EXHIBIT 2.0
Stock Purchase Agreement By and Between
Phoenix Waste Services Company, Inc. and
Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx
dated April 10, 2002
LU Transport
Stock Purchase Agreement
PHOENIX WASTE SERVICES COMPANY, INC.
Buyer
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- and -
XXXXXX XXXXXX AND XXXXXXX XXXXXX
ALL OF THE SHAREHOLDERS OF
LU TRANSPORT, INC.
Sellers
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Dated: APRIL 10, 2002
TABLE OF CONTENTS
1. Sale of Stock.......................................................................................Page 2
2. Purchase Price......................................................................................Page 2
3. Payment of Purchase Price...........................................................................Page 2
4. Representations and Warranties of Sellers...........................................................Page 5
5. Representations and Warranties of Buyer............................................................Page 13
6. Covenants of Sellers...............................................................................Page 14
7. Covenants of Buyer.................................................................................Page 17
8. Mutual Covenants of the Parties....................................................................Page 18
9. Conditions Precedent...............................................................................Page 18
10. The Closing........................................................................................Page 21
11. Survival of Representations, Warranties and Covenants..............................................Page 23
12. Indemnification....................................................................................Page 23
13. Brokers............................................................................................Page 26
14. Notices............................................................................................Page 26
15. Entire Agreement...................................................................................Page 27
16. Successors and Assigns.............................................................................Page 27
17. Paragraph Headings.................................................................................Page 27
18. Expenses...........................................................................................Page 27
19. Further Assurances.................................................................................Page 28
20. Termination of Agreement...........................................................................Page 28
21. Applicable Law.....................................................................................Page 28
22. Counterparts.......................................................................................Page 28
23. Severability.......................................................................................Page 29
24. Variations in Pronouns.............................................................................Page 29
25. Waiver.............................................................................................Page 29
26. Further Covenants and Agreements...................................................................Page 29
SCHEDULE 4(c) TO STOCK PURCHASE AGREEMENT...................................................................Page 32
SCHEDULE 4(d) TO STOCK PURCHASE AGREEMENT...................................................................Page 33
SCHEDULE 4(e) TO STOCK PURCHASE AGREEMENT...................................................................Page 34
SCHEDULE 4(f)(1) TO STOCK PURCHASE AGREEMENT................................................................Page 35
SCHEDULE 4(f)(2) TO STOCK PURCHASE AGREEMENT................................................................Page 36
SCHEDULE 4(g) TO STOCK PURCHASE AGREEMENT...................................................................Page 37
SCHEDULE 4(h) TO STOCK PURCHASE AGREEMENT...................................................................Page 38
SCHEDULE 4(i) TO STOCK PURCHASE AGREEMENT...................................................................Page 39
SCHEDULE 4(j) TO STOCK PURCHASE AGREEMENT...................................................................Page 40
SCHEDULE 4(l) TO STOCK PURCHASE AGREEMENT...................................................................Page 41
SCHEDULE 4(m) TO STOCK PURCHASE AGREEMENT...................................................................Page 42
SCHEDULE 4(o) TO STOCK PURCHASE AGREEMENT...................................................................Page 43
SCHEDULE 4(s) TO STOCK PURCHASE AGREEMENT...................................................................Page 44
SCHEDULE 6(f) TO STOCK PURCHASE AGREEMENT...................................................................Page 45
SCHEDULE 6(k) TO STOCK PURCHASE AGREEMENT...................................................................Page 46
SCHEDULE 7(c) TO STOCK PURCHASE AGREEMENT...................................................................Page 47
SCHEDULE 10(a)(iv) TO STOCK PURCHASE AGREEMENT..............................................................Page 48
SCHEDULE 10(a)(v) TO STOCK PURCHASE AGREEMENT...............................................................Page 49
SCHEDULE 10(b)(ii) TO STOCK PURCHASE AGREEMENT..............................................................Page 50
SCHEDULE 10(b)(iii) TO STOCK PURCHASE AGREEMENT.............................................................Page 51
SCHEDULE 10(b)(iv) TO STOCK PURCHASE AGREEMENT..............................................................Page 52
LU Transport Stock Purchase Agreement
This Stock Purchase Agreement (Agreement) is made and entered into on
this 10th day of April, 2002, by and between PHOENIX WASTE SERVICES COMPANY,
INC., a Delaware corporation, with its principal offices located at 00 Xxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxx Xxxxxx 00000, (Buyer), and the following named
individual persons, residents of the State of Illinois: Xxxxxx Xxxxxx and
Xxxxxxx Xxxxxx (Sellers), the legal owners of all of the outstanding stock of LU
TRANSPORT INC., an Illinois corporation with its principal offices located at
0000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (Company).
BE IT RESOLVED AS FOLLOWS:
WHEREAS, Sellers operate a long haul solid waste transporting business
in and around both Chicago, Illinois and New York, New York (the Business); and
WHEREAS, Company owns contracts with respect to the Business; and
WHEREAS, Company owns certain motorized hauling equipment, leasehold
interest(s), accounts receivables, cash on hand, a trade name, sundry office
equipment, written and non-written intellectual property, operating permits and
licenses, employment contracts and goodwill; and
WHEREAS, Sellers desire to sell, and deliver to Buyer, and Buyer
desires to purchase from Sellers, all of the outstanding stock of Company; and
WHEREAS, at Closing, defined below in Section 10, Sellers and Buyer
shall execute an Escrow Agreement, attached hereto as Exhibit A, and establish
an Escrow Account, defined below in Section 6(j), whereby Sellers shall secure
performance of its Indemnification obligations pursuant to Section 12 below; and
Page 1
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein, the parties agree as follows:
1. Sale of Stock: Subject to the conditions as set forth in this
Agreement, Sellers hereby agree to transfer to Buyer and Buyer hereby agrees to
purchase from Sellers, on the Closing Date, all of the outstanding stock of
Company (the Stock).
2. Purchase Price: The purchase price to be paid by Buyer to
Sellers for the Stock of Company shall be Four Million Five Hundred Thousand And
No/100 Dollars ($4,500,000) (Purchase Price).
3. Payment of Purchase Price: (a) At the Closing as is defined
below at Section 10, Buyer shall deliver to Sellers, by wire transfer or by
bank, cashier's or certified check made payable jointly to the order of Sellers,
the Purchase Price less the Escrow Fund Amount, defined below in Section 7(c).
