AGREEMENT FOR
PURCHASE AND SALE OF ASSETS
AMONG
USL PARALLEL PRODUCTS OF CALIFORNIA,
A CALIFORNIA CORPORATION
PARALLEL PRODUCTS OF KENTUCKY, INC.
A KENTUCKY CORPORATION
PARALLEL PRODUCTS OF FLORIDA, INC.
A FLORIDA CORPORATION
PARALLEL PRODUCTS,
A CALIFORNIA LIMITED PARTNERSHIP
DWA OF BELVEDERE COMPANY
A CALIFORNIA CORPORATION
ESTATE OF XXXXX X. XXXXX
XXXXX X. XXXXX TRUST NO. 1
XXXXX XXXXX
XXXX XXXXXXX
AND
XXXXXXX XXXXXXX
TABLE OF CONTENTS
PAGE
1. SALE AND TRANSFER OF ASSETS..................................(1)
1.01 GENERAL...............................................(1)
(a) SCHEDULED PROPERTY.............................(1)
(b) CONTRACTUAL RIGHTS.............................(1)
(c) LICENSES AND PERMITS...........................(1)
(d) EQUIPMENT......................................(2)
(e) SHORT TERM ASSETS..............................(2)
(f) NAMES AND NUMBERS..............................(2)
(g) RECORDS........................................(2)
(h) REAL PROPERTY..................................(2)
(i) OTHER ASSETS...................................(2)
(j) EXCLUDED ASSETS................................(2)
1.02 PURCHASE PRICE........................................(3)
(a) CLOSING CASH PAYMENT...........................(3)
(b) CLOSING STOCK PAYMENT..........................(3)
(c) CONTINGENT CASH PAYMENT........................(3)
(d) CONTINGENT STOCK PAYMENT.......................(3)
(e) EBITDA CALCULATIONS............................(3)
(f) VALIDITY; OTHER MATTERS........................(4)
(g) RESALE OF PARENT STOCK.........................(4)
(h) LEGENDS........................................(5)
1.03 ASSUMPTION OF LIABILITIES.............................(5)
1.04 ALLOCATION OF ASSETS AND PURCHASE PRICE...............(6)
1.05 EXCISE AND PROPERTY TAXES.............................(6)
1.06 THE CLOSING...........................................(6)
1.07 TITLE ASSURANCES......................................(6)
(a) OWNERS TITLE POLICY............................(6)
(b) PERMITTED ENCUMBRANCES.........................(7)
(c) SURVEY.........................................(7)
1.08 DELIVERIES AT THE CLOSING.............................(7)
1.09 EFFECTIVE DATE OF TRANSACTION.........................(7)
2. POST CLOSING ADJUSTMENT......................................(7)
2.01 CALCULATION OF NET WORKING CAPITAL AT CLOSING DATE. .(7)
2.02 PAYMENT OF ADJUSTMENT AMOUNTS.........................(8)
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION....(8)
3.01 REPRESENTATIONS AND WARRANTIES OF THE SELLERS.........(8)
(a) AUTHORIZATION OF TRANSACTION...................(8)
(b) NONCONTRAVENTION...............................(8)
(c) BROKERS' FEES..................................(8)
3.02 REPRESENTATIONS AND WARRANTIES OF THE BUYERS..........(9)
(a) ORGANIZATION OF THE BUYERS.....................(9)
(b) AUTHORIZATION OF TRANSACTION...................(9)
(c) NONCONTRAVENTION...............................(9)
(d) BROKERS' FEES..................................(9)
(e) SECURITIES DOCUMENTS...........................(9)
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS..........(10)
(g) ABSENCE OF LITIGATION.........................(10)
(h) DISCLOSURE....................................(10)
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY.......(10)
4.01 ORGANIZATION, QUALIFICATION, AND POWER...............(10)
4.02 CAPITALIZATION.......................................(11)
4.03 NONCONTRAVENTION.....................................(11)
4.04 BROKERS' FEES........................................(11)
4.05 TITLE TO ASSETS......................................(11)
4.06 CUSTOMERS AND SALES..................................(12)
4.07 NO SUBSIDIARIES OR EQUITY INVESTMENTS................(12)
4.08 FINANCIAL STATEMENTS.................................(12)
4.09 EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END.....(12)
4.10 UNDISCLOSED LIABILITIES..............................(14)
4.11 TAX MATTERS..........................................(14)
4.12 REAL PROPERTY........................................(15)
4.13 INTELLECTUAL PROPERTY................................(17)
4.14 PERSONAL PROPERTY....................................(17)
4.15 CONTRACTS............................................(17)
4.16 HAZARDOUS MATERIALS; DISPOSAL SITES..................(18)
4.17 PERMITS AND ENVIRONMENTAL MATTERS....................(19)
4.18 REPORTS, ETC.........................................(20)
4.19 APPLICABLE LAWS COMPLIANCE...........................(20)
4.20 ENVIRONMENT, HEALTH, AND SAFETY......................(21)
4.21 POWERS OF ATTORNEY...................................(22)
4.22 INSURANCE............................................(22)
4.23 LITIGATION...........................................(22)
4.24 EMPLOYMENT CONTRACTS.................................(22)
4.25 EMPLOYEE BENEFITS....................................(23)
4.26 GUARANTIES...........................................(23)
4.27 CERTAIN BUSINESS RELATIONSHIPS.......................(23)
4.28 SECURITIES MATTERS...................................(23)
4.29 SUFFICIENCY OF ASSETS................................(23)
4.30 DISCLOSURE...........................................(23)
5. PRE-CLOSING COVENANTS.......................................(24)
5.01 GENERAL..............................................(24)
5.02 NOTICES AND CONSENTS.................................(24)
5.03 OPERATION OF BUSINESS................................(24)
5.04 MAINTENANCE OF INSURANCE.............................(24)
iii
5.05 PRESERVATION OF BUSINESS.............................(24)
5.06 FULL ACCESS..........................................(24)
5.07 NOTICE OF DEVELOPMENTS...............................(25)
5.08 EXCLUSIVITY..........................................(25)
6 POST-CLOSING COVENANTS......................................(26)
6.01 GENERAL..............................................(26)
6.02 TRANSITION...........................................(26)
6.03 CONFIDENTIALITY......................................(26)
6.04 TAX RETURNS AND FILINGS..............................(26)
6.05 USE OF NAMES.........................................(27)
6.06 BATF PERMITS.........................................(27)
6.07 CCWD DISCHARGE FEE...................................(27)
7 CONDITIONS TO OBLIGATION TO CLOSE...........................(27)
7.01 CONDITIONS TO OBLIGATION OF THE BUYERS...............(27)
7.02 CONDITIONS TO OBLIGATION OF THE SELLERS..............(29)
8 REMEDIES FOR BREACHES OF THIS AGREEMENT.....................(30)
8.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
INDEMNITIES.........................................(30)
8.02 INDEMNIFICATION PROVISIONS FOR BENEFIT OF
THE BUYERS..........................................(31)
8.03 INDEMNIFICATION PROVISIONS FOR BENEFIT OF
THE SELLERS.........................................(31)
8.04 MATTERS INVOLVING THIRD PARTIES......................(32)
8.05 LIMITATION ON LIABILITY..............................(33)
8.06 OTHER INDEMNIFICATION PROVISIONS.....................(33)
9 TERMINATION.................................................(33)
9.01 TERMINATION OF AGREEMENT.............................(33)
9.02 EFFECT OF TERMINATION. .............................(34)
10 CERTAIN DEFINITIONS.........................................(34)
11. GENERAL.....................................................(38)
11.01 INCORPORATION OF EXHIBITS AND SCHEDULES..............(38)
11.02 NO THIRD-PARTY BENEFICIARIES.........................(39)
11.03 ENTIRE AGREEMENT.....................................(39)
11.04 SUCCESSION AND ASSIGNMENT............................(39)
11.05 COUNTERPARTS.........................................(39)
11.06 HEADINGS.............................................(39)
11.07 NOTICES..............................................(39)
11.08 APPOINTMENT OF AGENT.................................(40)
11.09 GOVERNING LAW........................................(40)
11.10 AMENDMENTS AND WAIVERS...............................(41)
11.11 SEVERABILITY.........................................(41)
11.12 EXPENSES.............................................(41)
11.13 CONSTRUCTION.........................................(41)
iv
11.14 SPECIFIC PERFORMANCE.................................(41)
11.15 AUTHORITY............................................(41)
Exhibit A-1 = Bills of Sale and Assignment - California/Oregon Assets
Exhibit A-2 = Xxxx of Sale and Assignment - Kentucky Assets
Exhibit A-3 = Xxxx of Sale and Assignment - Florida Assets
Exhibit B = Assignment and Assumption - Kentucky Property
Exhibit C-1 = Grant Deed for California Property
Exhibit C-2 = Grant Deed for Kentucky Property
Exhibit D = Form of Noncompetition Agreement
Exhibit E = Form of Opinion of Counsel to the Sellers
Exhibit F = Form of Spousal Consent
Schedule 1.01(j) = Excluded Assets
Schedule 1.03 = Assumption of Liabilities
Schedule 1.04 = Allocation Purchase Price
Schedule 3.01 = Authorization of Transaction/Noncontravention
Schedule 4.01 = Organization, Qualification, and Power
Schedule 4.02 = Capitalization
Schedule 4.03 = Noncontravention
Schedule 4.04 = Brokers' Fees
Schedule 4.05 = Title to Assets
Schedule 4.06 = Customers and Sales
Schedule 4.08 = Financial Statements
Schedule 4.09 = Events Subsequent to Most Recent Fiscal Year End
Schedule 4.10 = Undisclosed Liabilities
Schedule 4.12 = Real Property
Schedule 4.12(d) = Litigation, Land, Environmental
Schedule 4.13 = Intellectual Property
Schedule 4.14 = Personal Property
Schedule 4.15 = Contracts
Schedule 4.16 = Hazardous Materials; Disposal Sites
Schedule 4.17 = Permits and Environmental Matters
Schedule 4.18 = Reports, Etc.
Schedule 4.22 = Insurance
Schedule 4.23 = Litigation
Schedule 4.24 = Employment Contracts
Schedule 4.25 = Employee Benefits
Schedule 4.27 = Certain Business Relationships
v
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Agreement for Purchase and Sale of Assets ("Agreement") is entered
into as of April 21, 1998 by and between USL Parallel Products of California, a
California corporation ("PPC"), Parallel Products of Kentucky, Inc., a Kentucky
corporation ("PPK"), Parallel Products of Florida, Inc., a Florida corporation
("PPF" and collectively with PPC and PPK, the "BUYERS"), Parallel Products, a
California limited partnership (the "Company"), DWA of Belvedere Company, a
California corporation and the Company's general partner, Estate of Xxxxx X.
Xxxxx, Xxxxx X. Xxxxx Trust No. 1, Xxxxx Xxxxx, Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx
(collectively the "Partners"). The Company and the Partners are referred to
collectively herein as the "SELLERS". The Buyers and Sellers are referred to
collectively herein as the "Parties."
Buyers desire to purchase from the Company and the Company desires to
sell to Buyers, on the terms and subject to the conditions of this Agreement,
all the business and properties of the Company in return for the Purchase Price
provided for herein;
The Partners owns all of the outstanding partnership interests in the
Company and desire that this transaction be consummated;
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. SALE AND TRANSFER OF ASSETS.
1.01 GENERAL. Subject to the terms and conditions set forth in
this agreement, the Company agrees to sell, convey, transfer, assign,
and deliver to Buyers, and Buyers agree to purchase from the Company,
all the assets, properties, and business of Company of every kind,
character, and description, whether tangible, intangible, real,
personal, or mixed, and wherever located (except the Excluded Assets),
all of which are collectively referred to as the "Assets", including,
but without limitation to, the following:
(a) SCHEDULED PROPERTY. All property and other rights
listed as assets of the Company in the schedules or exhibits
attached to this Agreement;
(b) CONTRACTUAL RIGHTS. All rights and benefits of the
Company under all contracts, including, without limitation, all
(i) leases of real property used by the Company in the operation
of its Business and all leasehold improvements and fixtures
relating thereto, and (ii) all leases or rental agreements
covering machinery, equipment computer hardware and software,
tools, supplies, furniture and fixtures, vehicles and other
tangible personal property and assets used in the Business of the
Company.
(c) LICENSES AND PERMITS. All licenses, permits, operating
rights and franchises held or used by the Company in connection
with the ownership of the assets and the conduct of the operation
of the Assets.
(1)
(d) EQUIPMENT. All rolling stock, containers, machinery,
equipment, fixtures, furniture, computer hardware and software,
tools, supplies, vehicles and other tangible personal property
and assets of the Company related to its Business.
