Exhibit (2) (iii)
SECOND AMENDMENT TO ACQUISITION AGREEMENT
WHEREAS, Safety-Kleen Services, Inc. (the "Seller") and Clean Harbors,
Inc. (the "Purchaser"), are parties to an Acquisition Agreement dated as of
February 22, 2002, as amended by the First Amendment to Acquisition Agreement
dated as of March 8, 2002 (as so amended, the "Acquisition Agreement");
WHEREAS, the Seller and the Purchaser wish to amend certain provisions
of the Acquisition Agreement as set forth in this Second Amendment to
Acquisition Agreement (this "Amendment");
NOW, THEREFORE, the parties hereto agree as follows:
1. Section 1.1(b)(ii)(A) of the Acquisition Agreement is hereby amended
by changing the words "prior to the Due Diligence Expiration Date" which appears
in such Section to "on or prior to the Purchaser Schedule Delivery Date," (ii)
Sections 1.1(b)(ii)(B) and (D) of the Acquisition Agreement are hereby amended
by changing the words "prior to the Due Diligence Expiration Date" to "on or
prior to May 10, 2002," and (iii) Section 1.1(b)(vi)(B) of the Acquisition
Agreement is hereby amended by changing the words "(which Schedule will be
provided by the Seller prior to the Due Diligence Expiration Date)" to read as
follows: "(which Schedule will be provided by the Purchaser on or prior to May
10, 2002, provided that, to the extent that the Purchaser shall elect to delete
from Schedule 1.1(b)(vi)(B) any Real Property Leases which appear on the
schedule of all existing Real Property Leases of the Seller and the Selling Subs
which was delivered by the Seller to the Purchaser on April 8, 2002, the
Purchaser shall remain liable for any Assumed Liabilities associated with the
leased properties subject to such deleted Real Property Leases (other than
obligations in respect of rent and tax and utility payments which would have
arisen for periods after the Closing and any Cure Costs which would have been
payable under Section 1.4 in connection with such deleted Real Property Leases)
to the same extent as the Purchaser would have been liable had such deleted Real
Property Leases been included on Schedule 1.1(b)(vi)(B) as delivered by the
Purchaser).
2. Section 1.1 of the Acquisition Agreement is hereby amended by adding
a new Section 1.1(e) reading as follows:
(e) Although the Purchaser shall endeavor to use its
reasonable best efforts to include within Schedules 1.1(b)(ii)(B) and
(D) and Schedule 1.1(b)(vi)(B) all of those contracts and Real Property
Leases which the Purchaser has identified through May 10, 2002 as
includable within the Assigned Contracts and Leases, the Purchaser
shall retain the right to add additional contracts and Real Property
Leases through the Purchaser Schedule Delivery Date. Nothing in this
Section 1.1(e) shall affect the respective rights and obligations of
the
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Purchaser and the Seller with respect to executory contracts or
unexpired leases with respect to the Business under Section 5.12 of
this Agreement.
3. Section 1.1(b)(v) of the Acquisition Agreement is hereby amended to
read as follows:
(v) all rights and claims under all warranties,
representations and guarantees made by suppliers, manufacturers and
contractors in connection with the Acquired Assets and all rights and
claims relating to Assumed Liabilities except those shown or described
on Schedule 1.1(b)(v) provided that, notwithstanding any other
provision of this Agreement or any Schedule to the contrary, the
Acquired Assets shall include rights and claims under insurance
policies (if any) held by the Seller or any of its Affiliates as of the
Closing which are applicable to liabilities and obligations under
Environmental Laws (or other Laws) that relate to violations of
Environmental Laws arising before the Closing Date in connection with
the Owned Real Property, the real property subject to Real Property
Leases, the real property owned or leased, directly or indirectly, by
any Transferred Sub, or the operation of the Business which are assumed
by the Purchaser, but only to the extent that (A) such insurance
policies are not either (i) general liability insurance policies issued
prior to 1987 without pollution exclusions or (ii) part of the
Financial Assurance provided by the Seller or its Affiliates under
applicable Environmental Laws, and (B) such assignment of rights and
claims can be accomplished without additional cost to the Seller or any
of its Affiliates or other adverse consequence (which shall be deemed
to include, without limitation, any potential or actual reduction of
payments for other liabilities covered by such policies because of
maximum coverage limits) to the Seller or any of its Affiliates under
such insurance policies (if any);
4. Section 1.4 of the Acquisition Agreement is hereby amended in order
to limit to One Million Dollars ($1,000,000) the Seller's maximum obligation to
pay Cure Costs by deleting the first two sentences of Section 1.4 and inserting
in place thereof the following sentence: "The Seller and the Purchaser shall
each pay one-half of any and all pre-petition cure and reinstatement costs or
expenses ("Cure Costs") incurred prior the Closing Date, of or relating to the
assumption and assignment pursuant to this Agreement of the Assigned Contracts
and Leases until such costs and expenses equal Two Million Dollars ($2,000,000)
(the "Cure Costs Cap").
5. Section 1.8 of the Acquisition Agreement is hereby amended to read
as follows:
Section 1.8. Allocation of Purchase Price for Tax Purposes. The Seller
and the Purchaser agree that, for all tax reporting purposes, the allocation of
the Cash Purchase Price and the Assumed Liabilities to the Acquired Assets shall
be as set forth on Schedule 1.8, which Schedule 1.8 shall be completed by the
Closing Date and which, when completed, will have been arrived at by arm's
length negotiation in compliance with Section 1060 of the Internal Revenue Code
of 1986, as amended. In their preparation of Schedule 1.8, the Seller and the
Purchaser will use their best efforts to value the Assumed Liabilities
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(including, in particular, the Assumed Liabilities associated with compliance
with Environmental Laws included therein) as of the Closing Date in accordance
with the most recent estimates of the amount and timing of such Liabilities then
available to the Purchaser and the Seller. If there is any adjustment to the
Unadjusted Cash Purchase Price or the Assumed Liabilities in accordance with
this Agreement, the Seller and the Purchase agree to make appropriate
adjustments to the allocation set forth in Schedule 1.8. Each of the Purchaser
and the Seller shall (i) timely file all forms (including Internal Revenue
Service Form 8594) and Tax Returns required to be filed in connection with such
allocation, (ii) be bound by such allocation for purposes of determining Taxes,
(iii) prepare and file, or cause to be prepared and filed, its Tax Returns on a
basis consistent with such allocation and (iv) take no position, or cause no
position to be taken, inconsistent with such allocation on any applicable Tax
Return, in any audit or proceeding before any Tax Authority or in any report
made for Tax purposes. However, nothing in this Section 1.8 shall be deemed to
prohibit the Purchaser, for financial reporting purposes, from making
adjustments to the Purchase Price as determined for tax purposes in order to
reflect the costs incurred by the Purchaser in connection with this transaction
and, if in the reasonable judgment of the Purchaser and its independent public
accountants, additional adjustments are necessary or appropriate based upon GAAP
and the most recent estimates then available to the Purchaser as to the amount
and timing of the Assumed Liabilities associated with compliance with
Environmental Laws being assumed by the Purchaser in connection with this
transaction. If the allocation set forth on Schedule 1.8 is disputed by any
Taxing Authority, the party receiving notice of such dispute shall promptly
notify the other party hereto concerning the existence and resolution of such
dispute.
6. Sections 2.2(a)(vi), (viii) and (ix) of the Acquisition Agreement
are hereby amended to change the words "within fifty (50) days after the date of
this Agreement" to "by May 24, 2002."
7. Section 2.2(a)(xiii) of the Acquisition Agreement is hereby amended
to read as follows:
(xiii) certificates of tax and legal good standing (to the
extent applicable in the Transferred Subs' jurisdiction of
organization) and releases from secured lenders and other third parties
evidencing that the non-domestic Transferred Subs are in good standing
(if appropriate) and that the secured lenders of the non-domestic
Transferred Subs and such other third parties have released their
security interests and other claims (other than claims which are either
(A) liabilities which have been deducted in the calculation of Working
Capital under Section 1.7(b) or (B) liabilities or obligations arising
under applicable Environmental Laws (or other Laws) that relate to
violations of Environmental Laws) on the assets of such Transferred
Subs and on the issued and outstanding equity interests of such
Transferred Subs;
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8. Section 6.1(a) of the Acquisition Agreement is hereby amended to
change the date therein from "June 20, 2002" to "June 27, 2002."
9. Article IX of the Acquisition Agreement is hereby amended to (i)
revise the definitions of "Affiliate" and "Assigned Contracts and Leases," (ii)
correct the typographical error that now appears in the definition of "Target
Working Capital," and (iii) add a definition for "Purchaser Schedule Delivery
Date" as follows:
"Affiliate" of a Person means any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person. In no event shall
Xxxxxxx Inc. or any of its direct or indirect subsidiaries be deemed an
Affiliate of Safety-Kleen Corp. or any of its direct or indirect subsidiaries.
"Assigned Contracts and Leases" means those contracts and Real Property
Leases listed on Schedules 1.1(b)(ii)(A), (B) and (D) and Schedule
1.1(b)(vi)(B), provided that the Seller will not be deemed to have failed to
satisfy its obligation to include within the Assigned Contracts and Leases
transferred at the Closing as part of the Acquired Assets any Assigned Contract
or Lease which is listed on Schedules 1.1(b)(ii)(A), (B) and (D) and Schedule
1.1(b)(vi)(B) as of the Purchaser Schedule Delivery Date but which, in the case
of Schedules 1.1((b)(ii)(B) and (D) and Schedule 1.1(b)(vi)(B), was not listed
on such Schedules delivered pursuant to Section 1.1(e) by the Purchaser to the
Seller by May 10, 2002, if the Seller shall have used its reasonable best
efforts to cause such Assigned Contract or Lease to be part of the Acquired
Assets.
"Purchaser Schedule Delivery Date" means thirty (30) days following the
issuance of the Section 363/365 Order.
"Target Working Capital" means Sixty-four Million, Two Hundred and
Seventy Thousand Dollars ($64,270,000).
10. To the extent that the Seller reasonably determines that the
entities listed below do not have liabilities and claims asserted against them
which are Assumed Liabilities (as such term in defined in the Acquisition
Agreement) and do not conduct operations which are part of the Business (as such
term is defined in the Acquisition Agreement), Schedule 9.1 to the Acquisition
Agreement as previously delivered by the Seller to the Purchaser will be amended
to delete from that Schedule and therefore from the Selling Subs the following
entities: USPCI of Mississippi, Inc.; Safety-Kleen (Delaware), Inc.; SK Services
(East), L.C.; SK Services, L.C.; Safety-Kleen (Rosemount), Inc.; Safety-Kleen
OSCO Holdings, Inc.; Safety-Kleen (Nashville), Inc.; and OSCO Treatment Systems
of Mississippi, Inc.
11. Except as described in the preceding sections of this Amendment,
the Acquisition Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of April 30, 2002.
SAFETY-KLEEN SERVICES, INC.
By:/s/ Xxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: C.F.O.
CLEAN HARBORS, INC.
By:/s/ Xxxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
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