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EXH 2.1
AGREEMENT AND PLAN OF MERGER
by and among
NSC HOLDINGS, INC.
NSC ACQUISITION, INC.
WASTE MANAGEMENT, INC.
and
NSC CORPORATION
Dated as of February 12, 1999
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TABLE OF CONTENTS
ARTICLE 1
THE MERGER
Section 1.1 The Merger..................................................................................1
Section 1.2 Closing.....................................................................................2
Section 1.3 Effective Time..............................................................................2
Section 1.4 Effects of the Merger.......................................................................2
Section 1.5 Certificate of Incorporation and By-Laws....................................................2
Section 1.6 Directors and Officers of the Surviving Corporation.........................................2
ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
SURRENDER OF CERTIFICATES AND PAYMENT
Section 2.1 Effect on Capital Stock.....................................................................2
(a) Cancellation of Treasury Stock.........................................................3
(b) Conversion of Common Stock.............................................................3
(c) Capital Stock of Merger Subsidiary.....................................................3
Section 2.2 Conversion of Options.......................................................................3
Section 2.3 Payment and Surrender of Certificates.......................................................3
(a) Paying Agent...........................................................................3
(b) Payment Procedures for Stockholders....................................................3
(c) Stock Transfer Books...................................................................4
(d) Termination of Payment Fund............................................................4
(e) No Liability...........................................................................4
(f) Lost Certificates......................................................................4
Section 2.4 Dissenters' Rights..........................................................................4
Section 2.5 Assets and Liabilities of Merging Corporations Become Those of
Surviving Corporation..................................................................5
Section 2.6 Further Assurances..........................................................................5
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of NSC.......................................................5
(a) Organization, Standing and Corporate Power.............................................5
(b) Subsidiaries...........................................................................6
(c) Capital Structure......................................................................6
(d) Authority; Noncontravention............................................................6
(e) SEC Reports............................................................................7
(f) Absence of Certain Changes or Events...................................................8
(g) Compliance with Applicable Laws; Litigation............................................8
(h) Absence of Changes in Benefit Plans....................................................8
(i) ERISA Compliance.......................................................................9
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(j) Taxes.................................................................................10
(k) Voting Requirements...................................................................10
(l) State Takeover Statutes...............................................................10
(m) Brokers...............................................................................10
(n) Environmental Matters.................................................................11
Section 3.2 Representations and Warranties of Waste Management.........................................12
(a) Authority; Noncontravention...........................................................12
(b) Ownership of Waste Management Shares..................................................13
(c) ODC Management Claims.................................................................13
Section 3.3 Representations and Warranties of Holdings.................................................13
(a) Organization, Standing and Corporate Power............................................13
(b) Authority; Noncontravention...........................................................13
(d) State Takeover Statutes...............................................................14
(e) Brokers...............................................................................14
ARTICLE 4
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business........................................................................14
(a) Conduct of Business by NSC............................................................14
(b) Other Actions.........................................................................15
(c) Advice of Changes.....................................................................15
Section 4.2 No Solicitation............................................................................15
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.1 Preparation of Proxy Statement; Stockholders Meeting.......................................17
Section 5.2 Access to Information; Confidentiality.....................................................17
Section 5.3 Reasonable Best Efforts; Cooperation.......................................................18
Section 5.4 Indemnification............................................................................18
Section 5.5 Fees and Expenses..........................................................................20
Section 5.6 Public Announcements.......................................................................20
Section 5.7 Repurchase of [Waste Management] Shares....................................................21
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.................................21
(a) Stockholder Approval..................................................................21
(b) Governmental and Regulatory Approvals.................................................21
(c) No Injunctions or Restraints..........................................................21
(d) HSR Act...............................................................................21
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Section 6.2 Conditions to Obligations of Holdings and Merger Subsidiary................................21
(a) Representations and Warranties........................................................21
(b) Performance of Obligations of NSC.....................................................22
(c) Waste Management Non-Competition Agreement............................................22
(d) Asset Purchase Agreement..............................................................22
(e) Rust Note.............................................................................22
(f) Repurchase of Shares..................................................................22
Section 6.3 Conditions to Obligations of NSC...........................................................22
(a) Representations and Warranties........................................................22
(b) Performance of Obligations of Holdings................................................22
Section 6.4 Frustration of Closing Conditions..........................................................22
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination................................................................................23
Section 7.2 Effect of Termination......................................................................23
Section 7.3 Amendment..................................................................................24
Section 7.4 Extension; Waiver..........................................................................24
Section 7.5 Procedure for Termination, Amendment, Extension or Waiver..................................24
ARTICLE 8
GENERAL PROVISIONS
Section 8.1 Nonsurvival of Representations and Warranties..............................................24
Section 8.2 Notices....................................................................................24
Section 8.3 Interpretation.............................................................................25
Section 8.4 Counterparts...............................................................................26
Section 8.5 Entire Agreement: No Third-Party Beneficiaries.............................................26
Section 8.6 Governing Law..............................................................................26
Section 8.7 Assignment.................................................................................26
Section 8.8 Consent to Jurisdiction....................................................................26
Section 8.9 Headings...................................................................................27
Section 8.10 Severability...............................................................................27
Non-Competition Agreement.................................................................................Exhibit A
Asset Purchase Agreement..................................................................................Exhibit B
Subordinated Promissory Note .............................................................................Exhibit C
Subordinated Promissory Note..............................................................................Exhibit D
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TABLE OF DEFINED TERMS
TERM SECTION
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Acquisition Agreement........................................................................................4.2(b)
Acquisition Proposal.........................................................................................4.2(a)
Affiliate.......................................................................................................8.3
Agreement..................................................................................................Recitals
Holdings...................................................................................................Recitals
Certificates.................................................................................................2.3(b)
Certificate of Merger...........................................................................................1.3
Cleanup..................................................................................................3.1(n)(iv)
Closing.........................................................................................................1.2
Closing Date....................................................................................................1.2
Code......................................................................................................3.1(i)(i)
Common Stock...............................................................................................Recitals
Confidentiality Agreement.......................................................................................5.2
Disclosure Letters..............................................................................................3.1
Dissenting Shares............................................................................................2.2(b)
Dissenting Stockholders......................................................................................2.2(b)
Effective Time..................................................................................................1.3
Environmental Claim.......................................................................................3.1(n)(v)
Environmental Laws.......................................................................................3.1(n)(vi)
ERISA.....................................................................................................3.1(i)(i)
ERISA Affiliate.........................................................................................3.1(i)(iii)
Exchange Act.................................................................................................3.1(e)
Governmental Entity..........................................................................................3.1(d)
Hazardous Materials.....................................................................................3.1(n)(vii)
HSR Act......................................................................................................3.1(d)
Knowledge.......................................................................................................8.3
Liens........................................................................................................3.1(b)
Material Adverse Effect......................................................................................3.1(a)
Merger.....................................................................................................Recitals
Merger Consideration.........................................................................................2.2(b)
Merger Subsidiary..........................................................................................Recitals
Notice.......................................................................................................4.2(a)
ODC..........................................................................................................3.1(b)
ODM..........................................................................................................3.1(b)
Options......................................................................................................2.3(c)
Payment Agent................................................................................................2.3(a)
Paying Fund..................................................................................................2.3(a)
Person..........................................................................................................8.3
Preferred Stock..............................................................................................3.1(c)
Proxy Statement..............................................................................................3.1(d)
Release................................................................................................3.1(n)(viii)
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Restraints...................................................................................................6.1(c)
SEC..........................................................................................................3.1(d)
SEC Documents................................................................................................3.1(e)
Securities Act...............................................................................................3.1(e)
Stock Option Plan ...........................................................................................2.2(c)
Stockholder Approval.........................................................................................3.1(k)
Stockholders Meeting.........................................................................................5.1(b)
Subordinated Note ..............................................................................................2.1
Superior Proposal............................................................................................4.2(b)
Surviving Corporation...........................................................................................1.1
Takeover Statute.............................................................................................3.1(l)
NSC........................................................................................................Recitals
NSC Benefit Plans............................................................................................3.1(h)
NSC Entity(ies)..............................................................................................3.1(b)
NSC Subsidiary(ies)..........................................................................................3.1(b)
Taxes........................................................................................................3.1(j)
Waste Management ..........................................................................................Recitals
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
February 12, 1999, by and among NSC Holdings, Inc., a Delaware corporation
("Holdings"), NSC Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Holdings ("Merger Subsidiary"), Waste Management, Inc., a Delaware
corporation ("Waste Management") and NSC Corporation, a Delaware corporation
("NSC") .
W I T N E S S E T H:
WHEREAS, the parties hereto desire to cause Merger Subsidiary
to merge with and into NSC on the terms and conditions herein set forth and in
accordance with the Delaware General Corporation Law (the "DGCL");
WHEREAS, the Board of Directors of NSC has determined that the
merger is fair to the stockholders of NSC and is in the best interest of such
stockholders, and has approved and adopted this Agreement and the transactions
contemplated hereby and recommended approval and adoption of this Agreement by
the stockholders of NSC;
WHEREAS, the Boards of Directors of each of Holdings and
Merger Subsidiary have determined that the merger of Merger Subsidiary with and
into NSC is in the best interest of their respective stockholders, and have
approved and adopted this Agreement and the transactions contemplated hereby;
WHEREAS, each issued and outstanding share of common stock,
par value $0.01 per share, of NSC ("Common Stock"), other than Dissenting Shares
(as defined in Section 2.1(b)) and any shares of Common Stock held in the
treasury of NSC, will be converted into the right to receive the Merger
Consideration (as defined in Section 2.1(b));
WHEREAS, simultaneously with the execution and delivery hereof
Waste Management is entering into a voting agreement for the benefit of Holdings
with respect to the shares of Common Stock beneficially owned by Waste
Management upon the terms and conditions specified therein; and
WHEREAS, Holdings, NSC and Waste Management desire to make
certain representations, warranties, covenants and agreements in connection with
the Merger;
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE 1
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL, Merger
Subsidiary shall be merged with and into NSC at the Effective Time (as defined
in Section 1.3) and the separate corporate existence of Merger
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Subsidiary shall thereupon cease. Following the Effective Time, NSC shall be the
surviving corporation (the "Surviving Corporation").
Section 1.2 CLOSING. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties, which
shall be no later than the second business day after satisfaction or waiver
(subject to applicable law) of the conditions (excluding conditions that, by
their terms, cannot be satisfied until the Closing Date) set forth in Article 6,
unless another time or date is agreed to by the parties hereto. The Closing will
be held at the offices of Xxxxxx & Xxxxxx, L.L.P. in Houston, Texas or such
other location as the parties hereto shall agree to in writing. The date on
which the Closing occurs is hereinafter referred to as the "Closing Date."
Section 1.3 EFFECTIVE TIME. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall (i) file a certificate of merger (the "Certificate of Merger") in such
form as is required by and executed in accordance with the relevant provisions
of the DGCL and (ii) make all other filings or recordings required under the
DGCL. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware, or at
such subsequent date or time as NSC and Holdings shall agree and specify in the
Certificate of Merger (the date and time the Merger becomes effective being
hereinafter referred to as the "Effective Time").
Section 1.4 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time all the property, rights, privileges,
powers and franchises of NSC and Merger Subsidiary shall be vested in the
Surviving Corporation, and all debts, liabilities and duties of NSC and Merger
Subsidiary shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 1.5 CERTIFICATE OF INCORPORATION AND BY-LAWS. The
certificate of incorporation and by-laws of NSC shall be the certificate of
incorporation and by-laws of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable law.
