or otherwise best offer to all
Qualified Bidders who have informed the Seller of their intent to
participate in the Auction;
(iii) All bidders shall be entitled to
be present for all Subsequent Bids with the understanding that the
true identity of each bidder shall be fully disclosed to all other
bidders and that all material terms of each Subsequent Bid will be
fully disclosed to all other bidders throughout the entire
Auction. The Seller may employ and announce at the Auction
additional procedural rules that are reasonable under the
circumstances (e.g., the amount of time allotted to make
Subsequent Bids) for conducting the Auction, provided that such
rules are not inconsistent with these Bidding Procedures, the
Bankruptcy Code or any order of the Bankruptcy Court entered in
connection herewith;
(iv) Bidding at the Auction shall begin
with the highest or otherwise best Qualified Bid or combination of
Qualified Bids and continue in minimum increments of at least
$1,000,000 higher than the previous bid or bids. The Auction shall
continue in one or more rounds of bidding and shall conclude after
each participating bidder has had the opportunity to submit an
additional Subsequent Bid with full knowledge and written
confirmation of the then-existing highest bid or bids. For the
purpose of evaluating the value of the consideration provided by
Subsequent Bids (including any Subsequent Bid by the Purchaser),
the Seller may give effect to any Termination Fee or Expense
31
Reimbursement that may be payable to the Purchaser under this
Agreement as well as any assets and/or equity interests to be
retained by the Seller or the Selling Subs.
(v) At the conclusion of the Auction,
or as soon as thereafter as practicable, the Seller, in
consultation with its financial advisors, shall (i) review each
Qualified Bid on the basis of financial and contractual terms and
the factors relevant to the sale process, including those factors
affecting the speed and certainty of consummating the sale, and
(ii) identify the highest or otherwise best offer(s) for the
Acquired Assets and the Business received at the Auction (the
"Successful Bid(s)" and the bidder(s) making such bid, the
"Successful Bidder(s)").
(g) Sale Hearing; Alternate Bid. If the Seller
does not receive any Qualified Bids (other than the Qualified Bid of the
Purchaser), the Seller will report the same to the Bankruptcy Court at the
Sale Hearing and will proceed with a sale of the Acquired Assets to the
Purchaser. If the Seller does receive additional Qualified Bids, then at
the Sale Hearing the Seller shall seek approval of the Successful Bid(s),
as well as the second highest or best Qualified Bid(s) (the "Alternate
Bid(s)" and such bidder(s), the "Alternate Bidder(s)"). The Seller's
presentation to the Bankruptcy Court of the Successful Bid(s) and Alternate
Bid(s) shall not constitute the Seller's acceptance of either or any such
bid(s), which acceptance shall only occur upon approval of such bid(s) by
the Bankruptcy Court at the Sale Hearing. Following approval of the sale to
the Successful Bidder(s), if the Successful Bidder(s) fail(s) to consummate
the sale because of a breach or failure to perform on its part of such
Successful Bidder(s), then the Alternate Bid(s) shall be deemed to be the
Successful Bid(s) and the Seller shall effectuate a sale to the Alternate
Bidder(s) without further order of the Bankruptcy Court.
(h) Return of Good Faith Deposits. The Good
Faith Deposits of all Qualified Bidders shall be held in an
interest-bearing escrow account, and all Qualified Bids shall remain open
(notwithstanding Bankruptcy Court approval of a sale pursuant to the terms
of one or more Successful Bids by one or more Qualified Bidders), until two
(2) days following the closing of the sale (the "Return Date").
Notwithstanding the foregoing, the Good Faith Deposit, if any, submitted
by the Successful Bidder(s), together with interest thereon, shall be
applied against the payment of the Purchase Price upon closing of the sale
to the Successful Bidder(s). If any Successful Bidder fails to consummate
an approved sale because of a breach or failure to perform on its part, the
Seller shall not have any obligation to return any Good Faith Deposit
deposited by such Successful Bidder and shall retain such Good Faith
Deposit as liquidated damages. On
32
the Return Date, the Seller shall return the Good Faith Deposits of all other
Qualified Bidders, together with the accrued interest thereon.
(i) Termination Fee. In the event that the
Seller sells, transfers, leases or otherwise disposes directly or
indirectly, including through an asset sale, stock sale, merger, or other
similar transaction, all or substantially all or a material portion of the
Business or the Acquired Assets in a transaction or a series of
transactions with one or more parties other than the Purchaser in
accordance with the Bidding Procedures (such event being, an "Alternative
Transaction"), the Seller shall, upon the consummation of the Alternative
Transaction(s), pay to the Purchaser either the entire amount of or a
portion of the Termination Fee as set forth below:
(i) the Purchaser shall be entitled to
50% of the Termination Fee (i.e., $3,500,000) if the consummation
of the Alternative Transaction(s) occurs prior to the Purchaser's
satisfaction of the conditions specified in Section 6.3 (c) and
Section 6.3(f); and
(ii) the Purchaser shall be entitled to
100% of the Termination Fee if the consummation of the Alternative
Transaction(s) occurs after the Purchaser's satisfaction of the
conditions specified in Section 6.3(c) and Section 6.3(f).
(j) Expense Reimbursement. In the event this
Agreement is terminated by the Purchaser as set forth in this Section
5.2(j), provided the Purchaser is not in default of any provision of this
Agreement for which the Seller shall have previously notified the
Purchaser, the Seller shall within twenty (20) days after written demand by
the Purchaser reimburse the Purchaser's reasonable, documented, out-of-
pocket expenses and costs (including, without limitation, reasonable
attorney's fees, expenses of its financial advisor, expenses of other
consultants and the HSR filing fee) incurred in connection with the
transactions contemplated by this Agreement as follows (the "Expense
Reimbursement"): (i) up to $1,500,000 if the Purchaser terminates this
Agreement pursuant to Section 7.1(c), Section 7.1(d) or Section 7.1(f)
prior to the Due Diligence Expiration Date; (ii) up to $3,500,000 if, prior
to the conditions set forth in Section 6.3(c) and Section 6.3(f) being
satisfied, the Purchaser either (x) terminates this Agreement pursuant to
Section 7.1(c), Section 7.1(e), Section 7.1(f), Section 7.1(i) or Section
7.1(k) on or prior to October 15, 2002 or (y) terminates this Agreement
pursuant to
33
Section 7.1(g) (provided that Purchaser does not subsequently purchase or
acquire the Acquired Assets (or at least 50% thereof)); or (iii) up to
$5,250,000 if, after the conditions set forth in Section 6.3(c) and Section
6.3(f) are satisfied, either (A) the Purchaser (x) terminates this Agreement
pursuant to Section 7.1(c), Section 7.1(e) or Section 7.1(f) prior to
October 15, 2002 or (y) terminates this Agreement pursuant to Section 7.1(g)
(provided that Purchaser does not subsequently purchase or acquire the Acquired
Assets (or at least 50% thereof)) or (B) the Seller terminates this Agreement
pursuant to Section 7.1(f), Section 7.1(h), Section 7.1(i) or Section 7.1(k).
Notwithstanding anything to the contrary contained in this Section 5.2(j), the
Purchaser shall not be entitled to any Expense Reimbursement pursuant to this
Section 5.2(j) due to a termination of this Agreement pursuant to Section 7.1(i)
or Section 7.1(k) if any of the conditions set forth in Section 6.3(d), Section
6.3(i) or Section 6.3(j) have not been satisfied (but in the case of a failure
of the condition set forth in Section 6.3(j) not being satisfied, only if such
failure is due to an act or omission or other fault of the Purchaser). The
Purchaser acknowledges and agrees that in the event that it terminates this
Agreement or the Seller terminates this Agreement and it becomes entitled
to receive or receives any Expense Reimbursement it shall not be entitled
to receive nor shall it receive the Termination Fee or any portion thereof,
and conversely, that in the event that it becomes entitled to receive or
receives any Termination Fee, it shall not be entitled to receive nor shall
it receive the Expense Reimbursement or any portion thereof.
Section 5.3. Conduct of Business by the Seller Pending
the Closing. The Seller covenants and agrees that, except (i) as
contemplated by this Agreement, (ii) as disclosed in Schedule 5.3 of the
Seller Disclosure Schedule, (iii) with the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld, (iv) as
required by the Bankruptcy Court or otherwise approved by the Bankruptcy
Court or (v) to the extent required by the lenders in connection with the
Financing, after the date hereof and prior to the Closing Date:
(a) the Seller shall, and shall cause the
Business Subs to, use commercially reasonable efforts to conduct the
Business only in the ordinary course consistent with past practice; and
(b) the Seller shall not, and shall cause the
Selling Subs not to, take the following actions with respect to the
Transferred Subs, the Business and the Acquired Assets:
(i) any amendment, supplement,
termination or cancellation of the articles of incorporation or
bylaws or similar organizational documents of the Seller or a
Business Sub;
(ii) a pledge, mortgage, acquisition,
sale, lease or disposition of a material portion of the Acquired
Assets or the assets or properties of a Transferred Sub except in
the ordinary course;
34
(iii) any increases in, or additions
to, the compensation payable to any of the Transferred Employees
or any employees of the Transferred Subs, including pursuant to a
Seller Plan, other than in the ordinary course or pursuant to
existing Seller Plans or arrangements;
(iv) a material failure to maintain
books, records and accounts of the Seller, any Transferred Sub or
the Business in the ordinary course consistent with the Seller's
current practices;
(v) a material failure to comply with
the requirements of applicable Environmental Laws or the CAFO;
(vi) the issuance or sale of any
additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire the shares of, the capital stock or
equity or membership interests of any Transferred Sub, other than
an issuance or sale of such of the foregoing to the Seller or one
of the Selling Subs;
(vii) except pursuant to the Financing
(A) the incurrence or assumption of any long-term or short-term
debt or the issuance of any debt securities by a Transferred Sub
except for borrowings under existing lines of credit or from the
Seller in the ordinary course; (B) the assumption, guarantee,
endorsement or otherwise becoming liable or responsible (whether
directly, contingently or otherwise) by a Transferred Sub for the
material obligations of any other Person except in the ordinary
course in an amount not material to the Business; or (C) the
making by a Transferred Sub of any material loans, advances or
capital contributions to, or investments in, any other Person, in
each case other than in the ordinary course or if not material;
(viii) the acquisition or disposition
by a Transferred Sub (by merger, consolidation or acquisition of
stock or assets) of any corporation, partnership or other business
organization or division thereof or any equity interest therein
(other than in the ordinary course);
(ix) a material change of any of the
accounting methods used by the Seller or a Business Sub unless
required by GAAP or applicable law; and
35
(x) the authorization or entering into
an agreement to do any of the foregoing.
