Exhibit 10.1
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AGREEMENT FOR THE SALE AND PURCHASE
OF STOCK OF
ATLANTIC WASTE DISPOSAL, INC.
TABLE OF CONTENTS
ARTICLE I
ACQUISITION; CLOSING
Section 1.1 Incorporation of Recitals, Exhibits, and Schedules...................... 2
Section 1.2 Time and Place for Closing.............................................. 2
Section 1.3 Excluded Liabilities; Distribution of Atlantic New York Stock........... 2
Section 1.4 Agreement to Sell Shares to Purchaser................................... 3
Section 1.5 Consideration........................................................... 3
Section 1.6 Deliveries by Purchaser................................................. 4
Section 1.7 Deliveries by Seller.................................................... 4
Section 1.8 Termination............................................................. 6
Section 1.9 Tax Treatment........................................................... 6
Section 1.10 Procedure for Termination; Effect of Termination........................ 8
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER,
ATLANTIC DISPOSAL AND THE SUBSIDIARIES
Section 2.1 Organization, Standing and Ownership.................................... 8
Section 2.2 Contracts, Permits and Material Documents............................... 9
Section 2.3 Personal Property....................................................... 10
Section 2.4 Customers............................................................... 11
Section 2.5 The Property............................................................ 11
Section 2.6 Sufficiency of Assets; Title; Consents.................................. 12
Section 2.7 Financial Statements.................................................... 12
Section 2.8 Liabilities; Accounts Receivable and Working Capital.................... 13
Section 2.9 Fiscal Condition........................................................ 14
Section 2.10 Tax Returns............................................................. 14
Section 2.11 Employees, Pensions and ERISA........................................... 15
Section 2.12 Legality of Operation................................................... 16
Section 2.13 Corrupt Practices....................................................... 18
Section 2.14 Authority............................................................... 18
Section 2.15 Transaction Intermediaries.............................................. 19
Section 2.16 Intellectual Property................................................... 19
Section 2.17 Litigation.............................................................. 19
Section 2.18 Management of Atlantic Disposal and Subsidiaries........................ 19
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 3.1 Structure................................................................ 20
Section 3.2 Authorization to Proceed with this Agreement............................. 20
Section 3.3 Binding Effect........................................................... 20
Section 3.4 Legality of Operation.................................................... 20
Section 3.5 Financing................................................................ 21
Section 3.6 Absence of Intermediaries................................................ 21
Section 3.7 Commission Filings....................................................... 21
ARTICLE IV
ADDITIONAL AGREEMENTS OF SELLER, PURCHASER, ATLANTIC DISPOSAL AND THE SUBSIDIARIES
Section 4.1 Purchaser's Access to Records and the Property.......................... 21
Section 4.2 Seller's Access to Records and the Property............................. 21
Section 4.3 Continuation of Businesses.............................................. 22
Section 4.4 Continuation of Insurance............................................... 24
Section 4.5 No Solicitation......................................................... 24
Section 4.6 FIRPTA Certificate...................................................... 24
Section 4.7 Financial Statements.................................................... 24
Section 4.8 Consents and Approvals; Other........................................... 24
Section 4.9 Discharge of Excluded Liabilities....................................... 25
Section 4.10 SEC Filings............................................................. 25
Section 4.11 Updated Information..................................................... 25
Section 4.12 Landfill Lease.......................................................... 26
ARTICLE V
ADDITIONAL AGREEMENTS OF PURCHASER AND SELLER
Section 5.1 Payment of Expenses........................................................ 26
Section 5.2 Filing of Tax Returns and Payment of Taxes................................. 26
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 6.1 Compliance by Seller, Atlantic Disposal and the Subsidiaries............. 27
Section 6.2 Litigation Affecting This Transaction.................................... 28
Section 6.3 Governmental or Regulatory Consents...................................... 28
Section 6.4 Other Consents........................................................... 28
Section 6.5 Closing of New York Agreement............................................ 28
Section 6.6 Landfill Lease........................................................... 28
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ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
Section 7.1 Compliance by Purchaser.................................................. 28
Section 7.2 Litigation Affecting This Transaction.................................... 29
Section 7.3 Governmental and Regulatory Consents..................................... 29
Section 7.4 Other Consents........................................................... 29
Section 7.5 Closing of New York Agreement............................................ 29
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification by Seller................................................ 29
Section 8.2 Indemnification by Purchaser............................................. 31
Section 8.3 Procedure for Indemnification with Respect to Third Party Claims......... 31
Section 8.4 Procedure for Non-Third Party Claims..................................... 32
Section 8.5 Survival of Claims....................................................... 33
Section 8.6 Prompt Payment........................................................... 33
Section 8.7 Insurance................................................................ 34
ARTICLE IX
MISCELLANEOUS
Section 9.1 Nondisclosure by Seller................................................. 34
Section 9.2 Nondisclosure by Purchaser.............................................. 34
Section 9.3 Assignment; Binding Effect; Amendment................................... 35
Section 9.4 Entire Agreement........................................................ 35
Section 9.5 Counterparts............................................................ 35
Section 9.6 Notices................................................................. 35
Section 9.7 Governing Law........................................................... 36
Section 9.8 No Waiver............................................................... 37
Section 9.9 Time of the Essence..................................................... 37
Section 9.10 Captions................................................................ 37
Section 9.11 Severability............................................................ 37
Section 9.12 Construction............................................................ 37
Section 9.13 Extension or Waiver of Performance...................................... 37
Section 9.14 Liabilities of Third Parties............................................ 37
Section 9.15 Agreement Not Binding Until Fully Executed.............................. 38
Section 9.16 Publicity............................................................... 38
Section 9.17 Arbitration............................................................. 38
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EXHIBITS AND SCHEDULES
Schedules
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1.9 Allocation of Assets
2.2 Material Documents
2.3(a)(i) Landfill Equipment
2.3(a)(ii) Rolling Stock
2.3(a)(iii) Containers
2.3(a)(iv) Boxcars
2.3(a)(v) Other Personal Property over $50,000
2.4 Customer List and Contracts
2.5(d) Wetlands
2.6(b) Permitted Encumbrances
2.6(c) Exceptions to Consents and Approvals
2.9 Fiscal Condition of Company
2.11(a) Employment Agreements
2.11(b) Employee Information
2.11(c) Employee Benefit Plans, Funds or Programs
2.11(e) Non-Qualified Plans
2.12(a) Exceptions to Company's operation in compliance with laws, etc.
2.12(b) Exceptions relating to environmental issues and liability
2.12(c) Other Interests in Landfills
2.12(d) Exceptions to Compliance with Environmental Laws
2.12(e) Notices of Violation
2.13(g) Exceptions to Approvals
2.14 Exceptions to right of Company to enter this Agreement
2.17 List of Litigation and Summaries
3.4 Exceptions to Purchaser Compliance with Laws
6.4 Other Consents
Exhibits
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A Legal Description of Landfill
B Guaranty
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AGREEMENT FOR THE SALE AND PURCHASE OF
STOCK OF ATLANTIC WASTE DISPOSAL, INC.
This Agreement ("Agreement") for the Sale and Purchase of Stock of
Atlantic Waste Disposal, Inc., a Delaware corporation ("Atlantic Disposal"), is
made as of March 25, 1998, by and among Atlantic Disposal, Brambles Waste
Services, Inc., a Delaware corporation (the "Seller"), Atlantic Transportation
Services, Inc., a Delaware corporation ("Atlantic Transportation"), Atlantic
Collection, Inc., a Delaware corporation ("Atlantic Collection"), Resource
Products, Inc., a Delaware corporation ("Resource Products"), and Eastern
Environmental Services, Inc., a Delaware corporation ("Purchaser").
RECITALS
WHEREAS, (i) Brambles USA is a wholly-owned subsidiary of Brambles
Industries Limited; (ii) the Seller is a wholly-owned subsidiary of Brambles
USA, Inc.; (iii) Atlantic Disposal is a wholly-owned subsidiary of the Seller;
and (iv) each of Atlantic Transportation, Atlantic Collection, and Resource
Products, is a wholly-owned subsidiary of Atlantic Disposal. Atlantic
Transportation, Atlantic Collection and Resource Products are hereinafter
sometimes referred to individually as a "Subsidiary" and together as the
"Subsidiaries";
WHEREAS, Atlantic Disposal operates (i) a municipal solid waste
landfill in Waverly, Virginia (the "Landfill") (a legal description of which is
attached hereto as Exhibit A) pursuant to a Contract and Ground Lease Agreement
with the County of Sussex, Virginia dated September 19, 1991, as amended on May
18, 1995 and December 20, 1996 (the "Landfill Lease"), and (ii) through the
Subsidiaries, truck and rail transportation, waste collection and tire shredding
businesses (individually the business and operations of Atlantic Disposal and
each Subsidiary are hereinafter sometimes referred to as a "Business" and
collectively as the "Businesses") and all of the tangible and intangible assets
and properties owned by Atlantic Disposal and the Subsidiaries are sometimes
referred to herein as the "Assets";
WHEREAS, on the date hereof, the Purchaser, the Seller and Atlantic of
New York, Inc., a Delaware corporation ("Atlantic New York"), have entered into
an agreement for the sale and purchase of stock (the "New York Agreement")
pursuant to which Purchaser has agreed, subject to the terms and conditions of
the New York Agreement, to acquire all of the common stock of Atlantic New York;
WHEREAS, the Purchaser, the Seller, the Subsidiaries and Atlantic
Disposal wish to enter into this Agreement pursuant to which Purchaser may,
subject to the terms and conditions hereof, acquire ownership of all of the
outstanding shares of Atlantic Disposal's capital stock, par value $1 per share
(the "Shares"); and
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WHEREAS, Brambles USA has on the date hereof entered into a Guaranty
in the form attached hereto as Exhibit B.
NOW, THEREFORE, the parties hereto intending to be legally bound
hereby do hereby covenant and agree as follows:
ARTICLE I
ACQUISITION; CLOSING
Section 1.1 Incorporation of Recitals, Exhibits, and Schedules. The
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recitals set forth above and each Exhibit and Schedule hereto are incorporated
herein by reference and are a part of this Agreement. This Agreement contains a
number of references to Schedules. In each case, the referenced Schedule has
been included in a separate disclosure letter, delivered to Purchaser and
specifically identified as such, prior to the execution hereof. The Schedules
contained in that disclosure letter are specifically incorporated by reference
herein as and if set forth herein.
Section 1.2 Time and Place for Closing. The closing for the purchase
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and sale of the Shares by the Purchaser under this Agreement shall take place on
or before the fifteenth day after the conditions to Closing set forth in
Articles VI and VII are satisfied, time being of the essence, or such other date
as the parties mutually agree, at the offices of Purchaser's counsel, Drinker
Xxxxxx & Xxxxx LLP, 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 or such other
place as the parties hereto may agree upon. The actual date of closing will be
established by the Purchaser and the Seller within ten days after the date on
which the conditions are satisfied. The date that closing occurs is referred to
hereinafter as the "Closing Date" and the act of closing as the "Closing."
Section 1.3 Excluded Liabilities; Distribution of Atlantic New York
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Stock.
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Prior to the Closing, Brambles Waste shall assume the Excluded
Liabilities (as defined below) and Atlantic Disposal shall distribute all of the
outstanding capital stock of Atlantic New York to Brambles Waste (the
"Distribution"). The term "Excluded Liabilities" means (i) all intercompany
obligations between Atlantic Disposal or any of the Subsidiaries, on the one
hand, and any of Brambles Industries Limited, Brambles USA, Brambles Waste,
Atlantic New York and any of their respective direct or indirect subsidiaries
(other than Atlantic Disposal or any of the Subsidiaries), on the other hand,
(ii) any Tax Liability (as defined in Section 2.10), and (iii) any cost,
expense, liability or claim relating to or arising from the matters involved in
United States Dredging Corp. v. Atlantic Waste Disposal, Inc., 96-CV 1989
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(E.D.N.Y.) (the "New York Case") or any related case or claim or counterclaim.
Section 1.4 Agreement to Sell Shares to Purchaser. At the Closing, the
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Seller shall transfer to Purchaser (or, at the direction of Purchaser, its
assignee permitted under Section 9.3 of this Agreement) all of the Shares, free
and clear of any Encumbrance, in exchange for the Purchase Price (as defined
below).
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Section 1.5 Consideration. The aggregate purchase price (as adjusted,
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the "Purchase Price") for the Shares shall be $80,600,000. The Purchase Price
shall be paid by federal wire transfer at Closing to the Seller pursuant to
instructions furnished by the Seller to the Purchaser in writing not fewer than
three business days prior to Closing, and shall be subject to adjustment as and
when provided for in Section 1.5(b).