Section 1.6 DIRECTORS AND OFFICERS OF THE SURVIVING
CORPORATION. From and after the Effective Time, until the earlier of their
death, resignation or removal or until their respective successors are duly
elected and qualified, as the case may be, (a) the directors of the Merger
Subsidiary at the Effective Time shall be the directors of the Surviving
Corporation, and (b) the officers of the NSC at the Effective Time shall be the
officers of the Surviving Corporation.
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ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
SURRENDER OF CERTIFICATES AND PAYMENT
Section 2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of capital stock of NSC or Merger Subsidiary:
(a) CANCELLATION OF TREASURY STOCK. Each share of Common Stock
held in the treasury of NSC shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(b) CONVERSION OF COMMON STOCK. Each issued and outstanding
share of Common Stock (other than shares to be canceled in accordance with
Section 2.1(a) and shares of Common Stock ("Dissenting Shares") that are owned
by stockholders ("Dissenting Stockholders") that have properly exercised
appraisal rights pursuant to Section 262 of the DGCL) shall be converted into
the right to receive $1.12 in cash, without interest (the "Merger
Consideration"). All such shares of Common Stock shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each holder of a certificate representing any such shares of Common Stock shall
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration upon surrender of such certificate in accordance with
Section 2.3.
(c) CAPITAL STOCK OF MERGER SUBSIDIARY. Each share of common
stock of Merger Subsidiary issued and outstanding immediately prior to the
Effective Time shall be converted into one share of common stock of the
Surviving Corporation and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
Section 2.2 CONVERSION OF OPTIONS. NSC shall cause all
outstanding options to purchase shares of Common Stock ("Options") held by
directors and executive officers of NSC issued pursuant to NSC's 1990 Stock
Option Plan, as amended (the "Stock Option Plan"), and shall use its reasonable
best efforts to cause all other Options issued pursuant to the Stock Option Plan
as set forth in the Disclosure Letter, prior to or as of the Effective Time, to
be (i) exercised, exchanged and converted into Common Stock, or (ii) surrendered
and canceled without cost to NSC.
Section 2.3 PAYMENT AND SURRENDER OF CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time, Holdings shall
appoint a United States bank or trust company reasonably acceptable to NSC to
act as paying agent (the "Paying Agent") for the payment of the Merger
Consideration, and Holdings shall deposit or shall cause to be deposited with
the Paying Agent in a separate fund established for the benefit of the holders
of shares of Common Stock, for payment in accordance with this Article 2,
through the Paying Agent (the "Payment Fund"), in immediately available funds in
amounts necessary to make the payments pursuant to Section 2.1(b) and this
Section 2.3 to holders of shares of Common Stock entitled thereto pursuant to
Section 2.1(b).
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(b) PAYMENT PROCEDURES FOR STOCKHOLDERS. As soon as reasonably
practicable after the Effective Time, the Paying Agent shall deliver to each
holder of record of a certificate or certificates which at the Effective Time
represented outstanding shares of Common Stock (the "Certificates") whose shares
were converted into the right to receive the Merger Consideration pursuant to
Section 2.1(b), (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as NSC and Holdings may reasonably specify)
and (ii) instructions for use in surrendering the Certificates in exchange for
the Merger Consideration. Upon surrender of a Certificate for cancellation to
the Paying Agent, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor
cash in an amount equal to the product of (i) the number of shares of Common
Stock represented by such Certificate and (ii) the Merger Consideration, and the
Certificate so surrendered shall forthwith be canceled. No interest shall be
paid or accrued on the Merger Consideration payable upon the surrender of any
Certificate. If payment is to be made to a person other than the person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment, shall pay any transfer or other taxes required by reason of the payment
to a person other than the registered holder of the surrendered Certificate or
establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 2.3, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger
Consideration that the holder thereof has the right to receive in respect of
such Certificate pursuant to the provisions of this Article 2.
(c) STOCK TRANSFER BOOKS. After the Effective Time, there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Common Stock. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Paying
Agent for any reason, they shall be canceled and exchanged as provided in this
Article 2, except as otherwise provided by law.
(d) TERMINATION OF PAYMENT FUND. Any portion of the Payment
Fund which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to the Surviving Corporation,
upon demand, and any holders of the Certificates who have not theretofore
complied with this Article 2 shall thereafter look only to the Surviving
Corporation for payment of their claim for the Merger Consideration.
(e) NO LIABILITY. None of Holdings, Merger Subsidiary, NSC,
the Surviving Corporation or the Paying Agent shall be liable to any person in
respect of any amount properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(f) LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration due to such person pursuant to this
Agreement.
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Section 2.4 DISSENTERS' RIGHTS. No Dissenting Stockholder
shall be entitled to any portion of the Merger Consideration pursuant to this
Article 2 unless and until the holder thereof shall have failed to perfect or
shall have effectively withdrawn or lost such holder's right to dissent from the
Merger under the DGCL, and any Dissenting Stockholder shall be entitled to
receive only the payment provided by Section 262 of the DGCL with respect to
Common Stock owned by such Dissenting Stockholder. If any person who otherwise
would be deemed a Dissenting Stockholder shall have failed to properly perfect
or shall have effectively withdrawn or lost the right to dissent with respect to
any Common Stock, such shares of Common Stock shall thereupon be treated as
though such Common Stock had been converted into the right to receive the Merger
Consideration with respect to such Common Stock as provided in this Article 2.
NSC shall give Holdings (i) prompt notice of any written demands for appraisal,
attempted withdrawals of such demands and any other instruments served pursuant
to applicable law received by NSC relating to stockholders' rights of appraisal
and (ii) the opportunity to participate in all negotiations and proceedings with
respect to demand for appraisal under the DGCL. NSC shall not, except with the
prior written consent of Holdings, voluntarily make any payment with respect to
any demands for appraisals of Dissenting Shares, offer to settle or settle any
such demands or approve any withdrawal of any such demands.
Section 2.5 ASSETS AND LIABILITIES OF MERGING CORPORATIONS
BECOME THOSE OF SURVIVING CORPORATION. At the Effective Time, all rights,
privileges, powers, immunities, and franchises of each of Merger Subsidiary and
NSC, both of a public and private nature, and all property, real, personal, and
mixed, and all debts due on whatever account, and all other chooses or things in
action, and all and every other interest of or belonging to or due to either of
Merger Subsidiary and NSC, shall be taken by and deemed to be transferred to and
shall be vested in the Surviving Corporation without further act or deed
pursuant to Section 259 and other provisions of the DGCL.
Section 2.6 FURTHER ASSURANCES. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be authorized
to execute and deliver, in the name and on behalf of NSC or Merger Subsidiary,
any deeds, bills of sale, assignments or assurances and to take and do, in the
name and on behalf of NSC or Merger Subsidiary, any other actions and things to
vest, perfect or confirm of record or otherwise in the Surviving Corporation any
and all right, title and interest in, to and under any of the rights, properties
or assets acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF NSC. Except as
disclosed in the SEC Documents (as defined in Section 3.1(e)) or as set forth in
the Disclosure Letter delivered by NSC to Holdings prior to the execution of
this Agreement (the "Disclosure Letter"), NSC hereby represents and warrants to
Holdings as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. NSC and each
of the NSC Subsidiaries (as defined in Section 3.1(b)) is a corporation or other
legal entity duly organized, validly existing and in good standing (with respect
to jurisdictions which recognize such concept) under the laws of the
jurisdiction in which it is organized and has the requisite corporate or other
power, as the
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case may be, and authority to carry on its business as now being conducted,
except for those jurisdictions where the failure to be so organized, existing or
in good standing individually or in the aggregate would not have a material
adverse effect on the condition (financial or otherwise), business, assets or
results of operations of the NSC Entities (as defined in Section 3.1(b)) taken
as a whole (a "Material Adverse Effect"). NSC and each of the NSC Subsidiaries
is duly qualified or licensed to do business and is in good standing (with
respect to jurisdictions which recognize such concept) in each jurisdiction in
which the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or to be in good
standing individually or in the aggregate would not have a Material Adverse
Effect.
(b) SUBSIDIARIES. NSC has no subsidiaries, interests in any
joint ventures or partnerships, or interest in any other entity other than
National Surface Cleaning, Inc., National Service Cleaning Corp., Xxxxxx
Demolishing Management, Inc. ("ODM") and NSC Energy Services, Inc. (each a " NSC
Subsidiary," collectively, the "NSC Subsidiaries") (Xxxxxx Demolishing Company
("ODC"), together with NSC and the NSC Subsidiaries, the "NSC Entities"). All
the outstanding shares of capital stock of, or other equity interests in, each
NSC Subsidiary (i) have been validly issued and are fully paid and
nonassessable, (ii) are owned directly or indirectly by NSC, free and clear of
all pledges, claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens") and (iii) are free of any
other restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests), except in
the case of clauses (ii) and (iii) for any Liens or restrictions that
individually or in the aggregate would not have a Material Adverse Effect.
(c) CAPITAL STRUCTURE. The authorized capital stock of NSC
consists of (i) 20,000,000 shares of Common Stock and (ii) 10,000,000 shares of
preferred stock, par value $.01 per share, of NSC ("Preferred Stock"). As of the
date hereof: (i) 9,971,175 shares of Common Stock were issued and outstanding;
(ii) no shares of Preferred Stock were issued or outstanding; and (iii) 655,250
shares of Common Stock were reserved for issuance upon the exercise of
outstanding Options granted under Stock Option Plan. All of the outstanding
shares of capital stock of NSC are, and all shares which may be issued will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. Except as set forth in Schedule 3.1(c) of the
Disclosure Letter and except as provided in this Agreement there are not issued,
reserved for issuance or outstanding (A) any shares of capital stock or other
voting securities of NSC, (B) any securities of NSC convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of
NSC, (C) any warrants, calls, options or other rights to acquire from NSC, and
no obligation of NSC to issue, any capital stock, voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of NSC or (D) any debt securities of NSC not set forth on the
face of the financial statements or in the notes thereto under the caption
"Long-Term Debt," or any other similar caption, included in the SEC Documents
(as hereinafter defined) (the items in clauses (A), (B), (C), and (D) of this
section are collectively referred to as "NSC Securities"). There are no
outstanding obligations of NSC to repurchase, redeem or otherwise acquire any
NSC Securities other than as contemplated by Section 6.2(f) of this Agreement.
Other than the Options, there are no outstanding obligations of NSC to issue,
deliver or sell, or cause to be issued, delivered or sold, any NSC Securities.
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(d) AUTHORITY; NONCONTRAVENTION. NSC has all requisite
corporate power and authority to enter into this Agreement and, subject to the
Stockholder Approval (as defined in Section 3.1(k)), to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by NSC and the consummation by NSC of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of NSC, subject, in the case of the Merger, to the Stockholder Approval. This
Agreement has been duly executed and delivered by NSC and, assuming the due
authorization, execution and delivery by Holdings and Waste Management,
constitutes a legal, valid and binding obligation of NSC, enforceable against
NSC in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, (i) conflict with the certificate of incorporation
or by-laws of NSC, (ii) result in any default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of the NSC Entities
under any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, license or similar
authorization applicable to the NSC Entities or their respective properties or
assets or (iii) subject to the governmental filings and other matters referred
to in the following sentence, violate any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the NSC Entities or their respective
properties or assets, other than, in the case of clauses (ii) and (iii), any
such conflicts, violations, defaults, rights, losses or Liens that individually
or in the aggregate would not have a Material Adverse Effect. No consent,
approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any federal, state, local or foreign
government, any court, administrative, regulatory or other governmental agency,
commission or authority or any non-governmental U.S. or foreign self-regulatory
agency, commission or authority or any arbitral tribunal (each, a "Governmental
Entity") is required by NSC in connection with the execution and delivery of
this Agreement by NSC or the consummation by NSC of the transactions
contemplated hereby, except for: (i) the filing with the Securities and Exchange
Commission (the "SEC") of a proxy statement relating to the Stockholders Meeting
(as defined in Section 5.1(b)) (such proxy statement, as amended or supplemented
from time to time, the "Proxy Statement"); (ii) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware; (iii) compliance
with any applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended ("HSR Act"); and (iv) such consents, approvals, orders
or authorizations the failure of which to be made or obtained individually or in
the aggregate would not have a Material Adverse Effect.