Section 5.4. Access and Information. Subject to
applicable Law and the reasonable requirements of the Seller to protect
competitively sensitive information, the Seller shall afford to the
Purchaser and to the Purchaser's financial advisors, legal counsel,
accountants, consultants, financing sources and other authorized
representatives reasonable access during normal business hours throughout
the period prior to the Closing Date to the books, records, properties and
personnel of the Seller, the Selling Subs and the Transferred Subs relating
to the Business and, during such period, shall furnish reasonably promptly
to the Purchaser such information as the Purchaser reasonably may request.
All such information disclosed to the Purchaser shall remain subject to the
Confidentiality Agreement. Without limitation of the other provisions of
this Section 5.4, conditioned upon and as soon as the Bidding Procedures
Order referred to in Section 5.1(a) shall be entered, the Seller shall
permit McKinsey & Co. or another nationally recognized firm selected by the
Purchaser, in accordance with a mutually acceptable confidentiality
agreement entered into by the Purchaser, the Seller and such consultant, to
migrate any data concerning the Business which the Purchaser and such
consultant shall deem appropriate onto a server maintained by such
consultant but using the Purchaser's software programs. It is the
Purchaser's intent that if the Closing shall occur, the Purchaser shall
have immediate access to such migrated data in order to operate the
Business and comply with the Purchaser's reporting obligations for the
combined operations of the Purchaser and the Business under applicable
securities Laws. If the Closing shall not occur, such consultant shall
destroy all of such migrated data in compliance with such confidentiality
agreement.
Section 5.5. Approvals and Consents; Cooperation;
Notification.
(a) The parties hereto shall use their
respective reasonable best efforts, and cooperate with each other, to
obtain as promptly as practicable (i) all approvals, consents or waivers
from Governmental Entities required in order to consummate the transactions
contemplated by this Agreement and (ii) satisfaction of all conditions to
Closing set forth in Article VI.
(b) The Seller and the Purchaser shall take all
commercially reasonable actions necessary to file as soon as practicable
all notifications, filings and other documents required to obtain all
approvals, consents or waivers from Governmental Entities, including,
without limitation, under the HSR Act, and to respond as promptly as
practicable to any inquiries received from the Federal Trade Commission,
the Antitrust Division of the Department of Justice and any other
Governmental Entity
36
for additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any Governmental Entity
in connection therewith. The Purchaser agrees to take promptly any and all
commercially reasonable steps necessary to avoid or eliminate each and every
impediment under any antitrust or competition law that may be asserted by any
U.S. federal, non-U.S. national, state or local antitrust or competition
authority so as to enable the parties to expeditiously close the transactions
contemplated by this Agreement, including committing to or effecting, by consent
decree, hold separate orders, or otherwise, the sale or disposition of such of
its assets or businesses, or of the business to be acquired by it pursuant to
this Agreement, as is required to be divested in order to avoid the entry
of, or to effect the dissolution of, any decree, order, judgment,
injunction, temporary restraining order or other order in any suit or
proceeding, that would otherwise have the effect of materially delaying or
preventing the consummation of the transactions contemplated by this
Agreement. In addition, without limiting the generality of the foregoing
regarding Governmental Entities, the Purchaser agrees to take promptly any
and all commercially reasonable steps necessary to attempt to vacate or
lift any order or other restraint relating to antitrust matters that would
have the effect of making the transaction contemplated by this Agreement
illegal or otherwise prohibiting its consummation. However, notwithstanding
any other provision of this Section 5.5, the Purchaser shall not be
required to take any action under this Section 5.5 which would violate any
provision of the Refinancing Commitment or the Financial Assurance
Commitment without the prior written consent of the financial institutions
which are parties to such commitments.
(c) Each of the Seller and the Purchaser shall
give prompt notice to the other of the occurrence or failure to occur of an
event that would, or with the lapse of time would, cause any condition to
the consummation of the transactions contemplated hereby not capable of
satisfaction. In addition, the Seller shall provide the Purchaser with
prompt notice of any filing with the Bankruptcy Court which pertains to the
Acquired Assets or the Business.
(d) Beginning on the date of this Agreement
until the Closing Date, the Seller shall notify the Purchaser of any
written notice it has received from any Principal Customer whereby such
Principal Customer has indicated its intention to terminate or materially
and adversely modify its relationship with the Seller or any Business Sub.
Section 5.6. Additional Matters. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable best efforts 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. The obligations of each of
37
the Purchaser and the Seller pursuant to this Article V shall be subject to any
orders entered or approvals or authorizations granted by the Bankruptcy
Court and the Bankruptcy Code.
Section 5.7. Employment of Business Employees.
(a) Prior to the Closing Date, the Purchaser
shall make an offer of employment or, as the case may be with the
Transferred Subs and their respective subsidiaries, continued employment,
effective as of the Closing Date to each employee of the Seller and the
Business Subs who is employed in the Business other than inactive employees
(which shall not include persons on maternity or family leave) and those
other employees listed on Schedule 5.7(a)(i) (the "Excluded Employees") on
terms and conditions that, with respect to salary shall be the same as
currently offered by the Seller and the Business Subs as of the Closing
Date and with respect to bonus and benefits are comparable to those offered
to employees of Purchaser at similar levels. Each employee offered
employment as set forth above who accepts such employment shall be deemed
to be a "Transferred Employee." The Purchaser agrees to assume and
thereafter pay, perform or otherwise discharge any liability or obligation
for any severance and related termination costs (including but not limited
to, accrued but unpaid vacation benefits) of any Transferred Employee
pursuant to the severance policy of Purchaser set forth on Schedule
5.7(a)(ii). The Purchaser shall be responsible for any (i) accrued but
unpaid vacation days or (ii) earned but unpaid incentive or bonus
compensation that any Transferred Employee is entitled to in connection
with his or her service with the Seller or Selling Sub prior to the
Closing. The Seller shall be responsible for any severance, unpaid vacation
days and earned but unpaid wages, incentive or bonus compensation or other
benefits for the Excluded Employees. The Purchaser shall be responsible for
any severance of any employee who accepts the Purchaser's offer of
employment only to the extent set forth on Schedule 5.7(a)(ii).
(b) Effective as of the Closing Date, the
Transferred Employees shall cease participation in all Plans of the Seller
and, if applicable, the Selling Subs (the "Seller Plans") and commence
participation in similar Plans sponsored or established by the Purchaser
including, but not limited to health, life insurance and disability plans
("Purchaser Plans"). The Purchaser shall recognize and give credit for all
service by each Transferred Employee and each employee of the Transferred
Subs with the Seller or any predecessor or affiliate of the Seller for
purposes of (i) eligibility and vesting under the Purchaser Plans and (ii)
the Purchaser's policies related to vacation pay, sick leave and personal
or family leave except to the extent such credit would result in the
duplication of benefits. The Purchaser Plans shall not, with respect to any
Transferred Employee or any employee of the Transferred Subs, limit or
otherwise restrict participation thereunder for reason of any pre-existing
condition limitation or
38
waiting period in any such Purchaser Plan. The Purchaser shall credit the
Transferred Employees and the employees of the Transferred Subs with any amounts
paid prior to the Closing Date under any Seller Plan with respect to
satisfaction of any applicable deductible amounts and co-payment minimums under
any of the Purchaser Plans which provide similar benefits.
(c) The Purchaser shall indemnify and hold the
Seller, the Selling Subs and their subsidiaries and affiliates harmless
from and against any and all claims, losses, damages, expenses, obligation
and liabilities (including costs of collection, attorneys' fees and other
costs of defense) which the Seller, the Selling Subs or their subsidiaries
or affiliates may incur in connection with any suit or claim or violation
brought against the Seller, the Selling Subs or their subsidiaries or
Affiliates under the WARN Act or any similar national, multi-national,
state or local law that relates to actions taken by the Purchaser on or
after the Closing Date with regard to any site of employment or one or more
facilities or operating units within any site of employment of the business
of Purchaser.
(d) The Purchaser shall have no obligation to
include inactive or Excluded Employees or their families (other than family
members who are Transferred Employees) in its employee benefit plans,
including, without limitation, workers compensation coverage. Effective as
of the Closing, all employees of the Transferred Subs and any dependents of
such shall cease, to the extent applicable, to participate in all of the
Seller Plans.
Section 5.8. No Implied Representations or Warranties;
Due Diligence. The Purchaser hereby acknowledges and agrees that the Seller
is not making any representation or warranty whatsoever, express or
implied, except those representations and warranties of the Seller
explicitly set forth in this Agreement or in any certificate contemplated
hereby and delivered by the Seller in connection herewith.
Section 5.9. Books and Records. For a period of five (5)
years after the Closing Date (or such longer period as may be required by
any Governmental Entity or legal proceeding):
(a) the Purchaser shall not dispose of or
destroy any of the business records and files of the Business transferred
to it hereunder;
(b) the Purchaser shall allow the Seller and any
of its directors, officers, employees, counsel, representatives,
accountants and auditors access to the Transferred Employees, employees of
the Transferred Subs and other employees of the Purchaser or its
subsidiaries engaged in the operation of the Business and all
39
business records and files of the Seller, the Business Subs or the Business that
are transferred to it in connection herewith, which are reasonably required by
the Seller for purposes related to the Chapter 11 Case, Tax matters and
other reasonable business purposes, during regular business hours and upon
reasonable notice, and the Seller shall have the right to make copies of
any such records and files; and
(c) the Seller shall not dispose of or destroy
any of the material business records and files of the Business which remain
with the Seller after the Closing and shall allow the Seller and its
representatives and accountants access to its employees who have knowledge
of the Business so long as such access does not reasonably interfere with
the duties of such employees.
Section 5.10. Financial Assurance Matters. The parties
acknowledge that the Consent Agreement and Final Order (the "CAFO") between
the United States Environmental Protection Agency (the "EPA") and the
Seller and certain of the Seller's subsidiaries, dated as of September 5,
2000, as amended, requires certain actions by both the Seller and the
Purchaser prior to the Closing with respect to the covered facilities
listed on Schedule 5.10(i) (each a "Covered Facility"). The Covered
Facilities may not be transferred directly or indirectly through the
acquisition of the Acquired Assets to the Purchaser or any Purchasing Sub
until the Purchaser has received certain approvals (as set forth in
Paragraph 94 of the CAFO) in writing from the EPA and any applicable
participating states, which participating states are listed on Schedule
5.10(ii) (each a "Participating State"). In addition, certain other states
listed on Schedule 5.10(iii) (each a "Parallel Action State"), pursuant to
orders entered by such Parallel Action States' environmental Government
Entities, also require that the Purchaser receive their consent prior to
the transfer of any Covered Facility located in their respective states.