(b) The Purchase Price shall be increased by the amount by which,
at Closing, the Net Working Capital (as defined below) is greater than zero, and
the Purchase Price shall be decreased by the amount by which, at Closing, the
Net Working Capital (as defined below) is less than zero. Any such increase or
decrease in Purchase Price shall be paid by the Purchaser or the Seller, as
applicable, within five (5) business days following the conclusive determination
of Net Working Capital (such fifth business day, the "Due Date"). The
determination of Net Working Capital shall be made as set forth in Section
1.5(c) below.
(c)(i) Within sixty (60) days after the Closing Date, the Purchaser
shall prepare and deliver to Seller the consolidated balance sheet for Atlantic
Disposal as of the close of business on the Closing Date (the "Closing Date
Balance Sheet"). The Closing Date Balance Sheet shall set forth the
consolidated Net Working Capital (as defined below) of Atlantic Disposal.
Seller shall have the right to review all of the Purchaser's work papers and all
relevant records of the Purchaser, Atlantic Disposal and the Subsidiaries
relating to the Closing Date Balance Sheet. For purposes of this Agreement, Net
Working Capital of Atlantic Disposal shall mean the current assets of Atlantic
Disposal, less all current liabilities excluding only the Excluded Liabilities,
in each case as determined in accordance with generally accepted accounting
principles, applied consistently with the accounting methods and principles used
to prepare the financial statements referred to in Section 2.7.
(ii) The Closing Date Balance Sheet delivered by the Purchaser to
Seller shall be deemed to be and shall be final, binding and conclusive on the
parties hereto, unless Seller disputes the Closing Date Balance Sheet in
accordance with this Section 1.5(c)(ii). Seller may dispute any amounts
reflected on the Closing Date Balance Sheet (any such disputed amounts, the
"Disputed Matters") by giving written notice to the Purchaser of each Disputed
Matter within forty-five (45) days of receipt of the Closing Date Balance Sheet.
Any Disputed Matters shall be subject to good faith negotiations between the
parties for up to fifteen (15) days prior to being referred to the Independent
Accounting Firm (as defined below). Any Disputed Matters not resolved by such
good faith negotiations shall be decided by an independent accounting firm
acceptable to both Seller and Purchaser (the "Independent Accounting Firm").
The costs and expenses of the Independent Accounting Firm shall be shared
equally by the Seller and the Purchaser. The Independent Accounting Firm so
chosen shall consider only the Disputed Matters and the Purchaser and the Seller
shall use reasonable efforts to cause the Independent Accounting Firm to render
a final decision on the Disputed Matters by delivering a written report to
Purchaser and Sellers no later than thirty (30) days after having received the
assignment with respect thereto. The decision of the Independent Accounting
Firm with respect to all Disputed Matters shall be based solely on whether
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the Closing Date Balance Sheet was prepared in accordance with the requirements
of this Agreement, shall be final and binding upon the parties hereto and shall
not be subject to challenge in any court.
Section 1.6 Deliveries by Purchaser. At the Closing, the Purchaser
-----------------------
shall deliver to the Seller:
(a) The Purchase Price, as provided in Section 1.5 above;
(b) A certified copy of the resolutions of the Board of Directors of
Purchaser authorizing the execution and delivery of this Agreement and the other
agreements, documents and instruments referred to herein or required hereby (the
"Collateral Documents") and the consummation of the transactions contemplated
herein and therein;
(c) A certificate in form and substance reasonably satisfactory to
the Sellers executed by the Chief Executive and Chief Financial Officers of the
Purchaser to the effect that the condition precedent to the obligation of the
Seller hereunder set forth in Section 7.1 is satisfied; provided that if such
condition is not satisfied and the Seller elects to close, the certificate shall
contain such exceptions as may be reasonably acceptable to Seller and Purchaser;
(d) Such other certificates and writings as may reasonably be
requested by the Seller to effectuate or evidence the completion of the
pertinent transactions contemplated hereby and the satisfaction by the Purchaser
of the pertinent terms and conditions hereof;
(e) A release from the Purchaser providing that the Purchaser is
releasing Atlantic Disposal and the Subsidiaries from any and all claims, causes
of action, debts, and obligations whatsoever relating to events occurring at or
prior to Closing, except any and all obligations arising under this Agreement
and the Collateral Documents, in form and content satisfactory to Seller.
Section 1.7 Deliveries by Seller. At the Closing, the Seller shall
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deliver or cause to be delivered to the Purchaser:
(a) A certificate in form and substance reasonably satisfactory to
Purchaser executed by the Chief Executive and Chief Financial Officers of the
Seller, Atlantic Disposal and the Subsidiaries as Purchaser shall request to the
effect that the condition precedent to the obligations of Purchaser hereunder
set forth in Section 6.1 is satisfied; provided that if such condition is not
satisfied and the Purchaser elects to close, the certificate shall contain such
exceptions as may be reasonably acceptable to Purchaser and Seller.
(b) A release from the Seller in form and content satisfactory to
Purchaser, which provides that the Seller and its affiliates are releasing
Atlantic Disposal and the Subsidiaries from any and all claims, causes of
action, debts, and obligations whatsoever, except any and all obligations
arising under this Agreement and the Collateral Documents, and from events
occurring after the Closing;
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(c) Current certificates of good standing for the Seller, Atlantic
Disposal and the Subsidiaries from the Secretaries of State of their respective
jurisdictions of formation and each jurisdiction in which they are qualified as
a foreign corporation or other business entity;
(d) Such certified and authenticated copies of all documents,
agreements, and filings executed or made in connection with this Agreement and
the assumption of the Excluded Liabilities as the Purchaser may reasonably
request;
(e) Duly executed releases or terminations of financing statements,
or other evidence reasonably satisfactory to Purchaser and Purchaser's lenders
that all liens, mortgages on and security interests in the Assets (other than
those comprising Permitted Encumbrances and Encumbrances which are not,
individually or in the aggregate, material) have been released and terminated;
(f) At Purchaser's cost, a bring down endorsement of the title
insurance policy with respect to the real property subject to the Landfill Lease
(the "Property");
(g) Certificates representing all of the Shares, duly endorsed for
transfer or with stock powers affixed thereto executed in blank in proper form
for transfer, free and clear of any Encumbrance;
(h) Copies of the Certificates of Incorporation and Bylaws of
Atlantic Disposal and each Subsidiary, certified, as appropriate, by the
Secretary of State of its respective state of incorporation or the Secretary of
the appropriate corporation as appropriate;
(i) Such other assignments, certificates, bills of sale, deeds, title
policies, affidavits, indemnities, estoppels and other instruments of conveyance
and warranty (in proper recordable or fileable form, as appropriate) as may
reasonably be requested by Purchaser to effectuate or evidence the completion of
the pertinent transactions contemplated hereby and the satisfaction by the
Seller of the pertinent terms and conditions hereof; and
(j) Substantially all books and records of Atlantic Disposal and the
Subsidiaries.
Section 1.8 Termination. This Agreement may be terminated and the
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transactions contemplated herein may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Purchaser and Seller (it being understood
that Purchaser and Seller shall, if a condition to Closing contained in Article
VI or VII becomes impossible of fulfillment using the efforts required by this
Agreement, promptly terminate this Agreement pursuant to this Section 1.8(a));
(b) by Purchaser or Seller, if a material breach of any provision of
this Agreement has been committed by the other and such breach has not been
waived or cured within ten (10) days after notice or if a Closing shall not have
occurred by 165 days from the execution of this Agreement; provided,
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however, that neither Purchaser nor Seller shall be entitled to terminate this
Agreement if the other is ready, willing and able to close and has brought,
prior to the termination of this Agreement by any party under this Section 1.8,
a claim for specific performance of this Agreement, in which case this Agreement
may not be terminated until a final determination of such claim for specific
performance pursuant to Section 9.18 of this Agreement; or
(c) by Purchaser or Seller, if the New York Agreement has been
terminated pursuant to its terms.
Section 1.9 Tax Treatment.
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(a) Allocation of Purchase Price. The purchase price for the Shares
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(including assumed liabilities of Atlantic Disposal and the Subsidiaries) shall
be allocated among the assets of Atlantic Disposal in accordance with Schedule
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1.9 which shall be prepared by Seller and delivered to Purchaser within 60 days
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after the Closing Date. Seller shall prepare for Buyer's review a schedule
setting forth (a) the modified aggregate deemed sales price (the "MADSP") at
which the Atlantic Disposal is deemed to have sold its assets for tax purposes
as a result of the Section 338(h)(10) Election, (b) the adjusted grossed-up
basis (the "AGUB") at which the Atlantic Disposal is deemed to have purchased
its assets for tax purposes as a result of such election, and (c) the
allocations of MADSP and AGUB among the assets of the Atlantic Disposal
(collectively, the "Proposed Initial Allocation"). The Proposed Initial
Allocation shall be determined in accordance with Section 338 of the Code and
the applicable regulations thereunder, in a manner consistent with the
allocation set forth on Schedule 1.9 hereto. Unless Purchaser shall have
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objected in writing to the Proposed Initial Allocation within 30 days of the
receipt thereof, Seller will be deemed to have agreed to the Proposed Initial
Allocation, which shall become the Initial Allocation. The Initial Allocation
shall be set forth on a statement (the "Initial Allocation Statement") signed by
the president or any vice president of Purchaser and Seller. If any increase or
decrease in MADSP and/or AGUB occurs, the amount of such increase or decrease
and the allocation thereof among the assets of the Atlantic Disposal
(collectively, the "Adjustment Allocation") shall be set forth on a statement
(the "Adjustment Allocation Statement") prepared by Seller and delivered to
Purchaser in accordance with Treas. Reg. (S)1.338(b)-3(d) or Treas. Reg.
(S)1.338(b)-3(e), whichever is applicable. The Adjustment Allocation Statement
shall be subject to the consent of Purchaser. Purchaser and Seller will, to the
maximum extent permitted under applicable law, (a) file, or cause to be filed,
all Tax Returns in a manner consistent with the Initial Allocation and any
Adjustment Allocations and (b) not take any action inconsistent therewith.
(b) Any dispute regarding the Proposed Initial Allocation or any
Adjustment Allocation shall be subject to good faith negotiations between the
parties for up to sixty (60) days prior to being referred to the Tax Dispute
Accountants (as defined below). At the end of such sixty day period, any
remaining dispute regarding the Proposed Initial Allocation or any Adjustment
Allocation shall be submitted for resolution to independent accountants of
nationally recognized standing reasonably satisfactory to Purchaser and Seller
(the "Tax Dispute Accountants"). The decision of the Tax Dispute Accountants
shall be final, conclusive and binding on the parties. The fees and expenses of
the Tax
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Dispute Accountants in resolving a dispute will be borne equally by Purchaser
and Seller except that the Tax Dispute Accountants may, if justice requires,
allocate such expenses and fees in any other manner they may determine between
the Purchaser, one the one hand, and Seller on the other.
(c) Section 338(h)(10) Election. The parties intend for the purchase
---------------------------
of Shares constitutes a "qualified stock purchase" for purposes of Section
338(d)(3) of the Code, Seller and Purchaser shall join in making an election
under Section 338(h)(10) of the Code with respect to the purchase of the Shares
(the "338(h)(10) Election"). Seller shall deliver to Purchaser at the Closing
(1) Internal Revenue Service Form 8023 and any applicable similar forms required
by state or local law fully completed with respect to the purchase of the Shares
and executed by a duly authorized officer of Brambles USA, and (2) all
additional data and materials required to be attached to such Form 8023 and any
applicable similar forms required by state or local law pursuant to Temp. Treas.
Reg. (S)1.338-1T or otherwise. Brambles USA shall attach a copy of such Form
8023 to the consolidated Federal income tax return for the affiliated group of
corporations of which it is the common parent for its taxable period which
includes the Closing Date and otherwise shall cooperate fully with Purchaser in
making the 338(h)(10) Election.
(d) Federal and State Tax Treatment. The parties hereto acknowledge
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that for Federal income tax purposes (and for state tax purposes for those
states that use a taxpayer's Federal income tax liability or Federal taxable
income as a base for computing such taxpayer's state tax liability, or whose
income tax provisions are otherwise similar to the Federal income tax in this
respect) the purchase of the Shares and the 338(h)(10) Election will be treated
in all respects as a sale of assets by Atlantic Disposal to a newly-formed
subsidiary of Purchaser followed by a complete liquidation of Atlantic Disposal
into Seller, and the parties agree to report the transaction in a manner
consistent with this treatment. The parties also agree that neither Purchaser
nor Atlantic Disposal shall be liable for any taxes, including income, transfer,
franchise, sales or use taxes, resulting from the purchase of the Shares and the
338(h)(10) Election.