(e) SEC REPORTS. NSC has timely filed all required reports,
schedules, forms, statements and other documents (including exhibits and all
other information incorporated therein) under the Securities Act of 1933, as
amended (the "Securities Act") and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), with the SEC between January 1, 1996 and the date
of this Agreement (as such reports, schedules, forms, statements and documents
have been amended since the time of their filing, collectively the "SEC
Documents"). As of their respective dates, or if amended, as of the date of the
last such amendment, the SEC Documents complied in all material respects with
the requirements of the Securities Act, or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
such SEC Documents, and none of the SEC Documents when filed, or as amended,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein,
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in light of the circumstances under which they were made, not misleading. The
financial statements of NSC included in the SEC Documents comply as to form, as
of their respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present in all material respects the consolidated financial position of NSC and
its consolidated subsidiaries as of the dates thereof and the consolidated
statement of earnings, cash flows and stockholders' equity for the periods then
ended (subject, in the case of unaudited statements, to normal recurring
year-end audit adjustments).
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, since September 30, 1998, NSC and each of the NSC
Subsidiaries have conducted their business only in the ordinary course or as
disclosed in any SEC Document, and there has not been (i) any declaration,
setting aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any of NSC's capital stock, (ii) any split,
combination or reclassification of any of NSC's capital stock or any issuance or
the authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of NSC's capital stock, (iii) (A) any granting
by NSC or any NSC Subsidiary to any current or former director, executive
officer or other key employee of NSC or any NSC Subsidiary of any increase in
compensation, bonus or other benefits, except for normal increases in the
ordinary course of business or as was required under any employment agreements
in effect as of the date of the most recent audited financial statements
included in the SEC Documents filed and publicly available prior to the date of
this Agreement, (B) any granting by NSC or any NSC Subsidiary to any such
current or former director, executive officer or key employee of any increase in
severance or termination pay, except in the ordinary course of business, or (C)
any entry by NSC or any NSC Subsidiary into, or any amendment of, any
employment, deferred compensation, consulting, severance, termination or
indemnification agreement with any such current or former director, executive
officer or key employee, other than in the ordinary course of business, or (iv)
except insofar as may have been disclosed in the SEC Documents or required by a
change in generally accepted accounting principles, any change in accounting
methods, principles or practices by NSC materially affecting its assets,
liabilities or business.
(g) COMPLIANCE WITH APPLICABLE LAWS; LITIGATION. As of the
date of this Agreement, except as disclosed in the SEC Documents, no action,
demand, requirement or investigation by any Governmental Entity and no suit,
action or proceeding by any person, in each case with respect to NSC or any NSC
Subsidiary or any of their respective properties is pending or, to the knowledge
(as defined in Section 8.3 of NSC, threatened, other than, in each case, those
the outcome of which individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
(h) ABSENCE OF CHANGES IN BENEFIT PLANS. Except as set forth
on Schedule 3.1(h) of the Disclosure Letter, since September 30, 1998, there has
not been any (i) adoption by NSC of any collective bargaining agreement or any
material bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical, life, severance or other plan, arrangement or understanding providing
benefits to any current or former employee, officer or director of NSC
(collectively, the "NSC Benefit Plans") to which any of NSC's executive officers
is a participant
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or (ii) amendment to any NSC Benefit Plan that resulted in a material increase
in the benefits received or to be received thereunder by any executive officer
of NSC.
(i) ERISA COMPLIANCE.
(i) With respect to the NSC Benefit Plans, no event has
occurred and, to the knowledge of NSC, there exists no condition or set
of circumstances, in connection with which NSC could be subject to any
liability that individually or in the aggregate would have a Material
Adverse Effect under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Internal Revenue Code of 1986, as
amended (the "Code") or any other applicable law.
(ii) Each NSC Benefit Plan has been administered in accordance
with its terms, all applicable laws, including ERISA and the Code, and
the terms of all applicable collective bargaining agreements, except
for any failures so to administer any NSC Benefit Plan that
individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect. NSC and all NSC Benefit Plans are in
compliance with the applicable provisions of ERISA, the Code and all
other applicable laws and the terms of all applicable collective
bargaining agreements, except for any failures to be in such compliance
that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect. Each NSC Benefit Plan that is
intended to be qualified under Section 401(a) or 401(k) of the Code is
so qualified and each trust established in connection with any NSC
Benefit Plan that is intended to be exempt from federal income taxation
under Section 501(a) of the Code is so exempt. To the knowledge of NSC,
no fact or event has occurred which is reasonably likely to affect
adversely the qualified status of any such NSC Benefit Plan or the
exempt status of any such trust, except for any occurrence that
individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect, and to the knowledge of NSC, all
contributions to, and payments from, such NSC Benefit Plans which are
required to be made in accordance with such NSC Benefit Plans, ERISA or
the Code have been timely made other than any failures that
individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect.
(iii) Except as any of the following either individually or in
the aggregate would not reasonably be expected to have a Material
Adverse Effect, neither NSC nor any trade or business, whether or not
incorporated (an "ERISA Affiliate"), which together with NSC would be
deemed to be a "single employer" within the meaning of Section 4001(b)
of ERISA, has incurred any liability under Title IV of ERISA and no
condition exists that presents a risk to NSC or any ERISA Affiliate of
NSC of incurring any such liability (other than liability for benefits
or premiums to the Pension Benefit Guaranty Corporation arising in the
ordinary course).
(iv) As of the date of this Agreement, there is no labor
dispute, strike or work stoppage against NSC or any NSC Subsidiary
pending or, to the knowledge of NSC, threatened which may interfere
with the respective business activities of NSC or any NSC Subsidiary,
except where such dispute, strike or work stoppage individually or in
the aggregate would not reasonably be expected to have a Material
Adverse Effect.
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(v) No NSC Benefit Plan provides medical benefits (whether or
not insured) with respect to current or former employees after
retirement or other termination of service the cost of which would
reasonably expected to have a Material Adverse Effect.
(vi) The consummation of the transactions contemplated by this
Agreement will not, either alone or in combination with another event,
(A) entitle any current or former employee, officer or director of NSC
to severance pay, unemployment compensation or any other payment or (B)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee, officer or director.
(vii) Except as set forth on Schedule 3.1(i) to the Disclosure
Letter, no NSC Subsidiary is a party to any agreement, contract or
arrangement that could result, separately or in the aggregate, in the
payment of any "excess parachute payments" within the meaning of
Section 280G of the Code.
(j) TAXES. NSC and each NSC Subsidiary has filed all material
tax returns and reports required to be filed by it and all such returns and
reports are complete and correct in all material respects, or requests for
extensions to file such returns or reports have been timely filed, granted and
have not expired, except to the extent that such failures to file, to be
complete or correct or to have extensions granted that remain in effect
individually or in the aggregate would not have a Material Adverse Effect. NSC
and each NSC Subsidiary has paid (or NSC has paid on its behalf) all taxes (as
defined below) shown as due on such returns. As used in this Agreement, "taxes"
shall include all federal, state, local or foreign net and gross income,
alternative or add-on minimum, environmental, gross receipts, ad valorem, value
added, goods and services, capital stock, profits, license, single business,
employment, severance, stamp, unemployment, customs, property, sales, excise,
use, occupation, service, transfer, payroll, franchise, withholding and other
taxes or similar governmental duties, charges, fees, levies or other assessments
including any interest, penalties or additions with respect thereto.
(k) VOTING REQUIREMENTS. The affirmative vote of the holders
of a majority of the outstanding shares of Common Stock at the Stockholders
Meeting to adopt this Agreement (the "Stockholder Approval") is the only vote of
the holders of any class or series of NSC's capital stock necessary to adopt and
approve this Agreement and the Merger and the transactions contemplated hereby.
The Board of Directors of NSC has duly and validly approved and taken all
corporate action required to be taken by the Board of Directors of NSC for the
consummation of the transactions contemplated by this Agreement.
(l) STATE TAKEOVER STATUTES. The Board of Directors of NSC has
taken all necessary action so that no "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation (each, a
"Takeover Statute") is applicable to the Merger and the transactions
contemplated by this Agreement.
(m) BROKERS. Except for BT Alex. Xxxxx Incorporated, no
broker, investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of NSC.
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(n) ENVIRONMENTAL MATTERS.
(i) During the three-year period immediately preceding the
date of this Agreement, neither NSC nor any NSC Subsidiary has received
any written communication from a Governmental Entity alleging that NSC
or any NSC Subsidiary is not in compliance with applicable
Environmental Laws, other than those instances of alleged noncompliance
which individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect.
(ii) There is no Environmental Claim pending or, to the
knowledge of NSC, threatened, against NSC or any NSC Subsidiary or, to
the knowledge of NSC, against any person whose liability for any
Environmental Claim NSC or any NSC Subsidiary has or may have retained
or assumed either contractually or by operation of law other than those
Environmental Claims which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
(iii) There are no Releases of any Hazardous Material at any
property that could reasonably be expected to result in liability under
any Environmental Law for NSC or any NSC Subsidiary or, to the
knowledge of NSC, for any person whose liability for any Environmental
Claim NSC or any NSC Subsidiary has or may have retained or assumed
either contractually or by operation of law other than those
liabilities which individually or in the aggregate would not reasonably
be expected to have a Material Adverse Effect.
(iv) As used herein, the term "Cleanup" means all actions
required to (A) cleanup, remove, treat, manage or remediate Hazardous
Materials in the indoor or outdoor environment; (B) prevent the Release
of Hazardous Materials so that they do not migrate, endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; (C) perform pre-remedial studies and investigations and
post-remedial monitoring and care; or (D) respond to any government
requests for information or documents in any way relating to cleanup,
removal, treatment or remediation or potential cleanup, removal,
treatment or remediation of Hazardous Materials in the indoor or
outdoor environment.
(v) As used herein, the term "Environmental Claim" means any
claim, action, cause of action, investigation or written notice by any
person alleging potential liability or responsibility (including,
without limitation, potential liability for investigatory costs,
Cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, fines or penalties) arising out
of, based on or resulting from (A) the presence or Release of any
Hazardous Materials at any location, whether or not owned or operated
by NSC or any NSC Subsidiary or (B) circumstances forming the basis of
any violation of any Environmental Law.
(vi) As used herein, the term "Environmental Laws" means all
federal, state, local and foreign laws and regulations relating to
pollution or protection of the environment, including, without
limitation, laws relating to Releases of Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials.
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(vii) As used herein, the term "Hazardous Materials" means all
substances defined as Hazardous Substances, Hazardous Waste, Oils,
Pollutants or Contaminants in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. Section 300.5, or defined as such
by, or regulated as such under, any Environmental Law, including all
matters adversely affecting air, ground, ground water and/or
environmental quality or safety, including, without limitation,
petroleum, petroleum-derived products, underground storage tanks and
asbestos.