The Purchaser agrees to use all reasonable best efforts to take, or cause
to be taken, all action and to do, or cause to be done, all things
necessary, proper and advisable, including obtaining compliant Financial
Assurance, in order to obtain the approval of the transfer of the Covered
Facilities as contemplated by this Agreement from the EPA and the
applicable Participating States and Parallel Action States. Nothing in this
Agreement or in any Bankruptcy Court Order approving this Agreement shall
be construed to release or relieve any entity of any liability to a
Government Entity under any police and regulatory statute as the owner or
operator of property that entity owns or operates after the date of
transfer.
Section 5.11. Real Estate Due Diligence.
(a) Within twenty (20) days of the date of this
Agreement, the Seller shall deliver or cause to be delivered to the
Purchaser a copy of the Seller's or each Business Sub's title insurance
policies or, if the same is not within its possession
40
or control, a deed recording reference (collectively, the "Title Materials") for
each Owned Real Property and real property owned by any Transferred Sub, as
applicable. Within thirty-five (35) days after the Purchaser's receipt of
all of the Title Materials, the Purchaser will obtain an ALTA title
commitment (or such other comparable form as may be available in the
jurisdiction in which the property is located)(the "Title Commitment") from
LandAmerica or Chicago Title Insurance Company and will notify the Seller
in writing (the "Exception Notice") as to those title exceptions listed in
each Title Commitment which it will not accept as permitted, provided,
however, that Purchaser shall only be allowed to list title exceptions
which materially interfere with the current use of any parcel of Owned Real
Property or real property owned by a Transferred Sub or title exceptions
which would reasonably be likely to have a material adverse effect on the
ability of Purchaser to obtain financing with respect to any parcel of
Owned Real Property or real property owned by a Transferred Sub (all such
exceptions for which the Purchaser shall not have notified the Seller in
the Exception Notice shall be deemed to be "Permitted Exceptions," as
defined in this Agreement). In the event that the Purchaser fails to
provide an Exception Notice to the Seller within thirty-five (35) days
after Purchaser's receipt of all of the Title Materials, the Purchaser
shall be deemed to have waived its right to object to matters shown on the
Title Commitments, and all exceptions in the Title Commitment shall be
deemed to be Permitted Exceptions. The Seller shall have until the Due
Diligence Expiration Date to have all exceptions described in the Exception
Notice removed from the Title Commitment or to have the Title Company
commit to insure against any and all loss or damage that may be occasioned
by any such unpermitted exceptions. If the Seller fails on or before the
Due Diligence Expiration Date to reasonably demonstrate to the Purchaser
that the unpermitted exceptions have been removed or, in the alternative,
that the Seller has obtained a commitment for title insurance over such
exceptions, then, in either such case, the Purchaser shall have the option
to either (A) terminate this Agreement, whereupon the parties hereto shall
have no further obligations hereunder or (B) proceed with the Closing, in
which case the Seller shall pay the cost of removing any title exceptions
listed in the Exception Notice or for insuring over such exceptions listed
in the Exception Notice in each case, with respect to the real property
owned by any Transferred Sub which is not a Domestic Transferred Sub, and
all exceptions in the Title Commitment shall be deemed as Permitted
Exceptions, provided however, that in the event such costs exceed Five
Million Dollars ($5,000,000), either, at Purchaser's option, (i) the
Agreement shall be terminated and the Seller shall within twenty (20) days
after written demand by the Purchaser reimburse the Purchaser's reasonable,
documented, out-of-pocket expenses and costs up to Five Million Dollars
($5,000,000) (including, without limitation, reasonable attorney's fees,
expenses of its financial advisor, expenses of other consultants and the
HSR filing fee) incurred in connection with the transactions contemplated
by this Agreement or (ii) proceed with the Closing, in which case Seller
shall pay up to Five Million Dollars ($5,000,000) to remove such exceptions
or insure
41
over such exceptions. If the Purchaser desires to obtain any title policy with
respect to the Owned Real Property or real property owned by any Transferred
Sub, it shall do so at its sole cost and expense (except as specifically
provided in this Section 5.11(a)) and such title policy shall in no event be
deemed a condition to Closing; provided that the Seller shall provide any
affidavits or other documents reasonably required by the title company in order
to issue such policy.
(b) Within ten (10) days after the date of this
Agreement, the Seller and the Purchaser shall mutually determine the list
of material properties, which list shall be set forth on Schedule 5.11(b)
(the "Material Properties"). Within a reasonable time after the preparation
of Schedule 5.11(b), the Seller shall deliver to the Purchaser surveys of
the Material Properties prepared by land surveyors licensed in the
jurisdictions in which such Material Properties are located (collectively,
the "Surveys"). The Surveys shall be certified to the Purchaser and the
Title Company as having been prepared in accordance with the 1999 minimum
standard detail requirements for a land survey jointly adopted by
ALTA/ACSM. On or before the date that is ten (10) days after the
Purchaser's receipt of the Surveys, the Purchaser will notify the Seller in
writing (the "Survey Notice") as to the encroachments, gaps, gores and
other matters depicted on the Surveys which the Purchaser shall not accept
(the "Survey Defects"). In the event that the Purchaser fails to provide a
Survey Notice within ten (10) days after the Purchaser's receipt of the
Surveys, the Purchaser shall be deemed to have waived its right to object
to matters shown on the Surveys. The Seller shall have thirty (30) days, or
such later date as may be mutually agreed upon by the parties, from the
date of receipt of the Survey Notice (the "Survey Defects Removal Date") to
have the Survey Defects removed from the Surveys or to have the Title
Company commit to insure against any and all loss or damage that may be
occasioned by any such Survey Defect. If the Seller fails on or before the
Survey Defects Removal Date to reasonably demonstrate to the Purchaser that
the Survey Defects have been removed, or in the alternative, that the
Seller has obtained a commitment for title indemnification or title
insurance over such Survey Defects, then, in either such case, the
Purchaser shall have the option to either (A) terminate this Agreement,
whereupon the parties hereto shall have no further obligations hereunder or
(B) proceed with the Closing, in which case all Survey Defects shall be
deemed waived by the Purchaser.
Section 5.12. Notification of Motion to Reject Certain
Contracts; Additional Executory Contracts and Unexpired Leases. During the
period beginning on the date of this Agreement and ending on the Closing
Date, the Seller shall notify the Purchaser of its intent to file any
motion to reject executory contracts or unexpired leases with respect to
the Business that are not listed on Schedules 1.1(b)(ii)(A), (B) or (D) or
Schedule 1.1(b)(vi)(B). Within five (5) days of receiving such notice, the
Purchaser may notify the Seller that it wishes the Seller to assume and
assign to the
42
Purchaser any such executory contracts or unexpired leases. If the Purchaser
notifies the Seller prior to Closing, such executory contracts or unexpired
leases shall be added to Schedule 1.1(b)(ii)(A), (B) or (D) or Schedule 1.1(b)
(vi)(B), as appropriate, and shall be subject to the cure and reinstatement cost
provisions of Section 1.4. If the Purchaser notifies the Seller after Closing
but prior to the Confirmation Date, the Seller shall file a motion with the
Bankruptcy Court to assume and assign such executory contracts or unexpired
leases, provided that the Purchaser agrees to pay any cure and reinstatement
costs with respect to such executory contracts or unexpired leases. If the
Seller enters into any material executory contracts and unexpired leases after
the date of this Agreement with respect to the Business, the Seller shall notify
the Purchaser of such contracts and leases and the Purchaser shall have the
option of assuming such contracts and leases.
Section 5.13. Additional Financial Information. Not later
than April 12, 2002, the Seller will provide the Purchaser with Balance
Sheets and related notes as at the completion of the fiscal years of the
Business ended August 31, 1999, 2000 and 2001, together with a report
thereon from Xxxxxx Xxxxxxxx LLP. In addition, the Seller will also provide
the Purchaser with monthly Balance Sheets and income statements for the
Business as prepared in the ordinary course and consistent with past
practice by the finance and accounting staff of the Business for each month
after August 2001 for which the Seller has closed the accounting books of
the Business, which statements shall be delivered within forty-five (45)
days after each such closing. No financial information delivered by the
Seller pursuant to this Section 5.13 shall be deemed in any manner to
update Schedule 3.5.
Section 5.14. SEC Request. The Purchaser shall provide to
the staff of the Securities and Exchange Commission (the "SEC") such
additional information as the staff may request in connection with the
Purchaser's letter dated January 31, 2002, requesting that the SEC permit
the Purchaser to omit certain financial statements associated with the
Acquisition from the Form 8-K to be filed by the Purchaser as described in
such letter.
Section 5.15. Covenant Not to Compete; Non-Solicitation.
(a) Other than as may be explicitly allowed by the Ancillary Agreements,
for a period of three (3) years after the Closing Date, the Seller shall
not directly or indirectly, own, manage, operate, control, be or remain
employed or retained at, have any financial interest in, or otherwise be
connected in any manner with the ownership, management, operation or
control of any person, firm, partnership, corporation, or other entity that
is engaged in the Business or any business substantially similar to the
Business, provided that the Seller's covenants under this Section 5.15(a)
(i) shall not apply to the beneficial ownership of less than five percent
(5%) of any class of securities registered pursuant
43
to Section 12 of the Securities Exchange Act of 1934, as amended, (ii) shall not
prohibit the Seller from directly or indirectly continuing to operate its
remaining
businesses in the same manner as it has operated its remaining businesses
during the past year, except as set forth on Schedule 5.15 and (iii) shall
not prohibit any Person acquiring any of Safety-Kleen Corp.'s businesses
(other than the Business) by sale, merger or otherwise from continuing to
operate its businesses (other than the BSSD) as conducted prior to such
Person becoming a successor.
(b) For a period of three (3) years after the
Closing Date, the Seller shall not, directly or indirectly, solicit, induce
or attempt to solicit or induce, any Person or entity who at the time of
Closing was a customer or client of the Business (a "Customer"), to
terminate his, her or its relationship with the Purchaser for any purpose,
including, without limitation, the purpose of associating with or becoming
a Customer, whether or not exclusive, of the Seller or any entity of which
the Seller is or becomes a partner, stockholder, principal, member, agent
or trustee, or otherwise solicit, induce, or attempt to solicit or induce
any such Customer to terminate his, her or its relationship with the
Purchaser for any other purpose or no purpose, provided that this Section
5.15(b) (i) shall not apply to the beneficial ownership of less than five
percent (5%) of any class of securities registered pursuant to Section 12
of the Securities Exchange Act of 1934, as amended, (ii) shall not prohibit
the Seller from directly or indirectly continuing to operate its remaining
businesses and providing its services and products to any customers or
clients in the same manner as it has operated its remaining businesses
during the past year, except as set forth on Schedule 5.15 and (iii) shall
not prohibit any successor to any of Safety-Kleen Corp.'s businesses (other
han the Business) by sale, merger or otherwise from providing services and
products to any of its customers or clients.