(e) SHORT TERM ASSETS. All royalty rights, purchase and
sale orders, inventories, deposits, cash and cash equivalents,
accounts receivable, short-term investments, inventory and
prepaid expenses of the Company arising in connection with the
Business of the Company.
(f) NAMES AND NUMBERS. All right, title and interest the
Sellers have to use any trade names (including, without
limitation, "Parallel Products"), trademarks, service marks,
copyrights, patents, phone numbers and the like related to the
Business of the Company.
(g) RECORDS. All operating data and records of the Company
relating to its Business, including, without limitation, customer
lists and records, production reports and records, equipment
logs, operating guides and manuals, projections, copies of
financial, accounting and personnel records, correspondence and
other similar documents and records; provided, however, that
Seller may retain copies of such records as may be necessary for
Internal Revenue Service and local tax verification purposes.
(h) REAL PROPERTY. Those certain parcels of real property
(the "Land") more particularly described in SCHEDULE 4.14 hereof
together with any buildings, structures, or other improvements or
fixtures located on the Land and all rights, privileges, and
easements appurtenant to the Land, including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on or
under the Land (to the extent owned by Sellers) as well as all
development rights, permits, air rights, water, water rights, and
water stock relating to the Land, and any other easements,
rights-of-way or appurtenances used in connection with or
existing for the benefit of the Land owned by the Company
(collectively the "Real Property").
(i) OTHER ASSETS. All other real, personal and mixed
property and assets of every kind and nature, tangible or
intangible (including warranties and performance guaranties with
respect to such assets) owned by the Company or used or held for
use by the Company in connection with the Business of the
Company, except Excluded Assets.
(j) EXCLUDED ASSETS. The Assets shall not include assets
of the Company used primarily in connection with the "Cucamonga
Gold" line of business (the "Excluded Assets") specifically set
forth on SCHEDULE 1.01(J). Buyers and Seller shall enter into a
supply agreement for the purchase of raw materials used in the
manufacture of "Cucamonga Gold" products at fair market price
under commercially reasonable terms.
(2)
1.02 PURCHASE PRICE. Subject to Sections 1.03 and 2 below and the
contingencies set forth in the Section 1.02, Buyers will pay to the
Company for the Assets the aggregate sum of $15,750,000 less the amount
of any Long Term Liabilities as of the Closing (the "Purchase Price")
payable as follows:
(a) CLOSING CASH PAYMENT. $7,250,000 less the amount of
any Long Term Liabilities (the "Closing Cash Payment"), in
immediately available funds at the Closing.
(b) CLOSING STOCK PAYMENT. $4,300,000 (the "Closing Stock
Payment") in common stock of U S Liquids, Inc. ("Parent"), a
Delaware corporation (such stock referred to as "Parent Stock")
at the Closing. Buyers will issue (or cause Parent to issue) and
deliver to the Company, duly executed certificates in valid form
evidencing, in the aggregate, that number of shares of Parent
Stock determined as to the nearest whole share, by dividing into
the amount of the Closing Stock Payment, the average of the
closing sale price for such shares on the American Stock Exchange
("AMEX"), as reported by THE WALL STREET JOURNAL, for the twenty
(20) trading days prior to the earlier of (i) five (5) trading
days immediately preceding the Closing Date, or (ii) the public
announcement of this transaction (the "Valuation Price").
(c) CONTINGENT CASH PAYMENT. $2,100,000 (the "Contingent
Cash Payment") in immediately available funds, if the annual
earnings before interest, income tax, depreciation, and
amortization ("EBITDA") of the Business transferred hereunder
exceed $3,200,000 in any four consecutive quarters during the
first three (3) consecutive years after the Closing Date, payable
within sixty (60) days after attainment of such earnings (the
"Contingent Payment Date").
(d) CONTINGENT STOCK PAYMENT. $2,100,000 (the "Contingent
Stock Payment") in Parent Stock if the annual EBITDA of the
Business transferred hereunder exceed $3,200,000 in any four
consecutive quarters during the first three (3) consecutive years
after the Closing Date, payable on or before the Contingent
Payment Date. Buyers will issue (or cause Parent to issue) and
deliver to the Company, duly executed certificates in valid form
evidencing, in the aggregate, that number of shares of Parent
Stock determined as to the nearest whole share, by dividing the
average of the closing sale price for such shares on the AMEX, as
reported by THE WALL STREET JOURNAL, for the twenty (20) trading
days prior to the five (5) trading days immediately preceding the
Continent Payment Date into the amount of the Contingent Stock
Payment.
(e) EBITDA CALCULATIONS. In calculating the EBITDA of the
Company for purposes of the Contingent Cash Payment and the
Contingent Stock Payment, Buyers agree that they shall:
(i) measure only the Business transferred hereunder
and not aggregate loss activities from any other
Affiliates of Parent;
(3)
(ii) include all profits from the Business
transferred hereunder regardless of the fact that
such Business will be held by three separate
entities-PPF, PPC and PPK;
(iii) reduce the EBITDA threshold of $3,2000,000 in
the event that a substantial portion of the
Business transferred hereunder is disposed of other
than in the Ordinary Course of Business during the
first three (3) consecutive years. In such event,
the EBITDA threshold shall be reduced in proportion
to the value of that the assets comprising the
portion of the Business disposed of bears in
relation to the Purchase Price. For purposes of
this determination, assets disposed of shall be
valued consistent with the allocations of the
Purchase Price set forth in SCHEDULE 1.04.
(iv) take no write-off and/or charge affecting
EBITDA in any quarter which, if taken in the next
succeeding quarter would have resulted in a
Contingent Cash payment and Contingent Stock
Payment.
(v) use their reasonable best efforts to maximize
the EBITDA of the Company consistent with Buyers'
Ordinary Course of Business;
(vi) ensure that write-off and charges affecting
EBITDA of the Company shall be directly related to
operations of the Business and not related to other
Affiliates of the Buyers or Parent;
(vii) ensure that compensation and overhead for the
Company shall be consistent with the Ordinary
Course of Business of the Parent and consistent
with allocations made to other Subsidiaries of
Parent;
(viii) cause the Buyers' accountants to make the
calculations of EBITDA of the Company in accordance
with GAAP, applied consistently; and
(ix) provide access by Sellers to the accounting
records relating to the business for the purpose of
confirming the EBITDA of the Company.
(f) VALIDITY; OTHER MATTERS. The Parent Stock, when issued
and delivered as provided herein, will be duly authorized and
validly issued, fully paid, nonassessable and free of any
preemptive rights, and will be covered by a then-effective
registration statement under the Securities Act of 1933, as
amended (the "Securities Act"). Buyers shall file, or cause
Parent to file, with the AMEX a subsequent listing application
such that the Parent Stock is tradable on such exchange.
(4)
(g) RESALE OF PARENT STOCK. For a period of one year after
the Closing Date, Sellers shall comply with the resale
requirements of Rule 145(d) under the Securities Act, more
specifically, the volume limitations, broker transactions, and
manner of sale provisions of Rule 144(e), (f) and (g),
respectively. In addition, fifty percent (50%) of the Parent
Stock representing the Closing Stock Payment (the "Restricted
Stock") shall not be sold assigned, exchanged, transferred,
encumbered, pledged, distributed or otherwise disposed of for a
period of one (1) year after issuance
(h) LEGENDS. Sellers acknowledges and agrees that all
Parent Stock shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE PROVISIONS OF RULE 145(D) PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AND MAY NOT BE TRANSFERRED OR
DISPOSED OF BY THE HOLDER WITHOUT COMPLIANCE WITH SAID
RULE.";
PROVIDED, HOWEVER, that pursuant to Rule 145(d) of the
Securities Act, on the first anniversary following the
Closing Date, the foregoing legend shall be removed from
such certificates, and Buyers (or Parent) shall issue a
certificate without such legend to the Company upon
request.
In addition, the Restricted Stock shall bear the following
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
VOLUNTARILY SOLD, ASSIGNED, EXCHANGED, TRANSFERRED,
ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR OTHERWISE
DISPOSED OF, AND ISSUER SHALL NOT BE REQUIRED TO GIVE
EFFECT TO ANY ATTEMPTED VOLUNTARY SALE, ASSIGNMENT,
EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE, DISTRIBUTION,
APPOINTMENT OR OTHER DISPOSITION OF ANY OF THESE SHARES,
DURING THE ONE-YEAR PERIOD ENDING ON [APPROPRIATE DATE]."
(i) EXPENSES OF ISSUANCE OF PARENT STOCK. With respect to
the initial issuance of the Parent Stock, Buyers (or Parent)
shall pay all customary fees, costs and expenses of such
issuance, including without limitation all registration, filing
and
(5)
AMEX fees, printing expenses and fees and disbursements of
counsel and accountants for Buyers or Parent.
1.03 ASSUMPTION OF LIABILITIES. Buyers shall not assume (and as
of the Closing the Company shall not have) any liabilities of Sellers or
the Company except Current Liabilities, and the Long Term Liabilities of
the Company set forth in SCHEDULE 1.03 under the heading "ASSUMED
LIABILITIES". SCHEDULE 1.03 also sets forth under the heading
"LIABILITIES PAID AT CLOSING", the amount required to be paid by the
Company (or Sellers) to Xxxxx Fargo Bank, N.A. as of the Closing Date in
order to obtain free and clear title and ownership to all of the Assets
being conveyed hereunder. The Assumed Liabilities and the Liabilities
Paid at Closing together comprise the Long Term Liabilities of the
Company. The Liabilities Paid at Closing shall be paid directly by
Buyers, by wire transfer to Xxxxx Fargo Bank, N.A., at Closing. Sellers
shall be solely responsible for seeing that any liens, mortgages or
encumbrances held by Xxxxx Fargo Bank, N.A. or its successors on any
portion of the Assets are fully and promptly released following the
payment of the Liabilities Paid at Closing by Buyers.
1.04 ALLOCATION OF ASSETS AND PURCHASE PRICE. The Seller shall
convey all of the Assets relating to the California and Oregon portion
of the Business to PPC, all of the Assets relating to the Kentucky
portion of the Business to PPK and all of the Assets of the Florida
portion of the Business to PPF, pursuant to the bills of sale,
assignments, and deeds attached hereto as Exhibits X-0, X-0, X-0, X, X-0
and C-2. SCHEDULE 1.04 sets forth the allocation of the Purchase Price
among the Assets. Each of the Parties agrees to report this transaction
for federal and state tax purposes in accordance with such allocation of
the Purchase Price.
1.05 EXCISE AND PROPERTY TAXES. The Buyers shall pay all sales
and use taxes arising out of the transfer of the Assets and the Sellers
shall pay their portion, prorated as of the Closing Date (as defined
herein), of state and local real and personal property taxes of the
Company. Buyers shall not be responsible for any business, occupation,
withholding, or similar tax, or any taxes of any kind related to any
period before the Closing Date.
1.06 THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "CLOSING") shall take place at the law offices of
Best Best & Xxxxxxx, LLP, 000 Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000, commencing at 10:00 a.m. local time on April 21, 1998,
unless the Parties otherwise agree in writing.
1.07 TITLE ASSURANCES. Sellers shall furnish to the Buyers the
following title assurances:
(a) OWNERS TITLE POLICY. Sellers shall furnish to Buyers
an extended coverage owners policy of title insurance from a
title company reasonably acceptable to Buyers (the "Title
Company") in the agreed upon fair market value of the properties
and including comprehensive access, non-arbitration, going
concern, and zoning endorsements (where reasonably available from
the Title Company, insuring title to each parcel of the Land to
be in fee simple in the Buyers subject only to the exceptions
permitted by Section 1.07(b) hereof (the "Owners Policy").
Sellers shall
(6)
deliver to Buyers a preliminary title commitment in respect of
each parcel of the Land, together with copies of all exception
instruments referenced therein, and any unrecorded leases, option
agreement, contracts and any other items affecting title which
are in the possession of, or known to, Sellers at least 10
business days prior to the Closing. Buyers shall advise Sellers
within 7 business days after actual receipt of all such
materials, what exceptions to title, if any, will be accepted by
Buyers.
(b) PERMITTED ENCUMBRANCES. The Owners Policy shall insure
Buyers' interest in the Land to be free and clear of all
encumbrances whatsoever except: (i) zoning ordinances and
regulations which do not, in Buyers' reasonable judgement,
materially and adversely affect Buyers' use of the Land for the
Business; (ii) real estate taxes and assessments, both general
and special, which are a lien but not yet due and payable at the
Closing Date; and (iii) easement, encumbrances, covenants,
conditions, reservations and restrictions of record, if any, that
do not materially and adversely affect Buyers' use of the Land
for the Business or which have been approved in writing by
Buyers. Sellers shall pay all of the costs associated with the
delivery of the Owners Policy to Buyers.