(b) Payment of the Earnout Amount: (i) Buyer shall pay to
Sellers One Third (1/3) of the amount by which Company's earnings
before interest, taxes, depreciation and amortization (EBITDA), as
calculated in accordance with Section 3(f) below, in each or any of
fiscal years 2002, 2003 and 2004, exceeds Three Million And No/100
Dollars ($3,000,000), each such payment to be made on the first, second
and/or third anniversary of the Closing Date and the total collective
payment thereof, therefore, not to exceed Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000) (the Earnout Amount). For
example, in the event that Company's EBITDA for fiscal year 2002 is
Three Million Five Hundred Thousand and No/100 Dollars ($3,500,000),
then Buyer shall pay to Sellers, on the first anniversary of the
Closing Date, One Hundred Sixty Six Thousand Six Hundred Sixty Six And
Sixty Seven/Dollars ($166,666.67), which reflects One Third (1/3) of
Five Hundred Thousand and No/100 Dollars ($500,000). The Earnout Amount
is subject to offset pursuant to Section 12 below.
Page 2
(c) Notice to Sellers Concerning the Earnout Amount: For
purposes of this Section 3, all notices to Sellers with respect to any
determinations by Buyer of the EBITDA, the Earnout Amount, or with
respect to any issue reasonably relevant to either determinations of
the EBITDA or the Earnout Amount, shall be deemed properly given, if
supplied to Sellers, in writing, within the time set forth herein for
same.
(d) Disputes Concerning The EBITDA Determination: As soon
as practicable, but in no event later than Ninety (90) days following
the end of each fiscal year for which a portion of the Earnout Amount
may be due, Buyer shall prepare or cause to be prepared by Buyer's
certified auditors and shall deliver to Sellers a reasonable detailed
statement setting forth the EBITDA. Upon the written notice to Sellers
of the determination of the EBITDA by Buyer's certified auditors, if
Sellers disagree with the determination, Sellers shall notify Buyer in
writing within FOURTEEN (14) calendar days of the receipt of said
notice of the nature and extent of Sellers's disagreement. Thereafter,
the parties shall follow the procedure set out below in Section
3(d)(i)- (ii) to resolve the dispute concerning the EBITDA
determination of Buyer:
(i) Following the receipt by Buyer of Sellers'
written notice described in Section 3(c), in
the FOURTEEN (14) calendar days following
receipt of the said notice by Buyer, Sellers
and Buyer shall attempt to negotiate a good
faith settlement of the dispute.
(ii) If the dispute is not resolved within said
FOURTEEN (14) calendar days of good faith
negotiation, as may be extended by the
mutual agreement of Buyer and Sellers,
Sellers may file for arbitration of the
dispute pursuant to the rules of the
American Arbitration Association, utilizing
three arbitrators, one arbitrator chosen by
Sellers, one arbitrator chosen by Buyer, and
the third arbitrator chosen by the other two
arbitrators.
Page 3
(e) Arbitration Expenses: In connection with any dispute
concerning EBITDA referred to arbitration, each party shall be
responsible for its own expenses of the arbitration and attorney fees.
In those situations where an award is made, the arbitrators shall
allocate arbitration expenses and attorney fees as the arbitrators deem
fair and reasonable.
(f) EBITDA Calculation: For purposes of calculating
EBITDA hereunder: (i) no costs or expenses specifically attributable to
the transactions contemplated by this Agreement shall be deducted from
Company's earnings; (ii) Company shall be accounted for as a separate
entity and separate books and records shall be maintained therefor,
(iii) no overhead or amortization of goodwill created by the
transactions contemplated by this Agreement and no corporate charges or
fees otherwise allocated to Company by Buyer shall be deducted from
Company's earnings, except to the extent such overhead or other
expenses are directly attributable to Company's conduct of the Business
in the ordinary course; (iv) no professional, consulting, or similar
costs not incurred in the ordinary course of Company's business
consistent with Company's past practices and no extraordinary incentive
or other compensation paid to executives of the Business outside the
ordinary course of Company's business (except for such compensation as
the Sellers may authorize in advance) shall be deducted from Company's
earnings; (v) the level of Company's reserves shall be calculated in
accordance with generally accepted accounting principles (GAAP); (vi)
no capital expenditures incurred outside of the ordinary course of
business, except necessary repairs, shall be deducted from Company's
earnings; and (vii) in the event that Company devotes personnel,
assets, or other resources to another affiliate of Buyer, Company shall
charge a reasonable, arms-length rate therefor which shall be added to
Company's earnings.
Page 4
(g) Company's Debt on the Closing Date: All obligations
of Company, properly disclosed to Buyer pursuant to the requirements of
this Agreement, shall remain as obligations of Company after the
Closing Date.
4. Representations and Warranties of Sellers: Sellers hereby make
the following representions and warranties to Buyer as of the Closing Date as
follows, except as may be set forth in Schedules to be annexed hereto on or
prior to Closing. Buyer acknowledges and agrees that the schedules shall not be
annexed hereto on the date hereof and, therefore: (i) the representations and
warranties of Sellers are incomplete until such schedules are attached hereto;
and (ii) no rights or remedies shall arise out of Sellers' representations and
warranties until such schedules are attached hereto:
(a) Organization and Good Standing of Company. Company is
a corporation duly organized and validly existing under the laws of the
State of Illinois. Sellers further represent that Company is qualified
to do business and is in good standing in any and all other states (and
the District of Columbia) in which it does business. Company has full
corporate power and authority to own its properties and to carry on the
Business.
(b) Authorization and Effect of Agreement. This Agreement
and all other agreements and instruments to be executed in connection
herewith or pursuant hereto have been duly authorized and approved by
all requisite corporate action of Company, and when executed and
delivered by Sellers shall constitute the legal, valid and binding
obligations of Sellers, enforceable against Sellers in accordance with
their respective terms. The execution, delivery and performance of this
Agreement will not violate any provision of any law, rule or regulation
applicable to Sellers or Company, or any order, judgment or decree of
any court or other governmental agency binding on Sellers or Company,
or any agreement or instrument to which Sellers or Company are a party
or by which either of them may be bound.
Page 5
(c) Financial Statements. Company has delivered to Buyer
its unaudited internal financial statements for fiscal year 2001,
hereinafter referred to as the Financial Statements, attached as
Schedule 4(c). The Financial Statements fairly present the financial
position and results of operations of Company for the periods covered
thereby and have been prepared in accordance with GAAP consistently
applied throughout the periods covered, or if not prepared in
accordance with GAAP, the Financial Statements do not reflect a
materially different financial position or results of operations than
if the Financial Statements had been prepared in accordance with GAAP.
The Financial Statements fully and fairly reflect all the transactions,
properties, assets and liabilities of Company. There are no
extraordinary or material non-recurring items of income or expense
during the periods covered by the Financial Statements and the balance
sheets included in the Financial Statements do not reflect any write-up
or revaluation increasing the book value of any assets. The Financial
Statements reflect all adjustments necessary for a fair presentation of
financial information contained therein. All related party transactions
have been entered into and are reflected in the Financial Statements.
There are no loans between Company and Sellers or any parties related
to them, except as is set out on Schedule 4(c).
(d) No Adverse Change. Since December 31, 2001, the date
of the Financial Statements, the Business has been operated in the
ordinary course and there has not occurred any material adverse change
in the Business, properties, prospects or operations of the Business,
in Company's ability to operate the Business on an ongoing basis in the
future, or in the quality and character of Company's customers and
relations therewith or in the aggregate business volume done with
customers, except as identified on Schedule 4(d).
(e) Absence of Undisclosed Liability. There are no
material liabilities related to the Business or properties or Assets
(defined below) of Company, other than as reflected in the Financial
Statements, and as are fully listed on Schedule 5(e).
Page 6
(f) Title to Assets. Company is vested with good and
marketable title to all of its assets (the Assets), free and clear of
all liens, charges, encumbrances and liabilities, except as indicated
on Schedule 4(f)(1) annexed hereto. The Assets constitute all of the
right, title, or interest which are used in the operation of the
Business or reflected on the Balance Sheet (or acquired after the date
of the Balance Sheet). All material contracts, oral and written, to the
best of Sellers' knowledge, with suppliers of Sellers are listed on or
are annexed hereto as Schedule 4(f)(2).
(g) Inventory and Equipment. Schedule 4(g) annexed hereto
lists all the inventory and equipment of Company necessary to conduct
the operations of the Business. The inventory and equipment of Company
are in good, useable condition, except as is described on Schedule
4(g), and good and marketable title to same is vested in Company.
(h) Information. Company has no customers other than
those on the customer list forming the Information and annexed as
Schedule 4(h). Company has used reasonable efforts to maintain the
confidentiality of the Information and has not made it available to any
third party other than pursuant to non- disclosure agreements. All
customer contracts that could be located by Company upon a reasonably
diligent search are annexed as Schedule 4(h).
(i) Permits. Company holds all licenses, permits and
franchises which are required to allow it to conduct the Business and
all such licenses, permits and franchises are transferable, valid and
in full force and effect and annexed as Schedule 4(i).
(j) Litigation. Other than as set forth in Schedule 4(j),
there is no action, suit, proceeding or claim pending, or, to the
knowledge of Sellers, threatened against Company by any person,
including without limitation, by any government or governmental agency,
and there is no outstanding order, writ, injunction, decree, judgment
or award of any court, government or governmental agency against or
affecting Company, which would have a material adverse affect on the
value to Buyer of the Stock, or the utilization of the Assets in the
Business, or on Sellers' ability to consummate this transaction.
Page 7
(k) Compliance with Laws. To the best of Sellers'
knowledge, Company has complied in all material respects with all laws,
regulations and orders applicable to the Business and the Assets, and
there is no governmental law or regulation in effect or other event
which would have a material adverse affect on the value to Buyer of the
Stock, or on Sellers' ability to consummate the transaction.
(l) Labor, ERISA. Schedule 4(l) sets forth a list of all
employees of Company and their duties, current compensation and
employee benefits. Company is not a party to any collective bargaining
agreement with any union and Company has no knowledge or information
that there is currently pending or threatened any petition by employees
of Company for a union representative election, except as is described
on Schedule 4(l). Company does not maintain any employee benefit plan
in respect of which Buyer would become liable as a consequence of its
purchase of the Stock or that would affect Company's ability to
consummate this transaction. Company is not a participant in any
multi-employer pension or employee welfare benefit plan.
(m) Taxes. Company has duly and timely filed or will file
all tax returns and tax information reports required to be filed by it
and has timely paid or will pay in full all taxes owed by it, including
but not limited to, income, real estate, franchise, sales, social
security trust fund and state unemployment trust fund contributions,
that have accrued and become payable on or before the Closing Date or
with respect to tax periods ending on or after and including the
Closing Date. There are no tax liens or determinations by any taxing
authority against Company or the Stock that would have a material
adverse affect on the value to Buyer of the Stock, on the utilization
of the Assets in the Business, or on Sellers' ability to consummate
this transaction. There are no tax audits or determinations pending,
or, to the best knowledge of Sellers, threatened against the Business
or the Sellers or with respect to the Stock, except as listed on
Schedule 4(m). The charges, accruals and reserves with respect to taxes
on the books of Company are adequate and are at least equal to
Company's liability for taxes. All taxes that Company is or was
required to withhold or collect, and to the extent required, have been
paid to the proper governmental body or person.
Page 8
(n) No Restrictions. The execution and delivery of this
Agreement and all other agreements and instruments to be executed in
connection herewith, the consummation of the transactions provided for
herein and therein, and the fulfillment of the terms hereof and
thereof, will not result in a breach of or constitute a default under,
or conflict with: (i) any agreement, or other instrument to which
Company is or Sellers are individually or collectively a party or by
which it or they may be bound; (ii) the Certificate of Incorporation or
By-Laws of Company; (iii) any judgment, decree, order or award of any
court, government, governmental agency or arbitrator; or (iv) any law,
rule or regulation applicable to Company, the Business, the Assets or
the Stock.
(o) Insurance. Company has in effect workers compensation
insurance, vehicle insurance and general comprehensive liability
insurance that is adequate and customary for the Business engaged in by
Sellers. Premiums for all such insurance have been and will be timely
paid by Company. No notice of policy termination has been delivered to
Sellers or Company. Copies of all such insurance policies are attached
hereto on Schedule 4(o).
(p) Contamination. To the best of Sellers' knowledge,
Sellers represent and warrant that Company has not sent, had sent on
its behalf, or allowed to be sent by any action or omission, any
hazardous, toxic or deleterious substance or waste, as defined by any
applicable law (defined to include, without limitation, all applicable
statutory law and common law), hereinafter referred to as Hazardous
Materials, for treatment, storage, handling or disposal to any facility
or property which is: (1) listed, proposed for listing, or considered
for listing on the National Priorities List, the Comprehensive
Environmental Response Compensation and Liability Information System
List or any other hazardous site list published, promulgated or adopted
by any governmental authority; (2) the subject of any environmental
investigation, remediation or cost recovery action; or (3) any facility
or property from which such Hazardous Materials have been transhipped
to another facility or property which meets criteria (1) or (2) above.
Page 9
(q) Disposal or Release of Hazardous Materials. Sellers
represent and warrant that Company has not disposed of, released or
discharged any Hazardous Materials, as such term is defined by Illinois
law or any other applicable statutory law and common law, at or onto or
arising from the real estate upon which Company operates the Business
(the Real Property), or into the subsurface soils or groundwater
beneath the Real Property, that Company has not disposed of, released
or discharged any Hazardous Materials from, at or onto the Real
Property or surrounding properties or into the subsurface soils or
groundwater beneath the Real Property or surrounding properties,
including surface waters, sediments or environmentally sensitive areas
and any other potential areas of concern and receptors, and that
Company has not received any notice or claim asserting or claiming that
it is or may in any way be liable for any adverse environmental
condition existing on or under the Real Property or arising out of the
disposal, release or discharge of any Hazardous Materials.
(r) Exposure to Hazardous Substances. Sellers represent
and warrant that Company has not received any notice or claim asserting
or claiming that it is or may in any way be liable for any condition
arising out of or resulting from any exposure to Hazardous Materials.
Sellers represent and warrant that neither Sellers nor Company are
aware of any pending or threatened claim that Company is or may in any
way be liable for any condition arising out of or resulting from any
exposure to Hazardous Materials.
Page 10
(s) Real Property. Schedule 4(s) sets forth a full
description of all Real Property, as defined by Section 4(q) above,
with respect to which Company is an owner, lessor, lessee or has a
possessory interest. Any agreements affecting such Real Property are
annexed as part of Schedule 4(s). Company has not received any notice
for assessments for public improvements against the Real Property and,
to the best of Sellers' knowledge, no such assessment has been
proposed. There is no pending condemnation, expropriation, eminent
domain or similar proceeding concerning all or any portion of the Real
Property, and to the best of Sellers's knowledge, no such proceeding is
proposed.
(t) Relationships. Company's relationships with its
customers, suppliers and others with whom Company has business dealings
are satisfactory to Company, and Company has no knowledge of any
contemplated termination or other adverse change in any such
relationships.
(u) Health Care Claims. No health-related claim is
pending, or to the knowledge of Sellers, is threatened, by any
employee, his or her spouse or dependants not covered by insurance or
otherwise provided for by Company.
(v) Reasonable Equivalent Value. Sellers represent and
warrant that the Purchase Price is a reasonably equivalent value for
the transfer of the Stock to Buyer and that the transfer of the Stock
to Buyer is intended to be a contemporaneous exchange for new value
given to Sellers by Buyer.
(w) Liens. Other than as are disclosed on Schedule 4(e),
there are no liens, charges, chattel mortgages or other encumbrances on
any of the assets of Company.
(x) Full Disclosure. All information provided or to be
provided to Buyer by Sellers in connection with the transactions
contemplated by this Agreement is true and correct in all material
respects as of the date given to Buyer and as of the Closing Date, and
Sellers have exercised best efforts to provide Buyer with complete
information. As of the date given and as of the Closing Date, no
representation or warranty of Sellers contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained therein not misleading.
Page 11
(y) Company Issued and Outstanding Shares. There are a
total of One Thousand (1,000) issued and outstanding shares of Company
common stock, and Sellers are the sole owners of record of all such One
Thousand (1,000) shares, and the same represents all Company equity.
There are no obligations by Company to honor any warrants, pay any
stock options, and there are no liens or encumbrances on the Stock. All
of the outstanding equity securities of Company have been duly
authorized and validly issued and are fully paid and non-assessable.
There are no contracts or agreements relating to the issuance, sale or
transfer of any equity securities of Company.
(z) Improper or Unauthorized Dumping: To the best of
Sellers' knowledge, Sellers represent and warrant that Company is free
of any and all liability arising from the unauthorized or improper
dumping or disposal of waste material.
(aa) Total Sales: The total sales of Company is
approximately Eighteen Million Seven Hundred Fifty Thousand And No/100
Dollars (18,750,000) annually, as is reflected on the Financial
Statements, as said Financial Statements are adjusted for inter-company
sales and attached hereto as Schedule 4(c).
(bb) Annual EBITDA: Company produces an EBITDA of
approximately Four Million Two Hundred Thousand And No/100 Dollars
($4,200,000).
(cc) Loans Payable: Company is obligated for loans payable
in the approximate amount of Eight Million And No/100 Dollars
($8,000,000).
Page 12
(dd) Accounts Receivable: Company owns accounts receivable
totaling approximately One Million Nine Hundred Thousand And No/100
Dollars ($1,900,000), net of any reserves, as is reflected on the
Financial Statements, and all such accounts receivable are collectable
in the ordinary course of business. There is no contest, claim or right
of set off under any contract with any obligor of any accounts
receivable relating to the amount or validity of such accounts
receivable.
(ee) Net Worth: Company's net worth is approximately Two
Thousand Two Hundred and No/100 Dollars ($2,200.00), as is reflected on
the Financial Statements.
(ff) Certain Payments: Neither the Company nor any
officer, director or employee of Company has paid or received or caused
to be paid or received, directly or indirectly, in connection with the
business of Company (i) any bribe, kickback or other similar payment to
or from any domestic or foreign government or agency thereof or any
other person; or (ii) any contribution to any domestic or foreign
political party or candidate, other than from personal funds of such
officer, director or employee not reimbursed by Company or as permitted
by applicable law.
5. Representations and Warranties of Buyer: Buyer represents and
warrants to Sellers as follows:
(a) Organization and Good Standing. Buyer is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware.
(b) Authorization and Effect of Agreement. This Agreement
when executed and delivered by Buyer, shall constitute the legal, valid
and binding obligations of Buyer enforceable against it in accordance
with their respective terms, except as limited by bankruptcy,
insolvency or other laws affecting generally the enforcement of
creditors rights. The execution, delivery and performance of this
Agreement will not violate any provision of any law, rule or regulation
applicable to Buyer, or any order, judgment or decree of any court or
other governmental agency binding on Buyer or any agreement or
instrument to which Buyer is a party of by which it may be bound.
Page 13
6. Covenants of Sellers: At or before or after the Closing, as
the context requires, Sellers covenant and agree that:
(a) Due Diligence Review. From the date hereof, Sellers
shall make available for inspection by Buyer or its representatives
during normal business hours, Company's books and records and all other
documents reasonably requested by Buyer or its representatives that
relate to the transactions contemplated hereunder (Due Diligence
Review). Company shall furnish such information as shall be necessary
to enable Buyer or its representatives to verify the accuracy of the
representations and warranties contained in Sections 4 (a)-(ff).
Sellers shall further insure that Company shall cause its managerial
employees, its counsel and accountants to be available upon reasonable
notice to answer questions of Buyer and its representatives concerning
the Business, Assets and Stock of Company. Company and its executive
officers shall cooperate with Buyer in approaching customers and other
third parties designated by Buyer. The Due Diligence Review shall be
conducted in such a manner as not to interfere unreasonably with the
operations of Company. The Due Diligence Review conducted by Buyer or
its representatives hereunder shall not affect the representations and
warranties of Company and Sellers hereunder.
(b) Maintenance of Insurance. Sellers shall insure that
Company provides to Buyer copies of all policies of insurance of
whatever kind or description maintained in effect by Sellers, all of
which are attached hereto as Schedule 4(o). Sellers shall further
insure that Company will maintain in full force and effect all of its
presently existing insurance coverage through the Closing Date,
including all present insurance coverage for each vehicle used in the
Business until Closing.
Page 14
(c) Conduct of Business. The Sellers shall conduct its
Business in the ordinary course, consistent with the manner in which
the Business is presently conducted and will use its best efforts to
maintain, preserve and protect the Assets, the goodwill of the Sellers
and the relationships with its customers. During such period of time,
except upon the prior written consent of the Buyer, the Sellers shall
not: (i) incur any Liabilities except current obligations and
liabilities incurred in the ordinary course of business; (ii) sell,
transfer or acquire any properties or assets, tangible or intangible,
other than in the ordinary course of business; (iii) make any material
change in its customary method of operations, including marketing and
pricing policies; (iv) modify, amend or cancel any of its customers'
orders or enter into any contracts, agreements, leases or
understandings other than in the ordinary course of business; (v) enter
into any contract with new or existing customers the period of
performance of which extends beyond sixty (60) days from the date
entered into or which is on terms more favorable than offered by
Sellers to its customers in 2000; (vi) solicit, encourage or negotiate
with any third party as to any disposition of the Assets or the
Business or any shares of stock in the Sellers; (vii) pay any dividend
or make any distribution to shareholders prior to the Closing Date;
(viii) take any other action (A) that would cause any of the
representations and warranties made by the Sellers in this Agreement
not to be true and correct in all material respects on and as of the
Closing Date; or (B) that would materially adversely affect the value
of the Assets, their utilization in the Buyer's business or the ability
of the Sellers to consummate the transactions contemplated by this
Agreement.
(d) Confidentiality. Sellers shall take all steps
reasonably necessary to preserve, protect, and maintain the
confidentiality of information which is proprietary to it or which is
not generally known in the industry, and shall not disclose the same or
permit the disclosure thereof to any individual, corporation or other
entity who or which is not presently in possession thereof.
(e) Permits. Sellers shall have obtained all
authorizations, consents and permits of any and all persons required to
allow the consummation of the transactions contemplated by this
Agreement, as further discussed below in 6(f). With respect to any and
all permits, licenses and franchises being assigned, transferred or
conveyed hereunder, there are no restrictions or impediments to such
assignment, transfer or conveyance, and Sellers shall cause all such
permits to be assigned, transferred or conveyed to Buyer at Closing.
Page 15
(f) Environmental Review. Sellers shall obtain a Phase I
Environmental Review, demonstrating the right to the continued
unrestricted use of the entire Real Property and shall reflect the
satisfactory completion of remediation of the Real Property (including,
without limitation, soil, groundwater, surface water, sediments,
environmentally sensitive areas, and any other potential areas of
concern and receptors. In the event that the results of the Phase I
Environmental Review reasonably require further investigations, Sellers
shall conduct such further site investigations as are warranted,
including Phase II and Phase III Environmental Reviews (Environmental
Reports). In the event any site remediation on any Real Property is
required as a result of the Environmental Review(s), the reasonable
costs of same shall be borne by Sellers and deducted from the Purchase
Price. The Environmental Reports are attached hereto as Schedule 6(f).
(g) Hazardous Substances. No hazardous substances have
been released or spilled on any site where the Business is conducted.
(h) Sales Tax. Sellers shall cooperate with Buyer in
providing the notice to the Director of the Illinois Division of
Taxation required by appropriate law and/or regulation, if any, at
least ten (10) days prior to Closing and shall cooperate with the
Director in promptly satisfying or making adequate provisions to ensure
the satisfaction of any tax liabilities.
(i) Contracts. With respect to any and all contracts
owned by Company, and listed on Schedules 4(f)(2), 4(l) and 4(h), there
are no impairments to the validity of same resulting from the change in
ownership of all of the outstanding stock of Company occasioned by the
Closing.
Page 16
(j) Escrow Account. At Closing, upon receipt of the
Purchase Price, pursuant to Section 2 above, Sellers shall deliver the
Escrow Fund Amount, defined below in Section 7(c) to the Escrow Agent,
defined below in Section 8(a). The Escrow Fund Amount shall be
deposited into an interest bearing account (Escrow Account) established
by Escrow Agent and administered pursuant to an Escrow Agreement,
attached hereto as Exhibit A, entered into by and between Escrow Agent
and Sellers. Claims or demands may be made by Buyer for an offset
against the Escrow Account, pursuant to Exhibit A. Upon the expiration
of Exhibit A, Escrow Agent shall pay and distribute the amount
remaining, if any, in the Escrow Account, including all interest
accrued to date, to Sellers.
(k) Collections for Billed Services and Work in Process.
At least Three (3) days before the Closing Date, Sellers shall cause
Company to deliver to Buyer a schedule, identified as Schedule 6(k) to
this Agreement, listing by customer name the amounts that as of that
date are owed to Sellers in respect of all uncollected bills for
services completed or products sold and for un-billed work in process.
Copies of all invoices shall accompany Schedule 6(k).
7. Covenants of Buyer: At or before or after the Closing, as the
context requires, Buyer covenants and agrees that:
(a) Confidentiality. Buyer shall maintain the
confidentiality of all proprietary and confidential information it
receives or has received from Sellers and shall disclose and use the
same only in connection with the transactions contemplated hereby or
otherwise in compliance with laws. If the Closing does not occur for
any reason whatsoever, Buyer shall promptly return to Sellers all
copies of any confidential written information provided by Sellers then
in Buyer's possession or control and shall continue to maintain the
confidentiality required by this subparagraph until any item of such
information becomes generally available in the industry through no
fault of Buyer or of any officer, director or shareholder of Buyer.
(b) Payment of Earnout Amount. If it is reasonably
determined that Earnout Amounts are due to Sellers, Buyer or its
designee shall make all such payments fully and when due. In the event
of a merger or combination in which Buyer is not the surviving entity,
or of a sale of all or substantially all of Buyer's or Company's
assets, if it should be reasonably determined that Earnout Amount(s)
are due to Seller after such merger or sale, Buyer shall pay such
Earnout Amount(s) to Seller.
Page 17
(c) Escrow Account. Prior to the Closing Date and in
accordance with the terms of Exhibit A, should Buyer reasonably
determine that there may exist potential corporate liabilities which
may expose Buyer to possible legal liability, Buyer, in its sole
discretion, shall determine an amount to be deducted from the Purchase
Price at Closing for deposit into the Escrow Account, such amount shall
not to exceed Seven Hundred Fifty Thousand And No/100 Dollars
($750,000) (Escrow Fund Amount) and shall be set forth herein in
Schedule 7(c). If any legal proceeding shall be instituted or any claim
or demand shall be asserted by any legal person in respect of which
indemnity may be sought pursuant to Section 12 below, Buyer shall have
the right of offset against said Escrow Account, pursuant to the terms
of Exhibit A. In the event of a dispute between Buyer and Sellers
regarding the Escrow Fund Amount under this paragraph, the dispute
shall be resolved pursuant to Sections 3(d)(i)-(ii) above.
8. Mutual Covenants of the Parties: At or before or after the
Closing, as the context requires, Sellers and Buyer mutually covenant and agree
that:
(a) Escrow Agent. Prior to Closing, a third party bank
shall be chosen by the mutual assent of Buyer and Sellers to administer
the Escrow Account (Escrow Agent).
(b) Reasonable Efforts. Subject to the terms and
conditions provided in this Agreement, each of the parties hereto shall
cooperate with the other in good faith and shall use commercially
reasonable efforts to take promptly, or cause to be taken, all actions,
and to do promptly, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions
contemplated hereby, to obtain all necessary approvals, and to remove
any impediments or delays, legal or otherwise, in order to consummate
and make effective the transactions contemplated by this Agreement for
the purpose of securing to the parties hereto the benefits contemplated
by this Agreement.
9. Conditions Precedent. (a) The obligations of Sellers under the
Agreement to consummate the transaction contemplated hereby are subject to the
following (Conditions Precedent):
(i) The representations and warranties made by
Buyer herein shall be true and correct in
all material respects on and as of the
Closing.
Page 18
(ii) All of the provisions of this Agreement to
be complied with and performed by Buyer at
or before the Closing shall have been duly
complied with and performed in all material
respects.
(iii) On or before the Closing, no action or
proceeding shall have been instituted before
any court, governmental agency or arbitrator
to restrain or prohibit or to obtain
material damages from Sellers in respect to
this Agreement or the consummation of the
transaction contemplated herein, which, in
the opinion of Buyer or its counsel, makes
it inadvisable to consummate such
transaction.
(iv) Buyer shall have determined, in its sole
discretion, the Escrow Fund Amount, and
Buyer and Sellers shall have memorialized
the Escrow Fund Amount by affixing their
signature to Schedule 7(c) herein.
(v) Buyer shall have executed and delivered all
of the documents and instruments referred to
herein as exhibits to this Agreement.
(vi) Buyer shall have completed all tasks and
delivered all documents required by the
Agreements.
(b) The obligations of Buyer under the Agreement to
consummate the transaction contemplated hereby are subject to the
following conditions precedent:
(i) Buyer shall have completed to its sole
satisfaction a Due Diligence Review of the
Business.
(ii) Since the date of the Financial Statements
there shall have occurred no material
adverse change in the properties, prospects
or operations of Company or in the quality
and character of its customers and relations
therewith or in the aggregate business
volume done with customers of the Business.
Page 19
(iii) Sellers shall have obtained all consents
required to be obtained by Sellers and shall
have caused Company to have obtained all
consents required by Company in order to
execute, deliver and perform Sellers's
obligations under this Agreement.
(iv) Any and all liens and other encumbrances on
the Assets shall have been duly disclosed to
Buyer on Schedule 4(e) attached hereto.
(v) All licenses, permits and franchises which
are required in order to conduct the
Business by Buyer shall have been properly
assigned, transferred or conveyed by Sellers
to Buyer.
(vi) Sellers and Company shall have executed and
delivered all of the documents and
instruments referred to herein as Schedules
to this Agreement.
(vii) Buyer shall have obtained all permits and
approvals necessary, in Buyer's sole
discretion, in form and substance
satisfactory to Buyer in Buyer's sole
discretion, to own and operate the Business.
(viii) All required governmental approvals with
respect to this transaction, Buyer's
ownership of the Stock and Company's
operation of the Business shall have been
obtained and shall not be subject to any
condition(s) which, in the sole discretion
of Buyer, is/are not acceptable.
(xiv) The representations and warranties made by
Sellers herein shall be true and correct in
all material respects on and as of the
Closing. If Buyer, in its sole discretion,
determines that the representations and
warranties made by Sellers are substantially
incorrect or untrue, Buyer may elect to not
consummate this transaction.
(x) Sellers shall supply all information and
documents required to be attached hereto as
Schedules.
(xi) Sellers shall have completed all tasks
required by the Agreements.
Page 20
10. The Closing: The closing of the transactions contemplated by
this Agreement (the Closing) shall take place at the offices of Buyer located at
00 Xxxx Xxxxx, Xxxxx 000, Xxxxxx Xxx Xxxxxx, xx or about June 10, 2002, at 10:00
AM, or at such other place and/or time as shall be fixed by mutual agreement of
the parties hereto. The time and date of the Closing is referred to in this
Agreement as the Closing Date. The Closing shall be effective as of the time on
the Closing Date that the parties shall have performed all the acts and executed
and delivered all documents, payments and instruments to be performed and
executed and delivered at or before the Closing, as described herein. Sellers
assume all risk of loss due to fire or other casualty up to the Closing. In the
event the Closing does not occur on the Closing Date, and the Closing Date has
not been extended, in writing signed by both parties, then this Agreement shall
become null and void, and be deemed terminated pursuant to Section 20 herein.
(a) At the Closing, Sellers shall deliver to Buyer:
(i) Certificates for One Thousand (1,000) shares
of Company common stock, representing all of
the issued and outstanding shares of Company
common stock, duly endorsed for transfer to
Buyer, which shall transfer to Buyer good
and valid title to all of the Company common
stock, free and clear of all liens, claims,
restrictions and encumbrances of any nature
whatsoever; and
(ii) All permits, endorsements, consents, waivers
and/or approvals in connection with
Company's permits necessary for the
operation of the Business. A complete list
of the same is annexed hereto as Schedule
4(i); and
(iii) All certificates of title relating to the
motorized equipment listed on Schedule
4(g);and
(iv) All corporate, accounting, business and tax
records of Company; and
(v) The Good Standing Certificate of Company,
attached hereto as Schedule 10(a)(v); and
(vi) Any and all leases and deeds representing
Sellers's interest in the Real Estate, as
same is listed on Schedule 4(s) et. sec.;
and
Page 21
(vii) The Information, attached hereto as Schedule
4(c); and
(viii) The Phase I, Phase II and Phase III
Environmental Reports, as appropriate,
attached hereto as Schedule 6(f).
(ix) The Escrow Agreement; and
(x) All properly transferred licenses, permits
and franchises which are required in order
to conduct the Business; and
(xi) Sellers shall have supplied all information
and documents required to be attached hereto
as Schedules; and
(xii) Sellers shall have completed all tasks
required by the Agreements; and
(xiii) Such further documentation or instruments as
the Buyer or its counsel may reasonably
request to effectuate their terms of this
Agreement.
(b) At the Closing, Buyer shall deliver the following to
Sellers:
(i) The Purchase Price, less the Escrow Fund
Amount, by either certified check or wire
transfer; and
(ii) The Good Standing Certificate of Buyer,
attached hereto as Schedule 10(b)(ii); and
(iii) A letter from the New Jersey Department of
Environmental Protection (NJDEP) approving
the Stock Purchase Agreement, attached
hereto as schedule 10(b)(iii).
(iv) Properly executed originals of the
Employment and Covenant Not To Compete
Agreements by and between Buyer and Xxxxxx
Xxxxxx, Buyer and Xxxxxxx Xxxxxx, Buyer and
Xxxxxx Xxxxxx, and Buyer and Xxxxx Xxxxxx,
attached hereto as schedule 10(b)(iv); and
Page 22
(v) Buyer shall deliver to Sellers reasonable
verification of the delivery or transfer of
the Escrow Fund Amount to Escrow Agent; and
(vi) Such further documentation or instruments as
Sellers or its counsel may reasonably
request to effectuate the terms of this
Agreement.
11. Survival of Representations, Warranties and Covenants: The
representations, warranties and covenants contained herein shall survive the
Closing hereof for a period of Five (5) years to protect the party in whose
favor they run, irrespective of and unaffected by any investigation made or
knowledge obtained by any of the parties hereto, including, without limitation,
the participation of the Buyer's accountants or counsel on behalf of the Buyer
in any examination or review of the business, affairs, financial condition, or
Assets of the Sellers; provided however, that in the case of all such
representations, warranties, covenants and agreements, there shall be no such
termination with respect to any such representation, warranty, covenant or
agreement to the extent a bona fide claim has been asserted by written notice of
such claim delivered to the party or parties making such representation,
warranty, covenant or agreement prior to the expiration of the survival period.
12. Indemnification: (a) Excluding consequential, special or
punitive damages, Buyer shall, and hereby does, indemnify and hold Sellers
harmless from and against, and in respect of:
(i) any and all losses, liabilities, damages,
deficiencies and obligations (the
"Liabilities") resulting from any
misrepresentations or breach of warranty by
Buyer or nonfulfillment of any covenant or
condition to be performed or complied with
by Buyer under the terms of this Agreement;
and
(ii) all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and
expenses, including reasonable attorneys'
fees and disbursements, incident to the
items set forth in Section 12(a)(i) above.
Page 23
(b) Excluding consequential, special or punitive damages,
Sellers shall indemnify and hold Buyer harmless from and against:
(i) for a period of Five (5) years from the
Closing Date, any and all Liabilities of the
Sellers' Liabilities which are not expressly
assumed by the Buyer at the Closing,
including, without limitations, any and all
such Liabilities or obligations of Company
in respect of which claims are asserted
against the Assets, the Business or the
Buyer (A) as an alleged transferee of or
successor to the Sellers; or (B) involving
any Federal, state, local or foreign tax
liability of the Sellers, including any
interest or penalties thereon;
(ii) any and all Liabilities resulting from any
misrepresentation or breach of warranty or
nonfulfillment of any covenant or condition
to be performed or complied with by Sellers
under the terms of this Agreement; and
(iii) all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and
expenses, including reasonable attorneys'
fees and disbursements, incident to the
foregoing.
(c) In addition to and without limiting the foregoing in
any way, for a period of Five (5) years from the Closing Date, the
Sellers strictly shall defend, indemnify and hold harmless Buyer from
and against any and all fines, penalties, costs, liabilities, damages,
losses or expenses (including without limitation, sampling, monitoring
or remediation costs, reasonable attorneys', consultants' and
engineering fees and disbursements, costs of defense and interest)
(hereinafter referred to in this 12(c) as Claims) (i) incurred by
Buyer; or (ii) for which Buyer is liable or obligated pursuant to any
judicial or administrative judgment, order, directive or decree or any
settlement or compromise of any claim, arising from or relating to any
breach or violation of any applicable environmental law including the
release or discharge of any Hazardous Material or from or relating to
any breach or violation of any representation or warranty by Sellers
set forth in Section 4(p), (q), or (r) of this Agreement.
Page 24
(d) If any legal proceeding shall be instituted or any
claim or demand shall be asserted by any legal person in respect of
which indemnity may be sought by one party hereto (Indemnitee) from the
other party hereto (Indemnitor), then the Indemnitee shall send written
notice to the Indemnitor of the assertion of such claim or legal
proceeding promptly after the Indemnitee obtains knowledge thereof. The
Indemnitor shall have the option, at its own expense, to be represented
by counsel of its choice, and to defend against, negotiate, settle or
otherwise deal with such claim and/or proceeding; provided, however,
that no settlement shall be made without the prior written consent of
the Indemnitee (which shall not be unreasonably withheld or delayed)
unless the settlement provides for no liability for and no payment by
Indemnitee and acknowledges no fault by Indemnitee. The Indemnitee may
participate in any such proceeding with counsel of its choice, but at
its own expense. To the extent the Indemnitor elects not to or fails to
defend such proceeding, claim or demand, the Indemnitee may defend
against, settle or otherwise deal with any such proceeding, claim or
demand without the consent of the Indemnitor, provided that the
Indemnitee acts in good faith. The parties agree to cooperate fully
with each other in connection with the defense, negotiation or
settlement of any such legal proceeding, claim or demand. The amount of
indemnifiable claims due an Indemnitee shall be paid by the Indemnitor
to the Indemnitee on demand. If a claim shall be made wherein Sellers
could be obligated to indemnify and hold Buyer harmless pursuant to the
terms of this Agreement, and if any of the future Earnout Amount(s)
remains unpaid, pursuant to Section 3(b) above, in addition to the
Escrow Account and all other remedies to which Buyer shall be entitled,
Buyer may suspend payment of the future Earnout Amount(s) and place
such future Earnout Amount(s) into an interest bearning escrow account
until such time as the claim is finalized (Indemnity Account). In the
event that Buyer is obligated to pay a claim, on behalf of Company, to
any legal person pursuant to a judicial or administrative judgment,
order, directive, decree, or a settlement or compromise, Buyer shall be
entitled to use the Indemnity Account and any and all future Earnout
Amounts to satisfy such judicial or administrative judgment, order,
directive, decree, settlement or compromise. Any amount offset shall
first be applied against accrued and unpaid interest before any amounts
are offset against principal. Buyer shall exercise its right of offset
by providing notice of exercise to Sellers in accordance with the
provisions of Section 3(c). In the event that Buyer is found not liable
by any judicial or administrative body, Buyer shall return the future
Earnout Amount(s) in the Indemnity Account within Fifteen (15) business
days of such adjudication in Buyer's favor. All interest earned by the
Indemnity Account shall be the property of and shall be paid to the
party to whom the proceeds of the Indemnity Account are paid. In the
event of a dispute under this paragraph, the parties shall follow the
procedure set out above in Sections 3(d)(i)-(ii) to resolve the
dispute.
Page 25
(e) In the event of a legal proceeding brought by Company
and/or Buyer to enforce the terms of the Employment and Covenant Not to
Compete Agreements, in addition to any and all other remedies to which
Buyer and or Company shall be entitled, Buyer may suspend payments of
the future Earnout Amount(s) due and hold same to offset
dollar-for-dollar cost and damages finally determined to be a result of
any breach of or noncompliance with the terms of the Employment and
Covenant Not to Compete Agreements. Buyer shall exercise its right of
offset by providing notice of exercise to Sellers at any time before
payment in full of any future Earnout Amount(s).
(f) The rights and remedies granted in this Section 12
are not exclusive of any and all other rights and remedies which the
parties may have at law or in equity.
13. Brokers: Each party represents and warrants to the other that
it has had no dealings with any broker or finder in connection with the
transactions contemplated by this Agreement and that no broker or finder's fees
are due from either Buyer or Sellers with respect to this transaction.
14. Notices: Any notices or other communications required or
permitted hereunder shall be sufficiently given in writing and personally
delivered or delivered via any courier service or sent by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows
or to such other address as either party may hereafter designate by notice given
pursuant hereto:
In the case of Buyer:
Phoenix Waste Services Company, Inc.
00 Xxxx Xxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Page 26
In the case of Sellers:
LU Transport, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx
15. Entire Agreement: This Agreement, including the exhibits and
schedules hereto, contains the entire agreements and understandings between the
parties hereto, and no agreements, representations or warranties, oral or
written, express or implied, have been made by the parties which are not set
forth or referred to expressly in this Agreement. No alteration, amendment or
modification of this Agreement shall be valid unless made in a written
instrument signed by the parties hereto.
16. Successors and Assigns: This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns, but no other third party shall be a beneficiary of this
Agreement or any of its terms or provisions.
17. Paragraph Headings: The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
18. Expenses: Whether or not this transaction shall close, each
party hereto shall pay its own expenses, incurred in connection with this
Agreement and the transactions contemplated hereby, including without
limitation, any legal and accounting fees.
19. Further Assurances: The parties agree to execute and deliver
such further instruments and documents and to take such further actions as are
necessary or desirable to consummate the transactions contemplated hereby.
Page 27
20. Termination of Agreement: (a) This Agreement may be terminated
prior to Closing by Sellers, if Buyer is unable to comply with the Conditions
Precedent described in Section 9(b). This Agreement may be terminated by Buyer
for any reason prior to Closing, including Buyer's convenience. In the event of
a termination of this Agreement, the confidentiality obligations described in
Section 6(d) and Section 7(a) shall survive said termination for a period of One
(1) year from said termination date.
(b) In the event of termination of this Agreement as set
forth above Section 20(a), this Agreement shall forthwith become null
and void and there shall be no obligations on the part of either party
to this Agreement to consummate the transactions contemplated hereby
and neither party shall have any liability to the other party, except
that, the obligations described in Section 11 shall survive said
termination for a period of Five (5) years from said termination date,
and the confidentiality obligations referenced above in Section 20(a)
shall survive said termination for a period of One (1) year.
21. Applicable Law: This Agreement shall be governed by, and be
construed and enforced in accordance with, the laws of the State of Delaware
applicable to agreements to be performed wholly within that state. The parties
designate the courts situated in the State of New Jersey as the forum of choice
to hear and determine any claim, controversy or disagreement arising under this
Agreement.
22. Counterparts: This Agreement may be executed in two or more
counterparts each of which shall constitute an original instrument but all of
which shall constitute one and the same instrument.
23. Severability: Any provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions of this Agreement, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Page 28
24. Variations in Pronouns: All pronouns and variations thereof
shall be deemed to refer to the masculine, feminine or neutral as the identity
of the person or persons may require, and wherever necessary or appropriate in
the context of this Agreement, the singular shall include the plural and vice
versa.
25. Waiver: The failure of a party to insist on the performance of
any provision of this Agreement or to exercise any right, power or remedy upon a
breach hereof shall not constitute a waiver of any provision of this Agreement
that will limit the party's right thereafter to enforce any provision or
exercise any right relating to this Agreement.
26. Further Covenants and Agreements: The parties expressly
acknowledge and further covenant and agree as follows:
(a) Each party to this Agreement has read, understood,
and had the option to obtain qualified legal counsel to interpret its
legal effect. Accordingly, it is agreed that the usual rule of contract
interpretation causing ambiguities to be resolved in favor of the
non-drafting party shall not apply to the interpretation of this
Agreement.
(b) That entering into this Agreement, the respective
parties are not relying upon any information, data, predictions,
projections, opinion, statement or promise furnished or made by or on
behalf of the other party, except as may be expressly and specifically
set forth herein, and that each party expressly relieves the other
party of any duty whatsoever to disclose, furnish, explain or correct
any information, data, prediction, projection, opinion, statement or
promise that the other party has made in any discussions or
negotiations prior to or contemporaneously with the execution and
delivery of the Agreement.
Page 29
(c) That each party has carefully reviewed this Agreement
and is entering into it freely and not under any compulsion or duress.
(d) That the parties expressly and especially agree that
this Agreement shall be binding and enforceable in accordance with its
terms and that each party waives any claim or contention, now or in the
future, that this Agreement is or should be void, voidable,
unenforceable or not binding upon them for any reason whatsoever, and
further expressly and especially waive any such contention which would
or could be based upon any judicial decisions denying enforceability or
any such provisions.
(e) That the person signing this Agreement has all of the
requisite authority to bind the party for whom he is signing.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, on the day and year first above written.
(Remainder of page intentionally left blank)
Page 30
(Signature Page)
Buyer
-----
PHOENIX WASTE SERVICES COMPANY, INC.
By /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Xxxxxxx X. Xxxxxx
Vice President/Secretary
Sellers
-------
LU TRANSPORT INC.
By /s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx
By /s/ Xxxxxxx Xxxxxx
-----------------------------
Xxxxxxx Xxxxxx
Page 31