(c) For a period of three (3) years after the
Closing Date, Seller shall not, directly or indirectly, recruit or
otherwise solicit or induce any person who is an employee of, or otherwise
engaged by, Purchaser to terminate his or her employment or other
relationship with Purchaser; provided, however, the foregoing shall not
prohibit the Seller or any of its Affiliates from publishing any general
public solicitation of employment opportunities or from hiring any person
terminated by Purchaser after the Closing.
(d) Other than as may be explicitly allowed by
the Ancillary Agreements, for a period of three (3) years after the Closing
Date, the Purchaser shall not directly or indirectly, own, manage, operate,
control, be or remain employed or retained at, have any financial interest
in, or otherwise be connected in any manner with the ownership, management,
operation or control of any person, firm, partnership, corporation, or
other entity that is engaged in any of the businesses (other than the
44
Business) of the Seller immediately prior to the Closing Date (such
businesses referred to as the "Retained Business"), provided that the
Purchaser's covenants under this Section 5.15(d) (i) shall not apply to the
beneficial ownership of less than five percent (5%) of any class of
securities registered pursuant to Section 12 of the Securities Exchange Act
of 1934, as amended, (ii) shall not prohibit the Purchaser from directly or
indirectly continuing to operate its remaining businesses in the same
manner as it has operated its remaining businesses immediately prior to the
Closing Date and (iii) shall not prohibit any Person acquiring any of
Purchaser's businesses by sale, merger or otherwise from continuing to
operate its businesses (other than the Business) as conducted prior to such
Person becoming a successor.
(e) For a period of three (3) years after the
Closing Date, the Purchaser shall not, directly or indirectly, solicit,
induce or attempt to solicit or induce, any Person or entity who at the
time of Closing was a customer or client of the Retained Business (a "BSSD
Customer"), to terminate his, her or its relationship with the Seller for
any purpose, including, without limitation, the purpose of associating with
or becoming a customer, whether or not exclusive, of the Purchaser or any
entity of which the Purchaser is or becomes a partner, stockholder,
principal, member, agent or trustee, or otherwise solicit, induce, or
attempt to solicit or induce any such BSSD Customer to terminate his, her
or its relationship with the Seller for any other purpose or no purpose,
provided that this Section 5.15(b) (i) shall not apply to the beneficial
ownership of less than five percent (5%) of any class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended, (ii) shall not prohibit the Purchaser from directly or
indirectly continuing to operate its remaining businesses (other than the
Business) and providing its services and products to any customers or
clients in the same manner as it has operated its remaining businesses
(other than the Business) prior to the Closing Date and (iii) shall not
prohibit any successor to any of Purchaser's businesses by sale, merger or
otherwise from providing services and products to any of its customers or
clients or from continuing to operate its businesses (other than the
Business) as conducted prior to such Person becoming a successor.
(f) For a period of three (3) years after the
Closing Date, the Purchaser shall not, directly or indirectly, recruit or
otherwise solicit or induce any person who is an employee of, or otherwise
engaged by, the Seller to terminate his or her employment or other
relationship with the Seller; provided, however, the foregoing shall not
prohibit the Purchaser or any of its Affiliates from publishing any general
public solicitation of employment opportunities or from hiring any person
terminated by the Seller after the Closing.
(g) The parties to this Agreement acknowledge
and agree that the provisions of this Section 5.15 are a material
inducement to the Seller and the
45
Purchaser to enter into and perform their respective obligations under this
Agreement, and for which the Purchaser and the Seller shall, at the Closing,
have fully paid good and valuable consideration. The parties hereto further
agree that, after the Closing, any breach by the Seller or the Purchaser of one
or more of the provisions of this Section 5.15 will cause damage to the
Purchaser or the Seller, as the case may be, in an amount that is likely to be
difficult, if not impossible, for the parties to calculate accurately.
Accordingly, the parties agree that, in the event of any breach by the Seller or
the Purchaser of its obligations under this Section 5.15, the Purchaser or the
Seller, as the case may be, shall be entitled to immediate and permanent
injunctive relief to (i) enforce the provisions of this Section 5.15 in any
court of competent jurisdiction, and (ii) in the case of a breach by the
Seller, suspend or revoke the Seller's Intellectual Property rights under
Section 1.1(b)(iv) of this Agreement. The Seller and the Purchaser further
agree that, as of the Closing, the Seller's and the Purchaser's rights to
enforce the provision of this Section 5.15 shall be fully paid for and
enforceable without reference to any right of offset, counterclaim or the
like, and that the Seller's and the Purchaser's obligations under this
Section 5.15 shall not be deemed part of any executory contract between the
parties, all such claims being hereby expressly waived by the Seller and
the Purchaser.
Section 5.16. Investment Canada Act. The Purchaser shall
have complied with the requirements of the Investment Canada Act on the
Closing Date, or provided satisfactory evidence that the transactions
contemplated by this Agreement are not reviewable under the Investment
Canada Act, in which case it shall file a duly completed notification
within thirty (30) days of the Closing and provide a true copy thereof to
the Seller. The Seller will provide financial statements or a certificate
setting forth the book value of the assets of the Canadian portion of the
Business within thirty (30) days after the date of this Agreement.
Section 5.17. Schedule Amendments. For forty-five (45)
days from the date of this Agreement, the Purchaser and the Seller shall
each have the ability to amend any and all Schedules to this Agreement for
which it is responsible which are dated as of the date of the Agreement.
Section 5.18. Non-Domestic and Non-Canadian Operations.
The Seller will work with the Purchaser to identify its non-domestic and
non-Canadian operations. Until the Due Diligence Expiration Date, the
Purchaser shall have the option to purchase, pursuant to the terms of the
Agreement, any such operations. The Schedules to this Agreement will be
amended to include the assets and/or equity interests of such operations.
46
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1. Conditions Precedent to Obligation of the
Seller and the Purchaser. The respective obligations of each party to
effect the transactions contemplated by this Agreement shall be subject to
the satisfaction of the following conditions:
(a) not later than June 20, 2002, the Section
363/365 Order or the Confirmation Order, if applicable, shall each have
been entered by the Bankruptcy Court, and such order or orders shall each
have become a Final Order, unless the parties mutually agree to extend such
date;
(b) the waiting period applicable to the
transactions contemplated by this Agreement, if any, under the HSR Act
shall have expired or been terminated and each of the material approvals or
consents required by equivalent legislation in any other applicable
jurisdiction shall have been obtained or waived;
(c) no action, suit or proceeding (including any
proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C.
ss. 157(b) and (c)) brought by any Governmental Entity shall be pending to
enjoin, restrain or prohibit the transactions contemplated by this
Agreement, or that would be reasonably likely to prevent or make illegal
the consummation of the transactions contemplated by this Agreement; and
(d) no Governmental Entity shall have issued any
order, decree or ruling, and there shall not be any statute, rule or
regulation, restraining, enjoining or prohibiting the consummation of the
transactions contemplated by this Agreement.
Section 6.2. Conditions Precedent to Obligation of the
Seller. The obligation of the Seller to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction or
waiver at or prior to the Closing Date of the following additional
conditions:
(a) the Purchaser shall have performed in all
material respects its obligations under this Agreement required to be
performed by the Purchaser at or prior to the Closing Date;
(b) each of the representations and warranties
of the Purchaser contained in this Agreement shall be true and correct as
of the Closing Date as if made
47
at and as of such date, except where the failure of such representation and
warranty to be true and correct would not have a material adverse effect on the
Purchaser or the transactions contemplated by this Agreement;
(c) not later than June 20, 2002, the Section
363/365 Order shall have been entered by the Bankruptcy Court and such
order shall have become a Final Order and, without the necessity of any
further action or proceedings by the Seller, shall have as of the Closing
Date, effected a full and complete discharge and release of, and thereby
extinguish, all debts of the Seller (to the fullest extent possible under
the Bankruptcy Code) proposed to be discharged in accordance with this
Agreement;
(d) the Purchaser shall have acquired the
Refinancing Commitment and the Financial Assurance Commitment by the date
which is the later of (i) one week after receipt by the Purchaser of all of
the audited Balance Sheet required by Section 5.13 and (ii) May 30, 2002;
and
(e) the Purchaser shall have executed the
Ancillary Agreements.
Section 6.3. Conditions Precedent to Obligation of the
Purchaser. The obligation of the Purchaser to effect the transactions
contemplated by this Agreement shall be subject to the satisfaction or
waiver at or prior to the Closing Date of the following additional
conditions:
(a) the Seller shall have performed in all
material respects its obligations under this Agreement required to be
performed by the Seller at or prior to the Closing Date;
(b) each of the representations and warranties
of the Seller contained in this Agreement shall be true and correct as of
the Closing Date as if made at and as of such date, except where the
failure of such representation and warranty to be true and correct would
not have a Material Adverse Effect;
(c) the receipt by the Purchaser of the
Refinancing Commitment by the Purchaser;
(d) the closing of a transaction or transactions
in which the Purchaser receives funds and credit lines, etc., which are
sufficient to (i) pay the Cash Payment, (ii) refinance all of Purchaser's
outstanding indebtedness immediately prior to the Closing, (iii) provide
collateral for required Financial Assurance, (iv) fund the payment of all
reasonable costs and expenses of the transactions described in this
48
Agreement and (v) provide ongoing funding for working capital needs and
general corporate purposes;
(e) the completion of and satisfaction with the
results of continuing financial, business, environmental and legal due
diligence, provided however, that this condition shall be considered
satisfied as of the Due Diligence Expiration Date;
(f) the receipt by the Purchaser of the
Financial Assurance Commitment;
(g) the Purchaser shall have received from the
Seller the audited Balance Sheets as of August 31, 2001, August 31, 2000,
and August 31, 1999, by the date(s) set forth in Section 5.13;
(h) the Seller shall have executed the Ancillary
Agreements;
(i) the requested relief from the SEC, as
described in Section 5.14 hereof, shall have been received by the
Purchaser;
(j) the Purchaser shall have received all
Permits material to the Business to allow the Purchaser and the Purchasing
Subs to operate the facilities included in the Acquired Assets or owned
and/or operated by the Transferred Subs;
(k) not later than the dates specified in
Section 5.1(b), the Bidding Procedures Order shall have been entered;
(l) a Material Adverse Effect shall not have
occurred since the date of this Agreement; and
(m) the Purchaser shall have received opinions
of the Seller's Canadian counsel as required under Section 2.2(a)(xiv).