(c) SURVEY. Sellers shall obtain for Buyers' use and for
the use of the Title Company in connection with the issuance of
the Owners Policy, a current and complete survey of each parcel
of the Land, made on the ground by a competent registered
surveyor, showing: (i) the exact boundary lines of the Land; (ii)
the location thereon of all, if any, buildings, improvements,
water-courses, streams, roads, utilities, utility connections,
and easements now existing; (iii) the number of acres in each
parcel of the Land; (iv) the location of any buildings, fences or
other improvements which encroach on the Land; (v) the location
of any improvements on the Land which encroach on any neighboring
property or on any property which is subject to any easement or
right-of-way; (vi) all building lines established in respect of
the Land; and (vii) all public access to the Land, and
representing the boundaries of the Land are contiguous with the
boundaries of all adjoining parcels (the "Survey"). Prior to the
Closing, a copy of the Survey complying with the above
requirements shall be delivered to Buyers and the Title Company,
together with certification to each entity by the surveyor, which
certification complies with American Land Title Association
guidelines, and also together with such additional supporting
reports and other certificates as the Title Company may require
to enable the Title Company to delete its standard survey
exceptions from the Owners Policy. Sellers shall pay all costs of
the Survey.
1.08 DELIVERIES AT THE CLOSING. At the Closing, (a) the Sellers
will deliver to the Buyers the various certificates, instruments, and
documents referred to in Section 7.01 below, and (b) the Buyers will
deliver to the Sellers the various certificates, instruments, and
documents referred to in Section 7.02 below.
1.09 EFFECTIVE DATE OF TRANSACTION. The Parties hereto agree that
the effective date of the transactions contemplated hereby shall be as
of the Closing Date.
(7)
2. POST CLOSING ADJUSTMENT.
2.01 CALCULATION OF NET WORKING CAPITAL AT CLOSING DATE. On or
before the date that is ninety (90) days after the Closing Date, Buyers'
accountants shall compute the amount of Net Working Capital of the
Company with respect to the Assets as of the Closing Date , and shall
provide Sellers a summary reflecting how such computations were made.
Sellers and their accountants shall have the opportunity to review such
computations.
2.02 PAYMENT OF ADJUSTMENT AMOUNTS. If the Net Working Capital of
the Company with respect to the Assets as of the Closing Date is greater
than zero (0), then Buyers shall, within ten (10) business days of such
computation by Buyers' independent public accountants, pay the Company,
by check, an amount equal to the positive amount of Net Working Capital.
If the Net Working Capital with respect to the Assets as of the Closing
Date is less than zero (0), then the Company, within ten (10) business
days of such computation, shall pay Buyers, by check, an amount equal to
the negative amount of Net Working Capital.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
3.01 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Sellers
represent and warrant to the Buyers that the statements contained in
this Section 3.01: (i) are correct and complete as of the date of this
Agreement; (ii) will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3.01); and (iii) shall
survive the Closing.
(a) AUTHORIZATION OF TRANSACTION. Sellers have full power
and authority to execute and deliver this Agreement and to
perform their obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of Sellers, enforceable
in accordance with its terms and conditions. Except as set forth
in SCHEDULE 3.01 hereof, Sellers are not required to give any
notice to, make any filing with, or obtain any authorization,
consent, or approval of, any government or governmental agency in
order to consummate the transactions contemplated by this
Agreement.
(b) NONCONTRAVENTION. Except at provided in SCHEDULE 3.01,
neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which Sellers
are subject or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or
cancel, or require any notice under any material agreement,
contract, lease, license, instrument, or other arrangement to
which Sellers are a party or by which Sellers are bound or to
which the Assets are subject.
(8)
(c) BROKERS' FEES. Sellers do not have any Liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which the Buyers could become liable or obligated.
3.02 REPRESENTATIONS AND WARRANTIES OF THE BUYERS. The Buyers
represent and warrant to the Sellers that the statements contained in
this Section 3.02 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 3.02:
(a) ORGANIZATION OF THE BUYERS. PPC is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of California. PPK is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Kentucky. PPF is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Florida.
(b) AUTHORIZATION OF TRANSACTION. The Buyers have full
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of the Buyers, enforceable
in accordance with its terms and conditions. The Buyers need not
give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions
contemplated by this Agreement.
(c) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyers are
subject or any provision of their respective articles and bylaws
or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require
any notice under any material agreement, contract, lease,
license, instrument, or other arrangement to which the Buyers are
a party or by which they are bound or to which any material
amount of their assets are subject.
(d) BROKERS' FEES. The Buyers have no Liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement for which Sellers could become liable or obligated.
(e) SECURITIES DOCUMENTS. Parent has filed all required
documents (the "Parent Securities Documents") with the SEC and
all other federal and state securities regulatory authorities
(the "Securities Authorities"). As of their respective dates, the
Parent Securities Documents complied in all material respects
with the requirements of the Securities Authorities and none of
the Parent Securities Documents contained any untrue statement of
a material fact or omitted to state a
(9)
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under
which they were made, not misleading.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date
of the most recent Parent Reports, there has not been any change,
event or development in or affecting Parent that constitutes or
would reasonably be expected to have a material adverse effect on
Parent or to delay or prevent the consummation of the
transactions contemplated hereby.
(g) ABSENCE OF LITIGATION. Except as set forth in the
Parent's Securities Documents, there are no suits, claims,
actions, proceedings or investigations pending or threatened
against Parent or any of its subsidiaries, or any properties or
rights of Parent or any of its subsidiaries, before any court,
arbitrator or other governmental entity, domestic or foreign,
that, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the Parent. Neither
Parent nor any of its subsidiaries nor any of their respective
properties is or are subject to any writ, judgment, injunction,
decree, determination or award having, or which could reasonably
be expected to have a material adverse effect on the Parent or to
delay or prevent the consummation of the transactions
contemplated hereby.
(h) DISCLOSURE. The representations and warranties
contained in this SECTION 3.02 do not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements and information
contained in this SECTION 3.02 not misleading.
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY.
Sellers represent and warrant to the Buyers that except as set forth in
the schedules to the subsections of this Section 4 delivered by the Sellers to
Buyers on the date hereof (such schedules hereinafter collectively referred to
as the "Disclosure Schedules" and individually as a "Disclosure Schedule") the
statements contained in this Section 4: (i) are correct and complete as of the
date of this Agreement; (ii) will be correct and complete as of the Closing
Date, including with respect to any assets acquired by, or transferred to, the
Company after the date hereof (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4);
and (iii) shall survive the Closing. Nothing in the Disclosure Schedules shall
be deemed adequate to disclose an exception to a representation or warranty made
herein, however, unless the Disclosure Schedule sufficiently identifies the
exception and describes the relevant facts in reasonable detail. Without
limiting the generality of the foregoing, the mere listing (or inclusion of a
copy) of a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein (unless the representation
or warranty has to do with the existence of the document or other item itself).
4.01 ORGANIZATION, QUALIFICATION, AND POWER. The Company is a
limited partnership duly organized, validly existing, and in good
standing under the laws of the State of California, and is duly
authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required. The Company has
full power
(10)
and authority and all licenses, permits, and authorizations necessary to
carry on the business in which it is engaged and to own and use the
properties owned and used by it. SCHEDULE 4.01 hereto lists the general
partner of the Company, the federal tax ID numbers of the Company and
the Social Security Number of the Partners. Attached to SCHEDULE 4.01
are correct and complete copies of the Certificate of Limited
Partnership (LP-1) and partnership agreement of the Company (as amended
to date). The record books of the Company are correct and complete. The
Company is not in default under or in violation of any provision of its
partnership agreement.
4.02 CAPITALIZATION. The entire general and limited partnership
interests of the Company are as set forth in SCHEDULE 4.02; and no
partnership interests other than those reflected in such schedule as
being currently outstanding have ever been issued. All of the issued and
outstanding partnership interests have been duly authorized, are validly
issued, and are held of record by the Partners, in the percentages for
each Partner (a Partner's "Pro-Rata Share") as set forth in SCHEDULE
4.02,. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require the Company
to issue, sell, or otherwise cause to become outstanding any of its
partnership interests. There are no outstanding or authorized equity
appreciation, profit participation, or similar rights with respect to
the Company. There are no voting trusts, proxies, or other agreements or
understandings with respect to the partnership interests of the Company.
4.03 NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which
the Company is subject or any provision of the partnership agreement of
the Company or (b) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other
arrangement to which the Company is a party or by which it is bound or
to which any of its Assets are subject (or result in the imposition of
any Security Interest upon any of its Assets). Except as set forth in
SCHEDULE 4.03, the Company is not required to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
4.04 BROKERS' FEES. Except as set forth in SCHEDULE 4.04, the
Company does not have any Liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
4.05 TITLE TO ASSETS. The Company has good and marketable title
to all the Assets and interest in the Assets, whether real, personal,
mixed, tangible, or intangible, which constitute all the assets and
interests in assets that are used in the Business of Company. Except as
set forth in SCHEDULE 4.05, all the Assets are free and clear of
mortgages, liens, pledges, charges, encumbrances, equities, claims,
easements, rights of way, covenants, conditions, or restrictions, except
for: (i) the lien of current taxes not yet due and payable;
(11)
and (ii) possible minor matters that, in the aggregate, are not
substantial in amount and do not materially detract from or interfere
with the present or intended use of any of these assets, nor materially
impair business operations. All real property and tangible personal
property of Company is in good operating condition and repair, ordinary
wear and tear excepted. Company is in possession of all premises leased
to it from others. Neither the Partners, nor any general partner or
employee of the Company, nor any spouse, child, or other relative of any
of these persons, owns, or has any interest, directly or indirectly, in
any of the real or personal property owned by or leased to the Company
or any copyrights, patents, trademarks, trade names, or trade secrets
licensed by the Company. The Company does not occupy any real property
in violation of any law, regulation, or decree.
4.06 CUSTOMERS AND SALES. A correct and current list of all
customers of the Company together with summaries of the sales made to
each customer with a sales volume of more than $5,000 during the most
recent fiscal year is attached to this Agreement as SCHEDULE 4.06.
Except as indicated in that Schedule, neither the Company nor the
Partners has any information, nor is aware of any facts, indicating that
any of these customers intend to cease doing business with the Company
or materially alter the amount of the business that they are presently
doing with the Company.
4.07 NO SUBSIDIARIES OR EQUITY INVESTMENTS. The Company does not
have any subsidiaries, and does not control, directly or indirectly, or
have any direct or indirect equity participation in, any corporation,
partnership, trust, or other business association.
4.08 FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 4.08 are
the following financial statements (collectively the "FINANCIAL
STATEMENTS"): (a) audited statement of assets, liabilities and partners'
interest, statement of revenue and expenses and changes in partners'
interest and statement of cash flows for the twelve months ended
December 31, 1995, 1996 and 1997 (the "MOST RECENT FISCAL YEAR END") for
the Company; and (ii) reviewed statement of assets, liabilities and
partners' interest, statement of revenue and expenses and changes in
partners' interest and statement of cash flows (the "MOST RECENT
FINANCIAL STATEMENTS") as of and for the one month ended January 31,
1998 (the "MOST RECENT FISCAL MONTH END") for the Company. The Financial
Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly the financial condition of the
Company and the Assets as of such dates and the results of operations of
the Company for such periods, are correct and complete, and are
consistent with the books and records of the Company (which books and
records are correct and complete); PROVIDED, HOWEVER, that the Most
Recent Financial Statements are subject to normal year-end adjustments
(which will not be material individually or in the aggregate) and lack
footnotes and other presentation items. The Company has not changed its
accounting policies and practices in the past three years. No prior
period adjustment is reflected in the statements of revenue and expenses
and changes in partners' interest and cash flow contained in the
Company's Most Recent Financial Statements.