(viii) As used herein, the term "Release" means any release,
spill, emission, discharge, leaking, pumping, injection, deposit,
disposal, dispersal, leaching or migration into the environment
(including, without limitation, ambient air, surface water, groundwater
and surface or subsurface strata).
Section 3.2 REPRESENTATIONS AND WARRANTIES OF WASTE
MANAGEMENT. Waste Management hereby represents and warrants to Holdings as
follows:
(a) AUTHORITY; NONCONTRAVENTION. Waste Management has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Waste Management and the consummation by Waste
Management of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Waste Management. This Agreement
has been duly executed and delivered by Waste Management and, assuming the due
authorization, execution and delivery by Holdings and NSC, constitutes a legal,
valid and binding obligation of Waste Management, enforceable against Waste
Management in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the rights of creditors generally and general principles of equity. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement and compliance with the provisions
of this Agreement will not, (i) conflict with the certificate of incorporation
or by-laws of Waste Management, (ii) result in any default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a benefit under, or
result in the creation of any Lien upon the Waste Management Shares (as defined
in Section 3.2(b)) under any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to the Waste Management Shares or
(iii) subject to the governmental filings and other matters referred to in the
following sentence, violate any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Waste Management Shares, other
than, in the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights, losses or Liens that individually or in the aggregate would
not have a Material Adverse Effect. No consent, approval, order or authorization
of, action by or in respect of, or registration, declaration or filing with, any
Governmental Entity is required by Waste Management in connection with the
execution and delivery of this Agreement by Waste Management or the consummation
by Waste Management of the transactions contemplated hereby, except for
(i)compliance with any applicable requirements of the HSR Act and (ii) such
consents, approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not have a Material Adverse
Effect.
(b) OWNERSHIP OF WASTE MANAGEMENT SHARES. As of the date
hereof, Waste Management is the beneficial owner of 5,380,670 shares of Common
Stock (the "Waste Management Shares"), all of which shares are owned of record
by affiliates (as defined in Section 8.3) of Waste
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Management as set forth in SCHEDULE 3.2(b) of the Disclosure Letter. Except as
set forth in this Agreement, neither Waste Management nor any of its affiliates
is a party to any option, warrant, purchase right, or other contract or
commitment that could require any such entity to sell, transfer or otherwise
dispose of any of the Waste Management Shares.
(c) ODC MANAGEMENT CLAIMS. Except as set forth in the SEC
Documents, neither Waste Management, Rust International Inc., ODC nor any of
their affiliates have any claims against any NSC Subsidiary that would
reasonably be expected to have a Material Adverse Effect.
Section 3.3 REPRESENTATIONS AND WARRANTIES OF HOLDINGS. Except
as set forth in the Disclosure Letter delivered by Holdings to NSC prior to the
execution of this Agreement (the " Holdings Disclosure Letter"), Holdings hereby
represents and warrants to NSC and Waste Management as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of
Holdings and Merger Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
(b) AUTHORITY; NONCONTRAVENTION. Holdings and Merger
Subsidiary have all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Holdings and Merger Subsidiary have been
duly authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by Holdings and Merger Subsidiary and, assuming the due
authorization, execution and delivery by NSC and Waste Management, constitutes a
legal, valid and binding obligation of Holdings and Merger Subsidiary,
enforceable against Holdings and Merger Subsidiary in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the rights of creditors
generally and general principles of equity. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated by
this Agreement and compliance with the provisions of this Agreement will not (i)
conflict with the certificate of incorporation or by-laws of Holdings or Merger
Subsidiary, (ii) result in any default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of Holdings or Merger
Subsidiary under any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise, license or
similar authorization applicable to Holdings, Merger Subsidiary or their
respective properties or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, violate any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Holdings, Merger Subsidiary or their respective properties or assets. No
consent, approval, order or authorization of, action by, or in respect of, or
registration, declaration or filing with, any Governmental Entity is required by
Holdings or Merger Subsidiary in connection with the execution and delivery of
this Agreement by Holdings and Merger Subsidiary or the consummation by Holdings
and Merger Subsidiary of the transactions contemplated hereby, except for: (i)
the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware; and (ii) compliance with any applicable requirements of the HSR
Act.
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(c) HOLDINGS RESOURCES. At the Effective Time, Holdings will
have sufficient funds on hand or available to consummate the transactions
contemplated by this Agreement and to pay all transaction related fees and
expenses.
(d) STATE TAKEOVER STATUTES. The Board of Directors of
Holdings and Merger Subsidiary have taken all necessary action so that no
Takeover Statute is applicable to the Merger and the other transactions
contemplated by this Agreement.
(e) BROKERS. Except for Xxxx Capital Corp., no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Holdings.
ARTICLE 4
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 CONDUCT OF BUSINESS.
(a) CONDUCT OF BUSINESS BY NSC. Except as set forth in Section
4.1(a) of the Disclosure Letter, otherwise contemplated by this Agreement or
consented to by Holdings, consent not to be unreasonably withheld or delayed,
during the period from the date of this Agreement to the Effective Time, NSC
shall carry on its businesses in the ordinary course consistent with past
practice and in compliance in all material respects with all applicable laws and
regulations and, to the extent consistent therewith, use all reasonable efforts
to keep available the services of its current officers and other key employees
and preserve its relationships with those persons having business dealings with
them. Without limiting the generality of the foregoing (but subject to the above
exceptions), during the period from the date of this Agreement to the Effective
Time, NSC shall not, and shall not permit any NSC Subsidiary to:
(i) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of NSC to its parent (x) declare, set
aside or pay any dividends on, or make any other distributions in
respect of, any of its capital stock, (y) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for
shares of its capital stock, except for issuances of the Common Stock
upon the exercise of the Options under the Stock Option Plan;
(ii) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting
securities or any securities convertible into, or any rights, warrants
or options to acquire, any such shares, voting securities or
convertible securities, other than the issuance of Common Stock upon
the exercise of the Options under the Stock Option Plan;
(iii) amend its certificate of incorporation, by-laws or other
comparable organizational documents, or merge or consolidate with any
person;
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(iv) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or
assets other than in the ordinary course of business consistent with
past practice;
(v) enter into any written contracts of employment;
(vi) incur any indebtedness except under its existing
revolving credit facilities or trade payables incurred in the ordinary
course of business;
(vii) enter into commitments for capital expenditures
involving more than $10,000.00 in the aggregate except as may be
necessary for the maintenance of existing facilities, machinery and
equipment in good operating condition and repair in the ordinary course
of business;
(viii) fail to maintain insurance in accordance with past
practice; or
(ix) authorize, or commit or agree to take, any of the
foregoing actions;
provided, however, that the limitations set forth in this Section 4.1(a) (other
than clause (iii)) shall not apply to any transaction to which the only parties
are NSC or NSC Subsidiaries.
(b) OTHER ACTIONS. Except as required by law, NSC and Holdings
shall not, and, in the case of NSC, shall not permit any NSC Subsidiary to,
voluntarily take any action that would reasonably be expected to result in any
of the conditions to the Merger set forth in Article 6 not being satisfied.
(c) ADVICE OF CHANGES. NSC and Holdings shall promptly advise
the other party orally and in writing to the extent it has knowledge of any
change or event having, or which, insofar as can reasonably be foreseen, would
reasonably be expected to have a material adverse effect on such party or on the
truth of their respective representations and warranties or the ability of the
conditions set forth in Article 6 to be satisfied; PROVIDED, HOWEVER, that no
such notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement.
Section 4.2 NO SOLICITATION.
(a) NSC shall not, nor shall it permit any NSC Subsidiary, nor
shall it authorize or permit any of its directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it, to directly or indirectly through another person,
(i) solicit, initiate or encourage (including by way of furnishing information),
or take any other action designed to facilitate, any inquiries or the making of
any proposal which constitutes any Acquisition Proposal (as defined below) or
(ii) participate in any discussions or negotiations regarding any Acquisition
Proposal; PROVIDED, HOWEVER, that if, at any time, the Board of Directors of NSC
determines in good faith, after consultation with outside counsel, that it is
necessary to do so in order to act in a manner consistent with its fiduciary
duties to NSC's stockholders under applicable law, NSC may, in response to a
Superior Proposal (as defined in Section 4.2(b)) which was not solicited by it
or which did not otherwise result from a breach of this Section 4.2(a) and
subject to providing prior written
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notice of its decision to take such action to Holdings (the "Notice") and
compliance with Section 4.2(c), following delivery of the Notice (x) furnish
information with respect to NSC and the NSC Subsidiaries to any person making a
Superior Proposal pursuant to a customary confidentiality agreement (as
determined by NSC after consultation with its outside counsel) and (y)
participate in discussions or negotiations regarding such Superior Proposal. For
purposes of this Agreement, "Acquisition Proposal" means any inquiry, proposal
or offer from any person relating to any (w) direct or indirect acquisition or
purchase of all or substantially all of the business or assets of NSC, (x)
direct or indirect acquisition or purchase of 50% or more of any class of equity
securities of NSC, (y) tender offer or exchange offer that if consummated would
result in any person beneficially owning 50% or more of any class of equity
securities of NSC, or (z) merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving NSC,
other than the transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.2, neither
the Board of Directors of NSC nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Holdings, the approval or recommendation by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal or (iii) cause NSC
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement (each, an "Acquisition Agreement") related to any
Acquisition Proposal. Notwithstanding the foregoing, in the event that the Board
of Directors of NSC determines in good faith, after consultation with outside
counsel, that in light of a Superior Proposal it is necessary to do so in order
to act in a manner consistent with its fiduciary duties to NSC's stockholders
under applicable law, the Board of Directors of NSC may (subject to this and the
following sentences) terminate this Agreement in order to concurrently enter
into such Acquisition Agreement with respect to a Superior Proposal; PROVIDED,
HOWEVER, that NSC may not terminate this Agreement pursuant to this Section
4.2(b) unless and until (i) three business days have elapsed following the
delivery to Holdings of a written notice of such determination by the Board of
Directors of NSC and (x) NSC has delivered to Holdings the written notice
required by Section 4.2(c) below, and (y) during such three business day period,
NSC otherwise cooperates with Holdings with respect to an Acquisition Proposal
that constitutes a Superior Proposal with the intent of enabling Holdings to
engage in good faith negotiations so that the transactions contemplated hereby
may be effected and (ii) at the end of such three business day period the Board
of Directors of NSC continues reasonably to believe that the Acquisition
Proposal constitutes a Superior Proposal. For purposes of this Agreement, a
"Superior Proposal" means any proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer, exchange offer,
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash and/or
securities, or all or substantially all the assets of NSC and otherwise on terms
which the Board of Directors of NSC determines in its good faith judgment (based
on the advice of a financial advisor of nationally recognized reputation) to be
more favorable to NSC's stockholders than the Merger and for which financing, to
the extent required, is then committed or which, in the good faith judgment of
the Board of Directors of NSC, is reasonably capable of being obtained by such
third party.
(c) In addition to the obligations of NSC set forth in
paragraphs (a) and (b) of this Section 4.2, NSC shall immediately advise
Holdings orally and in writing of any request for information or of any
Acquisition Proposal, the material terms and conditions of such request or
Acquisition Proposal and the identity of the person making such request or
Acquisition Proposal. NSC will keep
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Holdings reasonably informed of the status and details (including amendments and
proposed amendments) of any such request or Acquisition Proposal.
(d) Nothing contained in this Section 4.2 shall prohibit NSC
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to
NSC's stockholders if, in the good faith judgment of the Board of Directors of
NSC, after consultation with outside counsel, failure so to disclose would be
inconsistent with its obligations under applicable law; PROVIDED, HOWEVER, that,
except as expressly permitted by paragraph (a) of this Section 4.2 in connection
with a Superior Proposal, neither NSC nor its Board of Directors nor any
committee thereof shall withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to this Agreement or the Merger or approve or
recommend, or propose publicly to approve or recommend, an Acquisition Proposal.
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.1 PREPARATION OF PROXY STATEMENT; STOCKHOLDERS
MEETING.
(a) As soon as practicable following the date of this
Agreement, NSC shall prepare and file with the SEC a proxy statement (the "Proxy
Statement"). NSC will use all reasonable best efforts to cause the Proxy
Statement to be mailed to NSC's stockholders as promptly as practicable after
the Proxy Statement is cleared by the staff of the SEC for mailing to NSC's
stockholders.
(b) NSC shall, as soon as practicable following the date of
this Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Stockholders Meeting") for the purpose of obtaining
Stockholder Approval and shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby. Without limiting the generality of the
foregoing, but subject to its rights pursuant to Section 4.2 and Section 7.1(e),
NSC agrees that its obligations pursuant to the first sentence of this Section
5.1(b) shall not be affected by the commencement, public proposal, public
disclosure or communication to NSC of any Acquisition Proposal.
Section 5.2 ACCESS TO INFORMATION; CONFIDENTIALITY. To the
extent permitted by applicable law and subject to the agreement dated April 16,
1998, between NSC and Holdings (the "Confidentiality Agreement"), each of NSC
and Holdings shall afford to the other party and to the officers, employees,
accountants, counsel, financial advisors and other representatives of such other
party, reasonable access during normal business hours during the period prior to
the Effective Time to all their respective properties, books, contracts,
commitments, personnel and records and all other information concerning its
business, properties and personnel as such other party may reasonably request.
Any review pursuant to this Section 5.2 shall be for the purposes of confirming
the accuracy of any representation or warranty contained in this Agreement given
by Holdings to NSC or by NSC to Holdings and facilitating transition planning.
Each of NSC and Holdings will hold, and will cause its respective officers,
employees, accountants, counsel, financial advisors and other representatives
and affiliates to hold, any nonpublic information in accordance with the terms
of the Confidentiality Agreement.
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Section 5.3 REASONABLE BEST EFFORTS; COOPERATION.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement. Nothing set forth in this Section 5.3(a) will limit or affect actions
permitted to be taken pursuant to Section 4.2.
(b) In connection with and without limiting the foregoing, NSC
and Holdings shall (i) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
the Merger, this Agreement or any of the other transactions contemplated hereby
and (ii) if any state takeover statute or similar statute or regulation becomes
applicable to the Merger, this Agreement or any of the other transactions
contemplated hereby, take all action necessary to ensure that the Merger and the
other transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and the other
transactions contemplated by this Agreement.
Section 5.4 INDEMNIFICATION.
(a) From and after the Effective Time, the Surviving
Corporation shall, to the fullest extent not prohibited by applicable law,
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date hereof, or who becomes prior to the Effective Time, an
officer, director or employee of NSC or any NSC Subsidiary (each, an
"Indemnified Party" and collectively, the "Indemnified Parties") against (i) all
losses, expenses (including reasonable attorneys' fees and expenses), claims,
damages or liabilities or, subject to the proviso of the next succeeding
sentence, amounts paid in settlement, arising out of actions or omissions
occurring at or prior to the Effective Time (and whether asserted or claimed
prior to, at or after the Effective Time) that are, in whole or in part, based
on or arising out of the fact that such person is or was a director, officer or
employee of NSC or any NSC Subsidiary or served as a fiduciary under or with
respect to any employee benefit plan (within the meaning of Section 3(3) of
ERISA) at any time maintained by or contributed to by NSC or any NSC Subsidiary
("Indemnified Liabilities"), and (ii) all Indemnified Liabilities to the extent
they are based on or arise out of or pertain to the transactions contemplated by
this Agreement. In the event of any such loss, expense, claim, damage or
liability (whether or not arising before the Effective Time), (i) the Surviving
Corporation shall pay the reasonable fees and expenses of counsel selected by
the Indemnified Parties, which counsel shall be reasonably satisfactory to the
Surviving Corporation, promptly after statements therefor are received and
otherwise advance to such Indemnified Party upon request reimbursement of
expenses reasonably incurred, (ii) the Surviving Corporation and NSC will
cooperate
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in the defense of such matter and (iii) any determination required to be made
with respect to whether an Indemnified Party's conduct complies with the
standards set forth under applicable law and the certificate of incorporation or
by-laws shall be made by independent counsel mutually acceptable to the
Surviving Corporation and the Indemnified Party; PROVIDED, HOWEVER, that the
Surviving Corporation shall not be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld or
delayed). In the event that any Indemnified Party is required to bring any
action to enforce rights or to collect moneys due under this Agreement and is
successful in such action, the Surviving Corporation shall reimburse such
Indemnified Party for all of its expenses in bringing and pursuing such action.
Each Indemnified Party shall be entitled to the advancement of expenses to the
full extent contemplated in this Section 5.4(a) in connection with any such
action. In addition, from and after the Effective Time, directors and officers
of NSC who become directors or officers of the Surviving Corporation will be
entitled to indemnification under the Surviving Corporation's certificate of
incorporation and by-laws, as the same may be amended from time to time in
accordance with their terms and applicable law, and to all other indemnity
rights and protections as are afforded to other directors and officers of the
Surviving Corporation.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision will be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 5.4.
(c) For six years after the Effective Time, the Surviving
Corporation shall maintain in effect the directors' and officers' liability tail
insurance identified on Schedule 4.1 with respect to those persons who are
currently covered by NSC's directors' and officers' liability insurance policy
on terms with respect to such coverage and amount no less favorable than those
of such policy in effect on December 31, 1998. In addition, for six years after
the Effective Time, the Surviving Corporation shall maintain in effect the NSC's
current fiduciary liability insurance policies for employees who serve or have
served as fiduciaries under or with respect to any employee benefit plans
described in Section 5.4(a) with coverages and in amounts no less favorable than
those of such policy in effect on the date hereof.
(d) The provisions of this Section 5.4 are (i) intended to be
for the benefit of, and will be enforceable by, each indemnified party, his or
her heirs and his or her representatives and (ii) in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
Section 5.5 FEES AND EXPENSES.
(a) Except as provided in this Section 5.4, all fees and
expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees
or expenses, whether or not the Merger is consummated.
(b) In the event that (i) this Agreement is terminated by NSC
pursuant to Section 7.1(e), then NSC shall promptly, but in no event later than
two days after the date of termination pursuant to this clause (i), pay Holdings
a fee equal to $100,000.00 (the "Termination Fee"), payable
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by wire transfer of same day funds, or (ii)(x) an Acquisition Proposal shall
have been made known to NSC or has been made directly to its stockholders
generally or any person shall have publicly announced an intention (whether or
not conditional) to make an Acquisition Proposal which, in any such case, has
not been publicly withdrawn prior to the Stockholders Meeting, (y) thereafter,
this Agreement is terminated by either NSC or Holdings pursuant to Section
7.1(b)(ii), and (z) within 12 months of such termination NSC enters into any
Acquisition Agreement or consummates any Acquisition Proposal, then NSC shall
pay Holdings the Termination Fee, payable by wire transfer of same day funds, no
later than two days after the first to occur of the execution of an Acquisition
Agreement or the consummation of an Acquisition Takeover Proposal. NSC
acknowledges that the agreements contained in this Section 5.5(b) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, Holdings would not enter into this Agreement.
(c) In the event that this Agreement is terminated by NSC
pursuant to Section 7.1(d), then Holdings shall promptly, but in no event later
than two days after the date of termination pursuant to this clause, pay NSC
liquidated damages equal to $100,000 (the "NSC Termination Fee"), payable by
wire transfer of same day funds.
(d) In the event this Agreement is terminated by Holdings
pursuant to Section 7.1(c), the NSC shall promptly, but in no event later than
two days after the date of termination pursuant to this clause, pay Holdings
liquidated damages equal to $100,000 (the "Holdings Termination Fee"), payable
by wire transfer of same day funds.
Section 5.6 PUBLIC ANNOUNCEMENTS. Holdings and NSC will
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with, any press release or other public
statements with respect to the transactions contemplated by this Agreement,
including the Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as either party may
determine is required by applicable law, court process or by obligations
pursuant to any rules and regulations of the Nasdaq Stock Market.
Section 5.7 REPURCHASE OF WASTE MANAGEMENT SHARES. Immediately
prior to the Effective Time Waste Management will sell to NSC and NSC will
purchase from Waste Management 996,420 shares of Common Stock to NSC in exchange
for a subordinated promissory note in the principal amount of $1,115,990,
bearing interest at 11% per annum, in the form attached hereto as Exhibit D.
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) STOCKHOLDER APPROVAL. The Stockholder Approval shall have
been obtained.
(b) GOVERNMENTAL AND REGULATORY APPROVALS. All consents,
approvals and actions of, filings with and notices to any Governmental Entity
required of Holdings, NSC or any NSC
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Subsidiary to consummate the Merger and the other transactions contemplated
hereby, the failure of which to be obtained or taken is reasonably expected to
have a material adverse effect on the Surviving Corporation and its
subsidiaries, taken as a whole, shall have been obtained in form and substance
reasonably satisfactory to each of Holdings and NSC.
(c) NO INJUNCTIONS OR RESTRAINTS. No judgment, order, decree,
statute, law, ordinance, rule or regulation, entered, enacted, promulgated,
enforced or issued by any court or other Governmental Entity of competent
jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") shall be in effect (i) preventing the consummation of the Merger,
(ii) prohibiting or limiting the ownership or operation by NSC and the NSC
Subsidiaries of any material portion of the business or assets of the NSC
Entities taken as a whole, or compelling NSC and the NSC Subsidiaries to dispose
of or hold separate any material portion of the business or assets of the NSC
Entities taken as a whole, as a result of the Merger or any of the other
transactions contemplated by this Agreement or (iii) which otherwise is
reasonably likely to have a Material Adverse Effect; PROVIDED, HOWEVER, that
each of the parties shall have used its reasonable best efforts to prevent the
entry of any such Restraints and to appeal as promptly as possible any such
Restraints that may be entered.
(d) HSR ACT. Any applicable waiting period (including any
extension thereof) under the HSR Act relating to the Merger shall have expired
or been terminated.
Section 6.2 CONDITIONS TO OBLIGATIONS OF HOLDINGS AND MERGER
SUBSIDIARY. The obligations of Holdings and Merger Subsidiary to effect the
Merger is further subject to satisfaction or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of NSC and Waste Management set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if made at and as
of such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties to be so true and correct would not have, individually or in the
aggregate, a Material Adverse Effect.
(b) PERFORMANCE OF OBLIGATIONS OF NSC. NSC shall have
performed in all material respects all of its obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
(c) WASTE MANAGEMENT NON-COMPETITION AGREEMENT. Waste
Management and NSC shall have executed a non-competition agreement for a
three-year term, in substantially the form of EXHIBIT A attached hereto.
(d) ASSET PURCHASE AGREEMENT. Waste Management and NSC, or
their respective affiliates, shall have executed an asset purchase agreement
relating to the sale of all or substantially all of the assets of ODC, in
substantially the form of EXHIBIT B attached hereto.
(e) RUST NOTE. The promissory note in the principal amount of
$4,520,000 made by NSC in favor of Rust International Inc. will be canceled and
a subordinated promissory note in the principal amount of $2,400,000, bearing
interest at 12 1/2 % per annum, in substantially the form of EXHIBIT C attached
hereto will be issued to Waste Management or its designee.
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(f) REPURCHASE OF SHARES. NSC shall have repurchased from
Waste Management 996,420 shares of Common Stock in exchange for a subordinated
promissory note in the principal amount of $1,115,990, bearing interest at 11%
per annum, in the form attached hereto as Exhibit D.
Section 6.3 CONDITIONS TO OBLIGATIONS OF NSC. The obligation
of NSC to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Holdings set forth herein shall be true and correct both when made
and at and as of the Closing Date, as if made at and as of such time (except to
the extent expressly made as of an earlier date, in which case as of such date),
except where the failure of such representations and warranties to be so true
and correct would not have, individually or in the aggregate, a Material Adverse
Effect.
(b) PERFORMANCE OF OBLIGATIONS OF HOLDINGS. Holdings shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date.
Section 6.4 FRUSTRATION OF CLOSING CONDITIONS. Neither
Holdings nor NSC may rely on the failure of any condition set forth in Sections
6.1, 6.2 or 6.3, as the case may be, to be satisfied if such failure was caused
by such party's failure to use reasonable best efforts to consummate the Merger
and the other transactions contemplated by this Agreement, as required by and
subject to Section 5.3.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after the Stockholder
Approval.
(a) by mutual written consent of Holdings and NSC.
(b) by either Holdings or NSC:
(i) if the Merger shall not have been consummated by June 30,
1999; PROVIDED, HOWEVER, that the right to terminate this Agreement
pursuant to this Section 7.1(b)(i) shall not be available to any party
whose failure to perform any of its obligations under this Agreement
results in the failure of the Merger to be consummated by such time;
(ii) if the Stockholder Approval shall not have been obtained
at the Stockholders Meeting duly convened therefor or at any
adjournment or postponement thereof, or
(iii) if any Restraint having any of the effects set forth in
Section 6.1(c) shall be in effect and shall have become final and
nonappealable; PROVIDED, that the party seeking to terminate this
Agreement pursuant to this Section 7.1(b)(iii) shall have used its
reasonable best efforts to prevent the entry of and to remove such
Restraint;
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(c) by Holdings, if NSC shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform would give rise to a material adverse change relating to NSC
and (A) is not cured within 30 days after written notice thereof or (B) is
incapable of being cured by NSC;
(d) by NSC, if Holdings shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, and such breach or
failure to perform (A) is not cured within 30 days after written notice thereof
or (B) is incapable of being cured by Holdings (it being understood that
Holdings' inability to finance the transactions contemplated hereby shall not be
curable); or
(e) by NSC in accordance with Section 4.2(b); PROVIDED that,
in order for the termination of this Agreement pursuant to this Section 7.1(e)
to be deemed effective, NSC shall have complied with all provisions of Section
4.2, including the notice provisions therein, and the applicable requirements,
including the payment of the Termination Fee, of Section 5.5.
Section 7.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement by either NSC or Holdings as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Holdings, NSC or Waste Management, other than the
provisions of Section 3.1(m), Section 3.3(e), the last sentence of Section 5.2,
Section 5.5, Section 5.6, this Section 7.2 and Article 8, which provisions
survive such termination.
Section 7.3 AMENDMENT. This Agreement may be amended by the
parties at any time before or after the Stockholder Approval; PROVIDED, HOWEVER,
that after such approval, there shall not be made any amendment that by law
requires further approval by the stockholders of NSC without further approval of
such stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
Section 7.4 EXTENSION; WAIVER. At any time prior to the
Effective Time, a party may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 7.3, waive compliance by the other party with any of
the agreements or conditions contained in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
Section 7.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER. A termination of this Agreement pursuant to Section 7.1 shall, in order
to be effective, require, in the case of Holdings or NSC, action by its Board of
Directors or, with respect to any amendment to this Agreement, the duly
authorized committee of its Board of Directors to the extent permitted by law.
The approval of the Board of Directors of Waste Management shall not be required
for any such action referred to in this Section 7.5.
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ARTICLE 8
GENERAL PROVISIONS
Section 8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.
Section 8.2 NOTICES. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
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(a) if to NSC, to: NSC Corporation
00 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with copies to: Xxxxxx, Millimet & Branch P.A.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx,
Xx., Esq.
(b) if to Holdings or Merger Subsidiary, to:
NSC Holdings, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X'Xxxxxxxx
with a copy to: Xxxxxx & Xxxxxx L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
(c) if to Waste Management, to:
Waste Management, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx,
Esq.
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with a copy to: Seyfarth, Shaw, Xxxxxxxxxxx & Xxxxxxxxx
00 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Section 8.3 INTERPRETATION. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. For purposes of this
Agreement, (i) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity, (including its permitted successors and assigns),
(ii) "knowledge" of any person which is not an individual means the knowledge of
such person's executive officers, and (iii) an "affiliate" of any person means
another person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such first person,
where "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a person, whether
through the ownership of voting securities, by contract or otherwise.
Section 8.4 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 8.5 ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARIES.
This Agreement (including the documents and instruments referred to herein), and
the Confidentiality Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter of this Agreement and (b) except for
the provisions of Article 2 and Section 5.4, are not intended to confer upon any
person other than the parties any rights or remedies.
Section 8.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
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REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES
OF CONFLICT OF LAWS THEREOF.
Section 8.7 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by either of the parties
hereto without the prior written consent of the other party. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding two
sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
Section 8.8 CONSENT TO JURISDICTION. Each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any federal
court located in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
and (c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or a Delaware state court.
Section 8.9 HEADINGS. 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.
Section 8.10 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
NSC CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
WASTE MANAGEMENT, INC.
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President and Secretary
NSC HOLDINGS, INC.
By: /s/ XXXXXX X'XXXXXXXX
------------------------------------------
Name: Xxxxxx X'Xxxxxxxx
Title: Chairman
NSC ACQUISITION, INC.
By: /s/ XXXXXX X'XXXXXXXX
------------------------------------------
Name: Xxxxxx X'Xxxxxxxx
Title: Chairman
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EXHIBIT A
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement"), dated as of
, 1999, is by and between NSC Corporation, a Delaware corporation
(the "Company"), and Waste Management, Inc., a Delaware
corporation ("Waste Management").
W I T N E S S E T H:
WHEREAS, NSC Holdings, Inc. ("Holdings"), NSC Acquisition,
Inc. ("Merger Subsidiary"), Waste Management and the Company are parties to that
certain Agreement and Plan of Merger, dated as of February 12, 1999 (the "Merger
Agreement"), which provides, among other things, upon the terms and subject to
the conditions thereof, that Merger Subsidiary will be merged with and into the
Company (the "Merger");
WHEREAS, Waste Management owns, through its affiliates,
approximately 54% of the outstanding shares of common stock, par value $.01 per
share, of the Company; and
WHEREAS, in order to induce Holdings to enter into the Merger
Agreement, and as a condition to the consummation of the Merger, Waste
Management has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Waste Management and the Company hereby agree as follows.
1. NON-COMPETITION.
a. CONDUCT. From and after the date of this Agreement and
ending on the third anniversary thereof, Waste Management shall not:
(i) enter into or engage in any business
that currently competes with the Business (as defined below)
within the Restricted Territory (as defined below);
(ii) solicit customers, active prospects,
business or patronage for any business wherever located that
competes with the Business within the Restricted Territory or
sell any services for any business, wherever located, that
competes with the Business within the Restricted Territory; or
(iii) solicit, divert, entice or otherwise
take away any customers, former customers, active prospects,
business, patronage or orders of the Business or attempt to
do.
b. BUSINESS. "Business" shall mean the asbestos abatement,
lead paint abatement, indoor air quality or demolition and dismantling
services business currently conducted by the Company, excluding waste
management services, which shall include,
36
without limitation, collection, transportation, transfer, processing,
treatment, recycling and disposal, and on-site technical services,
which shall include, without limitation, identification and packaging.
c. RESTRICTED TERRITORY. "Restricted Territory" means the
continental United States.
d. NON-COMPETITION - DIRECT OR INDIRECT. Waste Management will
be in violation of this Section 1 if it engages in any or all of the
activities set forth in this Section 1 directly on its own account, or
indirectly for any other Person and whether as partner, joint venturer,
agent and/or director of any Person or as an equity holder of any
Person in which Waste Management owns, directly or indirectly, any of
the outstanding equity interests; PROVIDED, HOWEVER, that (i) the
direct or indirect ownership by Waste Management of an interest
constituting no more than ten percent in the aggregate of the
outstanding voting capital stock in any Person which has a class of
voting securities listed for trading on a national securities exchange
or on an inter-dealer automated quotation system shall not be a
violation of this Section 1; (ii) the direct or indirect ownership by
Waste Management of any interest in any Person that derives less than
ten percent of its annual gross revenues from any operation that
competes with the Business shall not be a violation of this Section 1;
and (iii) Waste Management may engage, directly or indirectly, in the
business of asbestos abatement, lead paint abatement, indoor air
quality or demolition and dismantling services without restriction
hereunder to the extent such business is incidental to other businesses
or projects from time to time conducted by Waste Management. For
purposes of this Agreement, "Person" means an individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
2. REMEDIES. If Waste Management breaches, or fails to comply with, the
terms of Section 1 and such breach or failure causes serious and substantial
damage to the Company, the Company shall be entitled to an injunction
restraining Waste Management from any such breach or failure. All remedies
expressly provided for in this Section 2 are cumulative of any and all other
remedies now existing at law or in equity. The Company shall, in addition to the
remedies provided in this Agreement, be entitled to avail itself of all such
other remedies as may now or hereafter exist at law or in equity for
compensation, and for the specific enforcement of the covenants contained in
this Agreement. Resort to any remedy provided for hereunder or provided for by
law shall not preclude or bar the concurrent or subsequent employment of any
other appropriate remedy or remedies, or preclude the recovery by the Company or
monetary damages and compensation.
3. SEVERABILITY. In the event that any provision of this Agreement
shall finally be judicially determined to be invalid, ineffective or
unenforceable, such determination shall apply only in the jurisdiction in which
such adjudication is made and every other provision of this Agreement shall
remain in full force and effect. The invalid, ineffective or unenforceable
provision shall, without further action by the parties, be automatically amended
to effect the original purpose and intent of the invalid, ineffective or
unenforceable provision; PROVIDED, HOWEVER, that such amendment shall apply only
with respect to the operation of such provision in the particular jurisdiction
in which such adjudication is made.
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37
4. AMENDMENT; ASSIGNMENT. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto. No party may assign any of its rights
or obligations under this Agreement without the prior written consent of the
other party.
5. EXPENSES. Each party shall bear its own expenses and costs in connection
with this Agreement and the transactions contemplated hereby.
6. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and its successors and permitted
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
7. NOTICES. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by facsimile or by
registered or certified mail (postage prepaid, return receipt requested), to the
other party as follows:
(i) If to Waste Management, to: Waste Management, Inc.
0000 Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
with a copy to: Seyfarth, Shaw, Xxxxxxxxxxx & Xxxxxxxxx
00 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(ii) If to the Company, to: NSC Corporation
00 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with a copy to: Xxxxxx & Xxxxxx L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
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8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of Delaware, without regard to the
principles of conflicts of law thereof.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
10. DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
11. COUNTERPARTS. 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its representatives thereunto duly
authorized, all as of the day and year first above written.
WASTE MANAGEMENT, INC.
By:
--------------------------------------
Name:
Title:
NSC CORPORATION
By:
--------------------------------------
Name:
Title:
5
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EXHIBIT B
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated __________ __, 1999 (this
"Agreement"), is by and between Xxxxxx Demolishing Company Inc., a Texas
corporation ("ODC"), NSC Corporation, a Delaware corporation ("NSC") and Xxxxxx
Demolishing Management, Inc., a Delaware corporation and wholly owned subsidiary
of NSC ("ODM").
.
W I T N E S S E T H:
WHEREAS, Waste Management, Inc. ("Waste Management") owns,
through its affiliates, all of the outstanding capital stock of ODC;
WHEREAS, NSC, Waste Management, NSC Holdings, Inc.
("Holdings"), and NSC Acquisition, Inc. ("Merger Subsidiary") have entered into
an Agreement and Plan of Merger dated as of February 12, 1999 (the "Merger
Agreement"), which provides, among other things, upon the terms and subject to
the conditions thereof, that Merger Subsidiary will be merged with and into NSC
(the "Merger");
WHEREAS, in order to induce Holdings to enter into the Merger
Agreement, and as a condition to the consummation of the Merger, Waste
Management has agreed to cause ODC to enter into this Agreement; and
WHEREAS, ODC desires, and Waste Management desires to cause
ODC, to sell to ODM, and ODM desires, and NSC desires to cause ODM, to purchase
from ODC, all of ODC's right, title and interest in and to the Assets (as
hereinafter defined).
NOW, THEREFORE, in consideration of the mutual promises and
representations, warranties, covenants and agreements hereinafter set forth and
other good and valuable consideration, ODC, ODM and NSC hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 ASSETS TO BE TRANSFERRED. Simultaneously with the
execution and delivery hereof, ODM shall purchase from ODC, and ODC shall sell,
transfer, assign, convey and deliver to ODM all right, title and interest of ODC
in and to all of the assets and properties owned by ODC associated with the
Business (as defined in the Operating Agreement as hereinafter defined),
including, without limitation, (a) the assets identified on SCHEDULE I attached
hereto, (b) all of ODC's goodwill, if any, and (c) all of ODC's right, title and
interest in and to the name "Xxxxxx Demolishing" and any variations thereof
(collectively, the "Assets").
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1.2 PURCHASE PRICE. In consideration for the Assets,
simultaneously with the execution and delivery hereof, NSC shall deliver to ODC,
or its designee, a Subordinated Promissory Note, in substantially the form of
EXHIBIT A attached hereto, in the amount of $2,400,000, payable to ODC or its
designee (the "Note"). The purchase price (and all other capitalizable costs)
shall be allocated $230,400 to the Assets and $2,169,600 to the Note for all
purposes (including financial accounting and tax purposes).
ARTICLE 2
DELIVERIES
2.1 DELIVERIES BY ODC. Simultaneously with the execution and
delivery hereof, ODC shall deliver to ODM the following items:
(a) an executed copy of the Xxxx of Sale,
substantially in the form of EXHIBIT B attached hereto;
(b) certificates of title for all motor vehicles, if
any, included in the Assets;
(c) evidence satisfactory to ODM and NSC establishing
the cancellation of, and the discharge of any indebtedness under, that
certain working capital loan from Rust International Inc., an affiliate
of ODC and Waste Management, in the original principal amount of
$4,520,000;
(d) such documents and instruments satisfactory to
ODM and NSC establishing the termination of that certain Business
Operating Agreement, dated April 20, 1995 (the "Operating Agreement")
among Rust Engineering & Construction Inc., ODC, ODM and NSC, which
shall provide that Sections 4.4 and 9.2 of the Operating Agreement are
specifically rendered void (such that all new accounts, new contracts,
subcontracts and purchase agreements referenced in the Operating
Agreement shall remain in the sole ownership and for the sole benefit
of ODM); PROVIDED, HOWEVER, that the indemnification provisions set
forth in Section 10 of the Operating Agreement shall survive such
termination in accordance with their terms; and
(e) such other documents and instruments as NSC shall
reasonably request to consummate the transactions contemplated hereby.
2.2 DELIVERIES BY NSC. Simultaneously with the execution
hereof, NSC shall deliver to ODC the following items:
(a) an executed copy of the Note as set forth in
Section 1.2;
(b) such documents and instruments satisfactory to
ODC establishing the termination of the Operating Agreement as set
forth above; and
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(c) such other documents and instruments as ODC shall
reasonably request to consummate the transactions contemplated hereby.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ODC
3.1 EXISTENCE AND GOOD STANDING. ODC is a corporation duly
incorporated, validly existing and in good standing under the laws of Texas.
3.2 DUE AUTHORIZATION AND EXECUTION; NO CONFLICT. ODC has all
of the requisite power and authority to enter into and perform this Agreement.
The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary action by ODC. This Agreement has been duly and validly executed
and delivered by ODC and constitutes the valid and legally binding obligation of
ODC enforceable against ODC in accordance with its terms. The execution,
delivery and performance of this Agreement does not conflict with or violate the
Certificate of Incorporation or By-Laws of ODC, or any provision of any
applicable law or result in the creation or imposition of any lien in favor of
any third party with respect to any of the Assets.
3.3 CONSENTS. The execution, delivery and performance of this
Agreement by ODC, and the consummation of the transactions contemplated hereby
does not (i) result in a breach of, conflict with, violate or constitute a
default (whether upon the giving of notice or the passage of time or both)
under, any term or provision of any agreement or instrument to which ODC is a
party, or by which ODC or any of its properties or assets is bound, or (ii)
require the consent or approval of, or notice to, or filing with, any other
person or entity, including, without limitation, any governmental authority.
3.4 TITLE, ETC. Except for its interest in the name "Xxxxxx
Demolishing" as to which no representation or warranty is made, ODC has good and
marketable title to all of the Assets free and clear of any and all liens,
claims, charges, assessments, security interests and other encumbrances of any
kind whatsoever other than liens for current taxes, assessments, fees and other
charges by governmental authorities which are not due and payable as of the date
of this Agreement. The Assets listed on SCHEDULE I constitute all of the
operating assets owned by ODC.
3.5 BROKERS. No person has acted directly or indirectly as a
broker, finder or financial advisor for ODC in connection with the negotiations
relating to the transactions contemplated by this Agreement, and no person is
entitled to any fee or commission or like payment in respect thereof based in
any way on any agreement, arrangement or understanding made by or on behalf of
ODC.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ODM AND NSC
4.1 EXISTENCE AND GOOD STANDING. Each of ODM and NSC is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware.
4.2 DUE AUTHORIZATION AND EXECUTION; NO CONFLICT. Each of ODM
and NSC has all of the requisite power and authority to enter into and perform
this Agreement. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action by ODM and NSC. This Agreement has
been duly and validly executed and delivered by ODM and NSC and constitutes the
valid and legally binding obligation of ODM and NSC enforceable against ODM and
NSC in accordance with its terms. The execution, delivery and performance of
this Agreement does not conflict with or violate the Certificate of
Incorporation or By-Laws of ODM or NSC.
4.3 CONSENTS. The execution, delivery and performance of this
Agreement by ODM and NSC, and the consummation of the transactions contemplated
hereby does not (i) result in a breach of, conflict with, violate or constitute
a default (whether upon the giving of notice or the passage of time or both)
under, any term or provision of any agreement or instrument to which ODM or NSC
is a party, or by which ODM or NSC is bound, or (ii) require the consent or
approval of, or notice to, or filing with, any other person or entity,
including, without limitation, any governmental authority.
4.4 BROKERS. No person has acted directly or indirectly as a
broker, finder or financial advisor for ODM or NSC in connection with the
negotiations relating to the transactions contemplated by this Agreement, and no
person is entitled to any fee or commission or like payment in respect thereof
based in any way on any agreement, arrangement or understanding made by or on
behalf of ODM or NSC.
ARTICLE 5
INDEMNIFICATION
5.1 INDEMNIFICATION. ODM and NSC will jointly and severally
indemnify and hold harmless ODC, its affiliates (including Waste Management) and
all officers, directors, employees and agents of any of them (individually, an
"ODC Indemnitee") from and against any and all Damages arising from any and all
Claims in which ODC Indemnitee may be involved or threatened to be involved, as
a party or otherwise, arising out of, in connection with, or otherwise relating
to, the operation of the business following the termination of the Operating
Agreement, regardless of whether the ODC Indemnitee continues to be an
affiliate, or an officer, director, employee or agent of ODC or its affiliates
at the time any such Claims are made or Damages incurred; provided that the
foregoing indemnity shall not apply to any Claims or Damages incurred due to the
negligence or willful misconduct of any ODC Indemnitee. The terms "Claims" and
"Damages" shall have the same meaning herein as in the Operating Agreement
notwithstanding its termination.
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5.2 CONDITIONS OF INDEMNIFICATION. The respective obligations
and liabilities of an indemnifying party (the "Indemnifying Party") to the other
(the "Indemnified Party") under Section 5.1 hereof with respect to Claims
resulting from the assertion of liability by third parties shall be subject to
the following terms and conditions:
(a) Within 20 days (or such earlier time as might be
required to avoid prejudicing the Indemnifying Party's position) after
receipt of notice of commencement of any action evidenced by service of
process or other legal pleading, or with reasonable promptness after
the assertion in writing of any claim by a third party, the Indemnified
Party shall give the Indemnifying Party written notice thereof together
with a copy of such Claim, process or other legal pleading, and the
Indemnifying Party shall undertake the defense thereof by
representatives of its own choosing and at its own expense; PROVIDED,
HOWEVER, that the Indemnified Party may participate in the defense with
counsel of its own choice and at its own expense. The failure or
delinquency in providing notice pursuant to this subsection (a) shall
not relieve the Indemnifying Party from any liability except and only
to the extent that the Indemnifying Party is prejudiced thereby.
(b) In the event that the Indemnifying Party fails to
defend against such Claim, the Indemnified Party will (upon further
notice to the Indemnifying Party) have the right to undertake the
defense, compromise or settlement of such claim on behalf of and for
the account and risk of the Indemnifying Party and at the Indemnifying
Party's expense, subject to the right of the Indemnifying Party to
assume the defense of such Claim at any time prior to settlement,
compromise or final determination thereof upon reimbursement to the
Indemnified Party of all costs and expenses incurred by the Indemnified
Party in conjunction with such defense to that date.
(c) Anything in this Section 5.2 to the contrary
notwithstanding, the Indemnifying Party shall not settle any Claim
without the consent of the Indemnified Party unless such settlement
involves only the payment of money and the claimant provides to the
Indemnified Party a release from all liability in respect of such
Claim. If the settlement of the Claim involves more than the payment of
money, the Indemnifying Party shall not settle the Claim without the
prior consent of the Indemnified Party.
(d) The Indemnified Party and the Indemnifying Party
will each cooperate with all reasonable requests of the other.
ARTICLE 6
MISCELLANEOUS
6.1 FURTHER ASSURANCES. ODC at the request of ODM or NSC, at
or after the date hereof, shall, without further consideration, promptly execute
and deliver, or cause to be executed and delivered, to ODM or NSC such deeds,
assignments, bills of sale, consents and other instruments in addition to those
required by this Agreement, in form and substance satisfactory to ODM and NSC,
and take all such other actions, as ODM or NSC may reasonably deem necessary or
desirable to implement any provision of this Agreement and to more effectively
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transfer to and vest in ODM and to put ODM in possession of, all of the Assets,
free and clear of all liens.
6.2 AMENDMENT; ASSIGNMENT. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written
agreement executed by the parties hereto. No party may assign any of its rights
or obligations under this Agreement without the prior written consent of the
other party.
6.3 EXPENSES. Each party shall bear its own expenses and costs in
connection with this Agreement and the transactions contemplated hereby.
6.4 PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and its successors and permitted
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
6.5 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested),
to the other party as follows:
(a) If to ODC, to: Waste Management, Inc.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
with a copy to: Seyfarth, Shaw, Xxxxxxxxxxx & Xxxxxxxxx
00 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
(b) If to ODM or NSC, to: NSC Corporation
00 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with a copy to: Xxxxxx & Xxxxxx L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
6
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6.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, without regard to
the principles of conflicts of law thereof.
6.7 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity and enforceability of the other provisions hereof. If
any provision of this Agreement, or the application thereof to any person or
entity or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid and
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, or shall such invalidity
or unenforceability affect the validity or enforceability of such provision, or
the application thereof, in any other jurisdiction.
6.8 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
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47
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
XXXXXX DEMOLISHING COMPANY INC.
By:
---------------------------------
Name:
Title:
XXXXXX DEMOLISHING MANAGEMENT, INC.
By:
---------------------------------
Name:
Title:
NSC CORPORATION
By:
---------------------------------
Name:
Title:
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EXHIBIT C
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS SUCH
SALE, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION SHALL HAVE BEEN REGISTERED
UNDER SAID ACT, OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AND THEN
ONLY IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
ALL INDEBTEDNESS EVIDENCED HEREBY AND REFERENCED HEREIN IS SUBORDINATED IN RIGHT
OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL INDEBTEDNESS OWED TO FINOVA
CAPITAL CORPORATION AS SET FORTH IN THAT CERTAIN SUBORDINATION AND STANDSTILL
AGREEMENT ON OR ABOUT THE DATE HEREOF AMONG FINOVA CAPITAL CORPORATION, THE
PAYEE OF THIS NOTE AND THE OTHER PARTIES NAMED THEREIN (THE "FINOVA
SUBORDINATION AGREEMENT")
SUBORDINATED PROMISSORY NOTE
$2,400,000.00 Methuen, Massachusetts
__________ __, 1999
FOR VALUE RECEIVED, the undersigned, NSC Corporation, a
Delaware corporation ("Borrower"), hereby promises to pay to the order of Waste
Management, Inc., a Delaware corporation ("Payee"), in lawful money of the
United States of America, in immediately available funds at the principal
business address of Payee, 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, or at
such other location as the holder hereof may designate from time to time in
writing, the principal amount of TWO MILLION FOUR HUNDRED THOUSAND DOLLARS AND
NO CENTS ($2,400,000.00), together with interest from the date hereof, at a rate
of 12 1/2% per annum (computed on the basis of a 365-day year and based upon the
number of days actually elapsed), payable in arrears on the fifteenth day of
each August, November, February and May commencing August 15, 1999. The
principal amount hereof and any and all accrued but unpaid interest thereon
shall be due and payable on December 31, 2005.
If any amount of principal or interest payable hereunder is
not paid when due (whether at stated maturity, by acceleration or otherwise),
the then entire outstanding principal amount hereof, together with all overdue
interest, shall automatically and immediately accrue interest until such default
is cured, payable on demand, at a rate per annum equal to the lesser of (i) 5%
per annum above the interest rate otherwise in effect, or (ii) the maximum
interest rate permitted under applicable law.
Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day (as hereinafter defined), such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest. As used herein,
the term "Business Day" means any day of the year on which banks are not
required or authorized to close in New York, New York.
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This Note is executed and delivered pursuant to the Agreement
and Plan of Merger, dated as of February 12, 1999, by and among Borrower, Payee,
NSC Holdings, Inc. and NSC Acquisition, Inc..
Borrower shall be in default under this Note upon the
occurrence of any of the following events of default ("Events of Default"):
(a) default in the payment of the principal of or any
installment of interest on this Note when due, which default continues for a
period of ten (10) days after notice of such default is delivered by Payee to
Borrower;
(b) any "event of default," "default" or similar event or
occurrence that results in the acceleration of indebtedness of Borrower to any
other person under any note, indenture, agreement or undertaking; or
(c) the dissolution, voluntary or involuntary bankruptcy,
termination of existence, insolvency, business failure or appointment of a
receiver of any part of the property of Borrower or any guarantor or surety of
any of the obligations of Borrower.
Upon the occurrence of any Event of Default, and at any time
thereafter as long as any such Event of Default shall be continuing, Payee may
declare all liabilities and obligations of Borrower to Payee immediately due and
payable and the same shall thereupon become immediately due and payable without
any further action on the part of Payee, and upon the occurrence of any Event of
Default mentioned in clause (c) hereof, all liabilities and obligations of
Borrower to Payee shall become due and payable without any action upon the part
of Payee.
Borrower shall have the right at any time and from time to
time to prepay the unpaid principal amount hereof, in whole or in part, without
premium or penalty. In the case of any such prepayment, Borrower shall also pay
in full all accrued but unpaid interest in respect of the entire outstanding
principal amount hereof and all overdue interest, if any.
The indebtedness evidenced by this Note is subordinated to all
Senior Indebtedness of Borrower as set forth in the FINOVA Subordination
Agreement. Until all liabilities and obligations of Borrower to Payee are paid,
such Senior Indebtedness, together with all other indebtedness of Borrower for
money borrowed to which the indebtedness evidenced by this Note may be
subordinated, shall not exceed $22,000,000 in the aggregate, as provided in that
certain Memorandum of Understanding, dated February 12, 1999, between Payee and
Borrower.
Borrower hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
Borrower shall pay Payee, on demand, any reasonable
out-of-pocket expenses (including reasonable legal fees) arising out of or in
connection with any action or proceeding (including any action or proceeding
arising in or related to any insolvency, bankruptcy or reorganization involving
or affecting Borrower) taken to protect, enforce, determine or assert any right
or remedy under this Note.
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50
This Note shall bind Borrower and its successors and assigns,
and the benefits hereof shall inure to the benefit of Payee and its successors
and assigns. All references herein to "Borrower" and "Payee" shall be deemed to
apply to Borrower and Payee, respectively, and to their respective successors
and assigns.
This Note and any other documents delivered in connection
herewith and the rights and obligations of the parties hereto and thereto shall
for all purposes be governed by and construed and enforced in accordance with
the substantive law of Delaware without giving effect to its conflict of laws
principles.
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed by its officers thereunto duly authorized, as of the date first above
written.
NSC CORPORATION
By:
-----------------------------------
Name:
Title:
3
51
EXHIBIT D
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS SUCH
SALE, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION SHALL HAVE BEEN REGISTERED
UNDER SAID ACT, OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AND THEN
ONLY IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
ALL INDEBTEDNESS EVIDENCED HEREBY AND REFERENCED HEREIN IS SUBORDINATED IN RIGHT
OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF ALL INDEBTEDNESS OWED TO FINOVA
CAPITAL CORPORATION AS SET FORTH IN THAT CERTAIN SUBORDINATION AND STANDSTILL
AGREEMENT ON OR ABOUT THE DATE HEREOF AMONG FINOVA CAPITAL CORPORATION, THE
PAYEE OF THIS NOTE AND THE OTHER PARTIES NAMED THEREIN (THE "FINOVA
SUBORDINATION AGREEMENT")
SUBORDINATED PROMISSORY NOTE
$1,115,990.00 Methuen, Massachusetts
___________ __, 1999
FOR VALUE RECEIVED, the undersigned, NSC Corporation, a
Delaware corporation ("Borrower"), hereby promises to pay to the order of Waste
Management, Inc., a Delaware corporation ("Payee"), in lawful money of the
United States of America, in immediately available funds at the principal
business address of Payee, 0000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, or at
such other location as the holder hereof may designate from time to time in
writing, the principal amount of ONE MILLION ONE HUNDRED FIFTEEN THOUSAND NINE
HUNDRED NINETY DOLLARS AND NO CENTS ($1,115,990.00 ), together with interest
from the date hereof, at a rate of 11% per annum (computed on the basis of a
365-day year and based upon the number of days actually elapsed), payable in
arrears on the fifteenth day of each August, November, February and May
commencing August 15, 1999. The principal amount hereof and any and all accrued
but unpaid interest thereon shall be due and payable on December 31, 2003.
If any amount of principal or interest payable hereunder is
not paid when due (whether at stated maturity, by acceleration or otherwise),
the then entire outstanding principal amount hereof, together with all overdue
interest, shall automatically and immediately accrue interest until such default
is cured, payable on demand, at a rate per annum equal to the lesser of (i) 5%
per annum above the interest rate otherwise in effect, or (ii) the maximum
interest rate permitted under applicable law.
Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day (as hereinafter defined), such payment shall be
made on the next succeeding
52
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest. As used herein, the term "Business Day"
means any day of the year on which banks are not required or authorized to close
in New York, New York.
This Note is executed and delivered pursuant to the Agreement
and Plan of Merger, dated as of February 12, 1999, by and among Borrower, Payee,
NSC Holdings, Inc. and NSC Acquisition, Inc..
Borrower shall be in default under this Note upon the
occurrence of any of the following events of default ("Events of Default"):
(a) default in the payment of the principal of or any
installment of interest on this Note when due, which default continues for a
period of ten (10) days after notice of such default is delivered by Payee to
Borrower;
(b) any "event of default," "default" or similar event or
occurrence that results in the acceleration of indebtedness of Borrower to any
other person under any note, indenture, agreement or undertaking; or
(c) the dissolution, voluntary or involuntary bankruptcy,
termination of existence, insolvency, business failure or appointment of a
receiver of any part of the property of Borrower or any guarantor or surety of
any of the obligations of Borrower.
Upon the occurrence of any Event of Default, and at any time
thereafter as long as any such Event of Default shall be continuing, Payee may
declare all liabilities and obligations of Borrower to Payee immediately due and
payable and the same shall thereupon become immediately due and payable without
any further action on the part of Payee, and upon the occurrence of any Event of
Default mentioned in clause (c) hereof, all liabilities and obligations of
Borrower to Payee shall become due and payable without any action upon the part
of Payee.
Borrower shall have the right at any time and from time to
time to prepay the unpaid principal amount hereof, in whole or in part, without
premium or penalty. In the case of any such prepayment, Borrower shall also pay
in full all accrued but unpaid interest in respect of the entire outstanding
principal amount hereof and all overdue interest, if any.
The indebtedness evidenced by this Note is subordinated to all
Senior Indebtedness of Borrower as set forth in the FINOVA Subordination
Agreement. Until all liabilities and obligations of Borrower to Payee are paid,
such Senior Indebtedness, together with all other indebtedness of Borrower for
money borrowed to which the indebtedness evidenced by this Note may be
subordinated, shall not exceed $22,000,000 in the aggregate, as provided in that
certain Memorandum of Understanding, dated February 12, 1999, between Payee and
Borrower.
Borrower hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.
Borrower shall pay Payee, on demand, any reasonable
out-of-pocket expenses (including reasonable legal fees) arising out of or in
connection with any action or proceeding (including any action or proceeding
arising in or related to any insolvency, bankruptcy or
2
53
reorganization involving or affecting Borrower) taken to protect, enforce,
determine or assert any right or remedy under this Note.
This Note shall bind Borrower and its successors and assigns,
and the benefits hereof shall inure to the benefit of Payee and its successors
and assigns. All references herein to "Borrower" and "Payee" shall be deemed to
apply to Borrower and Payee, respectively, and to their respective successors
and assigns.
This Note and any other documents delivered in connection
herewith and the rights and obligations of the parties hereto and thereto shall
for all purposes be governed by and construed and enforced in accordance with
the substantive law of Delaware without giving effect to its conflict of laws
principles.
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed by its officers thereunto duly authorized, as of the date first above
written.
NSC CORPORATION
By:
---------------------------------
Name:
Title:
3