ARTICLE VII
TERMINATION, AMENDMENT, AND WAIVER
Section 7.1. Termination Events. This Agreement may be
terminated at any time prior to the Closing Date as follows:
49
(a) by mutual written agreement of the Purchaser
and the Seller;
(b) by the Seller (provided that the Seller is
not then in material breach of any representation, warranty, covenant or
other agreement contained herein for which the Purchaser shall have
previously notified the Seller), if there has been a breach by the
Purchaser of any of its representations, warranties, covenants or
agreements contained in this Agreement, or any such representation and
warranty shall have become untrue, in any such case that Section 6.2 will
not be satisfied and such breach or condition has not been promptly cured
within 30 days following receipt by the Purchaser of written notice of such
breach;
(c) by the Purchaser (provided that the
Purchaser is not then in material breach of any representation, warranty,
covenant or other agreement contained herein for which the Seller shall
have previously notified the Purchaser), if there has been a breach by the
Seller of any of its representations, warranties, covenants or agreements
contained in this Agreement, or any such representation and warranty shall
have become untrue, in any such case that Section 6.3 will not be satisfied
and such breach or condition has not been promptly cured within 30 days
following receipt by the Seller of written notice of such breach;
(d) by the Purchaser (provided that the
Purchaser is not then in material breach of any representation, warranty,
covenant or other agreement contained herein) at or prior to the Due
Diligence Expiration Date, if the Purchaser is not satisfied with its due
diligence review of the Business;
(e) by the Purchaser (provided that the
Purchaser is not then in material breach of any representation, warranty,
covenant or other agreement contained herein) at any time prior to Closing,
if a Material Adverse Effect event, condition or matter shall have occurred
and be continuing at the time of any such termination;
(f) by either the Seller or the Purchaser if any
decree, injunction, judgment, order or other action by any court of
competent jurisdiction, any arbitrator or any Governmental Entity
preventing or prohibiting the consummation of the transactions contemplated
hereby or the performance of the other material obligations of the Seller
or the Purchaser under this Agreement or the Ancillary Agreements shall
have become final and nonappealable (so long as the party seeking
termination is not in breach of Section 5.5 hereof);
50
(g) by the Purchaser, if the Bankruptcy Court
has not entered the Section 363/365 Order within the time frame specified
in Section 6.1(a), unless the Bankruptcy Court has not entered the Section
363/365 Order within such time frame due to the failure of the Purchaser to
perform or observe in all material respects the covenants and agreements of
the Purchaser set forth herein; provided, however, that if the Bankruptcy
Court has not entered the Section 363/365 Order within the time frame
specified in Section 6.1(a), and the Purchaser does not exercise its right
by written notice to terminate this Agreement pursuant to this Section
7.1(g) within one (1) Business Day of the failure of this condition, then
the date specified in Section 6.1(a) shall be extended for thirty (30)
days. If the Purchaser does not exercise its right to terminate this
Agreement by written notice pursuant to Section 7.1(g) within one (1)
Business Day after such thirty (30) day extended period, the Purchaser
shall be deemed to have irrevocably waived (x) its right to terminate this
Agreement pursuant to this Section 7.1(g) and (y) the condition set forth
in Section 6.1(a) of this Agreement;
(h) subject to the Purchaser's rights under
Section 5.7 of this Agreement, by the Seller if its Board of Directors
approves or recommends one or more Alternative Transactions in accordance
with the Bidding Procedures set forth in Section 5.2 of this Agreement and
the Bidding Procedures Order;
(i) provided the terminating party is not in
default of its obligations under this Agreement, by either the Seller or
the Purchaser if the Closing shall not have occurred on or prior to the
date that is sixty (60) days after the date of entry of the Section 363/365
Order on the docket of the Bankruptcy Court;
(j) providing the Purchaser is not in default of
its obligations under this Agreement, by the Purchaser pursuant to Section
5.11(a); or
(k) provided the terminating party is not in
default of its obligations under this Agreement, by either the Seller or
the Purchaser if the Closing shall not have occurred on or prior to October
15, 2002.
Section 7.2. Effect of Termination and Abandonment. In
the event of termination of this Agreement pursuant to this Article VII,
written notice thereof shall be given as promptly as practicable to the
other party to this Agreement and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action
by any of the parties hereto. If this Agreement is terminated as provided
herein (a) there shall be no liability or obligation on the part of the
Seller, the Purchaser, or their respective officers, directors and
Affiliates, and all obligations of the parties shall terminate, except for
(i) the obligations of the parties pursuant to Sections 5.2(i), 5.2(j), 7.2
and 8.8 and the Confidentiality Agreement, and (ii) that a party that is
51
in material breach of its representations, warranties, covenants, or
agreements set forth in this Agreement shall be liable for damages
occasioned by such breach, including without limitation any expenses,
including the reasonable fees and expenses of attorneys, accountants and
other agents, incurred by the other party in connection with this Agreement
and the transactions contemplated hereby; provided, however, that the
Purchaser shall not be deemed to be in material breach of this Agreement
solely by reason of its inability to satisfy one or more of the conditions
set forth in Section 6.3(c), Section 6.3(d), Section 6.3(f), Section 6.3(i)
or Section 6.3(j) if the Purchaser is attempting to satisfy such conditions
in good faith. In the event the Purchaser is entitled to receive the
Termination Fee or Expense Reimbursement, the right of the Purchaser to
receive such amount shall constitute the Purchaser's sole remedy for (and
such amount shall constitute liquidated damages in respect of) any breach
by the Seller of this Agreement, unless the Section 363/365 Order and, if
applicable, the Confirmation Order approving the transactions contemplated
hereby has been entered, in which case actual receipt of the Termination
Fee or Expense Reimbursement by the Purchaser shall constitute the
Purchaser's sole remedy for (and such amount shall constitute liquidated
damages in respect of) any breach by the Seller of this Agreement, and (b)
all filings, applications and other submissions made pursuant to the
transactions contemplated by this Agreement shall, to the extent
practicable, be withdrawn from the agency or Person to which made.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. Indemnification.
(a) Indemnification by Purchaser. Subject to the
limits set forth in this Article VIII, Purchaser agrees to indemnify,
defend and hold Seller, the Selling Subs and their respective officers,
directors and Affiliates, harmless from and in respect of any and all
Losses that they may incur arising out of or due to any failure on the part
of the Purchaser or the Purchasing Subs to perform and discharge the
Assumed Liabilities and their other liabilities.
(b) Notice and Opportunity to Defend. If there
occurs an event which a party (an "Indemnified Party") asserts is an
indemnifiable event pursuant to Section 8.1(a), the Indemnified Party shall
notify the Purchaser promptly. If such event involves (i) any claim or (ii)
the commencement of any action or proceeding by a third person, the
Indemnified Party will give the Purchaser prompt written notice of such
claim or the commencement of such action or proceeding. Such notice shall
be a condition precedent to any liability of the Purchaser hereunder;
provided, however, that
52
the failure to provide prompt notice as provided herein will relieve the
Purchaser of its obligations hereunder only to the extent that such failure
prejudices the Purchaser hereunder. In case any such action shall be brought
against any Indemnified Party and it shall notify the Purchaser of the
commencement thereof, the Purchaser shall be entitled to participate therein
and, to the extent that it shall elect, to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnified Party and, after notice from
the Purchaser to the Indemnified Party of such election so to assume the defense
thereof, the Purchaser shall not be liable to the Indemnified Party for any
legal expenses of other counsel or any other expenses subsequently incurred by
such party in connection with the defense thereof. The Indemnified Party agrees
to cooperate fully with the Purchaser and its counsel in the defense against
any such asserted liability. The Indemnified Party shall have the right to
participate at its own expense in the defense of such asserted liability.
The Purchaser shall not consent to the entry of any judgment or enter into
any settlement without the consent of the Indemnified Party if such
judgment or settlement does not include as an unconditional term thereof
the giving by each claimant or plaintiff to each Indemnified Party of a
release from all liability in respect to such claim.
Section 8.2. Survival of Representations, Warranties, and
Agreements. No representations or warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive beyond the
Closing Date.
Section 8.3. Payment of Certain Taxes. In accordance with
section 1146(c) of the Bankruptcy Code, the making or delivery of any
instrument of transfer under a plan confirmed under Section 1129 of the
Bankruptcy Code shall not be taxed under any law imposing a stamp tax or
similar tax. Any instruments transferring the Acquired Assets to the
Purchaser shall contain the following endorsement:
"Because this [instrument] has been authorized pursuant to Order
of the United States Bankruptcy Court for the District of Delaware
relating to a plan of reorganization of [the Seller], it is exempt
from transfer taxes, stamp taxes or similar taxes pursuant to 11
U.S.C.ss.1146(c).
In the event any transfer, stamp or similar tax is required to be paid, the
Seller shall pay (i) all real estate transfer taxes, if any, in connection
with the transfer of the Owned Real Property and the Real Property Leases
to the Purchaser, unless and to the extent that the law of the applicable
jurisdiction shall require that the Purchaser pay the same, and (ii) all
use, transfer and sales Taxes and similar Taxes or fees, if any, in
connection with the sale of the Acquired Assets. The Purchaser shall pay
all filing and application fees payable to any Governmental Entity for any
filings, permits, authorizations, consents, or approvals as may be required
pursuant to Section 6.1(b). Each party shall indemnify
53
and hold harmless the other from and against any liability resulting from such
party's failure to pay any Taxes or fees which it is required to pay pursuant to
this Section 8.3.
Section 8.4. Notices. All notices, claims, demands, and
other communications hereunder shall be in writing and shall be deemed
given upon (a) confirmation of receipt of a facsimile transmission, (b)
confirmed delivery by a standard overnight carrier or when delivered by
hand, or (c) the expiration of five (5) business days after the day when
mailed by registered or certified mail (postage prepaid, return receipt
requested), addressed to the respective parties at the following addresses
(or such other address for a party as shall be specified by like notice):
(a) If to the Purchaser, to
Clean Harbors, Inc.
0000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 000000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
with a copy to
Xxxxx, Xxxx & X'Xxxxxxxx, P.C.
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: C. Xxxxxxx Xxxx
and
(b) If to the Seller, to
Safety-Kleen Corp.
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: General Counsel
54
with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Section 8.5. Descriptive Headings; Rules of Construction.
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement. Unless the context otherwise requires: (i) a term has the
meaning assigned to it; (ii) "or" is not exclusive; (iii) words in the
singular include the plural, and in the plural include the singular and
(iv) "including" means "including without limitation."