Section 1.10 Procedure for Termination; Effect of Termination. A party
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terminating this Agreement pursuant to Section 1.8 shall give written notice
thereof to each other party hereto, whereupon this Agreement shall terminate and
the transactions contemplated hereby shall be abandoned without further action
and all further obligations of the parties under this Agreement will terminate;
provided, however, that no termination shall limit or impair any party's right
to pursue all legal remedies or limit any party's responsibility for any breach
of or failure to perform under this Agreement by another party. In addition to
any other remedy that the Purchaser or the Seller may have under this Agreement
or at law or in equity, the Purchaser shall be entitled to require the Seller to
specifically perform their obligations under this Agreement, and the Seller
shall be entitled to require the Purchaser to specifically perform its
obligations under this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER,
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ATLANTIC DISPOSAL AND THE SUBSIDIARIES
With knowledge that Purchaser is relying upon the representations and
warranties herein contained, the Seller, Atlantic Disposal and the Subsidiaries
each individually, severally and jointly represent and warrant to Purchaser, as
of the date hereof, and, as updated pursuant to Section 4.11, as of the Closing
Date, as follows. Certain of the following representations and warranties are
made to the knowledge of the Seller, Atlantic Disposal and Subsidiaries. When so
used, "knowledge" shall mean the actual knowledge of Xxxxxxx Xxxxxx, Xxxxx
Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxxxxx, T. Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxxx
and Xxxxx Xxxxxxx.
Section 2.1 Organization, Standing and Ownership.
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(a) Each of the Seller, Atlantic Disposal and the Subsidiaries is a
corporation, duly organized, validly existing, and in good standing under the
laws of its jurisdiction of formation and has all necessary corporate power and
authority to carry on its business as presently conducted, to own and lease the
assets and properties which it owns and leases and to perform all of its
obligations under each agreement and instrument by which it is bound. Each of
the Seller, Atlantic Disposal and the Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction in which it is required to qualify to do business, except where the
failure to be so qualified and in good standing would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
condition (financial or otherwise) or operations of Atlantic Disposal or the
Businesses, or on the Assets after taking into consideration the liabilities of
Atlantic Disposal and the Subsidiaries (a "Material Adverse Effect").
(b) All of the authorized capital stock of each Subsidiary is owned
of record by Atlantic Disposal as of the date hereof and at the Closing will be
owned of record by Atlantic Disposal free and clear of any Encumbrance.
(c) All of the capital stock of Seller is owned of record by Brambles
USA, free and clear of any Encumbrance. No individual, trust, corporation,
partnership, limited liability, joint venture, governmental body, tribunal,
agency, or instrumentality (individually a "Person" and collectively "Persons")
has any right (contractual, equitable, statutory or otherwise) option or warrant
to acquire any capital stock, indebtedness or obligation of Atlantic Disposal or
any Subsidiary and neither Atlantic Disposal nor any Subsidiary holds
beneficially or of record any equity or other interest (or has any obligation,
option, warrant, agreement or right to acquire) any equity interest in any
entity other than the Subsidiaries and Atlantic New York).
(d) All of the capital stock of Atlantic Disposal is owned of record
by the Seller free and clear of any Encumbrance. No Person (other than
Purchaser) has any statutory, equitable, contractual or other right of any kind
to acquire additional securities, interests, capital stock, indebtedness or
obligation of any kind in or from Atlantic Disposal nor has any Person claimed
any such rights. The
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Shares constitute all of the authorized capital stock of Atlantic Disposal. The
Shares have been duly authorized and validly issued, and are free and clear of
any Encumbrance.
Section 2.2 Contracts, Permits and Material Documents.
-----------------------------------------
(a) The items listed in Schedule 2.2 are all of the following that
are used by, in or for the benefit of the Businesses, in each case as and at the
date hereof ("Material Documents"): (i) leases for real and personal property;
(ii) licenses; (iii) franchises; (iv) promissory notes, guarantees, bonds,
letters of credit, mortgages, liens, pledges, and security agreements; (v)
collective bargaining agreements; (vi) patents, trademarks, trade names,
copyrights, trade secrets, trademarks, proprietary rights, symbols, service
marks, logos and all other intellectual property; (vii) permits, licenses,
consents and other approvals from governments, governmental agencies (federal,
state and local) and/or third parties relating to, used in or required for the
operation of the Businesses, including the license authorizing Atlantic Disposal
to operate a landfill at the Property ("Government Authorizations"); and (viii)
all other contracts, agreements (whether oral or written) and instruments not
listed on another Schedule attached to this Agreement (such as the customer
contracts listed on Schedule 2.4), in each such case, which are binding on
Atlantic Disposal or a Subsidiary and pursuant to which any of them derives any
material benefit or has imposed upon it any material detriment. The Material
Documents listed on Schedule 2.2 represent all of the items listed in subclauses
(i) through (viii) of the preceding sentence of Atlantic Disposal and the
Subsidiaries, including, without limitation, interests in leases for real
property, agreements and permits and licenses, except for documents under which
the aggregate liability and obligations of Atlantic Disposal and the
Subsidiaries does not and after the Closing will not exceed $200,000.
(b) Neither the Seller, Atlantic Disposal nor the Subsidiaries nor,
to their knowledge, any person or party to any of the Material Documents or
bound thereby is in material or knowing default under any of the Material
Documents, and no act or event has occurred which with notice or lapse of time,
or both, would constitute such a default, and the Landfill Lease is in full
force and effect and not in default in any respect. The Assets include all
rights necessary to enable Atlantic Disposal and the Subsidiaries to conduct the
Businesses as they are now being conducted. Except as disclosed on Schedule 2.2,
the Seller, Atlantic Disposal and each Subsidiary have performed all of their
obligations required to be performed by them under each Material Document.
(c) Each Material Document is in full force and effect, and is valid,
binding and enforceable against the parties thereto in accordance with its
terms.
Section 2.3 Personal Property. The Assets include all items of
-----------------
tangible personal property owned, leased or otherwise held for use by or in the
Businesses (the "Personal Property") and include, without limitation, the
following:
(i) Earthmoving, landfill, and other equipment used in the
landfilling operations, all of which are listed on Schedule 2.3(a)(i);
9
(ii) Rolling stock, including motor vehicles, trucks, front and
rear end loaders, and compactors and accessories and attachments to the rolling
stock together with information as to the make, description of body and chassis,
model number, serial number and year of each such vehicle all of which are
listed on Schedule 2.3(a)(ii);
(iii) Containers together with information as to container size
and year of manufacture, all of which are listed on Schedule 2.3(a)(iii);
(iv) Railroad boxcars, all of which are listed on Schedule
2.3(a)(iv);
Inventory of parts, tires and accessories;
(v) Shop tools;
(vi) Furniture and office or other equipment; and
(vii) Other tangible personal property having a book value or
original acquisition price in excess of $50,000, all of which are listed on
Schedule 2.3(a)(viii).
(a) At the Closing the Personal Property shall be in good operating
condition, normal wear and tear excepted.
Section 2.4 Customers. Schedule 2.4 attached hereto lists the name and
---------
address of each customer that provides or has provided within the past two years
prior to the date hereof more than 3% of the gross revenues of the Businesses
for any fiscal year, together with copies (or, in the case of oral contracts,
summaries), of all customer contracts with such customers, and the information
supplied thereon is true, correct and complete, in all material aspects. As of
the date hereof, neither the Seller, Atlantic Disposal nor the Subsidiaries nor,
to their knowledge, any Person or party to any of the customer contracts with
such customers is in material or knowing default under any of the customer
contracts, and no act or event has occurred which with notice or lapse of time,
or both, would constitute such a default. As of the date hereof, the Seller,
Atlantic Disposal and the Subsidiaries have not received any notice that any
such customer intends not to renew any contract or otherwise cease or curtail
doing business with any of them and, no such customer is currently renegotiating
any material term of any contract or any material contract. Except as would not
reasonably be expected to have a Material Adverse Effect, each such customer
contract is in full force and effect, and valid, binding and enforceable against
the parties thereto in accordance with its terms. Except as disclosed on
Schedule 2.4, each such customer contract is assignable without the consent,
approval by or authorization of any Person.
Section 2.5 The Property. Neither Atlantic Disposal nor any of the
------------
Subsidiaries has ever owned, leased or otherwise occupied, had an interest in or
operated any real property other than the Property, except as disclosed in
Schedule 2.5. Atlantic Disposal has, and at the Closing will have, a good and
10
marketable leasehold interest in full force and effect in the Property, and that
interest is insurable at regular standard rates by a reputable title company.
(a) Seller, Atlantic Disposal and the Subsidiaries have made
available to Purchaser all engineering, geologic and other similar reports,
documentation, surveys, title reports and maps relating to the Property in the
possession or control of Seller, Atlantic Disposal and the Subsidiaries or their
consultants or employed professional firms.
(b) No person, other than Atlantic Disposal, has a present or future
right to possession of all or any part of the Property, except for any right
defined in, under or by any of the Permitted Encumbrances.
(c) No portion of the Property contains any areas that could be
characterized as disturbed, undisturbed or man-made wetlands or as "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
Virginia Department of Environmental Protection ("DEP") whether such
characterization reflects current conditions or historic conditions which have
been altered without the necessary permits or approvals, except as listed on
Schedule 2.5(c).
(d) There are no levied or pending special assessments affecting all
or any part of the Property owed to any governmental entity and, to the Sellers'
knowledge, none is threatened.
(e) There are no proceedings or amendments pending and brought by or,
to the knowledge of the Seller, Atlantic Disposal and the Subsidiaries
threatened by, any third party which would result in a change in the allowable
uses of the Property or which would modify the right of Atlantic Disposal to use
the Property for a solid waste landfill after the Closing Date.
Section 2.6 Sufficiency of Assets; Title; Consents.
--------------------------------------
(a) The Assets will include all of the assets and properties used by
the Sellers, Atlantic Disposal and the Subsidiaries in the conduct of the
Businesses as of the date hereof together with all assets and properties
acquired by the Sellers, Atlantic Disposal and the Subsidiaries from and after
the date hereof, except, in each case, for assets that have been disposed of not
in breach of this Agreement. Such assets are sufficient to carry on the
Business after the Closing as previously conducted by the Sellers, Atlantic
Disposal and the Subsidiaries.
(b) Except as noted on Schedule 2.6(b), each Asset is presently owned
by Atlantic Disposal or a Subsidiary, free and clear of any security interests,
liens, mortgages, rights of third parties, title retention agreements, options,
equities and other restrictions on transfer or disposition (individually, an
"Encumbrance") and collectively "Encumbrances") other than (i) liens for taxes
that have not yet become delinquent and (ii) the Encumbrances listed on Schedule
2.6(b), (collectively, the "Permitted Encumbrances"). Upon the consummation of
the Closing all of the Assets will be owned by Atlantic
11
Disposal or a wholly-owned subsidiary of Atlantic Disposal free and clear of any
Encumbrance, except for Permitted Encumbrances. Each of Atlantic Disposal and
the Subsidiaries has and upon the consummation of the Closing will have good and
marketable title to all of the Assets, except for assets held under lease or
license. Schedule 2.6(b) identifies or specifically references another Schedule
identifying all liens and leases by amount affecting any of Assets and the
document, instrument or law under which it arises.
(c) Except as set forth on Schedule 2.6(c), no consent, approval,
ratification, waiver or other authorization of any Person (including, without
limitation, Government Authorizations) is necessary or appropriate for the
consummation of the transactions contemplated hereby (including, without
limitation, for the continuation of the Businesses by Atlantic Disposal and the
Subsidiaries without interruption as of the Closing).
Section 2.7 Financial Statements.
--------------------
(a) To the knowledge of the Seller, Atlantic Disposal and the
Subsidiaries, there is no material inaccuracy in the audited, consolidated
balance sheets for Brambles USA as of June 30, 1996 and June 30, 1997,
heretofore provided to Purchaser, and audited consolidated statements of income,
cash flow, and retained earnings for the twelve months then ended or the
unaudited, consolidated balance sheet for Brambles USA at December 31, 1997 and
unaudited consolidated statements of income, cash flow, and retained earnings
for the six-months then ended.
(b) The Seller, Atlantic Disposal and the Subsidiaries have
heretofore provided to Purchaser true and correct copies of unaudited
consolidated balance sheets for Atlantic Disposal and the Subsidiaries as of
June 30, 1996 and June 30, 1997, and unaudited consolidated statements of
income, cash flow and retained earnings for the twelve months then ended, all
prepared on an accrual basis.