4.09 EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Since the
Most Recent Fiscal Year End, there has not been any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects of the Company. Without
(12)
limiting the generality of the foregoing, except as set forth in
SCHEDULE 4.09, since such date there has been no:
(a) Transaction by the Company except in the Ordinary
Course of Business as conducted on that date;
(b) Capital expenditure by the Company exceeding $10,000;
(c) Material adverse change in the financial condition,
liabilities, assets, business, or prospects of the Company taken
as a whole;
(d) Destruction, damage to, or loss of any of the Assets
(whether or not covered by insurance) that materially and
adversely affects the financial condition, business, or prospects
of the Company;
(e) Labor trouble or other event or condition of any
character materially and adversely affecting the financial
condition, business, assets, or prospects of the Company;
(f) Change in accounting methods or practices (including,
without limitation, any change in depreciation or amortization
policies or rates) by the Company;
(g) Revaluation by the Company of any of the Assets;
(h) Declaration, setting aside, or payment of a dividend
or other distribution in respect to the partnership interests of
the Company, or any direct or indirect redemption, purchase, or
other acquisition by Company of any of its partnership interests;
(i) Increase in the salary or other compensation payable
or to become payable by the Company to any of its employees, or
the declaration, payment, or commitment or obligation of any kind
for the payment, by the Company, of a bonus or other additional
salary or compensation to any such person;
(j) Sale or transfer of any of the Assets, except in the
Ordinary Course of Business;
(k) Amendment or termination of any contract, agreement,
or license to which the Company is a party, except in the
Ordinary Course of Business;
(l) Loan by the Company to any person or entity, or
guaranty by the Company of any loan;
(m) Mortgage, pledge, or other encumbrance of any of the
Assets;
(13)
(n) Waiver or release of any right or claim of the Company
except in the Ordinary Course of Business;
(o) Other event or condition of any character that has or
might reasonably have a material and adverse effect on the
financial condition, business, assets, or prospects of the
Company;
(p) Issuance or sale by the Company of any partnership
interests; or
(q) Agreement by Company to do any of the things described
in the preceding clauses (a) through (p).
4.10 UNDISCLOSED LIABILITIES. Except as set forth in SCHEDULE
4.10, to the Knowledge of Sellers, the Company does not have any
Liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
against the Company giving rise to any Liability), except for (i)
Liabilities set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) and (ii) Liabilities which have
arisen after the Most Recent Fiscal Month End in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in
the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
4.11 TAX MATTERS. To the Knowledge of Sellers, with respect to
the Company, (a) all Tax Returns and all similar filings required to be
filed on or before the Closing Date by the Company (true and correct
copies of which have been furnished to the Buyers) with respect to any
Taxes have been timely filed with the appropriate governmental agencies
in all jurisdictions in which such Tax Returns are required to be filed,
or are on a timely filed extension, and all such Tax Returns correctly
reflect the liability of the Company for Taxes for the periods,
properties or events covered thereby; (b) all Taxes payable with respect
to the Tax Returns, and all Taxes accruable with respect to events
occurring through the Closing Date, whether disputed or not, and whether
or not shown on any Tax Return, will have been paid in full prior to the
Closing Date, or an adequate accrual in accordance with GAAP is provided
with respect thereto on the Most Recent Balance Sheet; (c) no deficiency
in respect of any Taxes which has been assessed against the Company
remains unpaid and there are no unassessed Tax deficiencies or any
audits or investigations pending or threatened against the Company with
respect to any Taxes, (d) except for the 1997 tax year, which is
currently on extension, there is in effect no extension for the filing
of any Tax Return and the Company has not extended or waived the
application of any statute of limitations of any jurisdiction regarding
the assessment or collection of any Tax; (e) no claim has ever been made
by any Tax authority in a jurisdiction in which the Company does not
file Tax Returns that they are or may be subject to taxation by that
jurisdiction; (f) there are no liens for Taxes upon any Assets except
for liens for current Taxes not yet due; (g) no issues have been raised
in any examination by any Tax authority with respect to the Company
which, by application of similar principles, reasonably could be
expected to result in a proposed deficiency for any other period not so
examined; (h) the Company is not a party to any Tax allocation or
sharing agreement or otherwise under any obligation to indemnify any
person with respect to any Taxes; (i) the Company is not a party to any
joint venture, partnership or other arrangement
(14)
that is treated as a partnership for federal income tax purposes; (j)
there are no accounting method changes or proposed accounting method
changes of the Company that could give rise to an adjustment under
section 481 of the Code for periods after the Closing Date; (k) there
are no requests for rulings in respect of any Tax pending between the
Company and any Tax authority; (l) the Company has never been a member
of any affiliated group as defined in Section 1504 of the Code; (m) the
Company has timely made all deposits required by law to be made with
respect to employees' withholding and other employment taxes; (n) the
Company has not filed any consent under Section 341(f) of the Code; and
(o) none of the Assets are treated as owned by any other person under
the "safe harbor lease" provisions of former Section 168(f)(8) of the
Code.
4.12 REAL PROPERTY. An accurate description of each parcel of
real property owned by or leased to the Company is attached to this
agreement as SCHEDULE 4.12. That Schedule contains a list of the
policies of title insurance issued to Company for these properties. To
the Knowledge of Sellers, all the leases listed in that Schedule are
valid and in full force, and there does not exist any default or event
that with notice or lapse of time, or both, would constitute a default
under any of these leases.
With respect to the Land (as defined herein):
(a) none of the Sellers, or to the Sellers' Knowledge, any
third party has ever conducted landfill operations on the
Land. The Land is fully licensed, permitted and authorized
for operation under, and in compliance with, all
Applicable Laws. The Land is fully in compliance with all
Applicable Laws and Environmental, Health and Safety Laws.
(b) the Land can be used after the Closing as it has been used
by Sellers prior the Closing without violating any
Applicable Law or private restriction, and such uses are
legal conforming uses. There are no proceedings or
amendments pending and brought by or, to the Knowledge of
Sellers, threatened by, any third party which would result
in a change in the allowable uses of the Land or which
would modify the right of the Company to use the Land as
contemplated after the Closing Date;
(c) Sellers have made available to Buyers all engineering,
geologic and other similar reports, documentation and maps
relating to the Land in the possession or control of
Sellers;
(d) Except as set forth in SCHEDULE 4.10 or SCHEDULE 4.12(D),
none of the Sellers or the Land is or, to the Knowledge of
Sellers ever has been, involved in any litigation or
administrative proceeding seeking to impose fines,
penalties or other liabilities or seeking injunctive
relief for violation of any Applicable Laws;
(e) to the Knowledge of Sellers, no Person, other than the
Company, has a present or future right to possession of
all or any part of the Land;
(15)
(f) to the Knowledge of Sellers, no portion of the Land
contains any areas that could be characterized as
disturbed, undisturbed or man made wetlands or "waters of
the United States" pursuant to any Applicable Laws or the
procedural manuals of the Environmental Protection Agency,
U.S. Army Corps of Engineers or the California
Environmental Protection Agency (or similar Oregon or
Kentucky agencies), whether such characterization reflects
current conditions or historic conditions which have been
altered without the necessary permits or approvals;
(g) no work has been performed on the Land within 120 days of
the date hereof for which a mechanic's lien could be
filed;
(h) except as set forth in SCHEDULE 4.05, there are no levied
or pending special assessments affecting all or any part
of the Land owed to any governmental entity and, to the
Knowledge of Sellers, none is threatened;
(i) except as set forth in SCHEDULE 4.10, there are no pending
or, to the Knowledge of Sellers, threatened condemnation
or eminent domain proceedings affecting all or any part of
the Land;
(j) except as set forth in SCHEDULE 4.03, the Sellers have
provided to the government agencies requiring the same,
all material reports, notices, filings and other
disclosures required by Applicable Laws and all such
reports, notices, filings and other documents were
complete and accurate in all material respects at the time
provided to said governmental agencies;
(k) no liens with respect to environmental liability have been
imposed against the Land under CERCLA, any comparable
California, Oregon or Kentucky statute or other Applicable
Law and no facts or circumstances exist which could give
rise to same; and
(l) no portion of the Land is listed on the CERCLIS list or
the National Priorities List of Hazardous Waste Sites or
any similar list maintained by the State of California,
Oregon or Kentucky and none of the Sellers is listed as a
potentially responsible party under CERCLA, any comparable
California, Oregon or Kentucky statute or other Applicable
Law, and none of the Sellers has received a notice of such
a listing.
(16)
4.13 INTELLECTUAL PROPERTY. The Company has not infringed, and is
not now infringing, on any trade name, trademark, service xxxx, or
copyright belonging to any other person, firm, or corporation. A
schedule of all trade names, trademarks, service marks, and copyrights
and their registrations, owned by Company or in which it has any rights
or licenses, together with a brief description of each, is attached to
this agreement as SCHEDULE 4.13. Except as set forth in that Schedule
(and excluding software subject to licensing restrictions), Company is
not a party to any license, agreement, or arrangement, whether as
licensor, licensee, or otherwise, with respect to any trademarks,
service marks, trade names, and copyrights necessary for its business as
now conducted by it (including without limitation those listed in that
Schedule), and that use does not, and will not, conflict with, infringe
on, or otherwise violate any rights of others.
4.14 PERSONAL PROPERTY.
(a) Attached as SCHEDULE 4.14 is a complete and accurate
list and a complete description as of the date hereof of all
personal property carried on the books of the Company which will
exist on the Closing Date (the "Personal Property"). All such
Personal Property is in good working order;
(b) The Company has good title to, or a valid leasehold
interest in, the Personal Property, free and clear of all
Security Interests, liens or other Adverse Claims;
(c) All leases set forth in Schedule 4.14 are in full
force and effect and constitute valid and binding agreements of
the parties thereto (and their successors) in accordance with
their respective terms. No default by Company, or any other party
to any of such leases exists, or would exist except for the
passage of time or delivery of a notice or both;
(d) All Personal Property is either owned by Company or
leased by Company under an agreement indicated on SCHEDULE 4.14.
4.15 CONTRACTS. Other than contracts cancelable on 60 days
notice, to the Knowledge of Sellers, SCHEDULE 4.15 lists the following
contracts and other agreements to which the Company is a party:
(a) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or
receipt of services, the performance of which will extend over a
period of more than one year, result in a material loss to the
Company, or involve consideration in excess of $10,000;
(b) any agreement (or group of related agreements) under
which the Company has created, incurred, assumed, or guaranteed
any indebtedness for borrowed money, or any capitalized lease
obligation, in excess of $10,000 or under
(17)
which the Company has imposed a Security Interest on any of its
Assets, tangible or intangible;
(c) any agreement with any of the Sellers and their
Affiliates, or regarding the advance of money to owners,
employees, officers, directors or agents of the Company or it
general partner;
(d) any profit sharing, option, purchase, equity
appreciation, deferred compensation, severance, or other plan,
agreement or arrangement for the benefit of current or former
owners, directors, officers, employees and independent
contractors; and any agreement for the employment or engagement
of any Person;
(e) any agreement concerning confidentiality or
noncompetition;
(f) any agreement concerning a partnership or joint
venture;
(g) any collective bargaining agreement; and
(h) any agreement under which the consequences of a
default or termination could have a material adverse effect on
the business, financial condition, operations, results of
operations, or future prospects of the Company; or any other
agreement (or group of related agreements) the performance of
which involves consideration in excess of $10,000.
With respect to each such agreement, and except as disclosed in
Schedule 4.15: (i) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (ii) the agreement
will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the
consummation of the transactions contemplated hereby; (iii) no
party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration,
under the agreement; and (iv) no party has repudiated any
provision of the agreement.
4.16 HAZARDOUS MATERIALS; DISPOSAL SITES. Except as set forth in
SCHEDULE 4.16, and other than waste materials included in residential or
commercial waste that have in all respects been handled, processed and
treated in compliance with all Environmental Laws and all other
applicable laws (including laws related to the permissible types and
quantities of such waste material), to the Knowledge of Sellers, Sellers
have never generated, transported, stored, handled, recycled, reclaimed,
disposed of, or contracted for the disposal of, Hazardous Materials (as
hereinafter defined). As used herein, the term "Hazardous Materials"
includes, but is not limited to, (i) any petroleum or petroleum
products, natural gas, or natural gas products, radioactive materials,
asbestos, urea formaldehyde foam insulation, transformers or other
equipment that contains dielectric fluid containing levels of
polychlorinated biphenyls ("PCBs"), and radon gas; (ii) any chemicals,
materials, waste or substances defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes,"
(18)
"toxic substances," "toxic pollutants," "contaminants," or "pollutants,"
or words of similar import, under any Environmental Laws (as hereinafter
defined); and (iii) any other chemical, material, waste or substance
which is in any way regulated by any federal, state or local government
authority, agency or instrumentality, including mixtures thereof with
other materials, and including any materials such as asbestos and lead;
and the term "Environmental Laws" includes, but is not limited to, any
federal, state or local statute, law, rule, regulation, ordinance, code,
policy or rule of common law now in effect and in each case as amended
to date and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree, or
judgment, relating to the environment, human health or safety, or
Hazardous Materials, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. xx.xx. 9601, ET SEQ. ("CERCLA"); The Hazardous
Materials Transportation Act, as amended, 49 U.S.C. xx.xx. 1801, ET
SEQ.; the Resource Conservation and Recovery Act of 1976, as amended, 42
U.S.C. xx.xx. 6901, ET SEQ.; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. xx.xx. 1201 ET SEQ.; the Toxic Substances Control
Act, 15 U.S.C. xx.xx. 2601, ET SEQ.; the Clean Air Act, 42 U.S.C. xx.xx.
7401, ET SEQ.; the Safe Drinking Water Act, 42 U.S.C. xx.xx. 3808, ET
SEQ.; the Federal Insecticide, Fungicide and Rodenticide Act, as
amended, 7 U.S.C. ss. 136, ET SEQ. Sellers have never owned, operated,
had an interest in, engaged in and/or leased a waste transfer,
recycling, treatment, storage or disposal facility, business or activity
other than the Business. To the Knowledge of Sellers, no employee,
contractor or agent of Sellers has, in the course and scope of
employment with Sellers, been exposed to Hazardous Materials in such a
manner as to be harmed thereby. Attached hereto as SCHEDULE 4.16 is a
complete list of all disposal sites at any time now or in the past
utilized by Sellers, none of which sites is listed on the CERCLA list or
the National Priorities List of hazardous waste sites. Sellers are not
listed as a potentially responsible party under CERCLA or any comparable
or similar U.S. federal or California, Oregon or Kentucky statute,
Sellers have not received notice of such a listing and Sellers do not
know of any facts or circumstances which could give rise to such a
listing. Sellers have at all times produced or received and, in each
case, retained all transportation documentation, including all
appropriate trip tickets, required by any, or necessary to evidence
compliance with, Environmental Laws in connection with the hauling or
disposal of municipal solid waste, and no such document indicates that
the Sellers have ever hauled or transported Hazardous Materials. The
Sellers have retained all documentation described in the preceding
sentence, all of which is currently maintained in their files and
records; such documentation shall constitute a part of the Business and
shall be transferred to the Buyers at the Closing.
4.17 PERMITS AND ENVIRONMENTAL MATTERS. Sellers (i) have all
permits necessary for or customary in connection with the operation of
the Business, none of which permits are or will be terminated or
otherwise adversely affected by the sale of Assets pursuant to this
Agreement (and, except as otherwise provided herein, such sale will not
require the approval of any agency or authority to continue the
effectiveness of such permits) and (ii) SCHEDULE 4.17 is an accurate
list and summary description as of the date hereof of all permits,
titles (including motor vehicles titles and current registrations), fuel
permits, licenses, franchises and other, certificates, owned or held by
the Company, none of which permits, titles, licenses, franchises and
certificates infringe on the rights of others and all of which are now
valid, in good standing and in full force and effect. All such permits,
titles, licenses,
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franchises and certificates required by law have been obtained, are in
good standing and are adequate for the operation of the Business.
4.18 REPORTS, ETC. Attached as SCHEDULE 4.18 is a description and
copies, as of the date of this Agreement, of all records,
correspondence, reports, notifications, permits, licenses, engineering
studies, environmental impact studies, assessments and audits and all
notifications from governmental agencies and any other person or entity
and any other documents relating to: (a) the Company's or Partners'
current and past conduct related to the Business and any current or past
liabilities associated therewith; (b) each actual, current, past and
possible violation of Applicable Laws, hereinafter defined, by the
Sellers, or any other party or otherwise relating to the Business, or
any operations or activities in connection therewith, and all, if any,
claims in respect thereof; (c) each actual, potential or threatened
claim or lawsuit against the Sellers, or any operation or activities in
connection therewith; (d) the discharge, leakage, spillage, transport,
disposal or release of any material into the environment by the Sellers
or any other party or otherwise relating to the Business or any
operations or activities in connection therewith; (e) the arrangement
for transport, disposal or release of material into the environment, or
any operations or activities in connection therewith; and (f) employee
health, public health or the environment related to the Business or any
operations or activities in connection therewith (collectively, the
"Environmental Documents").
4.19 APPLICABLE LAWS COMPLIANCE.
(a) The Company is, and at all times during its operation
has been, fully licensed, permitted and authorized under all
federal, state and local statutes, laws, rules, regulations,
orders, permits (including, without limitation, zoning
restrictions and land use requirements) and licenses affecting or
otherwise applicable to the Business and any operations or
activities in connection therewith (collectively, the "Applicable
Laws");
(b) All activities and operations conducted in connection
with the Business, whether by the Sellers or third parties, have
at all times been and continue to be conducted in compliance with
all Applicable Laws;
(c) Except as disclosed on SCHEDULE 4.10, none of the
Sellers is now nor has ever been involved in any litigation or
administrative proceedings seeking to impose fines, penalties or
other liabilities or seeking injunctive relieve for violation of
any Applicable Laws and there are no facts or circumstances that
would give rise to same;
(d) There have been no spills, leaks, deposits or other
releases into the environment or otherwise in connection with the
Business or operations or activities in connection therewith, of
any Hazardous Materials;
(20)
(e) The Sellers have never conducted or participated in
any landfill, land farming, recycling, waste hauling or other
disposal operations other than the Business;
(f) Sellers have provided Buyers all reports, notices,
filings and other disclosures related to the Business required by
Applicable Laws to be filed by the Company with any government
agencies; and the Company have duly and timely filed all such
reports with such agencies;
(g) No liens with respect to environmental liability have
been imposed against any of the Assets under CERCLA, any
comparable California, Oregon or Kentucky, or other Applicable
Laws and no facts or circumstances exist which would give rise to
the same; and
(h) Except as disclosed on SCHEDULE 4.10, to the Knowledge
of Sellers, none of the Sellers is in default under any
Applicable Laws or under any order of any court or governmental
administrative body having jurisdiction over the Company, or any
operations or activities thereon or thereunder, and there are no
claims, actions, suits or proceedings, pending or threatened,
against or affecting the Sellers at law or in equity, or before
or by any administrative body having jurisdiction; no notice of
any claim, action, suit or proceeding, whether pending or
threatened, has been received; and there are no facts or
circumstances which would give rise to the same.
4.20 ENVIRONMENT, HEALTH, AND SAFETY.
(a) Except as disclosed in SCHEDULE 4.10, to the Knowledge
of Sellers, the Company and its predecessors and Affiliates have
complied with all Environmental, Health, and Safety Laws, and no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced
against any of them alleging any failure so to comply. Without
limiting the generality of the preceding sentence, to the
Knowledge of Sellers, the Company and its predecessors and
Affiliates have obtained and been in compliance with all of the
terms and conditions of all permits, licenses, and other
authorizations which are required under, and have complied with
all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all Environmental, Health, and
Safety Laws.
(b) Except as disclosed in SCHEDULE 4.10, to the Knowledge
of Sellers, the Company does not have any Liability (and its
respective predecessors and Affiliates have never handled or
disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any
substance or condition, or owned or operated any property or
facility in any manner that could form the basis for any present
or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand of the Company giving rise to
any Liability) for damage to any site, location, or body of water
(surface or subsurface), for any illness of or
(21)
personal injury to any employee or other individual, or for any
reason under any Environmental, Health, and Safety Law.
(c) Except as disclosed on Schedule 4.10, to the Knowledge
of Sellers, all properties and equipment used by the Company and
its predecessors and Affiliates have been free of asbestos,
PCB's, methylene chloride, trichloroethylene, 1,2-trans-
dichloroethylene, dioxins, dibenzofurans, and Extremely
Hazardous Substances.
4.21 POWERS OF ATTORNEY. There are no outstanding powers of
attorney executed on behalf of the any of the Sellers.
4.22 INSURANCE. Attached as SCHEDULE 4.22 are complete and
accurate copies as of the date hereof of all insurance policies carried
by the Company and an accurate list of all insurance loss runs and
workers' compensation claims received for the past three policy years
With respect to each such insurance policy, to the Knowledge of Seller:
(i) the policy is legal, valid, binding, enforceable, and in full force
and effect; (ii) neither the Company nor any other party to the policy
is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which,
with notice or the lapse of time, would constitute such a breach or
default, or permit termination, modification, or acceleration, under the
policy; and (iii) no party to the policy has repudiated any provision
thereof. The Company has been covered during the past 10 years by
insurance in scope and amount customary and reasonable during the
aforementioned period. SCHEDULE 4.22 describes any self-insurance
arrangements affecting the Company.
4.23 LITIGATION. To the Knowledge of Sellers, SCHEDULE 4.23 sets
forth each instance in which the Company (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or
(ii) is a party or is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator. To the Knowledge of
Sellers, none of the actions, suits, proceedings, hearings, and
investigations set forth in SCHEDULE 4.23 could result in any material
adverse change in the business, financial condition, operations, results
of operations, or future prospects of the Company. None of the Sellers
(and employees of the Company with responsibility for litigation
matters) has any Knowledge that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against the
Company. To the Knowledge of Sellers, except as set forth in SCHEDULE
4.23, no proceeding is pending or threatened, as to which any Assets are
or would be subject. To the Knowledge of Sellers, SCHEDULE 4.23 also
sets forth each instance in which the Company is now, or has at any time
in the last ten (10) years, been, a plaintiff, petitioner or intervenor,
or has provided any public comment or statement, in any action, suit,
proceeding, hearing or investigation.
4.24 EMPLOYMENT CONTRACTS. A list of all employment contracts and
collective bargaining agreements, and all pension, bonus, profit-
sharing, option, or other agreements or arrangements providing for
employee remuneration or benefits to which Company is a party or by
which Company is bound is attached to this agreement as SCHEDULE 4.24.
All these contracts and arrangements are in full force and effect, and
neither Company, nor any
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other party, is in default under them. There have been no claims of
defaults and there are no facts or conditions which if continued, or on
notice, will result in a default under these contracts or arrangements.
There is no pending or threatened labor dispute, strike, or work
stoppage affecting Company' Business.
4.25 EMPLOYEE BENEFITS. Except for the plans disclosed in
SCHEDULE 4.25 ("Plans"), the Company (a) does not currently sponsor or
maintain any employee benefit plan within the meaning of section 3(3) of
ERISA and (b) has not since its inception sponsored, maintained or
contributed to any qualified employee pension benefit plan within the
meaning of sections 3(2) of ERISA and 401 of the Code, in which any
employees of the Company are or were participants (whether or not on an
active or frozen basis). The Company does not currently contribute to,
nor have they since its inception contributed (or been obligated to
contribute) to, any multiemployer pension plan within the meaning of
section 3(37) of ERISA on behalf of any employees of the Company. The
Company has complied in all material respects with the Consolidated
Omnibus Budget Reconciliation Act of 1985, and does not currently have,
and since its inception has not had, any retiree medical plan.
4.26 GUARANTIES. The Company is not a guarantor or otherwise
liable for any Liability or obligation (including indebtedness) of any
other Person.
4.27 CERTAIN BUSINESS RELATIONSHIPS. Except as set forth in
SCHEDULE 4.27, none of the Partners and their Affiliates has been
involved in any business arrangement or relationship with the Company
within the past 12 months, and none of the Partners and their Affiliates
owns any asset, tangible or intangible, which is used in the Business.
4.28 SECURITIES MATTERS. Sellers represent that they have
received the Prospectus covering the Parent Stock dated September 18,
1997, Prospectus Supplement No.1 and Prospectus Supplement No. 2, and a
copy of all documents incorporated therein by reference. The Sellers
further represent that they have been afforded an opportunity to ask
questions of, and receive responses from, officers or agents of Parent
and to investigate the business and affairs of Parent to their
satisfaction. The Sellers further represent that they are satisfied with
the results of their investigation and that they are relying on such
investigation, not on any particular representations made by Buyers
Parent, in their determination to invest in the Parent Stock. The
Sellers further represent that they are entirely familiar with the
nonhazardous liquid waste industry and that, in regard to an investment
in such industry, they are sophisticated investors and "accredited
investors" as such term is defined in the Securities Act.
4.29 SUFFICIENCY OF ASSETS. Except for the Excluded Assets and
the Company's existing BATF Permits, on the Closing Date the Buyers will
be acquiring all of the properties, rights and assets of every type and
description, real, personal and mixed, tangible and intangible, as have
been used or employed or held for use by the Company or its predecessors
in operating the Businesses during the past 12 months.
4.30 DISCLOSURE. To the Knowledge of Sellers, the representations
and warranties contained in this Section 4 do not contain any untrue
statement of a material fact or omit to
(23)
state any material fact necessary in order to make the statements and
information contained in this Section 4 not misleading. To the Knowledge
of Sellers, all information or materials provided by the Sellers (or
their agents or employees) to Buyers or their agents or employees
in connection with Buyers' examination of the Business, assets and
prospects of the Company have, in each case, been true and correct.
5. PRE-CLOSING COVENANTS.
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.
5.01 GENERAL. Each of the Parties will use his or its reasonable
best efforts to take all action and to do all things necessary in order
to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing
conditions set forth in Section 7 below).
5.02 NOTICES AND CONSENTS. The Partners will cause the Company to
give any notices to third parties, and will cause the Company to use its
best efforts to obtain any third-party consents that the Buyers
reasonably may request in connection with the transactions contemplated
by this Agreement. Each of the Parties will (and the Partners will cause
the Company to) give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection with
the transactions contemplated by this Agreement.