Section 8.6. Entire Agreement; Assignment. This Agreement
(including the Exhibits, Schedules and the other documents and instruments
referred to herein) (a) constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, among the
parties or any of them, with respect to the subject matter hereof,
including, without limitation, any transaction between or among the parties
hereto and (b) shall not be assigned by operation of law or otherwise by
either party, except with the consent to such assignment by the other party
hereto.
Section 8.7. Governing Law. This Agreement shall be
governed by and construed in accordance with the Laws of the State of
Delaware without regard to the rules of conflict of laws of the State of
Delaware or any other jurisdiction. Until confirmation of the Bankruptcy
Plan, the Purchaser and the Seller irrevocably and unconditionally consent
to submit to the jurisdiction of the Bankruptcy Court for any litigation
arising out of or relating to this Agreement and the transactions
contemplated thereby (and agree not to commence any litigation relating
thereto except in the Bankruptcy Court).
Section 8.8. Expenses. Except as otherwise provided
herein, whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated thereby shall be paid by the
party incurring such expenses. Notwithstanding the foregoing, (i) the
Seller shall pay (A) the costs of recording any releases required to clear
title to the Owned Real Property and one-half of all closing fees, if any,
in connection with the real estate closing and (B) the costs of the Surveys
of the Material Properties and (ii) the Purchaser shall pay (A) the costs
of recording any deeds, (B) one-half of all
55
closing fees, if any, in connection with the real estate closing, (C) any costs
incurred in connection with the Title Commitment or any title policy to be
issued to the Purchaser in connection therewith, and (D) the HSR filing fee.
Section 8.9. Amendment. This Agreement may not be
amended, modified or supplemented except by an instrument in writing signed
on behalf of all the parties hereto expressly stating that such instrument
is intended to amend, modify or supplement this Agreement.
Section 8.10. Waiver. At any time prior to the Closing
Date, the parties hereto may (a) extend the time for the performance of any
of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto, and (c) waive compliance with any
of the agreements or conditions contained herein. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if
set forth in a writing signed on behalf of such party.
Section 8.11. Counterparts; Effectiveness. This Agreement
may be executed in two or more counterparts, each of which shall be deemed
to be an original but all of which shall constitute one and the same
agreement. This Agreement shall become effective when each party hereto
shall have received counterparts thereof signed by all the other parties
hereto.
Section 8.12. Severability; Validity; Parties in
Interest. If any provision of this Agreement or the application thereof to
any Person or circumstance is held invalid or unenforceable, the remainder
of this Agreement, and the application of such provision to other Persons
or circumstances, shall not be affected thereby, and to such end, the
provisions of this Agreement are agreed to be severable. Nothing in this
Agreement, express or implied, is intended to confer upon any Person not a
party to this Agreement any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 8.13. Apportionment of Property Taxes. An
estimate shall be made, based on the most recent past-issued assessments,
of all real property and personal property taxes and similar ad valorem
obligations expected to be levied after the Closing Date with respect to
(i) the Acquired Assets and (ii) the real and personal property owned by
the Transferred Subs for a taxable period that includes (but does not end
on) the Closing Date and shall be apportioned between the Seller and the
Purchaser as of the Closing Date based on the number of days of such
taxable period included in the period ending with and including the Closing
Date (with respect to any such taxable period, the "Pre-Closing Tax
Period"), and the number of days of such taxable period
56
beginning after the Closing Date. The Seller shall pay, or cause to be paid, to
the Purchaser the proportionate amount of such estimated taxes attributable to
the Pre-Closing Tax Period at the Closing, and the Purchaser shall be liable for
all such taxes assessed after the Closing Date.
Section 8.14. No Section 338 Election. The Purchaser and
the Seller agree that no election under Section 338 of the Internal Revenue
Code of 1986, as amended, shall be made in connection with any transaction
contemplated in this Agreement.
Section 8.15. Taxes and Tax Returns. The Seller shall
prepare and duly file all required Tax Returns for the Transferred Subs for
all Pre-Closing Tax Periods, including, without limitation, for those
jurisdictions and tax authorities that permit or require a short period Tax
Return, for the period ending on the Closing Date. Purchaser shall prepare
and duly file, or cause the Transferred Subs to prepare and duly file, all
Tax Returns for the Transferred Subs for all periods beginning after the
Closing Date. The Purchaser shall file or cause to be filed when due all
Tax Returns that are required to be filed by or on behalf of a Transferred
Sub for any taxable year or period that begins before and ends after the
Closing Date; but with respect to any such Tax Return, the Purchaser shall
provide the Seller with a copy of such completed Tax Return and a statement
certifying the amount of Tax shown on such Tax Return that is allocable to
the Seller pursuant to Section 3.11(a), together with appropriate
supporting information and schedules, at least 20 business days prior to
the due date (including any extension thereof) for the filing of such Tax
Return, and the Purchaser shall have the right to review and comment on
such Tax Return and statement prior to the filing of such Tax Return. For
purposes of Section 3.11(a), whenever it is necessary to determine the
liability for Taxes of a Transferred Sub for a portion of a taxable year or
period that begins before and ends after the Closing Date, the
determination of such Taxes for the portion of the year or period ending
on, and the portion of the year or period beginning after, the Closing Date
generally shall be determined by assuming that the Transferred Sub had a
taxable year or period which ended on the Closing Date.
Section 8.16. Tax Matters Involving Third Parties. The
Purchaser and the Seller shall cooperate fully, and shall cause their
respective representatives to cooperate, with each other in connection with
any audit or other examination by any Governmental Entity of the Tax
Returns referred to in Section 8.15. Whenever any Governmental Entity
asserts a claim, makes an assessment, or otherwise disputes the amount of
Taxes for any Pre-Closing Tax Period, the Purchaser shall, if informed of
such an assertion, inform the Seller within 10 business days of being so
informed, and the Seller shall have the right to control any resulting
proceedings and to determine whether and when to settle any such claim,
assessment, or dispute to the extent such
57
proceedings or determinations affect the amount of Taxes for which the Seller is
or may be liable under Section 3.11(a).
ARTICLE IX
DEFINITIONS
As used herein, the terms below shall have the following
meanings:
"Accountants" has the meaning set forth in Section
1.7(d).
"Accounts Receivable" has the meaning set forth in
Section 1.1(b)(i).
"Acquired Assets" has the meaning set forth in Section
1.1.
"Acquisition" has the meaning set forth in the Recitals.
"Affiliate" of a Person means any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned Person.
"Agreement" has the meaning set forth in the Preamble.
"Alternate Bid" has the meaning set forth in Section
5.2(g).
"Alternate Bidder" has the meaning set forth in Section
5.2(g).
"Alternative Transaction" has the meaning set forth in
Section 5.2(i).
"Ancillary Agreements" means collectively, the Transition
Services Agreement, the Disposal Agreement, the Sales Agency Agreement and
the Escrow Agreement.
"Assigned Contracts and Leases" means those contracts and
real property leases listed on Schedules 1.1(b)(ii)(A), (B) and (D) and
Schedule 1.1(b)(vi)(B) as such Schedules may be adjusted by the Purchaser
as set forth in this Agreement.
"Assignment and Assumption Agreement" has the meaning set
forth in Section 2.2(a)(v).
"Assumed Liabilities" has the meaning set forth in
Section 1.3.
58
"Auction" has the meaning set forth in Section 5.2(f).
"Balance Sheet" means the balance sheet of the Business.
"Bankruptcy Code" has the meaning set forth in the
Recitals.
"Bankruptcy Court" has the meaning set forth in the
Recitals.
"Bankruptcy Plan" means the plan or plans of
reorganization to be proposed by each of the Seller and Business Subs who
are part of the Chapter 11 Case for the resolution of outstanding claims
and interests in the Chapter 11 Case, as such plan or plans may be amended,
modified or supplemented from time to time in accordance with the
Bankruptcy Code.
"Bid Deadline" has the meaning set forth in Section
5.2(c).
"Bidding Procedures" has the meaning set forth in Section
5.2.
"Bidding Procedures Order" has the meaning set forth in
Section 5.1(a).
"Bidding Process" has the meaning set forth in Section
5.2.
"BSSD" has the meaning set forth in Section 1.2(p)
"Business" has the meaning set forth in the Recitals.
"Business Subs" means the Transferred Subs, the Selling
Subs and their respective direct and indirect subsidiaries.
"CAFO" has the meaning set forth in Section 5.10.
"Cash Purchase Price" has the meaning set forth in
Section 1.6.
"Chapter 11 Case" has the meaning set forth in the
Recitals.
"Closing" has the meaning set forth in Section 2.1.
"Closing Date" has the meaning set forth in Section 2.1.
"Confidentiality Agreement" means that certain
Confidentiality Agreement dated as of October, 2001, by and between
Safety-Keen Corp. and Purchaser.
59
"Confirmation Date" means the date the order confirming
the Bankruptcy Plan is entered by the Bankruptcy Court.
"Confirmation Order" means the order confirming the
Bankruptcy Plan.
"Covered Facility" has the meaning set forth in Section
5.10.
"Cure Costs" has the meaning set forth in Section 1.4.
"Cure Costs Cap" has the meaning set forth in Section
1.4.
"Customer" has the meaning set forth in Section 5.15(b).
"Customer Contracts" has the meaning set forth in Section
1.1(b)(ii)(A).
"Disposal Agreement" has the meaning set forth in Section
2.2(a)(vii).
"Domestic Transferred Subs" means those Business Subs
listed on Schedule 1.1(d).
"Due Diligence Expiration Date" means the date which is
the later of (i) April 30, 2002 and (ii) five (5) days after the
Purchaser's receipt of the audited Balance Sheet as of August 31, 2001.
"Environmental Laws" means Laws and regulations relating
to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land surface
or subsurface strata) and the treatment, storage, transportation or
disposal of hazardous substances or wastes as defined in such laws.
"EPA" has the meaning set forth in Section 5.10.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"Escrow Agent" means the escrow agent under the Escrow
Agreement to be agreed to by the Seller and the Purchaser.
"Escrow Agreement" has the meaning set forth in Section
2.2(ix).
"Excluded Assets" has the meaning set forth in Section
1.2.
60
"Excluded Employees" has the meaning set forth in Section
5.7(a).
"Excluded Liabilities" means any liabilities and
obligations with respect to, arising out of or relating to, the ownership,
possession or use of the Acquired Assets and the operation of the Business
prior to the Closing Date (i) which are to be discharged by the Bankruptcy
Court in accordance with Section 3.8 hereof, (ii) with respect to fines
imposed by any Governmental Entity, (iii) with respect to injuries suffered
by employees of the Seller or any Business Sub, (iv) with respect to tort
(other than environmental clean-up) and common law claims for which
post-1986 general liability insurance containing pollution exclusions
normally would provide coverage, (v) which are amounts due from the
Business to BSSD or (vi) which are Taxes (other than Taxes for which the
Purchaser is expressly liable pursuant to the terms of this Agreement)
arising out of or relating to any period or any portion thereof ending on
or prior to the Closing Date without regard to when asserted, commenced or
identified.