(c) The Seller, Atlantic Disposal and the Subsidiaries have
heretofore provided to Purchaser true and correct copies of an unaudited
consolidated balance sheet for Atlantic Disposal and the Subsidiaries as of
December 31, 1997 ("Most Recent Balance Sheet"), and unaudited consolidated
statements of income, cash flow and retained earnings for the six months then
ended ("Most Recent Income Statement"), both prepared on an accrual basis and
consistently with the unaudited financial statements referred to in Section
2.7(b). The Most Recent Balance Sheet and Most Recent Income Statement are
hereafter referred to as the "Most Recent Financial Statements." Together, the
financial statements referred to in Sections 2.7(b) and (c) are hereinafter
referred to as the "Seller's Financial Statements."
The Seller's Financial Statements have been prepared in accordance with
Australian generally accepted accounting principles consistently applied as in
effect on the date hereof ("GAAP"), except in the case of the interim Seller's
Financial Statements, for the absence of footnotes. All notes and contingent
liabilities required to be stated and reflected under GAAP are stated and
reflected on the Seller's Financial Statements. Each of the Seller's Financial
Statements (including all footnotes thereto) is true, complete
12
and correct in all material respects. The consolidated balance sheets included
in Seller's Financial Statements present fairly and accurately in all material
respects the consolidated financial condition of Atlantic Disposal and the
Subsidiaries as of the dates indicated thereon and the statements of income
included in Seller's Financial Statements present fairly and accurately in all
material respects on an accrual basis the results of the operations of such
Atlantic Disposal and the Subsidiaries for the periods indicated thereon. Since
the respective dates of the Seller's Financial Statements, Atlantic Disposal and
the Subsidiaries have not (i) made any material change in accounting policies or
(ii) effected any prior period adjustment to, or other restatement of, any
Seller's Financial Statements for any period.
Section 2.8 Liabilities; Accounts Receivable and Working Capital.
----------------------------------------------------
(a) Atlantic Disposal and the Subsidiaries, on a consolidated basis,
have no liabilities other than (i) liabilities fully reflected or reserved for
in the Most Recent Financial Statements, (ii) liabilities incurred in the
ordinary course of the Businesses since the date of the Most Recent Financial
Statements, and (iii) liabilities, the existence of which are reflected on any
Schedule to this Agreement.
(b) All accounts receivable have been generated in the ordinary
course of the Businesses and all services required to be rendered for such
accounts receivable to be due have been rendered. To the knowledge of the
Seller, Atlantic Disposal and the Subsidiaries, there are no valid defenses or
set-offs to any of the accounts receivable.
Section 2.9 Fiscal Condition. Since the date of the Most Recent Balance
----------------
Sheet, except as set forth on Schedule 2.9, there has not been and, at the
Closing, there shall not have been:
(a) Any material adverse change in the condition (financial or
otherwise) and operations of Atlantic Disposal, the Subsidiaries or the
Businesses or of the Assets after taking into consideration the liabilities of
Atlantic Disposal and the Subsidiaries (a "Material Adverse Change"), or any
event, condition or contingency that is reasonably likely to result in such a
Material Adverse Change;
(b) Any disposition by Atlantic Disposal or any Subsidiary of any of
its capital stock or any grant of any option or right to acquire any of its
capital stock, or any acquisition or retirement by Atlantic Disposal and any
Subsidiary of any of its capital stock or any declaration or payment of any
dividend or other distribution of its capital stock;
(c) Any sale or other disposition of any asset, property or right
owned by Atlantic Disposal or any Subsidiary at the close of business on the
date of the Most Recent Balance Sheet, or acquired by them since that date,
other than in the ordinary course of business and not exceeding $200,000 in
value in the aggregate;
(d) Any expenditure or commitment by or on behalf of Atlantic
Disposal or any Subsidiary for the acquisition of any asset having an
acquisition price of $100,000 or more or assets having aggregate acquisition
prices of $200,000 or more;
13
(e) Any increase in excess of ten percent (10%) in the compensation
payable or to become payable by Atlantic Disposal or any Subsidiary to any
officer or key employee.
(f) any event which would be prohibited or would require the consent
of Purchaser under Section 4.3.
Section 2.10 Tax Returns. Atlantic Disposal and the Subsidiaries have
-----------
filed or will file all Federal and other tax returns, including without
limitation, income tax, franchise tax, corporate shell tax, sales tax, and use
tax, for all periods ending on or before the Closing Date, on or before the due
date of such return (as may have been extended by any valid extension of time)
and have paid or will pay all taxes owed by Atlantic Disposal and the
Subsidiaries for the periods covered by the said returns, except for such
failures to file or pay as could not result in a liability of Atlantic Disposal
or the Subsidiaries (a "Tax Liability") for such taxes or give rise to a lien on
the Assets or the capital stock of Atlantic Disposal or any Subsidiary.
Section 2.11 Employees, Pensions and ERISA.
-----------------------------
(a) Neither Atlantic Disposal, nor any Subsidiary has any contract of
employment with an officer or other employee that is not terminable without
penalty or payment other than accrued salary and benefits on notice of two weeks
or less, except as listed on Schedule 2.11(a).
(b) No employee of Atlantic Disposal or any Subsidiary is represented
by any union and there have been no organizing or other campaigns within the
past three years seeking such representation. The name, social security number
and current rate of compensation of each of the employees of the Businesses and
the department in which each person is employed is listed on Schedule 2.11(b)
attached hereto. There is no pending or threatened dispute between (i) the
Seller, Atlantic Disposal and the Subsidiaries and (ii) any of these employees
which might materially and adversely affect the continuance of the Businesses.
(c) Schedule 2.11(c) lists all employee benefit plans (as defined in
Section 2(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), funds or programs and any other employee benefit programs or
policies which are currently maintained by the Seller, Atlantic Disposal and the
Subsidiaries for the benefit of any employee of Atlantic Disposal or any
Subsidiary or to which any of them currently contributes or has an obligation to
contribute for the benefit of any employee of Atlantic Disposal or any
Subsidiary (collectively, the "Plans"), including, without limitation,
agreements containing "golden parachute" provisions, whether or not the Plans
are or are intended to be (i) covered or qualified under the Internal Revenue
Code of 1986, as amended (the "Code"), ERISA or any other applicable law, (ii)
written or oral, or (iii) funded or unfunded.
(d) The Seller, Atlantic Disposal and the Subsidiaries have delivered
to the Purchaser (i) true and complete copies of all Plan documents and other
instruments relating thereto as currently in
14
effect, (ii) accurate and complete detailed summaries of all oral Plans, (iii)
true and complete copies of the most recent financial statements with respect to
the Plans, (iv) true and complete copies of all annual reports for any Plan
prepared within the past three years, and (v) all filings submitted to and any
correspondence received from any government agency relating to any Plan within
the past three years.
(e) Each Plan which is intended to be qualified under Section 401(a)
and exempt from tax under Section 501(a) of the Code has received a favorable
determination letter from the IRS and no such letter relating to any Plan has
been revoked. To the knowledge of the Seller, Atlantic Disposal and the
Subsidiaries, nothing has occurred since the date of any such determination
letter which may adversely affect such qualification or exemption, or result in
the imposition of excise taxes or tax on unrelated business income under the
Code or ERISA except as set forth on Schedule 2.11(e).
(f) No Plan is subject to Title IV of ERISA. All Plans have been
administered, operated and managed in substantial compliance with the governing
documents of the Plan and the applicable requirements of ERISA and the Code and
other applicable laws and regulations.
(g) There is no material matter, action, audit, suit or claim pending
(other than routine claims for benefits) or, to the knowledge of the Seller,
Atlantic Disposal and the Subsidiaries, threatened relating to any Plan,
fiduciary of any Plan or assets of any Plan, before any court, tribunal or
government agency.
(h) The transactions contemplated herein will not accelerate any
liability under any Plan because of an acceleration of any rights or benefits to
which any employee may be entitled thereunder.
(i) Each most recent Plan audit report, and annual report, certified
by the Plan's auditors, fairly presents the actuarial status and the financial
condition of the Plan as at the date thereof and the results of operations of
the Plan for the plan year reflected therein and, subject to changes in amounts
attributable to investment performance and normal employee turnover, there has
been no material adverse change in the condition of the Plan since the date of
the most recent Form 5500 or audited annual financial statement.
(j) The Seller, Atlantic Disposal and the Subsidiaries have not had,
at any time, any obligations with respect to, and does not make and has not made
at any time contributions to, any multi-employer plan (as defined in Section
3(37) of ERISA).
Section 2.12 Legality of Operation.
---------------------
(a) Except as disclosed in Schedule 2.12(a) the Seller, Atlantic
Disposal and each of the Subsidiaries and the Property is and, upon the
consummation of the Closing will be, in compliance with all Federal, state and
local laws, rules and regulations, orders, decrees, directives, permits,
franchises, and consents applicable to it, the Businesses or the Assets
including, without limitation, the following laws: land use laws, zoning,
payroll, employment, labor, or safety laws; or federal, state or local
15
"anti-trust" or "unfair competition" or "racketeering" laws such as but not
limited to the Xxxxxxx Act, Xxxxxxx Act, Xxxxxxxx Xxxxxx Act, Federal Trade
Commission Act, or Racketeer Influenced and Corrupt Organization Act, but
excluding all Environmental Laws (as defined below) which are addressed in (b)
below, ("Law"). The Property at all times during the operation of the landfill
business has been licensed, permitted, and authorized as a landfill accepting
municipal solid waste in accordance with all applicable Laws. Except as
disclosed in Schedule 2.12(a) the Seller, Atlantic Disposal and each of the
Subsidiaries is, and upon consummation of the Closing, will be, in compliance
with all Government Authorizations. Except as disclosed in Schedule 2.12(a),
neither Seller, Atlantic Disposal nor the Subsidiaries has received notification
of any past or present failure by Atlantic Disposal or any Subsidiary to comply
with any Law applicable to it or its assets or to the Businesses or the Assets.
(b) Except as disclosed in Schedule 2.12(b) to this Agreement,
Atlantic Disposal and each Subsidiary is in compliance with all Federal, state
and local laws, rules and regulations relating to environmental issues of any
kind and/or the receipt, transport or disposal of any hazardous or non-hazardous
waste materials from any source ("Environmental Law"). Except as disclosed in
Schedule 2.12(b), with respect to any Environmental Law, each of Atlantic
Disposal and the Subsidiaries are in compliance with all permits, licenses, and
orders related thereto or issued thereunder with respect to Environmental Laws,
as are applicable to their respective property and operations, including,
without limitation, any order, decree or directive of any court or federal,
state, municipal, or other governmental department, commission, board, bureau,
agency or instrumentality wherever located. Except as set forth on Schedule
2.12(b), none of Atlantic Disposal or any Subsidiary has transported, stored,
treated or disposed, or allowed any third persons, on their behalf, to
transport, store, treat or dispose waste to or at (i) any location other than a
site lawfully permitted to receive such waste for such purpose or, (ii) any
location currently designated for remedial action pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or any similar
federal or state statute; nor has any of them performed, arranged for or allowed
by any method or procedure such transportation or disposal in contravention of
state or federal laws and regulations or in any other manner which may result in
liability for contamination of the environment; and none of them has disposed,
or knowingly allowed third parties to dispose of waste upon property owned or
leased by any of them other than as permitted by, and in conformity with,
applicable Environmental Laws. Without limiting the generality of the
foregoing, neither Atlantic Disposal nor any Subsidiary has received any
notification (including requests for information from any governmental agency
asserting that the Business is or may be a "potentially responsible person" for
a remedial action at a waste storage, treatment or disposal facility) pursuant
to the provisions of CERCLA, or any similar federal or state statute assigning
responsibility for the costs of investigating or remediating releases of
contaminants into the environment. Atlantic Disposal and the Subsidiaries have
not received hazardous waste as defined in the Resource Conservation and
Recovery Act, 42 USCA Section 6901 et seq., or in any similar federal or state
-- ---
statute in quantities which would require remediation.
(c) Except as listed in Schedule 2.12(c), neither Atlantic Disposal
nor any Subsidiary has ever owned, operated, had an interest in, and/or leased a
waste transfer, recycling, treatment, storage, landfill or other disposal
facility except for the facility located at the Property. Each of Atlantic
Disposal
16
and the Subsidiaries has obtained and maintained, when required to do so under
applicable Laws, trip tickets, signed by the applicable waste generators
demonstrating the nature of all waste deposited and or transported by any of
them. To the knowledge of the Seller, Atlantic Disposal and the Subsidiaries, no
employee, contractor or agent of any of Atlantic Disposal or any Subsidiary has,
in the course and scope of employment therewith, been harmed by exposure to
hazardous materials, as defined under the Environmental Laws. No liens with
respect to environmental liability have been imposed against any of Atlantic
Disposal or any Subsidiary under CERCLA or any comparable state statute or other
applicable Law, and no facts or circumstances exist which would give rise to the
same.
(d) Except as disclosed in Schedule 2.12(d), neither Atlantic
Disposal nor any Subsidiary has received notification of any past or present
failure by any of them to comply with any Environmental Law applicable to it or
its operations or its assets.
