SITE MAINTENANCE AND INDEMNIFICATION AGREEMENT
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THIS SITE MAINTENANCE AND INDEMNIFICATION AGREEMENT is entered into this
24th day of June, 1997 by and among Recycling Industries of South Carolina,
Inc., a Colorado corporation ("RISCI"), Recycling Industries, Inc., a Colorado
corporation (the "Parent"), Addlestone International Corporation, a Delaware
corporation ("AIC"), and Xxxxxx Addlestone ("Addlestone") with reference to
the following facts:
A. Parent, RISCI, AIC and Addlestone have entered into an Asset
Purchase Agreement dated April 7, 1997 as amended by the First Amendment to the
Asset Purchase Agreement dated June 24, 1997 (collectively the "Asset
Agreement") whereby RISCI will acquire substantially all of the assets and
business of AIC.
B. Pursuant to Section 7.1(b) of the Asset Agreement, the Parent and
RISCI have the right to terminate the Asset Agreement if the Environmental
Studies, as defined therein, disclose contamination of the real property or
business to be purchased from AIC.
C. The Environmental Studies delivered by AIC reflect the presence of
polychlorinated biphenyl's ("PCB's") and lead in certain areas of the Owned
Facilities (the "Environmental Condition" which term includes the presence of
said materials anywhere on the Owned Facilities and not limited to the specific
points of discovery as noted in the Environmental Studies).
D. Parent and RISCI have agreed to (i) accept the Owned facilities
with the Environmental Condition; (ii) assume all responsibility to cause the
removal, transportation and proper disposal of the PCB's and lead and/or
reduction in concentration thereof to acceptable levels; (iii) comply with
all applicable Environmental laws regarding the Environmental Condition;
(iv) file all requisite reports, and manifests, if any, regarding the
Environmental Condition; (iv) procure an insurance policy covering additional
environmental risks for the benefit of the Parties (a copy of the binder for
which and form of policy is attached to this agreement as Exhibit A); and
(vi) keep Addlestone and AIC informed of the progress of the preceding and
upon completion furnish proof thereof, as provided below. The preceding
obligations are referred to collectively as the "Environmental Tasks."
Further, Parent and RISCI agree to indemnify and hold AIC and Addlestone
harmless from any liability associated with the Environmental Condition
and/or Environmental Tasks, which obligation is referred to as the
"Environmental Indemnity."
E. Addlestone and AIC have agreed to pay $300,000 in full
consideration for the Environmental Tasks and Environmental Indemnity.
G. The Parties intend that, as a result of this agreement, AIC
and Addlestone shall have no further liability or expense for the Environmental
Condition or Environmental Tasks other than the payment of $300,000 as provided
herein.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which hereby are acknowledged, the parties hereto agree as follows:
1. Incorporation of Recitals. The foregoing recital of facts is
incorporated into and made a part of this Agreement.
2. Status of Owned Facilities. Parent and RISCI have received and
reviewed the Environmental Studies and are entering into this Agreement after
having the opportunity to have the Environmental Condition and the Owned
facilities fully investigated to their satisfaction.
3. Maintenance Agreement.
(a) Upon execution of this Agreement, AIC shall pay $300,000 to
Parent and RISCI as full consideration for parent and RISCI's agreement to
perform the Environmental tasks and give the Environmental Indemnity.
(b) Parent and RISCI shall engage Xxxxxxxxxxx & Associates, or,
upon mutual agreement of the Parties, another environmental engineering and
consultant firm (the "Consultant") to effect the performance of the
Environmental Tasks. The Consultant shall be retained at the sole cost and
expense of Parent and RISCI until the full completion of the Environmental
Tasks has been achieved. The requirement that AIC and Addlestone must agree
upon an engineering and consultant firm other than Xxxxxxxxxxx & Associates
does not imply the existence of any duty or right of Addlestone or AIC to
direct the performance of the Environmental Tasks and neither Addlestone or AIC
will in any way be deemed an operator with respect to the performance of the
Environmental Tasks or operation of the Owned Assets subsequent to time of
Closing.
(c) Commencement of the Environmental Tasks shall begin as soon
a reasonably possible after the Closing. Upon commencement, the Environmental
Tasks shall be diligently and continuously pursued until full completion of all
Environmental Tasks. The Consultant shall furnish regular written reports, not
less than quarterly, on the progress of the Environmental Tasks, to Addlestone
and AIC, regardless of whether Parent and RISCI request such reports. Such
reports shall be of sufficient detail to enable Addlestone and AIC to be fully
advised of the progress of the Environmental Tasks and shall include (i) those
reports regularly furnished by the Consultant to its clients; and (ii) include
copies, when delivered, of all other reports given to any governmental
authority or to Parent and RISCI.
(d) The Environmental Tasks will be deemed completed only when
each and all of the following conditions has been fully satisfied: (i) the
presence of PCB's and lead at the Owned Facilities are within the levels
permitted by the applicable Environmental Laws; (ii) the issuance of a "no
further action letter" or other equivalent document(s) indicating that no
further activity, monitoring or reporting is required with respect to the
Environmental Condition and that no enforcement activity will be undertaken;
provided, however, such requirement will exists only if any reports of the
Environmental Condition have been or were required to be made to any
governmental authorities and, if the filing of such reports could trigger
action by any governmental authorities concerning the Environmental Conditions;
(iii) the Consultant issues a written report addressed to all of the Parties
that (a) the Environmental Tasks have been fully completed (excluding the
maintenance of the insurance as provided herein); and (b) there are no further
environmental concerns with respect to the Environmental Conditions. Once such
a report has been issued, Parent and RISCI shall have no other reporting
obligations to Addlestone and AIC concerning the Environmental Condition
4. Liability of Parent and RISCI. All obligations of Parent and RISCI
in this Agreement are joint and several. Parent and RISCI shall be solely
responsible for all costs associated with the Environmental Tasks and
completion thereof.
5. Indemnification. Parent and RISCI shall and do hereby indemnify,
defend, reimburse and hold harmless each of AIC and Addlestone from and against
any and all claims, demands, penalties, fines, liabilities, obligations,
losses, settlements, damages, costs and expenses pertaining to the Environmental
Conditions and/or Environmental Tasks whether relating to third parties,
governmental authorities or otherwise, and reasonable attorney's fees and costs
incurred by AIC and Addlestone in connection with the foregoing. The
indemnification being provided by the Parent and RISCI pursuant to this Section
5 is in no manner limited or affected in any way by the indemnification as
provided in Article 11 of the Asset Agreement.
6. Insurance. The Parent and RISCI shall procure an environmental
liability insurance policy on the form attached hereto as Exhibit A. In
addition to the terms stated in the attached Exhibit A, such policy shall
provide for (i) waiver of subrogation against Addlestone and AIC of available;
(ii) prepaid premium for the first year; and (iii) provision that the policy
will not be canceled sooner than 30 days after giving notice of intent to
cancel to AIC and Addlestone. If such policy is a "claims occurred" policy,
coverage shall be kept in force until completion of the Environmental Tasks as
provided in Section 3(d), above. If such insurance is a "claims made" policy,
coverage shall be kept in force for not less than one year after the completion
of he Environmental Tasks as defined in Section 3(d), above. Proof of coverage
payment of premiums, and a complete copy of the policy shall be furnished
within 30 days from the date hereof.
7. Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Asset Agreement, provided, however,
that the term "Environmental Laws" shall mean such laws as currently in effect
or as amended from time to time during the term of this agreement.
8. Legal Opinion. Upon execution of this agreement, Parent and RISCI
shall cause their legal counsel to deliver an opinion that the terms of this
agreement are binding and enforceable against them.
9. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given only if and when: (1)
personally delivered; or (2) three business days after mailing, postage
prepaid, by certified mail; or (3) when delivered (and receipted for) by an
overnight delivery service; or (4) when delivered by facsimile transmission for
which automatic confirmation has been received, addressed in each case as
follows:
If to RISCI or the Parent:
Xxxxxx X. Xxxxx, Chairman and CEO
Recycling Industries, Inc.
Recycling Industries South Carolina, Inc.
Xxxxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
telephone: (000) 000-0000
facsimile: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx, Esq.
Xxxx X. Xxxxxxx, Esq.
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxxxxx, LLC
Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
telephone: (000) 000-0000
facsimile: (000) 000-0000
If to AIC or Addlestone:
Xx. Xxxxxx Addlestone
Addlestone International Corporation
Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
telephone: (000) 000-0000
facsimile: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxxxx, Esq.
Xxxxxxxxx & Xxxxxxxxx, P.A.
Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
telephone: (000) 000-0000
facsimile: (000) 000-0000
A Party may change its address by notice to every other Party.
10. Other Provisions
(a) Attorney's Fees. If a dispute arises with respect to this
Agreement, the party prevailing in such dispute shall be entitled to recover
all expenses, including without limitation, reasonable attorney's fees and
expenses incurred in ascertaining such party's rights, in preparing to enforce
or in enforcing such party's rights under this Agreement, whether or not it was
necessary for such party to institute suit.
(b) Entire Agreement. This Agreement, including all Exhibits
hereto, if any, constitutes the entire agreement of the parties with respect to
the subject matter hereof and may not be modified, amended or terminated except
by a written instrument specifically referring to this Agreement signed by each
of the parties hereto or as otherwise provided in this Agreement.
(c) Construction. In the event of an ambiguity or a question
of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
The word "including" means including without limitation. Where appropriate to
avoid any ambiguity and to encompass the broadest meaning, the word "and" shall
mean "and/or," and the word "or" shall mean "and/or." The parties intend that
each representation, warranty and covenant contained herein shall have
independent significance. If any party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there
exists another representation, warranty or covenant relating to the same
subject matter, regardless of the relative levels of specificity, which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant.
(d) 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.
(e) Governing Law. The interpretation and construction of this
Agreement, and all matters relating hereto, shall be governed by the internal
laws of the State of South Carolina, without regard to principles of conflicts
or choice of law.
(f) Submission to Jurisdiction; Waivers. The parties each
hereby irrevocably and unconditionally: (1) agree that any action or proceeding
related to this Agreement shall be brought in, and hereby submits itself and
its property to the jurisdiction of, the courts of the State of South Carolina
located in Charleston County, South Carolina, the courts of the United States
of America for the District of South Carolina, Charleston Division, and the
appellate courts from any thereof; (2) consent to the venue of any such action
or proceeding in any of said courts and waives any objection that it may have,
now or hereafter, that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same; and (3) agree that service of
process in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the party against whom the action or proceeding is
brought at its address set forth in Section 6, provided the same is permitted
by the appropriate rules of the governing court.
(g) Parties in Interest. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto, other than by operation
of law, or with the consent of the other parties. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns.
(h) Counterparts. This Agreement may be executed in two or
more counterparts, all of which taken together shall constitute one instrument.
(i) Severability. In case any provision in this Agreement shall
be held invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof will not in any way be
affected or impaired thereby.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day and year first above written.
"RISCI"
RECYCLING INDUSTRIES OF SOUTH CAROLINA, INC.
June 24, 1997 By:
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Xxxxxx X. Xxxxx, Chairman and CEO
THE "PARENT"
RECYCLING INDUSTRIES, INC.
June 24, 1997 By:
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Xxxxxx X. Xxxxx, Chairman and CEO
"AIC"
ADDLESTONE INTERNATIONAL CORPORATION
June 24, 1997 By:
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Xxxxxx Addlestone, President
"ADDLESTONE"
June 24, 1997 By:
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Xxxxxx Addlestone