"Exception Notice" has the meaning set forth in Section
5.11(a).
"Expense Reimbursement" has the meaning set forth in
Section 5.2(j).
"Final Order" means shall mean an order or judgment of
the Bankruptcy Court or other court of competent jurisdiction, (i) the
implementation or operation or effect of which has not been stayed, or (ii)
as to which the time to appeal, petition for certiorari, or move for
reargument or rehearing has expired and as to which no appeal, petition for
certiorari, or other proceedings for reargument or rehearing shall then be
pending or in the event that an appeal, writ of certiorari, reargument, or
rehearing thereof has been sought, such order of the Bankruptcy Court shall
have been determined by the highest court to which such order was appealed,
or certiorari, reargument or rehearing shall have been denied and the time
to take any further appeal, petition for certiorari, or move for reargument
or rehearing shall have expired; provided, however, that the possibility
that a motion, under Rule 59 or Rule 60 of the Federal Rules of Civil
Procedure or any analogous rule under the Bankruptcy Code, may be filed
with respect to such order shall not prevent such order from being deemed a
Final Order.
"Financial Assurance" means a demonstration of the
ability of the owner or operator of a facility to properly perform closure,
post-closure, corrective action, or other environmental activities which
demonstration is required by, and must be satisfied in the manner set forth
in (a) the Solid Waste Disposal Act, as amended, 42 U.S.C. Sec. 6901 et
seq. (including without limitation Sec. 6991b); (b) the Toxic Substances
Control Act, as amended, 15 U.S.C. Sec 2601 et seq.; (c) any state, county
or municipal Law analogous to, or similar to, the foregoing; or (d) any
regulations promulgated to any of
61
the foregoing federal, state, county or municipal Laws, including without
limitation regulations set forth in 40 C.F.R. Sections 258, 264, 265, 280 and
761.
"Financial Assurance Commitment" means a commitment
reasonably acceptable to the Seller from a responsible insurance company
with respect to Financial Assurance required by Governmental Entities in
order for the Purchaser to own and/or operate the Owned Real Property and
the Real Property subject to Real Property Leases.
"Financial Statements" has the meaning set forth in
Section 3.5.
"Financing" means the Debtor-In-Possession Credit
Agreement among the Sellers, the several lenders from time to time parties
thereto, Toronto Dominion (Texas), Inc., as General Administrative Agent
and Underwriter, and The CIT Group/Business Credit, Inc., as Collateral
Agent and Underwriter, dated as of June 11, 2000, as amended, including any
extension, renewal, refinancing or replacement (or successive extensions,
renewals, refinancings, refundings or replacements) thereof.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Good Faith Deposit" has the meaning set forth in Section
5.2(d).
"Governmental Entity" means any federal, state,
provincial, local, county or municipal government, governmental, judicial,
regulatory or administrative agency, commission, board, bureau or other
authority or instrumentality, domestic or foreign.
"HSR Act" has the meaning set forth in Section 3.4.
"Indemnified Party" has the meaning set forth in Section
8.1(b).
"Intellectual Property" has the meaning set forth in
Section 1.1(b)(iv).
"Initial Working Capital Statement" has the meaning set
forth in Section 1.7(a).
"Interests" has the meaning set forth in Section 1.1(a).
"Law" means any applicable federal, state, local or
foreign law, statute, ordinance, rule, regulations, standard, order,
judgment or decree, injunction, award, administrative or judicial decision,
and any other executive or legislative proclamation
62
of any government or political subdivision thereof, or any agency or
instrumentality of any such governmental or political subdivision, or any court
or arbitrator.
"Losses" shall mean losses, damages, costs and reasonable
expenses (including, without limitation, reasonable expenses of
investigation and defense fees and disbursements of counsel and other
professionals).
"Marked Agreement" has the meaning set forth in Section
5.2(d).
"Material Adverse Effect" means any event, condition, or
matter in respect of the operation of the Business, the Transferred Subs,
the Acquired Assets and the Assumed Liabilities that in the aggregate
result in or have a material adverse effect on the business, financial
condition or operations of the Business taken as a whole; provided,
however, that any event, condition or matter resulting from the execution
of this Agreement and the announcement of this Agreement, the Chapter 11
Case and the other transactions contemplated by this Agreement shall be
excluded from the determination of Material Adverse Effect.
"Material Properties" has the meaning set forth in
Section 5.11(b).
"Owned Real Property" has the meaning set forth in
Section 1.1(b)(vi).
"Parallel Action State" has the meaning set forth in
Section 5.10.
"Participating State" has the meaning set forth in
Section 5.10.
"Permits" has the meaning set forth in Section 3.7(b).
"Permitted Exceptions" means, with respect to any Person,
any of the following liens:
(a) liens with respect to the payment of Taxes,
assessments or governmental charges in all cases which are not yet due or
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;
(b) liens of landlords arising by statute and
liens of suppliers, mechanics, carriers, materialmen, warehousemen or
workmen and other liens imposed by Law created in the ordinary course of
business for amounts not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which
63
adequate reserves or other appropriate provisions are being maintained to the
extent required by GAAP;
(c) deposits made in the ordinary course in
connection with worker's compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money)
and surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning
restrictions easements, licenses, reservations, covenants, rights-of-way,
utility easements, building restrictions and other similar encumbrances on
the use of real property or any other matters of record;
(e) encumbrances arising under leases or
subleases of real property which do not in the aggregate materially detract
from the value of such real property or interfere with the ordinary conduct
of the business conducted and proposed to be conducted at such real
property;
(f) financing statements evidencing a lessor's
rights in and to personal property leased to such Person in the ordinary
course of such Person's business or a consignor's interest in goods
consigned to such Person in the ordinary course of business;
(g) liens arising in the ordinary course of
business after the date hereof and liens which do not materially impair the
current use or value of the asset subject to such liens;
(h) any exception that currently exists at the
Owned Real Property or the Real Property Leases which do not materially
interfere with the operation of the Business at each such site and for
which the Purchaser shall not have provided the Seller with an Exception
Notice pursuant to Section 5.11(a); and
(i) any matter deemed permitted pursuant to
Section 5.11 hereof.
"Person" means an individual, corporation, partnership,
association, limited liability company, trust, joint venture,
unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended).
"Petitions" has the meaning set forth in the Recitals.
64
"363/365 Filing Date" has the meaning set forth in
Section 5.1(a).
"Plans" means each deferred compensation and incentive
compensation, stock purchase, stock option and other equity compensation
plan, program, agreement or arrangement; each severance or termination pay,
medical, surgical, hospitalization, life insurance and other material
"welfare" plan, fund or program (within the meaning of Section 3(1) of
ERISA); each profit-sharing, stock bonus or other "pension" plan, fund or
program (within the meaning of Section 3(2) of ERISA); each material
employment, termination, change of control or severance agreement; and each
other material employee benefit plan, fund, program, agreement or
arrangement.
"Potential Bidder" has the meaning set forth in Section
5.2(a).
"Principal Customer" has the meaning set forth in Section
3.18.
"Purchase Price" means the sum of the Cash Purchase Price
and the Assumed Liabilities.
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Plans" has the meaning set forth in the
Section 5.7(b).
"Purchasing Subs" means the direct or indirect
subsidiaries of the Purchaser which either now exist or will be formed by
the Purchaser prior to the Closing to acquire a portion of the Acquired
Assets or Interest.
"Qualified Bid" has the meaning set forth in Section
5.2(e ).
"Qualified Bidder" has the meaning set forth in Section
5.2(a)
"Real Property Leases" has the meaning set forth in
Section 1.1(b)(vi).
"Refinancing Commitment" means capital commitments
reasonably satisfactory to the Purchaser which are sufficient to (i) pay
the Cash Payment, (ii) refinance all of the Purchaser's outstanding
indebtedness immediately prior to the Closing, (iii) provide collateral for
required Financial Assurance, (iv) fund the payment of all reasonable costs
and expenses of the transactions described in this Agreement and (v)
provide ongoing funding for working capital needs and general corporate
purposes. Such capital commitments shall contain normal and customary
conditions including material adverse change but excluding syndication and
due diligence.
65
"Return Date" has the meaning set forth in Section 5.2(h)
"Sales Agency Agreement" has the meaning set forth in
Section 2.2(a)(viii).
"Sale Hearing" means the hearing scheduled and held by
the Bankruptcy Court to consider approval of the sale of the Acquired
Assets under the Agreement, which hearing shall occur no later than the
June 2002 omnibus hearing date unless otherwise agreed to by the parties.
"Schedule" means a Schedule to this Agreement as the same
shall be updated and replaced in accordance with the provisions of this
Agreement.
"SEC" has the meaning set forth in Section 5.14.
"Section 363/365 Motion" means the motion filed by the
Seller in the Chapter 11 Case seeking entry of the Section 363/365 Order.
"Section 363/365 Order" means an order of the Bankruptcy
Court, in substantially the form attached hereto as Exhibit H, approving
the sale of the Acquired Assets and assumption/assignment of the executory
contracts and unexpired leases and Assumed Liabilities under this Agreement
pursuant to Sections 105, 363 and 365 of the Bankruptcy Code.
"Seller" has the meaning set forth in the Preamble.
"Seller Disclosure Schedule" has the meaning set forth in
the introduc tory paragraph to Article III.
"Seller Plans" has the meaning set forth in the Section
5.7(b).
"Selling Subs" means the direct or indirect subsidiaries
of the Seller listed on Schedule 9.1.
"Subsequent Bid" has the meaning set forth in Section
5.2(f)(i).
"Successful Bid" has the meaning set forth in Section
5.2(f)(v).
"Successful Bidder" has the meaning set forth in Section
5.2(f)(v).
"Survey" has the meaning set forth in Section 5.11 (b).
66
"Survey Defects" has the meaning set forth in Section
5.11(b).
"Survey Defects Removal Date" has the meaning set forth
in Section 5.11(b).
"Survey Notice" has the meaning set forth in Section
5.11(b).
"Tangible Personal Property" has the meaning set forth in
Section 1.1(b)(iii).
"Target Working Capital" means Sixty-four Thousand Two
Hundred and Seventy Dollars ($64,270,000).
"Tax Return" has the meaning set forth in Section
3.11(c).
"Taxes" has the meaning set forth in Section 3.11(c).
"Taxing Authority" has the meaning set forth in Section
3.11(c) .