5.03 OPERATION OF BUSINESS. The Partners will not cause or permit
the Company to engage in any practice, take any action, or enter into
any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, the Partners will not cause or
permit the Company to (i) declare, set aside, or pay any distribution
with respect to its partnership interests, or (ii) otherwise engage in
any practice, take any action, or enter into any transaction of the sort
described in SECTION 4.09 above.
5.04 MAINTENANCE OF INSURANCE. The Company will continue to carry
its existing insurance, subject to variations in amounts required in the
Ordinary Course of Business. At the request of Buyers and at Buyers'
sole expense, the amount of insurance against fire and other casualties
which, at the date of this Agreement, Company carries on any of its
properties or in respect of its operations shall be increased by such
amount or amounts as Buyers shall specify.
5.05 PRESERVATION OF BUSINESS. The Partners will use their best
efforts to cause the Company to keep its Business and properties
substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors,
licensors, suppliers, customers, and employees.
5.06 FULL ACCESS. The Partners will permit, and the Partners will
cause the Company to permit, representatives of the Buyers to have full
access at all reasonable times,
(24)
and in a manner so as not to interfere with the normal business
operations of the Company, to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Company.
5.07 NOTICE OF DEVELOPMENTS. Each of the Parties shall use
reasonable best efforts (and in the case of the representations and
warranties set forth in Sections 3.01(c), 4.02 and 4.05 shall take all
necessary actions) to avoid any of their representations and warranties
becoming inaccurate between the date hereof and the Closing Date. Each
of the Sellers will give prompt written notice to the Buyers of any
adverse development resulting in the material inaccuracy of any of the
representations and warranties in SECTION 4 above. Each Party will give
prompt written notice to the others of any adverse development resulting
in the material inaccuracy of any of his, her or its own representations
and warranties in SECTION 3 above. If any representation or warranty of
any Party becomes inaccurate between the date hereof and the Closing
Date notwithstanding the reasonable best efforts (or, in the case of the
representations and warranties set forth in Sections 3.01(c), 4.02 and
4.05, all necessary actions) of the Party making such representation and
warranty, the recipient under this Agreement of such representation and
warranty shall have no obligation to consummate the Closing, but
(provided that the Party giving the representation and warranty has
properly notified the recipient pursuant to this Section 5.08), if such
recipient elects to waive (or is deemed to waive) as a condition
precedent to its obligation to consummate the Closing pursuant to
Section 7 below the inaccuracy of such representation and warranty, the
representation and warranty (except for the representations and
warranties set forth in Sections 3.01(c), 4.02 and 4.05) shall be deemed
to be amended, supplemented and corrected by the information contained
in the notice. Within ten business days of receipt of notice from any
Party of any event resulting in any representation and warranty of such
Party becoming inaccurate, the recipient of such representation and
warranty (other than the representations and warranties set forth in
Sections 3.01(c), 4.02 and 4.05) must either elect to terminate this
Agreement, or the recipient will be deemed to have waived as a condition
precedent to its obligation to close the inaccuracy of such
representation and warranty.
5.08 EXCLUSIVITY. The Partners will not (and the Partners will
not cause or permit the Company to) (a) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition of any partnership interest, or any substantial portion of
the Assets of, the Company or any other transaction or series of
transactions that would cause the representations and warranties of the
Sellers set forth in Section 4 to be incorrect in any respect, or would
otherwise prevent or hinder the transactions contemplated by this
Agreement, or (b) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt
by any Person to do or seek any of the foregoing. The Partners will not
vote their partnership interests in favor of any such acquisition. The
Partners will notify the Buyers immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the
foregoing.
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6 POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following the
Closing:
6.01 GENERAL. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, provided that any out-of-pocket expenses in
connection therewith shall be at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefor under Section 8 below). The Sellers acknowledge
and agree that from and after the Closing the Buyers will be entitled to
possession of all documents, books, records (including Tax records),
agreements, and financial data of any sort relating to the Company.
6.02 TRANSITION. Sellers will take no action that is designed or
intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of the Company from
maintaining the same business relationships with the Buyers after the
Closing as it maintained with the Company prior to the Closing. Sellers
will refer all customer inquiries relating to the Business of the
Company to the Buyers from and after the Closing.
6.03 CONFIDENTIALITY. Sellers will treat and hold as such all of
the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver
promptly to the Buyers or destroy, at the request and option of the
Buyers, all tangible embodiments (and all copies) of the Confidential
Information which are in Sellers' possession. In the event that Sellers
are requested or required (by oral question or request for information
or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, Sellers will notify the Buyers promptly of the request or
requirement so that the Buyers may seek an appropriate protective order
or waive compliance with the provisions of this Section 6.03. If, in the
absence of a protective order or the receipt of a waiver hereunder,
Sellers are, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for
contempt, Sellers may disclose the Confidential Information to the
tribunal; PROVIDED, HOWEVER, that the Sellers shall use their reasonable
best efforts to obtain, at the reasonable request, and at the expense,
of the Buyers, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information
required to be disclosed as the Buyers shall designate. The foregoing
provisions shall not apply to any Confidential Information which is
generally available to the public immediately prior to the time of
disclosure.
6.04 TAX RETURNS AND FILINGS; PAYMENT OF TAXES. Sellers shall at
their cost and expense file all tax returns and other reports or filings
in respect of (a) operations of the Company and (b) resulting from or in
connection with the sale of Assets pursuant hereto (whether in
connection with any sales, transfer, stamp or documentary tax or
otherwise), and shall in each case retain full responsibility in respect
thereof.
(26)
6.05 USE OF NAMES. Sellers agree that after the Closing Date they
shall not use or employ in any manner directly or indirectly the names
currently used by the Company or listed in SCHEDULE 4.13 other than
"Cucamonga Gold", and that Partners will take and cause to be taken all
necessary action by the Company, and any other persons in order to
change Company's names on or before the Closing Date.
6.06 BATF PERMITS. Sellers and Buyers each agree to do, perform,
and honor their obligations with respect to the BATF Permits (as defined
herein) set forth in Section 7.01(j) herein.
6.07 CCWD DISCHARGE FEE. Sellers have disclosed to Buyers the
receipt by the Company of an February 26, 1998 letter from the Cucamonga
County Water District ("CCWD") indicating a possible assessment by CCWD
of additional connection fees in the amount of $541,393.50 or more based
on an average daily flow of wastewater of 90,410 gallons/day (the
"Current Discharge Level"), which exceed the baseline level of 71,471
gallons/day (the "Baseline Discharge Level"). The Parties agree that
Sellers shall be responsible for, and shall promptly reimburse to and
indemnify Buyers from within 10 days of Buyers' written request, any
additional connection fees or other charges imposed by CCWD which are
based on or attributable to any wastewater discharge (i) occurring
before the Closing Date, or (ii) occurring after the Closing Date to the
extent such discharge is in excess of the Baseline Discharge Level but
does not exceed the Current Discharge Level. Buyers shall be responsible
for that portion of any additional connections fees or other charges
which are based on or attributable to wastewater discharge occurring
after the Closing Date which exceeds the Current Discharge Level (with
Seller responsible for that portion of the fees attributable to
discharge at or below the Current Discharge Levels). Notwithstanding
anything in this paragraph to the contrary, Sellers' liability to Buyers
under this Section 6.07 shall not exceed $541,393.50 for fees or charges
relating to wastewater discharge occurring after the Closing Date, but
shall not be limited for those relating to wastewater discharge
occurring before the Closing Date. Buyers agree to use their reasonable
efforts to minimize, avoid or reduce any additional connection fees or
other charges, including reasonable efforts to apply new technology and
techniques (such as a sprayer system) to reduce discharge for which
Sellers would be responsible hereunder, provided the same can be done
without undue burden or significant cost to Buyers, and with out
significant adverse impacts on the profitability of the Business
conducted at the Rancho Cucamonga plant. Any fees or charges which
Sellers reimburse to or indemnify Buyers from under this Section 6.07
shall not be treated by Buyers as a write-off or charge affecting EBITDA
for purposes of calculating the Contingent Stock Payment or Contingent
Cash Payment, to the extent of such reimbursement or indemnity.
7 CONDITIONS TO OBLIGATION TO CLOSE.
7.01 CONDITIONS TO OBLIGATION OF THE BUYERS. The obligation of
the Buyers to consummate the transactions to be performed by it in
connection with the Closing is subject
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to satisfaction of the following conditions:
(a) the representations and warranties set forth in
Section 3.01 and Section 4 above shall be true and correct at and
as of the Closing Date;
(b) the Sellers shall have performed and complied with all
of their covenants hereunder through the Closing;
(c) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent
consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, or (iii)
affect adversely the right of the Buyers to own the Assets and to
operate the Business (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(d) the Sellers shall have delivered to the Buyers a
certificate to the effect that each of the conditions specified
above in subsections (a) through (c) is satisfied in all
respects;
(e) Sellers shall have obtained the execution of and shall
have delivered to Buyers the Noncompetition Agreement in the
forms attached as Exhibit D;
(f) the Buyers shall have received from counsel to the
Sellers an opinion in form and substance as set forth in Exhibit
E attached hereto, addressed to the Buyers, and dated as of the
Closing Date;
(g) the Partners shall each have obtained the execution
of, and delivered to the Buyers, a spousal consent in the for
attached as Exhibit F;
(h) Sellers shall have delivered to Buyers, the bills of
sale and assignments in the forms attached hereto as Exhibits
X-0, X-0, X-0, and B, all duly executed by the parties thereto.
(i) Sellers shall have conveyed to Buyers fee title to the
Real Property by execution and delivery of statutory warranty
deeds in forms attached hereto as Exhibit C-1 and C-2 to Buyers
and Sellers shall have delivered to Buyers the title assurances
provided for in Section 1.07 in form and substance acceptable to
Buyers
(j) All necessary agreements and consents to the
consummation of the transactions contemplated by this Agreement,
or otherwise pertaining to the matters covered by it (including,
but not limited to, transfer of any franchises from Company to
Buyers), shall have been obtained by Sellers and delivered to
Buyers, except for the consents required from the United States
Department of Treasury, Bureau of
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Alcohol, Tobacco and Firearms (the "BATF") to operate the assets,
properties and Business of the Company in the manner in which
they are currently operated (collectively, the "BATF Permits"),
which shall be transferred in the manner provided in subsection
(k) below.
(k) Buyers shall have obtained all necessary BATF Permits
required for Buyers to operate the assets, properties and
Business of the Company in the manner in which they are currently
operated. Buyers and Sellers acknowledge Buyers will be unable to
obtain their own BATF Permits until after the Closing Date, but
anticipate that Buyer will be able to temporarily operate the
Business under Sellers' existing BATF Permits after Closing. The
condition to Closing set forth in this subsection (k) shall be
deemed satisfied on the Closing Date to the extent that (i)
Buyers can legally operate the Business under Sellers' existing
BATF Permits and (ii) Buyers determine, in their reasonable
discretion, that Buyers will be able to secure their own BATF
Permits to operate the Business within a reasonable time
following Closing. Buyers agree to use their reasonable best
efforts to secure both the right to temporarily operate under
Sellers' BATF Permits and to obtain Buyers' own BATF Permits as
soon as practicable including, without limitation, filing the
necessary bond(s) and submitting the necessary application(s) to
the BATF. Sellers agree to cooperate with Buyers in Buyers'
efforts to secure the BATF Permits including, without limitation,
(i) providing such documentation and information on the Company
or the Business in connection with Buyers' applications as may
reasonably be necessary or expedient to secure the BATF Permits,
and (ii) allowing Buyers to operate the Business under Seller's
BATF Permits, at no cost to Sellers, until such time as Buyers
have secured their own BATF Permits, provided that such use by
Buyers of Sellers BATF Permit is not prohibited under applicable
BATF laws. Seller's existing BATF Permits shall be canceled at
such time as the new BATF Permits issued to Buyers.
(l) all actions to be taken by the Sellers in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required
to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyers.
The Buyers may waive any condition specified in this Section 7.01 if it
executes a writing so stating at or prior to the Closing.
7.02 CONDITIONS TO OBLIGATION OF THE SELLERS. The obligation of
the Sellers to consummate the transactions to be performed by them in
connection with the Closing is subject to satisfaction of the following
conditions:
(a) the representations and warranties set forth in
Section 3.02 above shall be true and correct at and as of the
Closing Date;
(b) the Buyers shall have performed and complied with all
of its covenants hereunder through the Closing;
(29)
(c) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent
consummation of any of the transactions contemplated by this
Agreement or (ii) cause any of the transactions contemplated by
this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall
be in effect);
(d) the Buyers shall have delivered to the Sellers a
certificate to the effect that each of the conditions specified
above in subsections (a) through (c) is satisfied in all
respects;
(e) all actions to be taken by the Buyers in connection
with consummation of the transactions contemplated hereby and all
certificates, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Sellers.
The Sellers may waive any condition specified in this Section 7.02 if
they execute a writing so stating at or prior to the Closing.
8 REMEDIES FOR BREACHES OF THIS AGREEMENT.
8.01 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
The representations, warranties, covenants and agreements set
forth in Sections 3.01(c), 4.02, 6.01, 6.02, 6.03, 6.04, 6.05 and
Section 11 will survive the Closing perpetually. The representations
warranties, covenants and agreements set forth in Sections 4.05, 4.11,
and 4.25 will survive the Closing until the expiration of all applicable
federal, state, local and foreign statutory periods of limitations
(after giving effect to any waiver, mitigation or extension of any such
statutory periods of limitations). All of the other representations,
warranties, covenants and agreements set forth in this Agreement or in
any certificate or other writing delivered pursuant to this Agreement
(and the indemnity obligations with respect thereto under Sections 8.02
and 8.03) will survive the Closing until the second anniversary of the
Closing; provided, however, that any indemnity obligations under
Sections 8.02 and 8.03 which are applicable to any representation,
warranty, covenant or agreement which itself survives for a specific
period of time under this Section 8.01 shall survive for a period of
time concurrent with the survival period of that representation,
warranty, covenant or agreement. Notwithstanding anything in this
Section 8.01 to the contrary, in the case of the Sellers, if any of the
Sellers had Knowledge as of the Closing of the inaccuracy of a
representation or warranty made by the Sellers, or in the case of the
Buyer, if the Buyer had Knowledge as of the Closing of the inaccuracy of
a representation or warranty made by the Buyer, such representations and
warranties shall survive the Closing indefinitely. Furthermore,
notwithstanding any provision to the contrary set forth in the preceding
sentences of this Section or elsewhere in this Agreement or any
certificate or other writing delivered pursuant to or in connection with
this Agreement, any representation , warranty, covenant or agreement in
respect of which indemnity may be sought under Section 8.02 or
(30)
8.03 will survive the time at which such representation , warranty,
covenant or agreement would otherwise terminate pursuant to the
preceding sentences of this Section, if notice of the incorrectness or
breach of such representation, warranty, covenant or agreement giving
rise to such right to indemnity is given to the party from which
indemnity is sought prior to the time at which such representation,
warranty, covenant or agreement would otherwise terminate pursuant to
the preceding sentences of this Section. Any such notice must describe
the event, condition or contingency giving rise to the claimed
incorrectness or breach of such representation, warranty, covenant or
agreement and the Section or Sections or other divisions of this
Agreement or any certificate or other writing delivered pursuant to or
in connection with this Agreement upon which such right to indemnity is
based.
8.02 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYERS.
(a) In the event (i) the Sellers breach any of their
representations, warranties, agreements, covenants or conditions
contained herein, or (ii) the Buyers ever suffers any loss,
claim, cost or damage in connection with any Liability or
asserted claim arising in connection with operations or
activities of the Company or its predecessors (including claims
arising or alleged to arise in connection with environmental
matters), then the Sellers agree to indemnify the Buyers from and
against the entirety of any Adverse Consequences the Buyers may
suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in
the nature of, or caused by such breach, loss, claim, cost or
damage.
(b) Without limiting the generality of Section 8.02(b)
above, Sellers further agree to indemnify the Buyers from and
against the entirety of any Adverse Consequences the Buyers ever
suffers in connection with any Liability or asserted claim
resulting from, arising out of, caused by, or relating to (i) the
investigation by the United State Attorney for the Xxxxxx
District of Kentucky into possible violations of federal
environmental laws resulting from possible improper handling of
asbestos containing materials, or the subject matter of such
investigation, or (ii) the presence of asbestos on, in or under
any real property or improvements owned, leased or used by the
Company and to be conveyed (or assigned, in the case of leased or
used property) to the Buyers under this Agreement.
Notwithstanding anything in Section 8.05 herein to the contrary,
Sellers' indemnification obligations with respect to the matters
described in this Section 8.02(b) shall apply to all Liability of
Buyer without regard to whether or not such obligations exceeds,
the $100,000 aggregate amount described in Section 8.02(b).
8.03 INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS. In
the event (i) the Buyers breach any of their representations,
warranties, agreements, covenants or conditions contained herein, or
(ii) the Sellers ever suffer any loss, claim, cost or damage in
connection with any Liability or asserted claim arising in connection
with operations or activities of the Business after the Closing Date
(including claims arising or alleged to arise in connection with
environmental matters), then the Buyers agree to indemnify the Sellers
from and against the entirety of any Adverse Consequences the Seller may
suffer through and after the date
(31)
of the claim for indemnification resulting from, arising out of,
relating to, in the nature of, or caused by such breach, loss, claim,
cost or damage.
8.04 MATTERS INVOLVING THIRD PARTIES.
(a) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") which may give rise to a claim for indemnification
against any other Party (the "Indemnifying Party") under this
Section 8, then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; PROVIDED, HOWEVER, that no
delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel
of its choice satisfactory to the Indemnified Party so long as
(i) the Indemnifying Party notifies the Indemnified Party in
writing within 15 days after the Indemnified Party has given
notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the entirety of
any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (iii) the
Third Party Claim involves only money damages, and does not seek
an injunction or other equitable relief which would have a
significant, material impact on the Business or the Buyers, (iv)
settlement of, or an adverse judgment with respect to, the Third
Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice
materially adverse to the continuing business interests of the
Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section
8.04(b) above, (i) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the
defense of the Third Party Claim, (ii) the Indemnified Party will
not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party, and (iii) the
Indemnifying Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnified Party.
(d) In the event any of the conditions in Section 8.04(b)
above is or becomes unsatisfied, however, (i) the Indemnified
Party may defend against, and consent to the entry of any
judgment or enter into any settlement with respect to, the
(32)
Third Party Claim in any manner it may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent
from, any Indemnifying Party in connection therewith), (ii) the
Indemnifying Parties will reimburse the Indemnified Party
promptly and periodically for the costs of defending against the
Third Party Claim (including attorneys' fees and expenses), and
(iii) the Indemnifying Parties will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by
the Third Party Claim to the fullest extent provided in this
Section 8.
8.05 LIMITATION ON LIABILITY. The defense, indemnification and
hold harmless obligations set forth herein shall only apply to breaches
any representations, warranties, covenants and agreements discovered,
and for which a claim is asserted against the breaching Party in
writing, within time limits set forth in SECTION 8.01 above. The
defense, indemnification and hold harmless obligations set forth in this
SECTION 8 shall apply only after the aggregate amount of such
obligations exceeds $100,000, at which time the defense, indemnification
and hold harmless obligations shall be effective as to all amounts
including the first $100,000; provided, however, that such defense,
indemnification and hold harmless obligations shall not exceed, in the
aggregate, an amount equal to the Purchase Price. Notwithstanding
anything to the contrary contained herein, each Partner shall be liable
only for such Partner's Pro-Rata Share of the defense, indemnification
and hold harmless obligations set forth herein.
8.06 OTHER INDEMNIFICATION PROVISIONS. The foregoing
indemnification provisions are in addition to, and not in derogation of,
any statutory, equitable, or common law remedy any Party may have for
breach of representation, warranty, or covenant.
9 TERMINATION.
9.01 TERMINATION OF AGREEMENT. The Parties may terminate this
Agreement at any time prior to the Closing Date:
(a) by mutual written consent at any time prior to the
Closing;
(b) By Buyers if any of the conditions specified in
Section 7.01 has not been met or waived by Buyers at such time as
such condition is no longer capable of satisfaction (provided
Buyers are not otherwise in material breach of their
representations, warranties, covenants or agreements under this
Agreement, which breach is the direct and proximate cause of the
failed condition);
(c) By Sellers if any of the conditions specified in
Section 7.02 has not been met or waived by Sellers at such time
as such condition is no longer capable of satisfaction (provided
none of Sellers is otherwise in material breach of its respective
representations, warranties, covenants or agreements under this
Agreement, which breach is the direct and proximate cause of the
failed condition);
(33)
(d) By Buyers if there has been a material breach on the
part of any of Sellers of any representation, warranty, covenant
or agreement by Sellers set forth in this Agreement, which
breach, if capable of cure, has not been cured within fifteen
(15) business days following receipt by Sellers of written notice
of such breach;
(e) By Sellers if there has been a material breach on the
part of Buyers of any representation, warranty, covenant or
agreement by Buyers set forth in this Agreement, which breach, if
capable of cure, has not been cured within fifteen (15) business
days following receipt by Buyers of written notice of such
breach; or
(f) By Buyers or Sellers upon written notice given in
compliance with this Agreement if any governmental authority of
competent jurisdiction shall have issued a final permanent order
enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby and, in any such case the time
for appeal or petition for reconsideration of such order shall
have expired without such appeal or petition being granted.
9.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement by any of Buyers or Sellers as provided above, this
Agreement shall forthwith become void and, except for termination
pursuant to Section 9.01(d) or 9.01(e), there shall be no
liability on the part of Buyers or Sellers or their respective
officers or directors; provided that Sections 3.01(a), 3.01(c),
3.02(b), 3.02(d), 4.01, 4.04 and this Section 9.02 and the
provisions of Section 11 shall survive the termination.
10 CERTAIN DEFINITIONS.
As used herein, the following terms have the definitions set forth or
referred to below:
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"AFFILIATE" has the meaning set forth in Rule 12-2 of the regulations
promulgated under the Securities Exchange Act.
"AGREEMENT" has the meaning set forth in the preface above.
"AMEX" means the American Stock Exchange.
"APPLICABLE LAWS" has the meaning set forth in Section 4.19 above.
"APPLICABLE RATE" means the base rate of interest announced from time to
time by The Chase Manhattan Bank, N.A. plus 3 additional points.
(34)
"ASSETS" has the meaning set forth in Section 1.01 above.
"BUSINESS" means waste the resource recovery business engaged in by the
Company including, but not limited to processing the sugar and alcohol-bearing
liquid waste streams of breweries, soft drink manufacturers and food processors
into ethanol.
"BUYERS" has the meaning set forth in the preface above.
"CERCLA" has the meaning set forth in Section 4.16 above.
"CLOSING" has the meaning set forth in Section 1.06 above.
"CLOSING CASH PAYMENT" has the meaning set forth in Section 1.02(a)
above.
"CLOSING DATE" has the meaning set forth in Section 1.06 above.
"CLOSING STOCK PAYMENT" has the meaning set forth in Section 1.02(b)
above.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning the Business
and affairs of the Company that is not already generally available to the
public.
"CONTINGENT CASH PAYMENT" has the meaning set forth in Section 1.02(C)
above.
"CONTINGENT PAYMENT DATE" has the meaning set forth in Section 1.02(C)
above.
"CONTINGENT STOCK PAYMENT" has the meaning set forth in Section 1.02(d)
above.
"COMPANY" has the meaning set forth in the preface above; PROVIDED,
HOWEVER, that for purposes of the representations and warranties set forth in
Section 4 above, the "COMPANY" includes any subsidiary, affiliate or predecessor
of the Company in the event any Liability or obligation is imposed upon or
incurred by the Company in connection with the actions or operations of such
subsidiary, affiliate or predecessor and any after acquired property of the
Company including the Real Property.
"CURRENT ASSETS" means the amounts reflected as current assets of the
Company on its financial statements determined in accordance with GAAP and
includes, but is not limited to, items such as cash and cash equivalents,
accounts receivable (less reserves for doubtful accounts), short-term
investments, inventory and current prepaid assets.
"CURRENT LIABILITIES" means the amounts reflected as current liabilities
of the Company on its financial statements determined in accordance with GAAP
and includes, but is not limited to, items such as accounts payable, current
maturities of long-term debt, accrued expenses, and unpaid accrued taxes.
(35)
"DISCLOSURE SCHEDULES" has the meaning set forth in Section 4 above.
"EBITDA" has the meaning set forth in Section 1.02(C) above.
"ENVIRONMENTAL DOCUMENTS" has the meaning set forth in Section 4.18
above.
"ENVIRONMENTAL, HEALTH, AND SAFETY LAWS" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 4.16 above.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED ASSETS" has the meaning set forth in Section 1.01(j) above.
"EXTREMELY HAZARDOUS SUBSTANCE" has the meaning set forth in Sec. 302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4.08 above.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"HAZARDOUS MATERIALS" has the meaning set forth in Section 4.16 above.
"INDEMNIFIED PARTY" has the meaning set forth in Section 8.04 above.
"INDEMNIFYING PARTY" has the meaning set forth in Section 8.04 above.
"KNOWLEDGE" means as to any Person, that which such Person actually
knows or should know after reasonable investigation.
"LAND" has the meaning set forth in Section 1.01(h) above.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
(36)
"LONG TERM LIABILITIES" means all of the liabilities of the Company on
its financial statements determined in accordance with GAAP other than Current
Liabilities
"MOST RECENT BALANCE SHEET" means the balance sheet contained within the
Most Recent Financial Statements.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in Section
4.08 above.
"MOST RECENT FISCAL MONTH END" has the meaning set forth in Section 4.08
above.
"MOST RECENT FISCAL YEAR END" has the meaning set forth in Section 4.08
above.
"NET WORKING CAPITAL" means the difference between the Current Assets
and the Current Liabilities of the Company as of the date of computation.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"OWNERS POLICY" has the meaning set forth in Section 1.07(a) above.
"PARENT" has the meaning set forth in Section 1.02(b) above.
"PARENT SECURITIES DOCUMENTS" has the meaning set forth in Section
3.02(e) above.
"PARENT STOCK" has the meaning set forth in Section 1.02(b) above.
"PARTNERS" has the meaning set forth in the preface above.
"PARTY" has the meaning set forth in the preface above.
"PCBS" has the meaning set forth in Section 4.16 above.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PERSONAL PROPERTY" has the meaning set forth in Section 4.14(a) above.
"PLANS" has the meaning set forth in Section 4.25 above.
"PPC" has the meaning set forth in the preface above.
"PPK" has the meaning set forth in the preface above.
"PPF" has the meaning set forth in the preface above.
(37)
"PRO-RATA SHARE" has the meaning set forth in Section 4.02 above.
"PURCHASE PRICE" has the meaning set forth in Section 1.02 above.
"REAL PROPERTY" has the meaning set forth in Section 1.01(h) above.
"RESTRICTED STOCK" has the meaning set forth in Section 1.02(g) above.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES AUTHORITIES" has the meaning set forth in Section 3.02(e)
above.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable and (c) purchase
money liens and liens securing rental payments under capital lease arrangements.
"SELLERS" has the meaning set forth in the preface above.
"SURVEY" has the meaning set forth in Section 1.07(a) above.
"TAXES" means any taxes, duties, assessments, fees, levies or similar
governmental charges, together with any interest, penalties and additions to
tax, imposed by any taxing authority, wherever located (I.E. whether federal,
state, local, municipal or foreign), including without limitation all net
income, gross income, gross receipts, net receipts, sales, use, transfer,
franchise, privilege, profits, social security, disability, withholding,
payroll, unemployment, employment, excise, severance, property, windfall
profits, value added, AD VALOREM, occupation or any other similar governmental
charge or imposition.
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without limitation
any schedule or attachment thereto, any amendment thereof, and any estimated
report or statement.
"THIRD PARTY CLAIM" has the meaning set forth in SECTION 8.04 above.
"TITLE COMPANY" has the meaning set forth in Section 1.07(a) above.
"VALUATION PRICE" has the meaning set forth in Section 1.02(b) above.
11. GENERAL.
11.01 INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
(38)
11.02 NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
11.03 ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties
and supersedes any prior understandings, agreements, or representations
by or among the Parties, written or oral, to the extent they related in
any way to the subject matter hereof.
11.04 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either
this Agreement or any of his or its rights, interests, or obligations
hereunder without the prior written approval of the Buyers and the
Sellers; PROVIDED, HOWEVER, that the Buyers may (i) assign any or all of
their rights and interests hereunder to one or more of their Affiliates,
or any successor to all or any substantial part of the Business and
Assets of Buyers, and (ii) designate one or more of their Affiliates to
perform their obligations hereunder (in any or all of which cases the
Buyers nonetheless shall remain responsible for the performance of all
of their obligations hereunder).
11.05 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument. This Agreement
(including all agreements, certificates, instruments, and documents
appearing as exhibits hereto or required hereunder) may be executed and
shall be binding upon the parties when executed and delivered by
facsimile (including counterparts of facsimiles). Any Party executing
and delivering this Agreement or any other documents required hereunder
by fax agrees to promptly follow up the fax delivery with a duly
executed original of the document executed by fax, which original shall
be delivered to the other Party by overnight courier.
11.06 HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.07 NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed
to the intended recipient as set forth below:
If to the Sellers: C/O DWA of Belvedere Company
00 Xxxxxxxxx Xxxx, X.X. Xxx X
Xxxxxxxxx, Xxxxxxxxxx 00000
(39)
with a copy to:
Xxxxxxx X. Xxxxxxxx
Lippenberger, Thompson, Welch,
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
If to the Buyers: U S Liquids, Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx,
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: President
with a copy to:
Xxxx X. Xxxxx, Esq.
Best Best & Xxxxxxx LLP
00000 Xxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any Party set forth
above may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving
the other Parties notice in the manner herein set forth.
11.08 APPOINTMENT OF AGENT. Sellers hereby irrevocably appoint
the law firm of Lippenberger, Thompson, Xxxxx & Xxxxxx LLP, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 as their
registered agent in the State of California to accept and acknowledge
service of process. Buyers hereby irrevocably appoint the law firm of
Best Best & Xxxxxxx LLP, 00000 Xxx Xxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxxxx,
Xxxxxxxxxx 00000 as their registered agent in the State of California to
accept and acknowledge service of process. The Parties agree that
service of process or notice in any such action, suit or proceeding
shall be effective if in writing and delivered to the address provided
in Section 11.07, in the manner prescribed in such section.
11.09 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
California without giving effect to any choice or conflict of law
provision or rule (whether of the State of California or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
(40)
11.10 AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and
signed by the Buyers and Seller. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder
or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
11.11 SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
11.12 EXPENSES. Each of the Parties will bear his or its own
costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
11.13 CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
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"
shall mean including without limitation. The Parties intend that each
representation, warranty, and covenant contained herein shall have
independent significance.
11.14 SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly, each
of the Parties agrees that the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the
matter, in addition to any other remedy to which they may be entitled,
at law or in equity.
11.15 AUTHORITY. If any Party hereto is a corporation, trust,
estate, limited liability company or partnership, or general or limited
partnership, each individual executing this Agreement on behalf of such
entity represents and warrants that he or she is duly authorized to
execute and deliver this Agreement on its behalf.
(41)
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
SELLERS:
Parallel Products
a California limited partnership
By: DWA of Belvedere Company
a California corporation
Its: General Partner
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: President of General Partner
DWA of Belvedere Company
a California corporation
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: President
Estate of Xxxxx X. Xxxxx
By: /s/ XXXXX X. XXXXX
Xxxxx Xxxxx, Executor
By: /s/ XXXXX XXXXXXXXX
Xxxxx Xxxxxxxxx, Executor
Xxxxx X. Xxxxx Trust No. 1
By: /s/ XXXXX X. XXXXX
Xxxxx Xxxxx, Trustee
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx, Trustee
By: /s/ XXXX X. XXXXXXX
Xxxx X. Xxxxxxx, Trustee
/s/ XXXXX X. XXXXX
Xxxxx Xxxxx
/s/ XXXX XXXXXXX
Xxxx Xxxxxxx
/s/ XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx
(42)
BUYERS:
USL Parallel Products of California,
a California corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
Parallel Products of Kentucky, Inc.
a Kentucky corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
Parallel Products of Florida, Inc.
a Florida corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
The undersigned US Liquids, Inc., has read the foregoing
Agreement and agrees to be bound by the obligations expressly relating to it
contained therein.
US Liquids, Inc.,
a Delaware corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
(43)
FIRST ADDENDUM
TO
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This First Addendum ("Addendum") is entered into as of April 21, 1998 by
and between USL Parallel Products of California, a California corporation
("PPC"), Parallel Products of Kentucky, Inc., a Kentucky corporation ("PPK"),
Parallel Products of Florida, Inc., a Florida corporation ("PPF" and
collectively with PPC and PPK, the "BUYERS"), Parallel Products, a California
limited partnership (the "Company"), DWA of Belvedere Company, a California
corporation and the Company's general partner, Estate of Xxxxx X. Xxxxx, Xxxxx
X. Xxxxx Trust No. 1, Xxxxx Xxxxx, Xxxx Xxxxxxx and Xxxxxxx Xxxxxxx
(collectively the "Partners"). The Company and the Partners are referred to
collectively herein as the "SELLERS". The Buyers and Sellers are referred to
collectively herein as the "Parties."
The Parties hereby add the following provisions to the Agreement for
Purchase and Sale of Assets ("Agreement") among the Parties dated concurrently
herewith, which Agreement is incorporated herein by reference:
1. XXXXX FARGO BANK PAYOFF. Sellers agree at their sole cost and expense
to be responsible for, and to promptly cause, the release, termination, and
reconveyance of all liens, mortgages, deeds of trust, security interests, and
monetary encumbrances against any of the Assets, which liens, etc. are held by
Xxxxx Fargo Bank, its affiliates, successors, and assigns, following the payment
by Buyers of the wire transfer to Xxxxx Fargo Bank described in Section 1.03 of
the Agreement.
2. KENTUCKY PROPERTY. Sellers shall cause the release from title, and
the removal as an exceptions to the Title Commitment dated April 17, 1998 issued
by First American Title Ins. Co. for the real property owned by the Company and
located at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx, of the following matters:
(i) that certain mortgage dated June 8, 1995 to Xxxxxxx Xxxxxxx
Xxxxx, Trustee, in the original principal amount of $100,000.
(ii) the references to existing leases appearing as Exceptions 6
& 7 of Schedule B, Section 2 of the Title Commitment.
3. SCHEDULE 4.12(D) DISCLOSURES. With respect to those exceptions set
forth in Schedule 4.12(d) of the Disclosure Schedule (excluding Item l (Schedule
4.23 cross reference) and Item 2.c. (CCWD)), Sellers represent and warrant to
the Buyers that the Company have taken all steps to resolve and have fully
complied with (including paying any applicable fines) all such governmental
orders, directives, letters, or notices disclosed.
4. DISTRIBUTION OF RESTRICTED STOCK BY ESTATE Buyers agree that the
Estate of Xxxxx X. Xxxxx shall have the right to make a one-time distribution of
the Restricted Stock to be received by the Estate under the Agreement to Xxxxxx
X. Xxxxx and to the Xxxxx X. and Xxxxxx X.
Xxxxx Trust, the beneficiaries of the Estate; provided, however, that said
beneficiaries shall receive the Restricted Stock subject to the restrictions and
with the same legends provided for in the Agreement with respect to Restricted
Stock.
5. TRANSFER TAXES. Buyers and Sellers agree to share equally, any
transfer taxes (but not other types of taxes) required to be paid in connection
with the conveyance of the two parcels of real property located in Kentucky and
California, respectively, from the Company to Buyers.
6. ASSIGNMENT FEE. Sellers have agreed to pay to the lessor (Xxxxxx
Xxxxxxxxx) of the real property located at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx Road (the lease to which is being assigned by Company to Buyers under
the Agreement), the sum of $75,000 in consideration for the lessor's consent to
the assignment of the lease and the lessors' agreement not to increase rent on
account of such assignment. Buyers have agreed to reimburse Sellers $25,000 of
that amount. Accordingly, the Parties agree that Buyers shall wire transfer the
sum of $75,000 to the lessor immediately following closing, of which $50,000
shall be deducted from the Closing Cash Payment due to Sellers at Closing.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
Ontario, California, as of the date first above written.
SELLERS:
Parallel Products
a California limited partnership
By: DWA of Belvedere Company
a California corporation
Its: General Partner
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: President of General Partner
DWA of Belvedere Company
a California corporation
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: President
Estate of Xxxxx X. Xxxxx
By: /s/ XXXXX X. XXXXX
Xxxxx Xxxxx, Executor
By: /s/ XXXXX XXXXXXXXX
Xxxxx Xxxxxxxxx, Executor
Xxxxx X. Xxxxx Trust No. 1
By: /s/ XXXXX X. XXXXX
Xxxxx Xxxxx, Trustee
By: /s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx, Trustee
By: /s/ XXXX X. XXXXXXX
Xxxx X. Xxxxxxx, Trustee
/s/ XXXXX XXXXX
Xxxxx Xxxxx
/s/ XXXX XXXXXXX
Xxxx Xxxxxxx
/s/ XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx
BUYERS:
USL Parallel Products of California,
a California corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
Parallel Products of Kentucky, Inc.
a Kentucky corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
Parallel Products of Florida, Inc.
a Florida corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
The undersigned US Liquids, Inc., has read the foregoing Addendum and agrees to
be bound by
the obligations expressly relating to it contained therein, if any.
US Liquids, Inc.,
a Delaware corporation
By: /s/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Authorized Representative