(e) Schedule 2.12(e) is a list of all notices of violations of
Environmental Law issued to any of Atlantic Disposal or any Subsidiary
pertaining to the Assets or the Businesses by any federal, state or local
regulatory agency. There are no notices of violation of Environmental Law
either from a federal, state or local authority received by any of them or
outstanding, except as listed in Schedule 2.12(e).
(f) To the knowledge of Seller, Atlantic Disposal and the
Subsidiaries, neither the Seller, Atlantic Disposal nor any Subsidiary is under
investigation by any District Attorney or similar state or local official or
agency or the Justice Department of the United States of America for the
violation of any Laws, including, without limitation, racketeering, unfair
competition or anti-trust. No facts or circumstances exist which would cause any
of them to be liable for the violation of any Laws including, without
limitation, racketeering, unfair competition, or anti-trust Laws.
(g) Except as set forth in Schedule 2.12(g), all licenses, approvals,
permits, certificates and other Government Authorizations needed or required for
the operation of the Businesses are set forth on Schedule 2.3. All such
Government Authorizations are in full force and effect, each of the Atlantic
Disposal and the Subsidiaries is in compliance with all such Government
Authorizations, and all such Government Authorizations have been validly and
legally obtained.
Section 2.13 Corrupt Practices. To the knowledge of Seller, Atlantic
-----------------
Disposal and the Subsidiaries, neither Atlantic Disposal nor any Subsidiary has
made, offered or agreed to offer anything of value to any employees of their
customers for the purpose of attracting business or any foreign or domestic
governmental official, political party or candidate for government office or any
of their respective employees or representatives, nor have any of them otherwise
taken any action which would cause it to be in violation of the Foreign Corrupt
Practices Act of 1977, as amended, or any law applicable to United States or
foreign election campaign contributions.
Section 2.14 Authority. Except as listed in Schedule 2.14, each of the
---------
Seller, Atlantic Disposal and the Subsidiaries, has the right, power, legal
capacity and authority to enter into, and, if a signatory
17
thereto, perform their respective obligations in respect of the transactions
under this Agreement, the Collateral Documents and the New York Agreement. The
execution, delivery and performance of this Agreement and the New York Agreement
have been duly authorized by all necessary action of the Seller, Atlantic
Disposal and the Subsidiaries. Except as set forth on Schedule 2.14, the
execution, delivery and performance of this Agreement, the Collateral Documents
and the New York Agreement will not result in a breach of or constitute a
default or result in the loss of any material right or benefit under:
(a) Any certificate, by-law, agreement or other document to which any
Seller or Subsidiary is a party or by which the Seller, Atlantic Disposal or the
Subsidiaries or any of its property is bound; or
(b) Any decree, order or rule of any court of governmental authority
which is binding on the Seller, Atlantic Disposal or the Subsidiaries or on the
property of any of them.
Section 2.15 Transaction Intermediaries. No agent or broker or other
--------------------------
person acting pursuant to the authority of the Seller, Atlantic Disposal and the
Subsidiaries is entitled to any commission or finder's fee in connection with
the transactions contemplated by this Agreement.
Section 2.16 Intellectual Property. To the knowledge of the Seller,
---------------------
Atlantic Disposal and the Subsidiaries, neither Atlantic Disposal nor any
Subsidiary has infringed or is infringing, on any trade name, trademark, service
xxxx, copyright, trade secret or patent belonging to any person, firm or
corporation ("Intellectual Property") and no one has or is infringing any
Intellectual Property right of any of them.
Section 2.17 Litigation. All pending or, to the knowledge of the Seller,
----------
Atlantic Disposal and the Subsidiaries threatened litigation, claims,
administrative or judicial proceedings or investigations by any governmental
agency or officials involving or potentially involving any of Atlantic Disposal,
any Subsidiary, the Businesses, the Property, the Assets, the Shares, this
Agreement or any of the transactions contemplated hereby, as of the date hereof,
together with a description of each such proceeding, is set forth on Schedule
2.17. As of the date hereof, there is no pending or, to the knowledge of the
Seller, Atlantic Disposal and the Subsidiaries, threatened litigation,
administrative or judicial proceedings or investigation involving any of
Atlantic Disposal, any Subsidiary, the Businesses, the Assets, the Shares except
as listed on Schedule 2.17, which could affect Atlantic Disposal, any
Subsidiary, the Businesses or the Assets.
Section 2.18 Management of Atlantic Disposal and Subsidiaries. As of the
------------------------------------------------
date hereof, the persons listed in the preamble to this ARTICLE II include the
principal members of the current management of Atlantic Disposal and the
Subsidiaries and hold the positions set forth next to their respective names
below:
Name position
-------------
Xxxxxxx Xxxxxx President and General Manager, Atlantic Disposal
18
Xxxxx Xxxxxxx Director of Operations, Atlantic Disposal
Xxxxxx Xxxxxxx Controller, Atlantic Disposal
Xxxxxx X. Xxxxxxxx President, Chief Executive Officer, Brambles USA
T. Xxxxxxx Xxxxxx Vice President, Corporate Development and
Acquisitions, Brambles USA
Xxxxxxx Xxxxxxx Vice President, Health, Safety and Environmental
Affairs, ENSCO
Xxxxx Xxxxxxx Chief Financial Officer, Brambles USA and Vice
President, Treasurer and Secretary, Atlantic
Disposal
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Seller that the representations
and warranties contained in this Article III are true on the date hereof.
Section 3.1 Structure. Purchaser is a corporation duly organized and
---------
legally existing in good standing under the laws of Delaware.
Section 3.2 Authorization to Proceed with this Agreement. Purchaser has
--------------------------------------------
the requisite corporate power and authority to execute and deliver this
Agreement and the New York Agreement and to perform its obligations hereunder
and thereunder. Purchaser has, by proper corporate proceedings, duly authorized
the execution, delivery and performance of this Agreement.
Section 3.3 Binding Effect. This Agreement has been, and on the Closing
--------------
Date the New York Agreement will be, legal, valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their respective
terms.
Section 3.4 Legality of Operation. Except as disclosed in Public
---------------------
Reports, and except as would not reasonably be expected to have a material
adverse effect on the ability of Purchaser to consummate the transactions
contemplated hereby (a "Purchaser Material Adverse Effect"), Purchaser is, and
upon the consummation of the Closing will be, in compliance with all Laws.
Except as disclosed in Schedule 3.4, and except as would not reasonably be
expected to have a Purchaser Material Adverse Effect, Purchaser is and upon the
consummation of the Closing will be, in compliance with all Government
Authorizations. Except as set forth on Schedule 3.4 and except as would not
reasonably be expected to have a Purchaser Material Adverse Effect or which
would invalidate this Agreement or any action taken or to be taken in connection
with this Agreement, with respect to any Law, there are no claims, actions,
suits, or proceedings pending, or, to the knowledge of Purchaser, threatened
against or affecting the Purchaser at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission board,
bureau, agency or instrumentality, wherever located.
19
Section 3.5 Financing. Purchaser has available to it, as of the date of
---------
this Agreement and as of the Closing, sufficient funds to enable it to
consummate the transactions contemplated by this Agreement, including, without
limitation, the Closing.
Section 3.6 Absence of Intermediaries. No agent, broker, or other
-------------------------
person acting pursuant to Purchaser's authority will be entitled to make any
claim against Seller for any commission or finder's fee in connection with the
transactions contemplated by this Agreement.
Section 3.7 Commission Filings. Purchaser has delivered to Sellers its
------------------
Form 10-Q for the quarter ending December 31, 1997, its Form 10-K for the fiscal
year ending June 30, 1997, all Form 8-K's, if applicable, filed by it since
December 31, 1997 through the date hereof, and any Proxy Statements or
Registration Statements, if applicable, filed by it since December 31, 1997 (the
"Public Reports").
ARTICLE IV
ADDITIONAL AGREEMENTS OF SELLER, PURCHASER, ATLANTIC DISPOSAL AND THE
SUBSIDIARIES
The Seller covenants and agrees with Purchaser as follows:
Section 4.1 Purchaser's Access to Records and the Property. The Seller
----------------------------------------------
will give to Purchaser and its representatives, experts and advisors, from and
after the date of execution of this Agreement and up until Closing, such access
during regular business hours and upon reasonable notice, to the properties of
Atlantic Disposal (including the Property), and to assets, books, contracts,
documents, records, contracts and customer lists relating to the Businesses as
Purchaser may reasonably request, and to make available to Purchaser and its
representatives, experts and advisors all additional financial statements of and
all information with respect to the Businesses that Purchaser may reasonably
request, except where Seller, Atlantic Disposal and the Subsidiaries reasonably
believe that such access may be prohibited by applicable law. Any such access
shall be coordinated exclusively through Brambles USA's management in Chicago,
Illinois. Notwithstanding the foregoing, Purchaser shall not contact any
customer of the Businesses, nor shall Purchaser contact any counter party to any
Material Document, for any reason, without the prior written consent of Brambles
USA. Purchaser and its representatives shall have the right to copy any
information or documentation the Purchaser is entitled to inspect under this
Section 4.1, except as is reasonably objected to by Seller, Atlantic Disposal
and the Subsidiaries.
Section 4.2 Seller's Access to Records and the Property. The Purchaser
-------------------------------------------
will give to Seller and its representatives, experts and advisors, from and
after the date of Closing, such access during regular business hours and upon
reasonable notice, to the Property, and to the assets, books, contracts,
documents, records, contracts and customer lists relating to the Businesses for
the period prior to the Closing Date as Seller may reasonably request, and to
make available to Seller and its representatives, experts and advisors all
additional financial statements of and all information with respect to the
Businesses that Seller may
20
reasonably request. If Seller's request causes Purchaser to incur unreasonable
additional out-of-pocket costs, Seller shall reimburse Purchaser for the
reasonable costs incurred in meeting Seller's request.
Section 4.3 Continuation of Businesses
--------------------------
(a) The Seller, Atlantic Disposal and the Subsidiaries will operate
the Businesses until the time of Closing using prudent business judgment so as
to preserve the business organizations. Each of Atlantic Disposal and the
Subsidiaries shall carry on its business in, and only in, the usual, regular and
ordinary course, consistent with past practice and in substantially the same
manner as heretofore conducted and, to the extent consistent with such business,
use its best efforts to preserve intact its present business organization, keep
available the services of its present officers and employees, and preserve its
relationships with customers, contractors, and others having business dealings
with it to the end that its goodwill and ongoing business shall be unimpaired at
the Closing. The Parties acknowledge the obligations of Seller under the New
York Agreement.
(b) Prior to the Closing, Seller, Atlantic Disposal and the
Subsidiaries shall not, without the prior consent of Purchaser, do, cause or
permit to occur any one or more of the following with respect to Atlantic
Disposal or any Subsidiary:
(i) Enter into or assume any contract or agreement which would
be a Material Document as defined in Section 2.2(a) had the contract or
agreement existed on the date this Agreement was executed, or amend any contract
or agreement which is a Material Document as defined in Section 2.2(a), or
forfeit or amend any license or permit or other qualification necessary or
useful to conduct the Businesses;
(ii) Borrow or agree to borrow any funds or voluntarily incur,
assume or become subject to whether directly or by way of guarantee, capital
lease or otherwise, any obligation for borrowed money or any obligation which
would be treated as long-term debt in accordance with GAAP;
(iii) Make any distribution of assets to its stockholders,
including without limitation cash and cash equivalents; provided, however, that
Atlantic Disposal may distribute cash and cash equivalents to Seller to the
extent it would not result in negative Net Working Capital;
(iv) Make any change in any profit-sharing, bonus, deferred
compensation, insurance, pension, retirement or other employee benefit plan;
(v) Enter into any collective bargaining agreement or enter
into any employment contracts or increase the compensation payable to or to
become payable by Atlantic Disposal or any Subsidiary after the Closing to any
person to be employed by Atlantic Disposal or any Subsidiary after the Closing,
except, upon notice, in the ordinary course of the Businesses upon compensation
anniversary dates;
21
(vi) Fail to pay or discharge when due any material
obligations, liabilities or debts;
(vii) Create or permit the creation of any Encumbrance of any
nature whatsoever (other than Permitted Encumbrances) on any of the Assets or
the Shares;
(viii) Take any action that would be required to be disclosed on
Schedule 2.9 pursuant to Sections 2.9(b), (c), (d), or (e) had it occurred prior
to the date hereof;
(ix) Make any change in its authorized or issued capital stock;
grant any stock option or other right to purchase shares of its capital stock or
other securities; issue or make any commitment to issue any security, including
any security convertible into capital stock; grant any registration rights or
purchase, redeem, retire or make any other acquisition of any shares of its
capital stock or other securities;
(x) Amend its certificate or articles of incorporation or
bylaws (or equivalent governing documents);
(xi) Execute, modify, amend or extend the term of any contract,
agreement or arrangement with any customer under which Atlantic Disposal or any
Subsidiary would be obligated to make payments or provide goods or services
after the Closing Date in an aggregate amount, or having an aggregate value, in
excess of $250,000;
(xii) Make any modification to Permit No. 562 issued by the
Virginia Department of Environmental Protection;
(xiii) Make any modification, amendment or extension to the term
of any of the following agreements: Disposal Agreement dated March 1, 1997, Rail
Expansion Agreement dated September 10, 1997, Contract and Ground Lease
Agreement between the County of Sussex, Virginia and Atlantic Development
Company, L.P. dated December 19, 1991, as amended by the First and Second
Amendments thereto, respectively, dated as of the 18th day of May, 1995 and the
20th day of December, 1996, respectively, the Operating Agreement between
Atlantic Waste Disposal, Inc. and Atlantic Development Company, L.P. dated as of
November 5, 1992, and the Agreement made as of June 1, 1994 by and between
Shoosmith Bros. and Atlantic Waste Disposal; or
(xiv) Enter into any agreement relating to any merger,
consolidation, combination, spinoff (other than the Distribution) or other
similar transaction involving Atlantic Disposal or any Subsidiary or otherwise
take any action prohibited by Section 4.4.
Section 4.4 Continuation of Insurance. The Seller will cause Atlantic
-------------------------
Disposal and each of its Subsidiaries to have at the Closing all policies of
insurance presently maintained and insuring any of the Assets against liability
and property damage, fire and other casualty.
22
Section 4.5 No Solicitation. Unless and until this Agreement is
---------------
terminated without the Closing having taken place neither Seller, Atlantic
Disposal nor the Subsidiaries will directly or indirectly solicit offers for the
sub-lease of the Property, or acquisitions or sales of Shares or other stock or
assets of Atlantic Disposal or any Subsidiary or for a merger or consolidation
involving Atlantic Disposal or any Subsidiary or respond to inquiries from,
share information with, negotiate with or in any way facilitate inquiries or
offers from, third parties who express or who have heretofore expressed an
interest in acquiring by merger, consolidation or other combination the
Businesses or any assets or properties of Atlantic Disposal or any Subsidiary.
Section 4.6 FIRPTA Certificate. Purchaser and the Seller acknowledge
------------------
that the financial provisions of this Agreement are subject to the requirements
of the Foreign Investment in Real Property Tax Act ("FIRPTA"), and that the
Internal Revenue Code ("Code") Sections 1445 and 6039C require Purchaser in
certain circumstances to withhold ten percent (10%) of the amount realized by
the Purchaser. Among other circumstances, Purchaser is not required to withhold
said amount if the Seller furnishes Purchaser with a certificate stating their
U.S. Taxpayer Identification Numbers and that they are not foreign persons
within the meaning of the Code. Accordingly, Seller shall provide to Purchaser
at Closing such certificate as is reasonably necessary to insure that such
withholding is not required under FIRPTA.
Section 4.7 Financial Statements. Prior to the Closing, Seller shall
--------------------
deliver (or cause to be delivered) to the Purchaser consolidated financial
statements for Atlantic Disposal and the Subsidiaries (including consolidated
balance sheets for Atlantic Disposal and the Subsidiaries and consolidated
statements of income, cash flow and retained earnings) in accordance with GAAP
covering each and every full (as of the Closing) fiscal quarter of Atlantic
Disposal and the Subsidiaries through the Closing.
Section 4.8 Consents and Approvals; Other. As promptly as practicable
-----------------------------
after the date of this Agreement, the Seller, Atlantic Disposal and the
Subsidiaries will make all filings required to be made by them in order to
consummate the transactions contemplated herein. The Seller and Purchaser shall
use all commercially reasonable efforts to cause the conditions to Closing in
Article VI and VII (including, without limitation, the obtaining of consent to
the acquisition by Purchaser through its acquisition of the Shares of the rights
of Atlantic Disposal under the Landfill Lease), to be satisfied and to obtain
all requisite approvals, authorizations, and consents to the transactions
contemplated hereby, including the obtaining of all Government Authorizations
and other consents necessary and appropriate to effect the Closing; provided,
however, that Seller, Atlantic Disposal and the Subsidiaries shall not (except
as they may otherwise agree in writing) be required to pay money other than the
reasonable expenses and costs of Seller, Atlantic Disposal and the Subsidiaries
and third parties to obtain any such consent nor will they be required to modify
or amend any contractual arrangements in a manner adverse to them to obtain any
such consent.
Section 4.9 Discharge of Excluded Liabilities. At or prior to the
---------------------------------
Closing, Seller shall discharge all intercompany liabilities referred to in
clause (i) of the definition of Excluded Liabilities. Following the Closing, the
Seller and Brambles USA shall (a) promptly discharge, as they become due, all
other
23
Excluded Liabilities, if any, and shall take all steps necessary to
ensure that no Excluded Liability shall become an obligation or liability of
Atlantic Disposal or any Subsidiary and (b) defend the New York Case and pay and
discharge when due all costs, expenses, and liabilities associated with the New
York Case. The Purchaser shall make available to the Seller all records and
personnel reasonably requested by Seller in connection with the New York Case.
Section 4.10 SEC Filings. Seller, Atlantic Disposal and the Subsidiaries
-----------
shall cooperate and shall use all reasonable efforts to cause their auditors to
cooperate with all reasonable requests of Purchaser and its auditors necessary
to audit or reaudit all prior periods for activities of Atlantic Disposal and
the Subsidiaries to the extent necessary to enable Purchaser and/or any
affiliate of Purchaser to make periodic reports pursuant to the Securities
Exchange Act of 1934, as amended (the "Securities Exchange Act"), to make a
public offering of its securities under the Securities Act of 1933, as amended
(the "Securities Act"), or to make a private placement of its securities, and
Seller, Atlantic Disposal and the Subsidiaries hereby consent to the use of
historical financial information, to be included (if required by the rules and
regulations of the Securities and Exchange Commission (the "Commission") or any
applicable state securities law) in any of Purchaser's or Purchaser's
affiliate's filing with the Commission or any state securities commission under
either the Securities Exchange Act or the Securities Act and in any prospectus
or memorandum used in connection with any offering of their securities. The
cooperation of Seller shall include, without limitation, the execution of any
audit representation letters reasonably requested by Purchaser's auditors.
Purchaser shall indemnify and hold harmless Seller, Atlantic Disposal and the
Subsidiaries against any and all fees and expenses incurred or to be incurred at
any time in the future to comply with the foregoing. Purchaser acknowledges
that neither Seller, Atlantic Disposal nor the Subsidiaries shall have any
responsibility to any purchaser of securities in Purchaser for any information
provided pursuant to this Section 4.10 and Purchaser shall indemnify and hold
harmless Seller, Atlantic Disposal and the Subsidiaries and their respective,
officers, directors, employees or representatives in connection with any
information provided pursuant to this Section 4.10 against claims made by any
such purchaser of securities.
Section 4.11 Updated Information. Not less than three days prior to the
-------------------
Closing, the Sellers shall provide the Purchaser with a Schedule or Schedules
listing all events and matters occurring after the date hereof which would have
been required to be disclosed on a Schedule to this Agreement if they had
occurred prior to the date hereof, together with a certificate of Sellers to the
effect that, each representation and warranty as supplemented is true and
correct as of the date of the certificate.
Section 4.12 Landfill Lease. The Seller, Atlantic Disposal, and, as
--------------
applicable, the Subsidiaries, shall use their reasonable best efforts to obtain
an amendment to the Landfill Lease in form and substance satisfactory to
Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS OF PURCHASER AND SELLER
24
Section 5.1 Payment of Expenses. Purchaser will pay all expenses
-------------------
(including legal and accounting fees) incurred by it in connection with the
negotiation, execution and performance of this Agreement and the Collateral
Documents. Except as otherwise specified herein, the Seller, Atlantic Disposal
and the Subsidiaries will pay all expenses incurred by Seller, Atlantic Disposal
and the Subsidiaries (including legal and accounting fees) in connection with
the negotiation, execution and performance of this Agreement and the Collateral
Documents and the consummation of the transactions hereunder and thereunder.
Additionally, the Purchaser shall bear the following expenses: (i) filing and
other fees payable under the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of
1976, as amended, (ii) the costs of auditing any accounting records of Atlantic
Disposal or its Subsidiaries for any period requested by Purchaser pursuant to
Section 4.10 and (iii) the cost of the title policies and surveys, if any, with
respect to the Property required by Purchaser as a condition of the Closing.
Section 5.2 Filing of Tax Returns and Payment of Taxes.
------------------------------------------
(a) As soon as practicable after the Closing Date, Brambles USA and
the Seller will prepare and file or cause to be prepared and filed all
appropriate tax returns that are required to be filed for the operations of
Atlantic Disposal and its subsidiaries for the Pre-Closing Tax Period (as
defined in Section 5.2(b)) and will timely pay or cause to be paid the amount of
taxes shown to be due on such tax returns. The books and records of the Seller,
Atlantic Disposal and its subsidiaries will be maintained, and the Federal,
state and other income tax returns of the "affiliated group" (as defined in
Section 1504(a) of the Code) of which the Seller and each of Atlantic Disposal
and its subsidiaries is a member (the "Seller Group") will be filed, so as to
accurately reflect the operations of Atlantic Disposal and its subsidiaries for
the Pre-Closing Tax Period. Purchaser shall prepare and file or cause to be
prepared and filed all appropriate tax returns for the operations of Atlantic
Disposal and its subsidiaries for all taxable periods after the Pre-Closing Tax
Period and will timely pay or cause to be paid the amount of taxes shown to be
due on such tax returns.
(b) For purposes of this Agreement, "Pre-Closing Tax Period" means
----------------------
the period (including all prior taxable years) ending on and including the
Closing Date. In the case of jurisdictions with respect to which a taxable
period of Atlantic Disposal or a subsidiary does not end on the Closing Date,
there shall be a deemed short taxable period ending on and including the Closing
Date and a second deemed short taxable period beginning on and including the day
after the Closing Date. For purposes of allocating gross income and deductions
between deemed short taxable periods, all amounts of income and deduction shall
be deemed to have accrued pro rata during Atlantic Disposal or such subsidiary's
actual taxable period, except for items of income or loss arising from an
extraordinary event, which shall be reflected in the period in which such event
occurred, and all taxes other than income taxes shall be deemed to have accrued
pro-rata during Atlantic Disposal's or such subsidiary's actual tax period.
(c) Purchaser and Seller will cooperate fully with each other in
connection with (i) the preparation and filing of any Federal, state or local
tax returns that include the business and operations of Atlantic Disposal and
its subsidiaries with respect to any tax return that includes operations of
Atlantic Disposal and its subsidiaries within the Pre-Closing Tax Period, and
(ii) any audit examination by any
25
government taxing authority of the tax returns referred to in clause (i). Such
cooperation shall include, without limitation, the furnishing or making
available of records, books of account or other materials of Atlantic Disposal
and its subsidiaries necessary or helpful for the defense against assertions of
any taxing authority as to any tax returns which include operations of Atlantic
Disposal and its subsidiaries within the Pre-Closing Tax Period.
ARTICLE VI
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to purchase the Shares shall be subject to the
fulfillment or waiver by the Purchaser at or prior to the time of the Closing of
each of the following items:
Section 6.1 Compliance by Seller, Atlantic Disposal and the
-----------------------------------------------
Subsidiaries. The Seller, Atlantic Disposal and the Subsidiaries shall (a) have
------------
performed and complied with all of the obligations and conditions required by
this Agreement to be performed or complied with by them at or prior to the
Closing Date; (b) there shall not have occurred any Material Adverse Change, and
(c) all representations and warranties of Seller, Atlantic Disposal and the
Subsidiaries contained in this Agreement shall have been true and correct when
made, and (d) each representation and warranty made in this Agreement by Seller,
Atlantic Disposal and the Subsidiaries, shall be true and correct as of the
Closing Date; provided, however, that where the failure to perform such
obligations and/or the failure of representations and warranties to be true and
correct, taken in the aggregate (and including any changes reflected as
supplemental disclosures provided pursuant to Section 4.11), would not have a
Material Adverse Effect, the condition to Closing set forth in subpart 6.1(d)
shall be deemed waived. Purchaser shall have received a Certificate of the
Seller, Atlantic Disposal and the Subsidiaries duly executed by the Chief
Executive and Chief Financial Officers of each Seller, Atlantic Disposal and the
Subsidiaries to such effect.
Section 6.2 Litigation Affecting This Transaction. No order, statute,
-------------------------------------
rule, regulation, executive order, injunction, stay, decree or restraining order
shall have been enacted, entered, promulgated or enforced by any court of
competent jurisdiction or governmental or regulatory authority or
instrumentality that prohibits the consummation of the transactions to be
consummated at the Closing; no action, suit, investigation or proceeding by any
governmental or regulatory authority or instrumentality shall be pending which
seeks to restrain, prohibit or declare illegal the transactions to be
consummated at the Closing.
Section 6.3 Governmental or Regulatory Consents. All governmental or
-----------------------------------
regulatory consents, approval, permits, and authorizations necessary for the
performance by Purchaser and the Seller, Atlantic Disposal and the Subsidiaries
of their respective obligations at the Closing, including termination of the
waiting period under the HSR Act and the obtaining of all necessary consents
under the Landfill Lease, shall have been obtained, shall unconditionally permit
the consummation of the transactions contemplated to be effected at the Closing
and shall be satisfactory to Purchaser in its sole discretion.
26
Section 6.4 Other Consents. The consents set forth on Schedule 6.4
--------------
shall have been obtained, shall unconditionally permit the consummation of the
transactions contemplated to be effected at the Closing and shall be
satisfactory to Purchaser in its sole discretion.
Section 6.5 Closing of New York Agreement. The closing of the
-----------------------------
transactions contemplated by the New York Agreement shall have occurred or shall
be occurring concurrently.
Section 6.6 Landfill Lease. The Landfill Lease shall have been amended
--------------
and such amendment shall be satisfactory in form and substance to Purchaser in
its sole discretion.
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of the Seller to transfer the Shares in accordance with
this Agreement shall be subject to the fulfillment or waiver in writing by the
Seller at or prior to the time of the Closing of each of the following
conditions:
Section 7.1 Compliance by Purchaser. The Purchaser shall have performed
-----------------------
and complied in all material respects with all of the obligations and conditions
required by this Agreement to be performed or complied with by it at or prior to
or at the Closing Date. All representations and warranties of Purchaser
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date, with the same force and effect as though made at
and as of the Closing Date.
Section 7.2 Litigation Affecting This Transaction. No order, statute,
-------------------------------------
rule, regulation, executive order, injunction, stay, decree or restraining order
shall have been enacted, entered, promulgated or enforced by any court of
competent jurisdiction or governmental or regulatory authority or
instrumentality that prohibits the consummation of the transactions to be
consummated at the Closing, and no action, suit, investigation or proceeding by
any governmental or regulatory authority or instrumentality shall be pending
which seeks to restrain, prohibit or declare illegal the transactions to be
consummated at the Closing.
Section 7.3 Governmental and Regulatory Consents. All governmental or
------------------------------------
regulatory consents, approval, permits and authorizations necessary for the
performance by Purchaser and the Seller, Atlantic Disposal and the Subsidiaries
of their respective obligations at the Closing, including termination of the
waiting period under the HSR Act, shall have been obtained, shall
unconditionally permit the consummation of the transactions contemplated to be
effected at the Closing and shall be satisfactory to Seller in its sole
discretion.
27
Section 7.4 Other Consents. The consents identified in Schedule 7.4
--------------
shall have been obtained, shall unconditionally permit the consummation of the
transactions contemplated to be effected at the Closing and shall be
satisfactory to Sellers in their sole discretion.
Section 7.5 Closing of New York Agreement. The closing of the
-----------------------------
transactions contemplated by the New York Agreement shall have occurred or shall
be occurring concurrently.
ARTICLE VII
INDEMNIFICATION
Section 8.1 Indemnification by Seller.
-------------------------
(a) Seller shall indemnify, defend, protect and hold harmless
Purchaser, its officers, directors, affiliates, subsidiaries, agents, employees,
legal representatives, successors and assigns and Atlantic Disposal and each
Subsidiary from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, penalties, costs and expenses whatsoever
(including specifically, but without limitation, reasonable attorneys' fees and
expenses) ("Damages"), from: (i) any breach of, misrepresentation in, untruth in
or inaccuracy in the representations and warranties by Seller, Atlantic Disposal
and Subsidiaries set forth in this Agreement or in any representation or
warranty brought current by the certificates described in Sections 4.11 and 6.1
(without regard to whether such breaches or failures of representations or
warranties had a Material Adverse Effect); (ii) all events and matters occurring
after the date hereof which are set forth in any updated schedules delivered
under Section 4.11 to the extent that the matter or event reflects a detrimental
change to the Business, Assets, Shares, or Atlantic Disposal and the
Subsidiaries from the schedules delivered at execution of the Agreement; however
changes which occurred in the ordinary course of business and not as a result of
the Seller's breach of this Agreement shall not be the basis of an
indemnification claim; (iii) nonfulfillment or nonperformance of any agreement
or covenant on the part of Seller, Atlantic Disposal and Subsidiaries made in
this Agreement and to be performed by any of them before or after the Closing
Date including potential assessment under Paragraph 1.1502-6(b) of the Internal
Revenue Code; (iv) violation of the requirements of any governmental authority
relating to the reporting and payment of federal, state, local or other income,
sales, use, franchise, excise or property tax liabilities of the Seller,
Atlantic Disposal and Subsidiaries (to the extent such taxes result in a lien on
the Assets or Atlantic Disposal or any Subsidiary becomes liable for such taxes)
or arising or accrued prior to the Closing Date; and (v) any Excluded Liability.
The Purchaser and the Seller have agreed, for the purposes of determining
whether or not the conditions to the obligations of the Purchaser to close have
been satisfied, pursuant to 6.1(d), that the Purchaser will be obligated to
close notwithstanding breaches of representations or warranties contained in
this Agreement or brought current by the certificate described in 4.11, if such
breaches do not result in a Material Adverse Effect. For the purposes of
indemnification, however, Purchaser shall be entitled to claim, subject to the
limitations set forth in Section 8.1(d), for breaches of representations and
warranties contained in this Agreement or brought current by the certificate
described in Section 4.10, notwithstanding the immateriality of any such breach.
28
(b) The indemnification provided for in this Section 8.1 shall
be Purchaser's sole and exclusive remedy for any Damages arising out of or
relating to the transactions contemplated by this Agreement, except as set forth
in the next sentence and except insofar as any such Damages are caused by the
fraudulent misconduct of any Seller. The limitations set forth in the
immediately preceding sentence and Section 8.1(c) below shall not apply to any
Damages arising out of any breach of or failure to perform obligations under the
New York Agreement; Section 4.9 or any failure to perform covenants required to
be performed prior to Closing. This Section is not intended to limit the remedy
of specific performance provided for in Section 1.10.
Without limiting the generality of the first sentence of
this Section 8.1(b), each of Purchaser and Atlantic Disposal expressly waives
and releases any claim that it may have, now or in the future, against Seller or
any of its affiliates pursuant to CERCLA or any similar state or local law;
provided, however, that nothing in this sentence shall limit any right that the
Purchaser may have under this Agreement, the New York Agreement or any
Collateral Document, including any right in respect of a breach of a
representation and warranty relating to CERCLA.
(c) Notwithstanding the foregoing, in no event shall the Seller
be liable for any Damages pursuant to Section 8.1(a)(i) or for covenants to be
performed after Closing, except for the covenant in Section 4.9 (to which the
limitation of liability does not apply) unless the aggregate amount of such
Damages exceeds $500,000, in which case the Seller shall only be liable for the
amount of such Damages in excess of $500,000. Likewise, Seller shall not be
liable for Damages under Section 8.1(a)(i) or for covenants to be performed
after Closing, except for the covenant in Section 4.9 to which the limitation of
liability does not apply in excess of an amount equal to 50% of the Purchase
Price.
Section 8.2 Indemnification by Purchaser. (a) Purchaser agrees that it
----------------------------
will indemnify, defend, protect and hold harmless Seller, and its officers,
shareholders, directors, affiliates, subsidiaries, parents, agents, employees,
heirs, legal representatives, successors and assigns, as applicable, from and
against all Damages incurred by it, as a result of or incident to: (i) any
breach of, misrepresentation in, untruth in or inaccuracy in the representations
and warranties of Purchaser set forth in this Agreement; and (ii) nonfulfillment
or nonperformance of any agreement or covenant on the part of Purchaser made in
this Agreement and to be performed by Purchaser before or after the Closing
Date.
(b) The indemnification provided for in this Section 8.2 shall
be the Seller's sole and exclusive remedy for any Damages arising out of or
relating to the transactions contemplated by this Agreement, except as set forth
in the next sentence and except insofar as any such Damages are caused by the
fraudulent misconduct of Purchaser. The limitations set forth in the immediately
preceding sentence and Section 8.2(c) below shall not apply to any Damages
arising out of any breach of or failure to perform obligations under the New
York Agreement or failure to perform covenants required to be performed prior to
Closing. This Section is not intended to limit the remedy of specific
performance provided for in Section 1.10.
29
(c) Notwithstanding the foregoing, in no event shall the
Purchaser be liable for any Damages under Section 8.2(a)(i) or for covenants to
be performed after Closing unless the aggregate amount of such Damages exceeds
$500,000, in which case the Purchaser shall only be liable for the amount of
such Damages in excess of $500,000. Likewise, Purchaser shall not be liable for
Damages under Section 8.2(a)(i) or for covenants to be performed after Closing
in excess of an amount equal to 50% of the Purchase Price.
Section 8.3 Procedure for Indemnification with Respect to Third Party
---------------------------------------------------------
Claims.
------
(a) If any third party shall notify a party to this Agreement
(the "Indemnified Party") with respect to any matter (a "Third Party Claim")
that may give rise to a claim for indemnification against any other party to
this Agreement (the "Indemnifying Party") under this Article VIII, 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 is thereby prejudiced. Such notice shall state the amount of the claim and
the relevant details thereof.
(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 ten days after the Indemnified
Party has given notice of the Third Party Claim that the Indemnifying Party will
indemnify the Indemnified Party pursuant to the provisions of this Article VIII,
as applicable, from and against the entirety of any adverse consequences (which
will include, without limitation, all losses, claims, liens, and attorneys' fees
and related expenses) 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 Third Party Claim involves only monetary damages and does not seek an
injunction or equitable relief, (iii) settlement of, or 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 adverse
to the continuing business interests of the Indemnified Party, and (iv) 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 8.3(b) above, the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in (but not control) the defense of the Third Party Claim. 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 (which will not be unreasonably withheld), 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 (which will not be unreasonably
withheld). In the case of (c)(ii) or (c)(iii) above, any such consent to
judgment or settlement shall include, as an unconditional term thereof, the
release of the Indemnified Party from all liability in connection therewith.
30
(d) If any condition set forth in Section 8.3(b) above is or
becomes unsatisfied, (i) the Indemnified Party may defend against the Third
Party Claim with counsel of its choice and the Indemnifying Party shall have the
right to participate in (but not control) such defense, and (ii) consent to the
entry of any judgment or enter into any settlement with respect to, the Third
Party Claim and any matter it may deem appropriate and the Indemnified Party
need not consult with, or obtain any consent from, any Indemnifying Party in
connection therewith, (iii) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the cost of defending against
the Third Party Claim (including attorneys' fees and expenses), and (iv) the
Indemnifying Party 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 Article VIII. Notwithstanding the above, if the only item in Section 8.3(b)
which was not satisfied is item 8.3(b)(iii), the Indemnified Party will consult
with the Indemnifying Party prior to settling a Third Party Claim.
Section 8.4 Procedure for Non-Third Party Claims. If Purchaser, Seller,
------------------------------------
Atlantic Disposal, or the Subsidiaries wishes to make a claim for indemnity
under Section 8.1 or Section 8.2, as applicable, and the claim does not arise
out of a third party notification which makes the provisions of Section 8.3
applicable, the party desiring indemnification ("Indemnified Party") shall
deliver to the party from which indemnification is sought ("Indemnifying Party")
a written demand for indemnification ("Indemnification Demand"). The
Indemnification Demand shall state: (a) the amount of losses, damages or
expenses to which the Indemnified Party has incurred or has suffered or is
expected to incur or suffer to which the Indemnified Party is entitled to
indemnification pursuant to Section 8.1 or Section 8.2, as applicable; and (b)
the nature of the event or occurrence which entitles the Indemnified Party to
receive payment under Section 8.1 or Section 8.2, as applicable. If the
Indemnifying Party wishes to object to an Indemnification Demand, the
Indemnifying Party must send written notice to the Indemnified Party stating the
objections and the grounds for the objections ("Indemnification Objection"). If
no Indemnification Objection is sent within thirty (30) days after the
Indemnification Demand is sent, the Indemnifying Party shall be deemed to have
acknowledged the correctness of the claim or claims specified in the
Indemnification Demand and shall pay the full amount claimed in the
Indemnification Demand within forty-five (45) days of the day the
Indemnification Demand is dated. If for any reason the Indemnifying Party does
not pay the amounts claimed in the Indemnification Demand, within thirty days of
the Indemnification Demand's date, the Indemnified Party may institute legal
proceedings to enforce payment of the indemnification claim contained in the
Indemnification Demand and any other claim for indemnification that the
Indemnified Party may have.
Section 8.5 Survival of Claims. The respective representations and
------------------
warranties of the parties to this Agreement shall survive consummation of the
transactions contemplated by this Agreement as follows: (i) all representations
and warranties pertaining to Excluded Liabilities shall survive until the later
of the expiration of the applicable statute of limitations on any claim which
can be brought against Atlantic Disposal by tax authorities or governmental
agencies or governmental units or one year after a final, nonappealable order
has been entered in the New York Case and (ii) all representations and
warranties other than those set forth in (i) above shall survive until the date
which is 18 months after the Closing Date. Notwithstanding the prior sentence
which provides that the representations and warranties expire
31
after certain stated periods of time, if within the stated period of time, a
notice of a claim for indemnification or Indemnification Demand is given, or a
suit or action based upon representation or warranty is commenced, the
Indemnified Party shall not be precluded from pursuing such claim or action, or
from recovering from the Indemnifying Party (whether through the courts or
otherwise) on the claim or action, by reason of the expiration of the
representation or warranty. No investigation made by Purchaser shall limit in
any way Purchaser's rights to recover damages. The covenants and agreements of
the parties set forth in this Agreement to be performed after Closing shall
survive Closing in accordance with their terms.
Section 8.6 Prompt Payment. In the event that any party is required to
--------------
make any payment under this Article VIII, such party shall promptly pay the
Indemnified Party the amount so determined. If there should be a dispute as to
the amount or manner of determination of any indemnity obligation owed under
this Article VIII, the Indemnifying Party shall, nevertheless, pay when due such
portion, if any, of the obligation as shall not be subject to dispute. The
portion in dispute shall be paid upon a final and non-appealable resolution of
such dispute. Upon the payment in full of any claim, the Indemnifying Party
shall be subrogated to the rights of the Indemnified Party against any person
with respect to the subject matter of such claim.
Section 8.7 Insurance. If Seller pays an Indemnification Demand,
---------
Purchaser agrees to provide Seller upon Seller's request information concerning
any insurance coverages Purchaser has that could result in an insurance recovery
relating to the event which resulted in the indemnity payment ("Insured
Indemnity Event"). Upon Seller's request, Purchaser shall make a claim with its
insurers for the Insured Indemnity Event. If Purchaser receives any insurance
proceeds from the submitted claim, Purchaser shall retain from the insurance
proceeds the amount of Damages from the Insured Indemnity Event not paid to it
by Seller, due to the provision in Section 8.1(a) which provides that Seller is
not liable for the first $500,000 of Damages, and Purchaser shall pay the Seller
the balance of the insurance proceeds. This Section 8.7 does not impose any
requirement on Purchaser to commence litigation against its insurers unless
Seller pays all costs and expenses of such litigation.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Nondisclosure by Seller. Seller, Atlantic Disposal and the
-----------------------
Subsidiaries recognize and acknowledge that they have in the past, currently
have, and in the future will have certain confidential information of Purchaser
such as lists of customers, operational policies, and pricing and cost policies
that are valuable, special and unique assets of Purchaser. Seller, Atlantic
Disposal and the Subsidiaries agree that for a period of ten (10) years from the
date hereof they will not disclose such confidential information to any person,
firm, corporation, association or other entity for any purpose or reason
whatsoever, except to authorized representatives of Purchaser, unless (i) such
information becomes known to the public generally through no fault of Seller,
Atlantic Disposal and the Subsidiaries, or (ii) Seller, Atlantic Disposal
32
and the Subsidiaries is compelled to disclose such information by a governmental
entity or pursuant to a court proceeding. In the event of a breach or threatened
breach by Seller, Atlantic Disposal and the Subsidiaries of the provisions of
this Section, Purchaser shall be entitled to an injunction against such
disclosure, in whole or in part, such confidential information. Nothing herein
shall be construed as prohibiting Purchaser from pursuing any other available
remedy for such breach or threatened breach, including, without limitation, the
recovery of damages.
Section 9.2 Nondisclosure by Purchaser. Purchaser recognizes and
--------------------------
acknowledges that it has in the past, currently has, and prior to the Closing
Date, will have access to certain confidential information of the Seller,
Atlantic Disposal and the Subsidiaries, such as lists of customers, operational
policies, and pricing and cost policies that are valuable, special and unique
assets of the Seller, Atlantic Disposal and the Subsidiaries. Purchaser agrees
that it will not utilize such information in the business or operation of
Purchaser or any of its affiliates or for ten (10) years from the date hereof
disclose such confidential information to any person, firm, corporation,
association, or other entity for any purpose or reason whatsoever, unless (i)
such information becomes known to the public generally through no fault of
Purchaser or any of its affiliates, (ii) Purchaser is compelled to disclose such
information by a governmental entity or pursuant to a court proceeding, or (iii)
Closing takes place. In the event of a breach or threatened breach by Purchaser
of the provisions of this Section, Seller, Atlantic Disposal and the
Subsidiaries shall be entitled to an injunction restraining Purchaser from
utilizing or disclosing, in whole or in part, such confidential information.
Nothing contained herein shall be construed as prohibiting Seller, Atlantic
Disposal and the Subsidiaries from pursuing any other available remedy for such
breach or threatened breach, including, without limitation, the recovery of
damages.
Section 9.3 Assignment; Binding Effect; Amendment. This Agreement and
-------------------------------------
the rights of the parties hereunder may not be assigned (except by operation of
law) and shall be binding upon and shall inure to the benefit of the parties
hereto, and their respective successors, personal representatives and assigns.
This Agreement, upon execution and delivery, constitutes a valid and binding
agreement of the parties hereto enforceable in accordance with its terms and may
be modified or amended only by a written instrument executed by all parties
hereto. Notwithstanding the foregoing, the Purchaser may assign this Agreement
and all of its rights and obligations hereunder to any directly or indirectly
wholly-owned subsidiary of the Purchaser; provided that, in connection with any
such assignment, the Purchaser shall execute an guarantee and suretyship
agreement, in form and substance reasonably satisfactory to the Seller, pursuant
to which the Purchaser shall guarantee and stand surety for all of the
obligations of its assignee hereunder.
Section 9.4 Entire Agreement. This Agreement together with the
----------------
Collateral Documents is the final, complete and exclusive statement and
expression of the agreement among the parties hereto with relation to the
subject matter of this Agreement, it being understood that there are no oral
representations, understandings or agreements covering the same subject matter
as the Agreement. The Agreement supersedes, and cannot be varied, contradicted
or supplemented by evidence of any prior to contemporaneous discussions,
correspondence, or oral or written agreements of any kind, including, without
limitation, the Letter of Intent, dated November 20, 1997 by and among Purchaser
and Brambles
33
USA. The parties to this Agreement have relied on their own advisors for all
legal, accounting, tax or other advice whatsoever with respect to the Agreement
and the transactions contemplated hereby.
Section 9.5 Counterparts. This Agreement may be executed simultaneously
------------
in two or more counterparts, each of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
Section 9.6 Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing and may be given by depositing the same
in United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, by overnight courier
or by delivering the same in person to such party.
34
(a) If to Purchaser, addressed to it at:
Eastern Environmental Services, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000-0000
Attention: H. Xxxx Xxxxxx, Xx.
(b) If to Seller, Atlantic Disposal and the Subsidiaries
addressed to:
Brambles USA, Inc.
The Wrigley Building
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy (which shall not constitute notice) to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx
Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier and three business days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received, if earlier. Any
party may change the address for notice by notifying the other parties of such
change in accordance with this Section 9.6.
Section 9.7 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the State of Delaware, without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
35
Section 9.8 No Waiver. No delay of or omission in the exercise of any
---------
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in any
such breach or default, or of or in any similar breach or default occurring
later; nor shall any waiver of any single breach or default be deemed a waiver
of any other breach of default occurring before or after that waiver.
Section 9.9 Time of the Essence. Time is of the essence of this
-------------------
Agreement as well as all dates referred to herein and extensions thereof.
Section 9.10 Captions. The headings of this Agreement are inserted for
--------
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
Section 9.11 Severability. In case any provision of this Agreement shall
------------
be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as most
nearly to retain the intent of the parties. If such modification is not
possible, such provision shall be severed from this Agreement. In either case
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
Section 9.12 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 shall be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" means including, without limitation.
Section 9.13 Extension or Waiver of Performance. Either the Seller or
----------------------------------
Purchaser may extend the time for or waive the performance of any of the
obligations of the other, waive any inaccuracies in the representations or
warranties by the other, or waive compliance by the other with any of the
covenants or conditions contained in this Agreement, provided that any such
extension or waiver shall be in writing and signed by the Seller and the
Purchaser.
Section 9.14 Liabilities of Third Parties. Nothing in this Agreement,
----------------------------
whether expressed or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties to it and
their respective successors, legal representative and assigns, nor is anything
in this Agreement intended to relieve or discharge the obligation or liability
of any third persons to any party to this Agreement, nor shall any provisions
give any third person any rights of subrogation or action over or against any
party to this Agreement.
Section 9.15 Agreement Not Binding Until Fully Executed. This Agreement
------------------------------------------
shall not be binding on any party hereto until the Agreement has been fully
executed.
36
Section 9.16 Publicity. Prior to the Closing, except as may be required
---------
by law, no party to this Agreement shall issue any press release or otherwise
make any statement with respect to the transactions contemplated by this
Agreement without prior consent with the other party, which shall not be
unreasonably withheld.
Section 9.17 Arbitration.
-----------
(a) Each and every controversy or claim arising out of or
relating to this Agreement shall be settled by arbitration in Wilmington,
Delaware, in accordance with the commercial rules (the "Rules") of the American
Arbitration Association then obtaining, and judgment upon the award rendered in
such arbitration shall be final and binding upon the parties and may be
confirmed in any court having jurisdiction thereof. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement,
which such demand shall set forth in the same degree of particularity as
required for complaints under the Federal Rules of Civil Procedure the claims to
be submitted to arbitration. Additionally, the demand for arbitration shall be
stated with reasonable particularity with respect to such demand with documents
attached as appropriate. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claim, dispute or other matter in question would be barred by the applicable
statutes of limitations.
(b) The arbitrators shall have the authority and jurisdiction to
determine their own jurisdiction and enter any preliminary awards that would aid
and assist the conduct of the arbitration or preserve the parties' rights with
respect to the arbitration as the arbitrators shall deem appropriate in their
discretion. The award of the arbitrators shall be in writing and it shall
specify in detail the issues submitted to arbitration and the award of the
arbitrators with respect to each of the issues so submitted.
(c) Within sixty (60) days after the commencement of any
arbitration proceeding under this Agreement, each party shall file with the
arbitrators its contemplated discovery plan outlining the desired documents to
be produced, the depositions to be take, if ordered by the arbitrators in
accordance with the Rules, and any other discovery action sought in the
arbitration proceeding. After a preliminary hearing, the arbitrators shall fix
the scope and content of each party's discovery plan as the arbitrators deem
appropriate. The arbitrators shall have the authority to modify, amend or change
the discovery plans of the parties upon application by either party, if good
cause appears for doing so.
(d) The award pursuant to such arbitration will be final,
binding and conclusive.
(e) Counsel to Seller and Purchaser in connection with the
negotiation of and consummation of the transactions under this Agreement shall
be entitled to represent their respective party in any and all proceedings under
this Section or in any other proceeding (collectively, "Proceedings"). Seller
and Purchaser, respectively, waive the right and agree they shall not seek to
disqualify any such counsel in any such Proceedings for any reason, including
but not limited to the fact that such counsel or any member thereof may be a
witness in any such Proceedings or possess or have learned of information
37
of a confidential or financial nature of the party whose interests are adverse
to the party represented by such counsel in any such Proceedings.
38
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
BRAMBLES WASTE SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name:Xxxxxx X. Xxxxxxxx
---------------------------
Title:CEO
--------------------------
ATLANTIC WASTE DISPOSAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name:Xxxxxx X. Xxxxxxxx
---------------------------
Title:CEO
--------------------------
ATLANTIC TRANSPORTATION
SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name:Xxxxxx X. Xxxxxxxx
---------------------------
Title:CEO
--------------------------
ATLANTIC COLLECTION, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------
Title:CEO
--------------------------
RESOURCE PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------
Title:CEO
--------------------------
EASTERN ENVIRONMENTAL SERVICES,
INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: /s/ Xxxxxx X. Xxxxxx
----------------------------
Title:Executive Vice-President
----------------------------
39