"Termination Fee" means $7,000,000 which may be paid to
the Purchaser is the manner set forth in Section 5.2.
"Title Commitment" has the meaning set forth in Section
5.11(a).
"Title Company" has the meaning set forth in Section
5.11(a).
"Title Materials" has the meaning set forth in Schedule
5.11(a).
"Transferred Employees" has the meaning set forth in the
Section 5.7(a).
"Transferred Subs" has the meaning set forth in Section
1.1(a).
"Transition Services Agreement" has the meaning set forth
in Section 2.2(a)(vi).
"Unadjusted Cash Purchase Price" has the meaning set
forth in Section 1.6.
"WARN Act" means the Worker Adjustment and Retraining
Notification Act of 1988.
"Working Capital" has the meaning set forth in Section
1.7(b).
67
"Working Capital Deficiency" has the meaning set forth in
Section 1.7(a)(i).
"Working Capital Statement" has the meaning set forth in
Section 1.7(b).
"Working Capital Surplus" has the meaning set forth in
Section 1.7(a)(ii).
68
IN WITNESS WHEREOF, the Seller and the Purchaser have
caused this Agreement to be executed on their behalf by their officers
thereunto duly authorized, as of the date first above written.
SAFETY-KLEEN SERVICES, INC.
By:/s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: C.F.O.
CLEAN HARBORS, INC.
By: /s/ Xxxx X. XxXxx
-----------------------------
Name:
Title: President
69
Exhibit A
FORM OF XXXX OF SALE AND ASSIGNMENT
THIS XXXX OF SALE AND ASSIGNMENT, made, executed and
delivered this [o] day of [o], 2002 (the "Closing Date"), by Safety-Kleen
Services, Inc., a Delaware corporation (the "Company"), and [Names of
Selling Subs] (each a "Seller", and together, the "Sellers") to Clean
Harbors, Inc., a Massachusetts corporation (the "Purchaser"). Capitalized
terms used herein but not defined herein shall have the meanings ascribed
to such terms in the Acquisition Agreement.
W I T N E S S E T H:
WHEREAS, the Company and the Purchaser have entered into
an Acquisition Agreement, dated as of February 22, 2002 (the "Acquisition
Agreement"), pursuant to which the Company has agreed to sell, assign,
transfer, convey and deliver, or to cause to be sold, assigned, conveyed or
delivered, and the Purchaser has agreed to purchase and accept, the
Acquired Assets; and
WHEREAS, the parties desire to carry out the intent and
purpose of the Acquisition Agreement by the Sellers' execution and delivery
to the Purchaser of this instrument evidencing the vesting in the Purchaser
of the Acquired Assets owned by the Sellers.
NOW, THEREFORE, in consideration of the premises and of
other valuable consideration to the Company paid by the Purchaser, at or
before the execution and delivery hereof, the receipt and sufficiency of
which by the Company is hereby acknowledged, the Sellers, by this Xxxx of
Sale and Assignment, do convey, grant, bargain, sell, transfer, set over,
assign, alien, remise, release, deliver and confirm unto the Purchaser, its
successors and assigns forever, all of the Sellers' right, titles and
interests in and to the Acquired Assets (which do not include the Excluded
Assets).
TO HAVE AND HOLD all of the Acquired Assets unto the
Purchaser, its successors and assigns to its and their own use and behoof
forever, subject to the provisions of the Acquisition Agreement.
Section 1. Each of the Sellers hereby constitutes and
appoints the Purchaser, its successors and assigns, as such true and lawful
attorney, with full power of substitution, in such Seller's name and stead,
but on behalf and for the benefit of the Purchaser, its successors and
assigns, to demand and receive any and all of the Acquired
A-1
Assets, and to give receipts and releases for and in respect of the same, and
any part thereof, and from time to time to institute and prosecute in such
Seller's name, or otherwise, for the benefit of the Purchaser, its successors
and assigns, any and all proceedings at law, in equity or otherwise, which the
Purchaser, its successors or assigns, may deem proper for the collection or
reduction to possession of any of the Acquired Assets or for the collection
and enforcement of any claim or right of any kind hereby sold, conveyed,
transferred or assigned, or intended so to be, and to do all acts and
things in relation to the Acquired Assets which the Purchaser, its
successors or assigns shall deem desirable, each of the Sellers hereby
declaring that the foregoing powers are coupled with an interest and are
and shall be irrevocable by such Seller or by its dissolution or in any
other manner or for any reason whatsoever.
Section 2. Each of the Sellers hereby covenants that,
from time to time after the delivery of this instrument, at the Purchaser's
request and without further consideration, the Sellers will do, execute,
acknowledge, and deliver, or will cause to be done, executed, acknowledged
and delivered, all and every such further acts, deeds, conveyances,
transfers, assignments, powers of attorney and assurances as reasonably may
be required more effectively to convey, transfer to and vest in the
Purchaser any of the Acquired Assets
Section 3. Nothing in this instrument, express or
implied, is intended or shall be construed to confer upon, or give to, any
Person other than the Purchaser and its successors and assigns, any remedy
or claim under or by reason of this instrument or any terms, covenants or
condition hereof, and all the terms, covenants and conditions, promises and
agreements contained in this instrument shall be for the sole and exclusive
benefit of the Purchaser and its successors and assigns.
Section 4. This instrument shall be binding upon the
Sellers and the Purchaser, their respective successors and assigns,
effective immediately upon its delivery to Purchaser.
Section 5. Nothing contained in this Xxxx of Sale and
Assignment shall in any way supersede, modify, replace, amend, change
rescind, expand, exceed or enlarge or in any way affect the provisions,
including the warranties, covenants, agreements, conditions, or in general,
any rights and remedies, and any of the obligations of the Company or the
Purchaser set forth in the Acquisition Agreement.
Section 6. This Xxxx of Sale and Assignment shall be
governed by and construed in accordance with the Laws of the State of
Delaware without regard to the rules of conflict of laws of the State of
Delaware or any other jurisdiction. Until confirmation of the Bankruptcy
Plan, the Purchaser and the Seller irrevocably and
A-2
unconditionally consent to submit to the jurisdiction of the Bankruptcy Court
for any litigation arising out of or relating to this Xxxx of Sale and
Assignment and the transactions contemplated thereby (and agree not to commence
any litigation relating thereto except in the Bankruptcy Court).
Section 7. No amendment or modification of this Xxxx of
Sale and Assignment shall be effective unless it is set forth in writing
and signed by each of the parties hereto.
Section 8. This Xxxx of Sale and Assignment may be
executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same original.
[Signature page follows]
A-3
IN WITNESS WHEREOF, each of the Sellers and the Purchaser
have caused this Xxxx of Sale and Assignment to be signed by their
respective duly authorized officer as of the date set forth above.
SAFETY-KLEEN SERVICES, INC.
By: ___________________________
Name:
Title:
[Selling Subs]
By: ___________________________
Name:
Title:
CLEAN HARBORS, INC.
By: ___________________________
Name:
Title:
A-4
Exhibit B
FORM OF ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT made as of [o], 2002 by Clean
Harbors, Inc., a Massachusetts corporation (the "Obligor"), in favor of
Safety-Kleen Services, Inc., a Delaware corporation (the "Company"), and
[Names of Selling Subs] (the "Sellers"). Capitalized terms used herein but
not defined herein shall have the meanings ascribed to such terms in the
Acquisition Agreement.
W I T N E S S E T H:
WHEREAS, Obligor and the Company are parties to an
Acquisition Agreement, effective as of February 22, 2002 (the "Acquisition
Agreement"), relating to the sale of certain assets by the Sellers to
Obligor. The Obligor has agreed to assume from the Sellers and their
Affiliates the Assumed Liabilities as set forth in the Acquisition
Agreement; and
WHEREAS, the parties desire to carry out the intent and
purpose of the Agreements by Obligor's execution and delivery to the
Sellers of this instrument evidencing the assumption of certain liabilities
and obligations of the Sellers.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
Section 1. As of the date hereof, Obligor, pursuant to
Section 1.3 of the Acquisition Agreement, hereby covenants and agrees to
assume and thereafter pay, perform or otherwise discharge the Assumed
Liabilities, in accordance with their terms, as set forth in Section 1.3 of
the Acquisition Agreement.
Section 2. Obligor hereby covenants that from time to
time after delivery of this Assumption Agreement at the request of the
Sellers and without further cost or expense to the Sellers, unless
otherwise provided in the Acquisition Agreement, Obligor will execute and
deliver such other instruments which the Sellers may reasonably request in
order to more effectively consummate the assumption of the Assumed
Liabilities contemplated by the Acquisition Agreement.
Section 3. Nothing in this instrument, express or
implied, is intended or shall be construed to confer upon, or give to, any
person, firm or corporation, other than
B-1
the Sellers and their successors and assigns, any remedy or claim under or by
reason of this instrument or any terms, covenants or condition hereof, and all
the terms, covenants and conditions, promises and agreements in this instrument
shall be for the sole and exclusive benefit of the Sellers and their successors
and assigns.
Section 4. Notwithstanding anything to the contrary
contained herein or in the Acquisition Agreement, the assumption by Obligor
of the Assumed Liabilities as set forth above shall not be construed to
defeat, impair or limit in any way (i) any rights or remedies of Obligor
against third parties to contest or dispute the validity or amount of any
of such Assumed Liabilities or (ii) any other rights or remedies of the
Obligor under the Acquisition Agreement.
Section 5. Nothing contained herein shall release the
Company or the Obligor from any of its duties or obligations under the
Acquisition Agreement or in any way diminish, limit or modify any of the
representations, warranties, covenants or agreements set forth in the
Acquisition Agreement.
Section 6. This Assumption Agreement shall be governed by
and construed in accordance with the Laws of the State of Delaware without
regard to the rules of conflict of laws of the State of Delaware or any
other jurisdiction. Until confirmation of the Bankruptcy Plan, the Obligor
and the Seller irrevocably and unconditionally consent to submit to the
jurisdiction of the Bankruptcy Court for any litigation arising out of or
relating to this Agreement and the transactions contemplated thereby (and
agree not to commence any litigation relating thereto except in the
Bankruptcy Court).
Section 7. This Assumption Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 8. This Assumption Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same original.
[Signature page follows]
B-2
IN WITNESS WHEREOF, this Assumption Agreement has been
duly executed and delivered by the duly respective authorized officers of
each of the Obligor and the Sellers as of the date first above written.
CLEAN HARBORS, INC.
By: ___________________________
Name:
Title:
SAFETY-KLEEN SERVICES, INC.
By: ___________________________
Name:
Title:
[NAMES OF SELLING SUBS]
By: ___________________________
Name:
Title:
