EXHIBIT 10.15
_________________________________________________________________
PURCHASE AGREEMENT
by and among
the STOCKHOLDERS
of
ILLINOIS BULK HANDLERS, INC.,
SHRED-ALL RECYCLING SYSTEMS, INC.,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUCKING CO., INC.,
ENVIRONTECH, INC.
and
AMERICAN DISPOSAL SERVICES, INC.
dated as of September 9, 1997
_________________________________________________________________
TABLE OF CONTENTS
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . 2
ARTICLE II SALE AND PURCHASE OF STOCK. . . . . . . . . . . . 15
2.1 Stock Purchase . . . . . . . . . . . . . . . . . . 15
2.2 Purchase Price . . . . . . . . . . . . . . . . . . 16
ARTICLE III CLOSING. . . . . . . . . . . . . . . . . . . . . 26
3.1 The Closing. . . . . . . . . . . . . . . . . . . . 26
3.2 Obligations of Sellers . . . . . . . . . . . . . . 26
3.3 Obligations of Buyer . . . . . . . . . . . . . . . 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
THE PRINCIPAL STOCKHOLDER. . . . . . . . . . . . . . . . . . 27
4.1 Organization and Qualification . . . . . . . . . . 27
4.2 Authority; No Breach . . . . . . . . . . . . . . . 28
4.3 Securities and Ownership . . . . . . . . . . . . . 30
4.4 [Intentionally Omitted]. . . . . . . . . . . . . . 31
4.5 Financial Statements. . . . . . . . . . . . . . . 31
4.6 Interests of Related Persons . . . . . . . . . . . 32
4.7 Absence of Undisclosed Liabilities . . . . . . . . 32
4.8 Absence of Certain Changes or Events . . . . . . . 33
4.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . 34
4.10 Assets . . . . . . . . . . . . . . . . . . . . . . 35
4.11 Intellectual Property. . . . . . . . . . . . . . . 38
4.12 [Intentionally Omitted]. . . . . . . . . . . . . . 38
4.13 [Intentionally Omitted]. . . . . . . . . . . . . . 38
4.14 Contracts. . . . . . . . . . . . . . . . . . . . . 38
4.15 Customers and Suppliers. . . . . . . . . . . . . . 39
4.16 Insurance. . . . . . . . . . . . . . . . . . . . . 39
4.17 Litigation, Etc. . . . . . . . . . . . . . . . . . 40
4.18 Compliance with Law; Necessary
Authorizations . . . . . . . . . . . . . . . . . . 41
4.19 Environmental Matters . . . . . . . . . . . . . . 41
4.20 Labor Difficulties . . . . . . . . . . . . . . . . 42
4.21 Employee Benefit Plans . . . . . . . . . . . . . . 44
4.22 [Intentionally Omitted]. . . . . . . . . . . . . . 46
4.23 Questionable Payments .. . . . . . . . . . . . . . 46
4.24 Finders. . . . . . . . . . . . . . . . . . . . . . 46
4.25 Disclosure . . . . . . . . . . . . . . . . . . . . 47
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER. . . . . . 47
5.1 Organization and Qualification . . . . . . . . . . 47
5.2 Authority. . . . . . . . . . . . . . . . . . . . . 47
5.3 Capital Stock . . . . . . . . . . . . . . . . . . 48
5.4 No Breach. . . . . . . . . . . . . . . . . . . . . 48
5.5 Finders. . . . . . . . . . . . . . . . . . . . . . 49
5.6 Investment Purpose. . . . . . . . . . . . . . . . 49
5.7 No Knowledge of Breach. . . . . . . . . . . . . . 49
5.8 SEC Reports and Financial Statements. . . . . . . 49
5.9 Absence of Certain Changes. . . . . . . . . . . . 51
5.10 ADS Common Stock Issuable to the Sellers. . . . . 51
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . 51
6.1 Conduct of Business of the
Operating Companies. . . . . . . . . . . . . . . . 51
6.2 Company Records. . . . . . . . . . . . . . . . . . 52
6.3 Filings and Authorizations . . . . . . . . . . . . 53
6.4 Publicity. . . . . . . . . . . . . . . . . . . . . 54
6.5 Distribution of Net Cash Balances
and Distributed Assets to Sellers. . . . . . . . . 54
6.6 Discussions with Others. . . . . . . . . . . . . . 57
6.7 Supplements to Disclosure Schedule . . . . . . . . 57
6.8 Covenant to Satisfy Conditions . . . . . . . . . . 58
6.9 Further Assurances . . . . . . . . . . . . . . . . 58
6.10 Delivery of Periodic Reports . . . . . . . . . . . 58
6.11 Nasdaq . . . . . . . . . . . . . . . . . . . . . . 58
6.12 Tax Matters. . . . . . . . . . . . . . . . . . . . 59
ARTICLE VII [INTENTIONALLY OMITTED]. . . . . . . . . . . . . 64
ARTICLE VIII CONDITIONS TO CLOSING . . . . . . . . . . . . . 64
8.1 Conditions Precedent to Obligations of Buyer . . . 64
(a) Representations and Warranties Accurate . . . 64
(b) Performance by Sellers . . . . . . . . .. . . 65
(c) [Intentionally Omitted] . . . . . . . . . . . 65
(d) Consents. . . . . . . . . . . . . . . . . . . 65
(e) No Legal Prohibition. . . . . . . . . . . . . 65
(f) Certificate. . . . . . . . . . . . . . . . . 66
(g) Opinion of Counsel for Sellers. . . . . . . . 66
(h) HSR Act . . . . . . . . . . . . . . . . . . . 66
(i) Repayment of Indebtedness . . . . . . . . . . 66
(j) Small Business Set Asides . . . . . . . . . . 66
(k) Material Adverse Change . . . . . . . . . . . 66
(l) Releases. . . . . . . . . . . . . . . . . . . 67
(m) Resale Agreement. . . . . . . . . . . . . . . 67
(n) Non-Competition Agreement . . . . . . . . . . 67
(o) Employment Agreements . . . . . . . . . . . . 67
(p) ▇▇▇▇▇▇▇ Agreement . . . . . . . . . . . . . . 67
(q) Facility Lease. . . . . . . . . . . . . . . . 67
(r) Additional Documents, Etc. . . . . . . . . . . 68
8.2 Conditions Precedent To Obligations
Of Sellers. . . . . . . . . . . . . . . . . . . . . 68
(a) Representations and Warranties Accurate. . . . 68
(b) Performance by Buyer . . . . . . . . . . . . . 68
(c) Consents. . . . . . . . . . . . . . . . . . . 68
(d) No Legal Prohibition . . . . . . . . . . . . . 69
(e) Certificate. . . . . . . . . . . . . . . . . . 69
(f) Opinion of Counsel for Buyer . . . . . . . . . 69
(g) HSR Act. . . . . . . . . . . . . . . . . . . . 69
(h) Material Adverse Change. . . . . . . . . . . . 70
(i) Nasdaq . . . . . . . . . . . . . . . . . . . . 70
(j) [Intentionally Omitted]. . . . . . . . . . . . 70
(k) Effective Registration Statement . . . . . . . 70
(l) Employment Agreements. . . . . . . . . . . . . 70
(m) ▇▇▇▇▇▇▇ Agreement. . . . . . . . . . . . . . . 70
(n) Facility Lease . . . . . . . . . . . . . . . . 70
(o) Additional Documents, Etc. . . . . . . . . . 70
ARTICLE IX INDEMNIFICATION . . . . .. . . . . . . . . . . . . 71
9.1 Survival of Representations and Warranties. . . . . 71
9.2 Indemnification by Sellers. . . . . . . . . . . . . 71
9.3 Indemnification by Buyer. . . . . . . . . . . . . . 73
9.4 Exclusive Remedy. . . . . . . . . . . . . . . . . . 74
9.5 Terms and Conditions of Indemnification . . . . . . 75
9.6 Treatment of Payments . . . . . . . . . . . . . . . 77
ARTICLE X ESCROW. . . . . . . . . . . . . . . . . . . . . . . 77
10.1 Establishment of Escrow Account . . . . . . . . . . 77
10.2 Funding of and Withdrawals From
Escrow Account. . . . . . . . . . . . . . . . . . . 77
ARTICLE XI MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 78
11.1 Termination; Liquidated Damages. . . . . . . . . . 78
11.2 Expense. . . . . . . . . . . . . . . . . . . . . . 79
11.3 Amendment. . . . . . . . . . . . . . . . . . . . . 79
11.4 Entire Agreement . . . . . . . . . . . . . . . . . 80
11.5 Waivers. . . . . . . . . . . . . . . . . . . . . . 80
11.6 Notices. . . . . . . . . . . . . . . . . . . . . . 80
11.7 Counterparts . . . . . . . . . . . . . . . . . . . 81
11.8 Governing Law. . . . . . . . . . . . . . . . . . . 81
11.9 Binding Effect; Third Party Beneficiaries;
Assignment . . . . . . . . . . . . . . . . . . . . 82
11.10 Severability. . . . . . . . . . . . . . . .. . . . 82
11.11 Headings . . . . . . . . . . . . . . . . . . . . . 83
11.12 No Agency. . . . . . . . . . . . . . . . . . . . . 83
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of September 9, 1997 by
and among the stockholders of ILLINOIS BULK HANDLERS, INC., an
Illinois corporation ("Handlers"), SHRED-ALL RECYCLING SYSTEMS,
INC., an Illinois corporation ("Recycling"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TRUCKING CO., INC., an Illinois corporation ("Trucking"), and
ENVIRONTECH, INC., a Delaware corporation ("Environtech")
(Handlers, Recycling, Trucking and Environtech are hereinafter
collectively referred to as the "Operating Companies"), set forth
on the signature page hereto (collectively, the "Sellers"), and
AMERICAN DISPOSAL SERVICES, INC., a Delaware corporation (the
"Buyer").
W I T N E S S E T H:
WHEREAS, the Sellers own all of the issued and
outstanding shares of capital stock (the "Stock") of the
Operating Companies; and
WHEREAS, the Sellers desire to sell and transfer, and
the Buyer desires to purchase and acquire, all of the Stock of
the Operating Companies, upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, OF
THE REPRESENTATIONS, WARRANTIES, COVENANTS AND MUTUAL AGREEMENTS
HEREINAFTER CONTAINED AND OF OTHER GOOD AND VALUABLE
CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE
PARTIES AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS
The terms defined in this Article I, whenever used
herein (including without limitation the Exhibits and Schedules
hereto), shall have the following meanings for all purposes of
this Agreement:
"ADS Common Stock" means the Common Stock, par value
$.01 per share, of Buyer.
"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 such
Person.
"Agreement" means this agreement among the parties set
forth on the first page hereof, including without limitation all
Exhibits and Schedules hereto.
"Average Daily Tonnage" means the total volume of waste
received divided by the number of days, other than a Saturday,
Sunday or holiday for employees of the City of Chicago, on which
waste was received.
"Balance Sheet Date" means June 30, 1997.
"▇▇▇▇▇▇▇ Agreement" has the meaning given to it in
Section 8.1(p) of this Agreement.
"Business" means the solid waste collection,
transportation, processing, hauling, transfer and disposal
business conducted by the Operating Companies.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in New York City or
Chicago, Illinois are required or authorized by law to be closed.
"Buyer" has the meaning given to it in the caption
hereof.
"Buyer Claimant" has the meaning given to it in Section
9.2 of this Agreement.
"Buyer Shares" means any shares of ADS Common Stock to
be delivered to the Sellers pursuant to this Agreement.
"Claimant" means the party seeking indemnification
under Article IX of this Agreement.
"Closing" means the closing of the transactions
contemplated by this Agreement which shall occur on the Closing
Date.
"Closing Date" means September 10, 1997, or such other
date as the parties may mutually agree.
"Code" means the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations promulgated thereunder.
"Covenant Not to Compete" means the obligations of the
Principal Stockholder under the Non-Competition Agreement.
"Consent" means any consent, approval, authorization,
license or order of, registration, declaration or filing with, or
notice to, or waiver from, any federal, state, local, foreign or
other Governmental Entity or any Person, including, without
limitation, any security holder or creditor which is necessary to
be obtained, made or given by any of the Sellers or the Operating
Companies in connection with the execution and delivery by the
Sellers of this Agreement, the performance by the Sellers of
their obligations hereunder and the consummation of the
transactions contemplated hereby.
"Disclosure Schedule" means the disclosure schedule
attached to this Agreement as Exhibit 4.0, and includes but is
not limited to each of the Schedules expressly referred to in
Article IV.
"Distributed Assets" has the meaning given to it in
Section 6.5 of this Agreement.
"Employee Benefit Plan" means any bonus, deferred
compensation, pension, profit-sharing, retirement, stock
purchase, stock option, stock appreciation, other forms of
incentive compensation, excess benefit, supplemental pension
insurance, disability, medical, supplemental unemployment,
vacation benefits, severance, or post-retirement insurance,
compensation or benefit, welfare or any other employee benefit
plans, arrangements or practices, whether written or oral.
"Employment Agreements" has the meaning given to it in
Section 8.1(o) of this Agreement.
"Encumbrance" means any security interests, liens,
pledges, charges, encumbrances, options, rights of first refusal,
mortgages, indentures, security agreements or other similar
agreements or agreements restricting voting or transfer.
"Environmental Action" means any complaint, summons,
citation, notice, directive, order, claim, litigation,
investigation, proceeding, judgment, letter or other written
communication from any Federal, state, local or municipal agency,
department, bureau, office or other authority or any third party
involving a Hazardous Discharge or any violation of any Permit or
Environmental Laws.
"Environment" means any surface or subsurface physical
medium or natural resource, including, air, land, soil, surface
waters, ground waters, stream and river sediments.
"Environmental Laws" means any federal, state, local or
common law, rule, regulation, ordinance, code, order or judgment
relating to the injury to, or the pollution or protection of
human health and safety or the Environment.
"Environmental Liabilities" means any claims,
judgments, damages (including punitive damages), losses,
penalties, fines, liabilities, encumbrances, liens, violations,
costs and expenses (including attorneys and consultants fees) of
investigation, assessment, remediation or defense of any matter
relating to human health, safety or the Environment of whatever
kind or nature by any Person or Governmental Entity, which are
incurred as a result of (i) the existence of Hazardous Substances
in, on, under, at or emanating from any Real Property, (ii) the
offsite transportation, treatment, storage or disposal of
Hazardous Substances generated by any of the Operating Companies
or (iii) the violation of any Environmental Laws by any of the
Operating Companies.
"Environtech" has the meaning given to it in the
caption hereof.
"Environtech Landfill" means the solid waste disposal
facility located in Morris, Illinois and owned by Environtech.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
"Escrow Account" means the trust account established
and maintained with the Escrow Agent pursuant to the Escrow
Agreement.
"Escrow Agent" means Lakeside Bank, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Escrow Agreement" means an Escrow Agreement with the
Escrow Agent in substantially the form annexed hereto as Exhibit
1A.
"Escrow Amount" has the meaning given to it in Section
2.2(b) of this Agreement.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Facility Lease" has the meaning given to it in Section
8.1(q) of this Agreement.
"Financial Statements" means (i) the combined balance sheets as
of December 31, 1994, December 31, 1995 and December 31, 1996 and
the related combined statements of operations, stockholder's
equity and cash flows of the Operating Companies for the fiscal
years then ended, in each case audited by Ernst & Young, L.L.P.,
and including in each case the related notes thereto, and (ii)
the combined balance sheets as of June 30, 1997, and the
related combined statements of operations, stockholder's equity
and cash flows of the Operating Companies for the six-month
period then ended, in each case audited by Ernst & Young, L.L.P.,
and including in each case, the related notes thereto.
"GAAP" means United States generally accepted
accounting principles, applied on a consistent basis which
assumes the continuation of each of the Operating Companies as a
going concern.
"Governmental Entity" means any federal, state, local
or foreign government, political subdivision, legislature, court,
agency, department, bureau, commission or other governmental
regulatory authority, body or instrumentality to which any of the
Operating Companies is subject.
"Handlers" has the meaning given to it in the caption
hereof.
"Hazardous Discharge" means any releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping of Hazardous
Substances, whether on or off the premises of any of the
Operating Companies.
"Hazardous Substance" means petroleum, petroleum
products, petroleum-derived substances, radioactive materials,
hazardous wastes, polychlorinated biphenyls, lead based paint,
radon, urea formaldehyde, asbestos or any materials containing
asbestos, and any materials or substances regulated or defined as
or included in the definition of "hazardous substances,"
"hazardous materials," "hazardous constituents," "toxic
substances," "pollutants," "contaminants" or any similar
denomination intended to classify or regulate substances by
reason of toxicity, carcinogenicity, ignitability, corrosivity or
reactivity under any Environmental Law.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
"Indemnitor" means the party against whom
indemnification is sought under Article IX of this Agreement.
"Intellectual Property" means patents and pending
patent applications, registered and unregistered trademarks,
service marks, logos, and copyrights, trade names and pending
registrations and applications to register or renew the
registration of any of the foregoing, computer software and other
similar intellectual property rights material to the Operating
Companies considered as a single enterprise in connection with
the conduct of their respective businesses.
"Material Adverse Effect" means any material adverse
effect on the business, results of operations or financial
condition of the Operating Companies considered as a single
enterprise.
"MRF Contract" has the meaning given to it in Section
2.2(c) of this Agreement.
"Net Cash Balances" has the meaning given to it in
Section 6.5 of this Agreement.
"Non-Competition Agreement" has the meaning given to it
in Section 8.1(n) of this Agreement.
"Operating Companies" means, collectively, Handlers,
Recycling, Trucking, and Environtech.
"Pension Plan" means any "employee pension benefit
plan" within the meanings of Section 3(2) of ERISA maintained or
contributed to by or on behalf of any of the Operating Companies.
"Person" means an individual, corporation, partnership,
limited liability company, firm, joint venture, association,
joint stock company, trust, unincorporated organization or other
entity, or any governmental or quasi-governmental body or
regulatory authority.
"Permits" means all licenses, certificates of
authority, permits, orders, consents, approvals, registrations,
local siting approvals, authorizations, qualifications and
filings under any federal, state or local laws or with any
Governmental Entities.
"Permitted Encumbrances" means (i) exceptions to title
as set forth in Section 4.10(a) of the Disclosure Schedule; (ii)
liens for Taxes not yet payable or any Taxes being contested in
good faith (and which are reflected in Section 4.9 of the
Disclosure Schedule); (iii) liens arising as a matter of law in
the ordinary course of business, provided that the obligations
secured by such liens are not delinquent or are being contested
in good faith; and (iv) such imperfections of title and
encumbrances, if any, as do not, in the aggregate, materially
interfere with the present use of any of the properties and
assets of the Operating Companies subject thereto.
"Principal Stockholder" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"Property" means any Real Property and any personal or
mixed property, whether tangible or intangible.
"Purchase Price" means the purchase price for the Stock
as set forth in Section 2.2 of this Agreement.
"Real Property" means any real property presently or
formerly owned, used, leased, occupied, managed or operated by
any of the Operating Companies.
"Recycling" has the meaning given to it in the caption
hereof.
"Related Person" has the meaning given to it in Section
4.6 hereof.
"Resale Agreement" has the meaning given to it in
Section 8.1(m) of this Agreement.
"Section 338 Forms" shall mean all returns, documents,
statements, and other forms that are required to be submitted to
any federal, state, county, or other local taxing authority in
connection with a Section 338(h)(10) Election. Section 338 Forms
shall include, without limitation, any "statement of section 338
election" and United States Internal Revenue Service Form 8023
(together with any schedules or attachments thereto) that are
required pursuant to applicable Treasury Regulations.
"Section 338(h)(10) Election" means an election
described in Section 338(h)(10) of the Code with respect to the
sale of the Stock of the Operating Companies to Buyer pursuant to
this Agreement. "Section 338(h)(10) Election" shall also include
any substantially similar election under a state or local taxing
statute.
"Securities Act" means the Securities Act of 1933, as
amended.
"Sellers" has the meaning given to it in the caption
hereof.
"Seller Claimant" has the meaning given to it in
Section 9.3 hereof.
"Stock" has the meaning given to it in the recitals
hereto.
"Subsidiary" with respect to any party, means any
corporation, partnership, joint venture or other organization,
whether incorporated or unincorporated, of which (i) such party
or any other Subsidiary of such party is a general partner; (ii)
voting power to elect a majority of the board of directors or
others performing similar functions with respect to such
corporation, partnership, joint venture or other organization is
held by such party and/or one or more of its Subsidiaries; or
(iii) at least 50% of the equity, other securities or other
interests is, directly or indirectly, owned or controlled by such
party and/or by one or more of its Subsidiaries.
"Tax Return" means each and every report, return,
declaration, information return, statement or other information
required to be supplied to a taxing or governmental authority
with respect to any Tax or Taxes, including without limitation
any combined or consolidated return for any group of entities
including any of the Operating Companies.
"Taxes" (or "Tax" where the context requires) shall
mean all federal, state, county, provincial, local, foreign and
other taxes (including, without limitation, income, profits,
premium, estimated, excise, sales, use, local host fees, land
fill taxes, occupancy, gross receipts, franchise, ad valorem,
severance, capital levy, production, transfer, withholding,
employment and payroll related and property taxes and other
governmental charges and assessments), whether attributable to
statutory or nonstatutory rules and whether or not measured in
whole or in part by net income, and including without limitation
interest, additions to tax or interest, charges and penalties
with respect thereto and all costs of defending any Tax
proceedings.
"Transaction Documents" means, collectively, this
Agreement, the Escrow Agreement, the ▇▇▇▇▇▇▇ Agreement, the
Employment Agreements, the Non-Competition Agreement, the Resale
Agreement and the Facility Lease.
"Trucking" has the meaning given to it in the caption
hereof.
"Valuation Termination Date" means the first to occur
of (i) the Date of Termination (as defined in the ▇▇▇▇▇▇▇
Agreement); provided, however, that in no event shall the
Valuation Termination Date occur earlier than the fifth
anniversary of the Closing Date unless the ▇▇▇▇▇▇▇ Agreement is
terminated pursuant to Section 6(c) or Section 6(d)(i)(B)
thereof, and (ii) the ninth anniversary of the Closing Date.
"Welfare Plans" has the meaning given to it in Section
4.22 hereof.
ARTICLE II
SALE AND PURCHASE OF STOCK
2.1 Stock Purchase. Upon the terms and subject to the
conditions hereof, and upon the basis of the agreements,
representations and warranties contained in this Agreement,
Sellers shall sell, transfer, assign, convey, set over and
deliver to Buyer, and Buyer shall purchase and acquire from
Sellers, on the Closing Date, all of the Stock, free and clear of
any and all Encumbrances other than any applicable restrictions
on the further transfer of the Stock that may be imposed by
Federal and state securities laws.
2.2 Purchase Price. (a) The aggregate initial
Purchase Price for the Stock and the Covenant Not to Compete
shall be equal to Fifty-Eight Million, Five Hundred Thousand
Dollars ($58,500,000) subject to adjustment as provided in
Sections 2.2(c),(d),(e),(f),(g),(h) and (i) below. The initial
Purchase Price shall be allocated as set forth on Exhibit 2.2(a)
hereto.
(b) The initial Purchase Price shall be paid to
Sellers on the Closing Date as follows:
(i) $37,875,000 in immediately available funds by
wire transfer to a bank account or accounts specified by the
Principal Stockholder in a written notice delivered to Buyer not
later than two (2) Business Days prior to the Closing Date;
(ii) $6,000,000 (the "Escrow Amount") in
immediately available funds by wire transfer to an Escrow Account
specified by the Escrow Agent in accordance with Article X
hereof; and
(iii) Certificates representing 539,917 Buyer
Shares registered in the names and in the denominations specified
by the Principal Stockholder in a written notice delivered to the
Buyer not later than two (2) Business Days prior to the Closing
Date.
(c) If during the period commencing on the Closing
Date and ending on the Valuation Termination Date, Buyer or any
of its Subsidiaries enters into a contract with the City of
Chicago to operate a materials recycling facility ("MRF")
currently being operated in the City of Chicago at ▇▇▇▇ ▇▇▇▇▇▇
and Racine Avenue by Recycling having an initial term of at least
seven years and on other terms and conditions that are no less
favorable to the Buyer than those set forth on Exhibit 2.2(c)
hereto (the "MRF Contract"), Buyer will make the payments set
forth in Clauses (i), (ii), (iii) and (iv) below to the Principal
Stockholder for the benefit of the former stockholders of
Recycling (and such adjustment to the Purchase Price shall be
allocated as set forth on Exhibit 2.2(a) hereto to the purchase
of the stock of Recycling). If the MRF Contract is for an
initial term of at least five years but less than six years,
Buyer will make 5/7ths of the payments set forth in Clauses (i),
(ii), (iii) and (iv) below to the Principal Stockholder for the
benefit of the former stockholders of Recycling. Upon each of
the first two one-year renewals of the MRF Contract, if any,
beyond the initial five-year term, Buyer will make 1/7th of the
payments set forth in Clauses (i), (ii), (iii) and (iv) below to
the Principal Stockholder for the benefit of the former
stockholders of Recycling. If the MRF Contract is for an initial
term of at least six years but less than seven years, Buyer will
make 6/7ths of the payments set forth in Clauses (i), (ii),
(iii) and (iv) below to the Principal Stockholder for the benefit
of the former stockholders of Recycling. Upon a one-year renewal
of the MRF Contract, if any, beyond the initial six-year term,
Buyer will make 1/7th of the payments set forth in Clauses (i),
(ii), (iii) and (iv) below to the Principal Stockholder for the
benefit of the former stockholders of Recycling.
(i) Upon receipt of the MRF Contract and the
commencement of the delivery of municipal solid waste to the
Buyer's or any of its Subsidiary's, as the case may be, MRF
pursuant to such contract, the sum of $5,000,000;
(ii) Six months following the satisfaction of the
conditions set forth in Clause (i) above, an amount equal to the
product of (A) $50,000 and (B) the Average Daily Tonnage of
municipal solid waste generated by the MRF Contract during such
six-month period; provided, however, that in no event shall the
payment to be made pursuant to this Clause (ii) exceed
$15,000,000;
(iii) Eighteen months following the satisfaction
of the conditions set forth in Clause (i) above, an amount equal
to the difference between (A) the product of (1) $50,000 and (2)
the Average Daily Tonnage of municipal solid waste generated by
the MRF Contract during such eighteen-month period and (B) the
aggregate payments theretofore made pursuant to Clauses (i) and
(ii) above; provided, however, that in no event shall the payment
to be made pursuant to this Clause (iii) exceed $10,000,000;
(iv) eighteen months following the satisfaction
of the conditions set forth in Clause (i) above, an amount equal
to the product of (A) $20,000 and (B) the Average Daily Tonnage
of municipal solid waste generated by the MRF Contract during
such eighteen-month period which exceeds 700 tons; and
(v) an amount equal to $250,000 for each one-year
renewal of the MRF Contract, if any, beyond seven years obtained
(on terms at least as favorable to Buyer as those contained in
such contract during the initial term), whether any such renewal
occurs prior to or after the Valuation Termination Date.
In no event shall the aggregate payments to
be made pursuant to Clauses (i), (ii) and (iii) of this Section
2.2(c) exceed $30,000,000. Any payment required to be made
pursuant to Clauses (i), (ii), (iii) or (iv) above shall be made
by Buyer not later than twenty (20) Business Days following the
satisfaction of the applicable conditions and shall be payable
75% in cash by wire transfer of immediately available funds to an
account or accounts designated by the Principal Stockholder to
Buyer in the manner specified herein for delivery of notices and
25% by delivery to the Principal Stockholder of Buyer Shares.
The number of Buyer Shares to be delivered in each case shall be
determined by dividing the dollar value of the Buyer Shares to be
delivered to the Principal Stockholder by the average of the last
reported prices of ADS Common Stock on the Nasdaq National Market
for the 20 consecutive trading days ending on the trading day
immediately preceding the day on which the applicable conditions
were satisfied. Any payment required to be made pursuant to
Clause (v) above shall be made by Buyer not later than twenty
(20) Business Days following such renewal and shall be payable in
cash by wire transfer of immediately available funds to an
account or accounts designated by the Principal Stockholder to
Buyer in the manner specified herein for delivery of notices.
(d) If during the period commencing on the Closing
Date and ending on the Valuation Termination Date, Environtech
receives (i) final, non-appealable local siting approval from the
local authority with jurisdiction over siting to increase the
airspace available for disposal of the Environtech Landfill by at
least 2,000,000 cubic yards over the original sited airspace
available for disposal of 6,119,318 cubic yards, and (ii) the
local host agreement between Environtech and the City of ▇▇▇▇▇▇
and the local host agreement between Environtech and the County
of Grundy are amended to permit the disposal of a minimum of
2,500 tons of solid waste per day at the Environtech Landfill
(with such amendments being final and binding), Buyer will pay to
the Principal Stockholder for the benefit of the former
stockholders of Environtech an amount equal to the product of (A)
$1.00 and (B) the difference between the number of cubic yards in
the new sited capacity and 6,119,318 cubic yards; provided,
however, that in no event shall the payment to be made pursuant
to this Section 2.2(d) exceed $10,000,000 (and such adjustment to
the Purchase Price shall be allocated as set forth on Exhibit
2.2(a) hereto to the purchase of the stock of Environtech). Any
such payment shall be made by the Buyer not later than twenty
(20) Business Days following the satisfaction of the foregoing
conditions and shall be payable 75% in cash by wire transfer of
immediately available funds to an account or accounts designated
by the Principal Stockholder to Buyer in the manner specified
herein for delivery of notices and 25% by delivery to the
Principal Stockholder of that number of Buyer Shares (rounded up
to the nearest whole number) determined by dividing the dollar
value of the Buyer Shares to be delivered to the Principal
Stockholder by the average of the last reported sale prices of
the ADS Common Stock on the Nasdaq National Market for the 20
consecutive trading days ending on the trading day immediately
preceding the day on which the applicable conditions were
satisfied.
(e) If during the period commencing on the Closing
Date and ending on the Valuation Termination Date, Buyer or any
of its Subsidiaries receives a final non-appealable S.B. 172
siting approval from the applicable local jurisdictional
authority to site and develop a transfer station of at least 350
tons per day in DuPage County, Illinois, Buyer will pay to the
Principal Stockholder for the benefit of the former stockholders
of Recycling the sum of five hundred thousand dollars
($500,000.00); provided, however, that if the Buyer or any of its
Subsidiaries receives a final non-appealable permit from the
Illinois Environmental Protection Agency to operate the transfer
station at the rate of at least 350 tons per day, Buyer will pay
to the Principal Stockholder for the benefit of the former
stockholders of Recycling an additional amount equal to
$3,000,000 plus the product of (A) $500,000 and (B) the number of
full 50 ton per day increments covered by the permit in excess of
350 tons per day (and such adjustment to the Purchase Price shall
be allocated as set forth on Exhibit 2.2(a) hereto to the
purchase of the stock of Recycling). In no event shall the
aggregate payments to be made pursuant to this Section 2.2(e)
exceed $5,000,000. Any such payment shall be made by the Buyer
not later than twenty (20) Business Days following the
satisfaction of the foregoing conditions and shall be payable 75%
in cash by wire transfer of immediately available funds to an
account or accounts designated by the Principal Stockholder to
Buyer in the manner specified herein for delivery of notices and
25% by delivery to the Principal Stockholder of that number of
Buyer Shares (rounded up to the nearest whole number) determined
by dividing the dollar value of the Buyer Shares to be delivered
to the Principal Stockholder by the average of the last reported
sale prices of the ADS Common Stock on the Nasdaq National Market
for the 20 consecutive trading days ending on the trading day
immediately preceding the day on which the applicable conditions
were satisfied.
(f) If during the period commencing on the Closing
Date and ending on the Valuation Termination Date, Buyer or any
of its Subsidiaries receives a contract from the City of Chicago
to operate a MRF currently being operated by a third party in the
City of Chicago on terms at least as favorable to the Buyer or
such Subsidiary, as the case may be, as those contained in the
MRF Contract (other than with respect to the term of such
contract), and provided that the MRF Contract is still in effect,
Buyer will make the following payments to the Principal
Stockholder for the benefit of the former stockholders of
Recycling: (i) upon receipt of such contract an amount equal to
the product of (A) $1,000,000 and (B) the number of full years in
the initial term of such contract; provided, however, that in no
event shall the aggregate payment to be made pursuant to clause
(i) of this Section 2.2(f) exceed $5,000,000 and (ii) an amount
equal to $250,000 for each one-year renewal of such contract
obtained (on terms at least as favorable to Buyer as those
contained in such contract during the initial term), whether any
such renewal occurs prior to or after the Valuation Termination
Date (and such adjustment to the Purchase Price shall be
allocated as set forth on Exhibit 2.2(a) hereto to the purchase
of the stock of Recycling). Any payment required to be made
pursuant to clause(i) of this Section 2.2(f) shall be made by
Buyer not later than twenty (20) Business Days following the
satisfaction of the applicable conditions and shall be payable
75% in cash by wire transfer of immediately available funds to an
account or accounts designated by the Principal Stockholder to
Buyer in the manner specified herein for delivery of notices and
25% by delivery to the Principal Stockholder of that number of
Buyer Shares (rounded up to the nearest whole number) determined
by dividing the dollar value of the Buyer Shares to be delivered
to the Principal Stockholder by the average of the last reported
sale prices of the ADS Common Stock on the Nasdaq National Market
for the 20 consecutive trading days ending on the trading day
immediately preceding the day on which the applicable conditions
were satisfied. Any payment required to be made pursuant to
clause (ii) above shall be made by Buyer not later than twenty
(20) Business Days following any such renewal and shall be
payable in cash by wire transfer of immediately available funds
to an account or accounts designated by the Principal Stockholder
to Buyer in the manner specified herein for delivery of notices.
(g) For each full calendar month during the period
commencing on the Closing Date and ending on the Valuation
Termination Date, in which the tonnage of municipal solid waste
hauled by the Buyer and its Subsidiaries during such month in
Illinois on behalf of ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries, Inc. exceeds
30,000 tons, Buyer shall remit to the Principal Stockholder for
the benefit of the former stockholders of Trucking an amount
equal to the product of (i) one dollar ($1) and (ii) the
difference between (A) the tonnage actually hauled on behalf of
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries, Inc. during such month and (B) 30,000
tons (and such adjustment to the Purchase Price shall be
allocated as set forth on Exhibit 2.2(a) hereto to the purchase
of the stock of Trucking). Any such payment shall be made by the
Buyer not later than ten (10) Business Days following the end of
such month, by wire transfer of immediately available funds to an
account or accounts designated by the Principal Stockholder to
Buyer in the manner specified hereinafter or delivery of notices.
(h) For each full calendar month during the period
commencing on the Closing Date and ending on the Valuation
Termination Date in which the aggregate tonnage of municipal
solid waste delivered during such month to Recycling's transfer
station located at ▇▇▇▇ ▇▇▇▇▇▇ and Racine in the City of Chicago
pursuant to Recycling's Bulk Contract with the City of Chicago
annexed hereto as Exhibit 2.2(h)(i) and Recycling's C and D
Contract with the City of Chicago annexed hereto as Exhibit
2.2(h)(ii) exceeds 13,000, Buyer shall remit to the Principal
Stockholder for the benefit of the former stockholders of
Recycling an amount equal to the product of (i) two dollars ($2)
and (ii) the difference between (A) the aggregate tonnage of
waste actually delivered as provided above during such month and
(B)13,000 tons (and such adjustment to the Purchase Price shall
be allocated as set forth on Exhibit 2.2(a) hereto to the
purchase of the stock of Recycling). Any such payment shall be
made by the Buyer not later than ten (10) Business Days following
the end of such month, by wire transfer of immediately available
funds to an account or accounts designated by the Principal
Stockholder to Buyer in the manner specified herein for delivery
of notices.
(i) The payment to be made pursuant to Section
2.2(b)(i) above shall be increased by an amount equal to the cost
of all capital expenditures made by the Operating Companies
during the period from April 1, 1997 through the Closing Date
(and such adjustment to the Purchase Price shall be allocated as
set forth on Exhibit 2.2(a) hereto); provided, however, that in
no event shall the increase in the payment to be made pursuant to
this Section 2.2(i) exceed $750,000.
ARTICLE III
CLOSING
3.1 The Closing. The Closing shall take place at 9:00
a.m, local time, on the Closing Date, at the offices of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other time, date or place as the
parties may mutually agree, subject to the satisfaction or waiver
of all of the conditions to Closing set forth in Article VIII
hereof.
3.2 Obligations of Sellers. At or prior to the
Closing, Sellers shall deliver or cause to be delivered to Buyer
the following:
(a) Certificates representing the Stock, duly
endorsed in blank for transfer or accompanied by stock powers
duly endorsed in blank.
(b) The certificates, legal opinion and other
documents required by Section 8.1 hereof.
(c) Appropriate receipts.
(d) All other documents, instruments and writings
required to be delivered by Sellers at or prior to the Closing
Date pursuant to this Agreement.
3.3 Obligations of Buyer. At or prior to the Closing,
Buyer shall deliver or cause to be delivered to Sellers the
following:
(a) The initial Purchase Price in the manner provided
by Section 2.2(b) of this Agreement.
(b) The certificates, legal opinion and other
documents required by Section 8.2 hereof.
(c) Appropriate receipts.
(d) All other documents, instruments and writings,
required to be delivered by Buyer at or prior to the Closing Date
pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PRINCIPAL STOCKHOLDER
The Principal Stockholder hereby represents and
warrants to Buyer as follows (all such representations and
warranties are qualified by the Disclosure Schedule attached to
this Agreement as Exhibit 4.0):
4.1 Organization and Qualification. Each of the
Operating Companies is a corporation duly organized, validly
existing and good standing under the laws of the State of its
organization, with corporate power and authority to own, lease
and operate its assets and properties and carry on its business
as presently owned or conducted. Each of the Operating Companies
is licensed or qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction in which,
because of its business conducted there or the nature of its
assets or properties there, it would be required to be so
licensed or qualified, except where the failure to be so
qualified or in good standing would not have a Material Adverse
Effect. Each such jurisdiction is set forth in Schedule 4.1 of
the Disclosure Schedule. The copies of the certificate or
articles of incorporation (or other charter or organization
documents), including all amendments thereto, and by-laws of each
of the Operating Companies delivered to Buyer are complete and
accurate copies of such instruments as currently in effect.
4.2 Authority; No Breach. (a) Each of the Sellers has
all requisite power and authority to execute and deliver this
Agreement and to perform his or her obligations hereunder. The
execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of each of
the Sellers. This Agreement has been duly executed and delivered
by each of the Sellers and constitutes the legal, valid and
binding obligation of each of the Sellers, enforceable against
such Seller in accordance with its terms except that (i) the
enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may
be brought.
(b) Except as set forth in Schedule 4.2 of the
Disclosure Schedule, neither the execution and delivery of this
Agreement by any of the Sellers nor the consummation of the
transactions contemplated herein, nor the full performance by the
Sellers, of their obligations hereunder do or will: (i) violate
any provision of the certificate or articles of incorporation (or
other charter or organization documents), as the case may be, or
by-laws, if applicable, of any of the Operating Companies; (ii)
conflict with, result in a breach or violation of, or constitute
a default under (or an event which, with or without notice, lapse
of time or both, would constitute a default) or result in the
invalidity of, or accelerate the performance required by or cause
or give rise to any right of acceleration or termination of any
right or obligation pursuant to any agreement or contract to
which any of the Sellers or the Operating Companies is a party or
by which any of them (or any of their respective assets or
properties) is subject or bound; (iii) result in the creation of,
or with the passage of time result in the creation of, any
Encumbrance upon the Stock or any assets or properties of the
Operating Companies; (iv) violate any writ, injunction, statute,
law, ordinance, rule, regulation, judgment, award, Permit,
decree, order, or process of any Governmental Entity; or (v)
require any of the Sellers or the Operating Companies to obtain
any Consent, except as may be required under the HSR Act, which,
in the cases of clauses (ii), (iii), (iv) or (v) above, would
have a Material Adverse Effect.
4.3 Securities and Ownership. (a) The total number of
shares of capital stock, and the classes and par values thereof,
which each of the Operating Companies is authorized to issue, the
designation, par value and number of such shares which are issued
and outstanding and the identity and number of such outstanding
shares owned (of record and beneficially) by each holder thereof
are as set forth in Schedule 4.3 of the Disclosure Schedule and
no other shares of any other class or series of capital stock are
issued and outstanding.
(b) None of the Operating Companies has issued any
securities in violation of any preemptive or similar rights and
there are no outstanding (i) securities convertible into or
exchangeable for any shares of capital stock or other securities
of any of the Operating Companies; (ii) subscriptions, options,
warrants, calls, commitments, preemptive rights or other rights
of any kind (absolute, contingent or otherwise) entitling any
third party to acquire or otherwise receive from any of the
Operating Companies any shares of capital stock or other
securities; (iii) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the
issuance of any capital stock of any of the Operating Companies,
any such convertible or exchangeable securities, or any such
subscriptions, options, warrants or rights. There are no shares
of stock or other securities of any of the Operating Companies
reserved for issuance for any purpose.
(c) The Stock has been duly authorized, validly issued
and is fully paid and nonassessable.
(d) The Sellers own and upon the consummation of the
transactions contemplated hereby Buyer will acquire at the
Closing good and valid title to the Stock free and clear of any
and all Encumbrances other than any applicable restrictions on
the further transfer of the Stock that may be imposed by Federal
and state securities laws and Encumbrances arising as a result of
any action taken by the Buyer or any Affiliate of the Buyer.
(e) None of the Operating Companies owns, directly or
indirectly, any economic, voting or other ownership interest in
any other Person.
4.4 [Intentionally Omitted]
4.5 Financial Statements. The Financial Statements
have been prepared from the books and records of the Operating
Companies, and present fairly (i) the combined financial position
of the Operating Companies at the dates thereof and (ii) the
combined results of operations for the respective periods then
ended, in each case in accordance with GAAP. The books and
records of the Operating Companies are accurate and complete in
all material respects.
4.6 Interests of Related Persons. Except as set forth
in Schedule 4.6 of the Disclosure Schedule or as otherwise
contemplated by the terms of this Agreement, none of the Sellers
nor any officer, director, relative, significant other, or
Affiliate of any of the Sellers or the Operating Companies
(collectively, the "Related Persons"):
(a) owns any interest in any Person which is a
competitor, supplier or customer of any of the Operating
Companies;
(b) owns, in whole or in part, any property, asset or
right, used in connection with the business of any of the
Operating Companies;
(c) has an interest in any contract or agreement
pertaining to the business of any of the Operating Companies; or
(d) has any contractual arrangements with any of the
Operating Companies.
4.7 Absence of Undisclosed Liabilities. Except as set
forth in Schedule 4.7 of the Disclosure Schedule, none of the
Operating Companies has any direct or indirect material
liabilities, losses or obligations of any nature, whether
absolute, accrued, contingent or otherwise, that would be
required to be reflected on a balance sheet or the notes thereto
prepared in accordance with GAAP other than (i) liabilities
reflected, accrued or reserved for in the Financial Statements,
(ii) liabilities disclosed in the Disclosure Schedule, (iii)
liabilities incurred in the ordinary course of business
subsequent to the Balance Sheet Date and not inconsistent with
past practice, (iv) liabilities or performance obligations
arising in the ordinary course of business (and not as a result
of a breach or default by any of the Operating Companies) out of
or under agreements, contracts, leases, arrangements or
commitments to which any of the Operating Companies is a party or
(v) liabilities under this Agreement.
4.8 Absence of Certain Changes or Events. Except as
set forth in Schedule 4.8 of the Disclosure Schedule or as
otherwise provided herein, since the Balance Sheet Date the
business of each of the Operating Companies has been conducted
only in the ordinary course and consistent with past practice.
Except as set forth in Schedule 4.8 of the Disclosure Schedule or
as otherwise provided herein, since the Balance Sheet Date none
of the Operating Companies has:
(a) suffered any material adverse change in the
business, results of operations or financial condition of the
Operating Companies considered as a single enterprise;
(b) suffered any material damage, destruction or
casualty loss (whether or not covered by insurance);
(c) authorized, declared, set aside or paid any
dividend or other distribution other than distributions
consistent with past practice;
(d) directly or indirectly redeemed, purchased or
otherwise acquired any of its shares of capital stock;
(e) paid, discharged or satisfied any material claim,
liability or obligation other than the payment, discharge or
satisfaction of liabilities and obligations incurred in the
ordinary course of business and consistent with past practice;
(f) canceled any debts or waived any material claims
or rights other than in the ordinary course of business;
(g) sold, transferred, or otherwise disposed of any of
its properties or assets which are material to the Operating
Companies considered as a single enterprise, except in the
ordinary course of business and consistent with past practice; or
(h) agreed, whether in writing or otherwise, to take
any action described in this Section 4.8.
4.9 Taxes. (a) Each of the Operating Companies is an
S corporation within the meaning of Section 1361 of the Code, the
"S" election made by each such company has not been revoked or
terminated and none of such companies or any shareholder thereof
has taken any action which would cause the termination of such
"S" election. Each of the Operating Companies has duly, timely
and properly filed when due, all federal, state, local and other
Income Tax Returns and all other material Tax Returns required to
be filed by it with respect to its sales, income, business or
operations (including without limitation any consolidated or
combined Tax Returns in which it is included) and, as of the
Closing Date, such Tax Returns, as amended prior to the date
hereof, will be true, complete and accurate in all material
respects. As of the Closing Date, each of the Operating
Companies will have duly paid (or made provision for in the
Balance Sheet) all Taxes due from them. True and complete copies
of all of such Tax Returns for the past three fiscal years have
been previously provided to Buyer.
(b) All amounts required to be withheld by the
Operating Companies from or on behalf of employees for income,
social security and unemployment insurance taxes have been
collected or withheld and either paid to the appropriate
governmental agency or set aside and, to the extent required by
law, held in accounts for such purpose.
4.10 Assets. (a) As of the Closing Date, each of the
Operating Companies will have good and valid title to all the
personal property assets (tangible and intangible) which such
company purports to own on the date hereof (in each case other
than the Net Cash Balances, Distributed Assets and assets
disposed of in the ordinary course of business) free and clear of
all Encumbrances (other than Permitted Encumbrances).
(b) Schedule 4.10(b) of the Disclosure Schedule
contains a complete and correct list of all Real Property to be
owned by any of the Operating Companies as of the Closing Date as
well as a list of any options to acquire any Real Property held
by any of the Operating Companies. As of the Closing Date, the
Operating Companies will have good and valid title to all such
owned Real Property, free and clear of all Encumbrances (other
than Permitted Encumbrances).
(c) Schedule 4.10(c) of the Disclosure Schedule
contains a complete and correct list of all Real Property leased
by any of the Operating Companies. Each of the Operating
Companies enjoys peaceful possession of all such property.
Sellers have previously delivered to Buyer true, complete and
correct copies of all lease documents relating to such property.
To the knowledge of the Principal Stockholder, all lease
documents are valid, binding and enforceable in accordance with
their terms and are in full force and effect. All material work
required to be done by any of the Operating Companies as a tenant
on such Real Property has been duly performed. No event has
occurred which constitutes or, with the passing of time or giving
of notice, or both, would constitute, a material default by any
of the Operating Companies under any such lease document.
(d) No Real Property owned or leased by any of the
Operating Companies is subject to any rights of way, building use
restrictions, easements, reservations or limitations which would
materially restrict any of the Operating Companies or the Buyer
from conducting the Business after the Closing. Neither the
whole nor any portion of the Real Property, leaseholds or any
other assets of any of the Operating Companies is subject to any
governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor to the knowledge of
the Principal Stockholder, has any such condemnation,
expropriation or taking been proposed.
(e) Schedule 4.10(e) sets forth with respect to any
Real Property which is listed on Schedule 4.10(b) or (c) and is a
sanitary landfill, the estimated remaining landfill airspace
which has been sited pursuant to applicable local siting
procedures under S.B. 172 (which is defined to be available
airspace from the bottom of the final cap to the top of the
liner) and the estimated remaining landfill airspace for which
there is a development permit from the Illinois Environmental
Protection Agency, in each case as of the date of this Agreement.
(f) Schedule 4.10(f) contains a true and complete list
with respect to each of the Operating Companies of:
(i) the number and size of containers, stationary
compactors and other similar equipment which is owned or leased
by the Operating Companies; and
(ii) the number of vehicles used in the business
of the Operating Companies together with information as to the
make, description of body and chassis, model and serial number,
and year of each such vehicle.
4.11 Intellectual Property. Schedule 4.11 of the
Disclosure Schedule contains an accurate and complete summary of
(a) all Intellectual Property owned by any of the Operating
Companies and (b) all licenses of Intellectual Property to or
from the Operating Companies and contracts or agreements
pertaining to such licenses. The Operating Companies' rights in
and to such Intellectual Property and licenses are sufficient to
permit the Operating Companies to conduct their respective
businesses in all material respects as presently conducted.
4.12 [Intentionally Omitted]
4.13 [Intentionally Omitted]
4.14 Contracts. Schedule 4.14 of the Disclosure
Schedule lists all contracts, agreements and amendments thereto,
to which any of the Operating Companies is a party or by which
any of its assets or properties may be bound, which are material
to the operation of the businesses of the Operating Companies
considered as a single enterprise. To the knowledge of the
Principal Stockholder, except as set forth in Section 4.14 of the
Disclosure Schedule, (i) each of such material contracts,
agreements and understandings is in full force and effect, except
where the failure to be in full force and effect would not have a
Material Adverse Effect and (ii) there are no existing defaults
by any party thereunder, which default would result in a Material
Adverse Effect. Accurate and complete copies of each contract
and agreement referred to in Schedule 4.14, together with all
amendments thereto, have been heretofore made available to Buyer
for review.
4.15 Customers and Suppliers. Except as set forth on
Schedule 4.15 of the Disclosure Schedule:
(i) To the knowledge of the Principal
Stockholder, the business relationship of the Operating Companies
with each material customer or supplier is a good commercial
working relationship and no material customer or supplier has
canceled or otherwise terminated such relationship.
(ii) None of the Operating Companies is engaged
in any material disputes with any material customers or suppliers
and the Principal Stockholder does not know of any facts which
lead him to conclude that any material customer or supplier
intends to discontinue or otherwise materially modify its
relationship with the Operating Companies after the Closing Date.
4.16 Insurance. Schedule 4.16 of the Disclosure
Schedule contains a true and complete list of all insurance
policies covering any of the Operating Companies or otherwise
held by or on behalf of them, or any aspect of their assets or
business, indicating the type of coverage, name of insured, the
insurer, the amount of coverage, the deductibles, the premium and
the expiration date thereof and the aggregate amounts paid
thereunder. Schedule 4.16 of the Disclosure Schedule contains a
list of any pending claims under any of the foregoing. The
Principal Stockholder knows of no reason why any of such
insurance policies would be terminated, suspended, modified or
amended, or not renewed on substantially identical terms
(including without limitation premium costs), or would require
alteration of any equipment or any improvements to Real Property
occupied by or leased to or by the Operating Companies, or the
purchase of additional equipment, or the modification of any of
the methods of doing business.
4.17 Litigation, Etc. Except as set forth on Schedule
4.17 of the Disclosure Schedule, there has not been in the
twenty-four months prior to the date hereof, nor is there as of
the date hereof, any claim, action, suit, proceeding or
investigation of any kind or nature whatsoever, by or before any
court or governmental or other regulatory or administrative
agency or commission or tribunal pending or, to the knowledge of
the Principal Stockholder, threatened against the Operating
Companies or their business, Properties, officers or directors,
or which questions or challenges the validity of this Agreement
or any action taken or to be taken by the Sellers pursuant to
this Agreement or in connection with the transactions
contemplated hereby which would have a Material Adverse Effect or
a material adverse effect on the Sellers' ability to consummate
the transactions contemplated hereby. None of the Operating
Companies is subject to any judgment, order or decree which may
have a Material Adverse Effect that has not been satisfied or
complied with.
4.18 Compliance with Law; Necessary Authorizations.
Except as set forth on Schedule 4.18 of the Disclosure Schedule,
each of the Operating Companies is in compliance in respect of
its business, operations and properties, with all applicable
laws, rules, regulations, orders, building and other codes,
zoning and other ordinances, Permits, authorizations, judgments
and decrees of all Governmental Entities, except where the
failure to be in such compliance would not be reasonably likely
to have a Material Adverse Effect.
4.19 Environmental Matters. Except as set forth on
Schedule 4.19 of the Disclosure Schedule, all of the operations
of the Operating Companies are in compliance with all applicable
Environmental Laws except where the failure to be in such
compliance would not be reasonably likely to have a Material
Adverse Effect and none of the Operating Companies is subject to
any Environmental Liabilities which would be reasonably likely to
have a Material Adverse Effect.
(a) None of the Operating Companies has in the past
engaged in activities that (i) were in violation of any
Environmental Law and (ii) after the Closing Date, would be
reasonably likely to have a Material Adverse Effect;
(b) There is no pending or, to the knowledge of the
Principal Stockholder, threatened claim, lawsuit or
administrative proceeding against the Operating Companies under
any Environmental Law which would be reasonably likely to have a
Material Adverse Effect. None of the Operating Companies has
received written notice from any person, including but not
limited to any federal, state, or local governmental agency,
alleging that the Operating Companies are in violation of any
applicable Environmental Law or otherwise may be liable under any
applicable Environmental Law, which violation or liability would
be reasonably likely to have a Material Adverse Effect;
(c) There have been no Releases, spills or discharges
of Hazardous Substances on or underneath any of the Real Property
that would be reasonably likely to have a Material Adverse
Effect. For purposes of this subsection, the term "Releases"
shall have the meaning given to it in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
and the Resource Conservation Recovery Act, as amended.
4.20 Labor Difficulties. To the knowledge of the
Principal Stockholder, except to the extent set forth in Schedule
4.20 of the Disclosure Schedule:
(a) there is no labor strike, or dispute, grievance,
arbitration proceeding, slowdown or stoppage, or charge of unfair
labor practice actually pending, threatened against or affecting
the Operating Companies;
(b) none of the Operating Companies has, during the
twelve (12) month period prior to the date hereof, experienced
any work stoppage or other labor dispute including, without
limitation, the filing of an unfair labor practice complaint with
the National Labor Relations Board or any other Governmental
Entity against it;
(c) there are no charges or complaints of
discrimination pending before the Equal Employment Opportunity
Commission or any state or local agency with respect to the
Operating Companies;
(d) no union or collective bargaining agreement which
is binding on the Operating Companies restricts it from
relocating or closing any of its operations; and
(e) no unions or other collective bargaining units
have been certified or recognized by the Operating Companies as
representing any of its employees and there are no existing union
organizing efforts or representation questions with respect to
any of the employees of the Operating Companies.
4.21 Employee Benefit Plans. Except as set forth in
Schedule 4.21 of the Disclosure Schedule, there are no Employee
Benefit Plans maintained or sponsored by the Operating Companies
applicable to employees or former employees of the Operating
Companies or with respect to which any of the Operating Companies
has any liability. Accurate and complete copies of each written
Employee Benefit Plan and an accurate summary of each material
oral Employee Benefit Plan have been heretofore made available to
Buyer. None of the Operating Companies has any formal commitment
to create any additional Plan or arrangement that would affect
any employee or former employee of the Operating Companies.
(a) Included in Schedule 4.21 of the Disclosure
Schedule is a list of each Pension Plan maintained by or on
behalf of the Operating Companies. No Pension Plan is a
"multiemployer pension plan" within the meaning of Section 3(37)
of ERISA. Neither the Operating Companies, nor any of the ERISA
Plans, has engaged in a "prohibited transaction," within the
meaning of (i) Section 4975 of the Code, or (ii) Section 406 of
ERISA, with respect to any Pension Plan which might subject any
such plan or related trust, or any trustee or administrator
thereof, or the Operating Companies to a material tax or penalty
imposed by Section 4975 of the Code or to a material civil
penalty imposed by Section 502 of ERISA. Except as set forth in
Schedule 4.21 of the Disclosure Schedule, each of the Pension
Plans has been operated and administered in all material respects
in accordance with the applicable provisions of ERISA and the
Code. Except as set forth in Schedule 4.21 of the Disclosure
Schedule, none of the Pension Plans subject to Title IV of ERISA
has, since September 2, 1974, been completely or partially
terminated, nor has there been any "reportable event," as such
term is defined in Section 4043(b) of ERISA, with respect to any
such plan since the effective date of said Section 4043(b). None
of the Pension Plans or related trusts incurred any "accumulated
funding deficiency," as such term is defined in Section 412 of
the Code, whether or not waived, since the effective date of said
Section 412.
(b) Included in Schedule 4.21 of the Disclosure
Schedule is a list of all material "employee welfare benefit
plans," within the meaning of Section 3(1) of ERISA, whether or
not insured, maintained by or on behalf of the Operating
Companies ("Welfare Plans"). Except as set forth in Schedule
4.21 of the Disclosure Schedule, each Welfare Plan is and has
been in material compliance with the applicable provisions of
ERISA and the Code. Except as set forth on Schedule 4.21 of the
Disclosure Schedule or otherwise required by applicable law, none
of the Operating Companies participate in or make contributions
to any Welfare Plan that provides post-employment or post-
retirement benefits to retired or former employees of the
Operating Companies. Each of the Operating Companies has
complied in all material respects with all of its obligations,
including without limitation the making of all required
contributions, under each of the Welfare Plans.
(c) Except as set forth in Schedule 4.21 of the
Disclosure Schedule, there is no Pension Plan or Welfare Plan
maintained in connection with any trust described in Section
501(c)(9) of the Code.
4.22 [Intentionally Omitted]
4.23 Questionable Payments. None of the Operating
Companies, or any director, officer, agent, employee, or any
other Person acting on behalf of the Operating Companies, or any
of the Sellers has, directly or indirectly, used any corporate
funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses; made any unlawful payment to government
officials or employees or to political parties or campaigns;
established or maintained any unlawful fund of corporate monies
or other assets; made or received any bribe, or any unlawful
rebate, payoff, influence payment, kickback or other unlawful
payment to any governmental or non-governmental Person.
4.24 Finders. Neither Sellers nor the Operating
Companies nor any of their respective directors or officers, has
taken any action that, directly or indirectly, would obligate
Buyer or, after the Closing Date, the Operating Companies, to
anyone acting as broker, finder, financial advisor or in any
similar capacity in connection with this Agreement or any of the
transactions contemplated hereby.
4.25 Disclosure. No representation or warranty by
Sellers in this Agreement, in any documents or papers furnished
to Buyer or its representatives by or on behalf of any of the
Sellers pursuant to this Agreement or any statement contained in
the Disclosure Schedule or any certificates delivered hereunder
contains or will contain any untrue statement of material fact or
omits or will omit to state a material fact necessary to make the
statements in this Agreement or therein in light of the
circumstances under which they were made, not misleading, other
than untrue statements and omissions which would not have a
Material Adverse Effect. All copies of contracts, agreements and
other documents made available to Buyer or any of its
representatives pursuant hereto are true and complete.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants as follows:
5.1 Organization and Qualification. Buyer is a
corporation duly organized, validly existing and in good standing
in its jurisdiction of incorporation.
5.2 Authority. Buyer has all requisite corporate
power and authority to execute and deliver this Agreement and the
other Transaction Documents to be executed and delivered by Buyer
at the Closing and to perform, carry out and consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the other
Transaction Documents have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement has been
duly executed and delivered by Buyer and constitutes, and each of
the other Transaction Documents when duly executed and delivered
by Buyer at the Closing, will constitute, the legal, valid and
binding obligation of Buyer, enforceable against Buyer in
accordance with its terms.
5.3 Capital Stock. The authorized capital stock of
Buyer consists of 20,000,000 shares of Common Stock, par value
$.01 per share, of which 14,375,339 shares are issued and
outstanding as of the date hereof, and 5,000,000 shares of
Preferred Stock, par value $.01 per share, of which no shares are
issued and outstanding as of the date hereof.
5.4 No Breach. Neither the execution and delivery of
this Agreement and the other Transaction Documents by Buyer nor
the consummation of the transactions contemplated herein and
therein and the full performance by Buyer of its obligations
hereunder and thereunder do or will: (i) violate any provision
of the certificate of incorporation or by-laws of Buyer; (ii)
conflict with, violate, result in a breach of or constitute a
default under any writ, injunction, statute, law, ordinance,
rule, regulation, judgment, award, decree, order, or process of
any Governmental Entity; (iii) require Buyer to obtain any
Consent, except as may be required under the HSR Act.
5.5 Finders. Neither Buyer nor any of its directors
or officers, has taken any action that, directly or indirectly,
would obligate any of the Sellers to pay a fee to anyone acting
as a broker, finder, financial advisor or in any similar capacity
in connection with this Agreement or any of the transactions
contemplated hereby.
5.6 Investment Purpose. Buyer is acquiring the Stock
for investment only and not with a view to resale in connection
with any distribution of the Stock, except in compliance with the
Securities Act, and all other applicable securities laws.
5.7 No Knowledge of Breach. As of the date hereof,
the Buyer has no knowledge of any material breach of any of the
representations and warranties of the Principal Stockholder
contained herein.
5.8 SEC Reports and Financial Statements. (a) Since
December 31, 1996, Buyer has filed all required forms, reports
and documents with the SEC required to be filed by it pursuant to
the Securities Act and the Exchange Act, all of which have
complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act. Buyer
has made available to the Sellers copies of all such forms,
reports and documents (hereinafter collectively referred to as
the "Buyer Reports"). None of the Buyer Reports, including,
without limitation, any financial statements or schedules
included therein, as of the time filed, contained any untrue
statement of material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. Except to the extent information
contained in any of the Buyer Reports, including without
limitation any financial statements or schedules included
therein, has been revised, corrected or superseded by a later-
filed form, report or document, none of the Buyer Reports,
including, without limitation, any financial statements or
schedules included therein, presently contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(b) The consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity and
changes in financial position (including the related notes
thereto) of Buyer included in the financial statements contained
in Buyer's Annual Report on Form 10-K for the year ended December
31, 1996 and in Buyer's Quarterly Report on Form 10-Q for the
quarters ended March 31, 1997 and June 30, 1997, present fairly
the consolidated financial position of Buyer as of their
respective dates, and the consolidated results of operations and
changes in consolidated financial position for the period then
ended, all in conformity with generally accepted accounting
principles applied on a consistent basis, subject in the case of
unaudited interim financial statements to normal year-end audit
adjustments.
5.9 Absence of Certain Changes. Since June 30, 1997
and through the date hereof (a) the business of Buyer has been
conducted only in the ordinary course and consistent with past
practice in all material respects and (b) there has been no
material adverse change in the financial condition, results of
operations, or business of Buyer and its Subsidiaries considered
as a single enterprise.
5.10 ADS Common Stock Issuable to the Sellers. The
Buyer Shares, when delivered as herein provided, will be validly
issued, fully paid and nonassessable, and will not be subject to
preemptive rights. The Buyer Shares shall be of a class
registered under the Exchange Act, shall have been issued
pursuant to an effective Registration Statement under the
Securities Act and, at the time of their issuance, duly included
for quotation on the Nasdaq National Market System.
ARTICLE VI
COVENANTS
6.1 Conduct of Business of the Operating Companies.
Sellers covenant that from the date hereof and until the Closing
Date, except as contemplated by this Agreement, as disclosed in
the Disclosure Schedule or expressly consented to by an
instrument in writing signed by Buyer, the Sellers will cause
each of the Operating Companies to: (i) conduct its business and
operations only in the ordinary course, consistent with past
practice, and (ii) not declare or pay any dividend or make any
distribution in respect of its capital other than distributions
consistent with past practice.
6.2 Company Records. (a) Prior to the Closing Date,
during normal business hours and with reasonable advance notice
to the Principal Stockholder and without material disruption to
the business and operations of any of the Operating Companies,
the Principal Stockholder shall cause the Operating Companies to
afford Buyer, its attorneys, accountants and representatives,
reasonable access to the Operating Companies and their business,
books, records and employees, and shall provide to and cause the
Operating Companies to provide to Buyer and its representatives
such additional financial and operating data and other
information as the Buyer shall from time to time reasonably
request.
(b) Except as otherwise provided in Section 6.12, the
Principal Stockholder and the Buyer agree that from the
date hereof and until such time as the statute of
limitations with respect to all tax matters which are
the subject of Section 6.12 has expired, during normal
business hours, each such party will permit, at no
charge, cost or expense to such party and without
disruption of such party's business, the other party
and his or its respective auditors and other
representatives to have reasonable access to the
properties, auditors and officers of the Operating
Companies and to all books and records relating to the
Operating Companies and to examine and take copies
thereof. Each such party agrees not to destroy at any
time any files or records which are subject to this
Section 6.2(b) without giving reasonable notice to the
other party, and within 30 days of receipt of such
notice, such other party may cause to be delivered to
him or it the records intended to be destroyed, at such
other party's expense.
6.3 Filings and Authorizations. Each of the Sellers
and Buyer, as promptly as practicable, (i) shall make, or cause
to be made, all such filings and submissions under laws, rules
and regulations applicable to it or its Affiliates, as may be
required to consummate the transfer of the Stock in accordance
with the terms of this Agreement, and (ii) shall use all
commercially reasonable efforts to obtain, or cause to be
obtained, all Consents from all governmental and non-governmental
Persons necessary to be obtained by it or its Affiliates, in
order to consummate such transfer. The Operating Companies,
Sellers and Buyer shall coordinate and cooperate with one another
in exchanging such information and supplying such reasonable
assistance as may be reasonably requested by each in connection
with the foregoing.
6.4 Publicity. From the date hereof to the Closing
Date, neither Sellers nor Buyer shall issue or make, or cause, or
in the case of Sellers permit any of the Operating Companies to
have issued or made, the publication or dissemination of any
press release or other announcement to divulge the existence of
this Agreement or with respect to the transactions contemplated
hereby except (i) as required by law or (ii) after consultation
with and prior approval of the other parties hereto, which
approval shall not be unreasonably withheld.
6.5 Distribution of Net Cash Balances and Distributed
Assets to Sellers. (a) Prior to the Closing, the Operating
Companies shall distribute to the Sellers all of the Net Cash
Balances as of the close of business on the day immediately prior
to the Closing. "Net Cash Balances" shall mean all of the cash
of the Operating Companies less the sum of (i) the then aggregate
amount of customer prepayments and (ii) the amount, if any, by
which the then aggregate accounts payable of the Operating
Companies exceed the then aggregate accounts receivable of the
Operating Companies, in each case as of the close of business on
the day immediately prior to the Closing. Prior to the Closing,
the Operating Companies shall distribute to the Sellers those
assets of the Operating Companies set forth in Schedule 6.5(a) of
the Disclosure Schedule (the "Distributed Assets").
(b) As soon as practicable, but in no event later than
90 days following the Closing Date, the Principal Stockholder
shall prepare and deliver to the Buyer a Statement of Net Cash
Balances of the Operating Companies as of the close of business
on the day immediately prior to the Closing (the "Closing Date
Statement") together with the workpapers used in the preparation
thereof. The Buyer shall have 10 days to review the Closing Date
Statement after receipt thereof. Unless the Buyer delivers
written notice to the Principal Stockholder on or prior to the
10th day after the Buyer's receipt of the Closing Date Statement
of the Buyer's objection to the Closing Date Statement and
specifying in reasonable detail all disputed items and the basis
therefor, the Buyer shall be deemed to have accepted and agreed
to the Closing Date Statement. If the Buyer so notifies the
Principal Stockholder of its objection to the Closing Date
Statement, the Buyer and the Principal Stockholder shall, within
30 days following such notice (the "Resolution Period"), attempt
to resolve their differences and any resolution by them as to any
disputed amounts shall be final, binding and conclusive. If
following resolution of any disputed amount there do not remain
in dispute amounts the aggregate net effect of which exceeds
$250,000, then all amounts remaining in dispute shall be deemed
to have been resolved in favor of the Closing Date Statement
delivered by the Principal Stockholder to the Buyer.
(c) If, at the conclusion of the Resolution Period,
the aggregate net effect of all amounts remaining in dispute
exceeds $250,000, then all amounts remaining in dispute shall be
submitted to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (the "Neutral Auditors").
All fees and expenses relating to the work, if any, to
be performed by the Neutral Auditors shall be borne equally by
the Principal Stockholder and the Buyer. The Neutral Auditors
shall act as an arbitrator to determine, based solely on
presentations by the Principal Stockholder and the Buyer, and not
by independent review, only those issues still in dispute. The
Neutral Auditors' determination shall be made within 30 days of
their selection, whether or not such presentations by the
Principal Stockholder and the Buyer have been made within such
period, and shall be set forth in a written statement delivered
to the Principal Stockholder and the Buyer and shall be final,
binding and conclusive. The term "Adjusted Closing Date
Statement," as hereinafter used, shall mean the definitive
Closing Date Statement agreed to by the Principal Stockholder and
the Buyer in accordance with Section 6.5(b) or the definitive
Closing Date Statement resulting from the determinations made by
the Neutral Auditors in accordance with this Section 6.5(c) (in
addition to those items theretofore agreed to by the Principal
Stockholder and the Buyer).
(d) Net Cash Balances shall be increased or decreased,
as the case may be, dollar for dollar, to the extent the Net Cash
Balances reflected in the Adjusted Closing Date Statement is
greater than or less than, respectively, the Net Cash Balances
distributed to the Sellers prior to the Closing. The amount of
any increase to or reduction of Net Cash Balances pursuant to
this Section 6.5 shall be paid by wire transfer in immediately
available funds to the account specified by the Principal
Stockholder or the Buyer, as the case may be, within five
business days after the Adjusted Closing Date Statement is agreed
to or any remaining disputed items are ultimately determined by
the Neutral Auditors.
6.6 Discussions with Others. From the date hereof
until the Closing Date Sellers will not and will not permit the
Operating Companies, nor shall the Sellers authorize or knowingly
permit any officer, director, employee or representative of
Sellers or the Operating Companies, to solicit or enter into
negotiations with any party, other than Buyer, with regard to a
purchase and sale of any portion of the capital stock of the
Operating Companies, any material portion of the assets of the
Operating Companies or any merger or consolidation of the
Operating Companies with any third party.
6.7 Supplements to Disclosure Schedule. From time to
time prior to the Closing, the Principal Stockholder and Buyer
will promptly supplement or amend the sections of the Disclosure
Schedule relating to their respective representations and
warranties in this Agreement with respect to any matter,
condition or occurrence hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required
to be set forth or described in their respective sections of the
Disclosure Schedule. Except with respect to a supplement or
amendment not objected to in writing by the other party within
five business days after receipt thereof, no supplement or
amendment by either party shall have any effect for the purpose
of (i) determining satisfaction by Sellers of the conditions set
forth in Sections 8.1(a) and 8.2(b) hereof or the compliance by
Sellers with the covenant set forth in Section 6.1 hereof or (ii)
determining satisfaction by Buyer of the conditions set forth in
Sections 8.2(a) and 8.2(b) hereof.
6.8 Covenant to Satisfy Conditions. Each party agrees
to use all reasonable efforts to ensure that the conditions set
forth in Article VIII hereof are satisfied, insofar as such
matters are within the control of such party.
6.9 Further Assurances. The parties hereto shall from
time to time after the Closing Date execute and deliver such
additional instruments and documents, as any party hereto may
reasonably request to consummate the transfers and other
transactions contemplated hereby.
6.10 Delivery of Periodic Reports. From and after the
date hereof and prior to the Closing Date, Buyer shall deliver to
the Sellers, copies of all registration statements and regular
periodic reports, if any, which Buyer shall file with the
Securities and Exchange Commission.
6.11 Nasdaq. Buyer shall use its best efforts to have
the Buyer Shares authorized for inclusion on the Nasdaq National
Market System, upon official notice of issuance, as promptly as
practicable.
6.12 Tax Matters.
(a) Liability of the Sellers for Taxable Periods
Ending on or Before Closing Date. The Principal Stockholder
shall be liable for, and shall indemnify, defend, and hold the
Buyer and its Affiliates harmless against, any and all Taxes of,
or payable by, the Operating Companies for any taxable year or
taxable period ending on or before the Closing Date, including,
but not limited to, the Illinois Replacement Tax and any other
income or franchise Tax imposed with respect to the built-in gain
in the assets of the Operating Companies as of the Closing Date,
whether such Tax is imposed (with respect to the taxable year
that includes the Closing Date or, on account of any payments
pursuant to Sections 2.2(c) through (i). The Sellers shall
timely file or cause to be filed all Tax Returns relating to the
Operating Companies for any taxable year ending on or before the
Closing Date. The Sellers shall determine the amount of taxable
income of the Operating Companies on the basis of its permanent
records and consistent with the past income tax accounting
methods utilized in preparing its prior income tax returns,
except as otherwise required by law.
(b) Liability of the Buyer and the Sellers for
Taxable Periods Commencing Before and Ending After the Closing
Date. The Buyer shall cause each Operating Company to pay all
Taxes due from such Operating Company for any taxable year or
taxable period commencing before and ending after the Closing
Date (the "Split Tax Period"). Upon timely notice from the
Buyer, the Sellers shall pay to such Operating Company prior to
the due date for such Taxes an amount equal to the amount of such
Taxes that have not been paid as of the Closing Date and would
have been due from such Operating Company if the Split Tax Period
had ended on the Closing Date.
(c) Liability of the Buyer for Taxable Periods
Commencing After Closing Date. The Buyer and the Operating
Companies shall be liable for, and shall indemnify and hold the
Sellers and any of their respective Affiliates harmless against,
(i) any and all Taxes of, or payable by, the Operating Companies
for any taxable year or taxable period commencing after the
Closing Date and (ii) any Taxes relating to operations, acts or
omissions of the Buyer or the Operating Companies that occur
after the Closing on the Closing Date.
(d) Refunds or Credits. Any refunds or credits
attributable to Taxes for which the Sellers are liable pursuant
to Section 6.12(a) or (b) shall be solely for the account of the
Sellers, and, to the extent that such refunds or credits are
attributable to Taxes for which the Buyer is liable pursuant to
Section 6.12(b) or (c), such refunds or credits shall be solely
for the account of the Buyer. The Buyer shall cause the
Operating Companies promptly to forward to the Sellers or to
reimburse the Sellers for any such refunds or credits due the
Sellers after receipt thereof by either the Buyer or the
Operating Companies, and the Sellers shall promptly forward to
the Operating Companies or reimburse the Operating Companies for
any refunds or credits due the Operating Companies after receipt
thereof by the Sellers of such refunds or credits that are for
the account of the Operating Companies hereunder.
(e) Mutual Cooperation. As soon as practicable,
but in any event within 30 days after the Sellers' or the Buyer's
request, as the case may be, the Buyer shall or shall cause the
Operating Companies to deliver to the Sellers, or the Sellers
shall deliver to the Buyer, such information and other data in
the possession of the Sellers, the Buyer or the Operating
Companies, as the case may be, relating to the Tax Returns and
Taxes of, or with respect to, the Operating Companies, including
such information and other data customarily required by the
Sellers or the Buyer, as the case may be, to cause the payment of
all Taxes or to permit the preparation of any Tax Returns for
which it has responsibility or liability or to respond to audits
by any taxing authorities with respect to any Tax Returns or
Taxes for which it has any responsibility or liability under this
Agreement or otherwise or to otherwise enable the Sellers or the
Buyer, as the case may be, to satisfy its accounting or Tax
requirements. For a period of seven years after the Closing,
and, if at the expiration thereof any Tax audit or judicial
proceeding is in progress or the applicable statute of
limitations has been extended, for such longer period as such
audit or judicial proceeding is in progress or such statutory
period is extended, each party shall maintain and make available
to the other, on reasonable request, copies of any and all
information, books and records referred to in this Section
6.12(e). After such period, any party may dispose of such
information, books and records, provided that prior to such
disposition such party shall give the other a reasonable
opportunity to take possession of such information, books and
records.
(f) Contests. Whenever any taxing authority
asserts a claim, makes an assessment or otherwise disputes or
affects the Tax reporting position of the Operating Companies for
periods ending on or prior to the Closing Date or the amount of
Taxes for which the Sellers are or may be liable under this
Agreement, the Buyer shall, promptly upon receipt by the Buyer or
the Operating Companies of notice thereof, inform the Sellers,
and the Sellers shall have the right to control any resulting
proceedings and to determine whether and when to settle any such
claim, assessment or dispute, but only to the extent such
proceedings or determinations affect the Tax reporting position
of the Operating Companies for periods ending on or prior to the
Closing Date or the amount of Taxes for which the Sellers are
liable under this Agreement, and not in a manner that binds the
Operating Companies' Tax reporting position for taxable periods
following the Closing Date, without the consent of the Buyer,
which shall not be unreasonably withheld. Whenever any taxing
authority asserts a claim, makes an assessment or otherwise
disputes the amount of Taxes for which the Buyer is liable under
this Agreement, the Sellers shall, promptly upon receiving notice
thereof, inform the Buyer. The Buyer shall have the right to
control any resulting proceedings and to determine whether and
when to settle any such claim, assessment or dispute; provided
that neither the Sellers nor the Buyer or any of its Affiliates
shall take any position on any Tax Return or in any contest or
proceedings that is inconsistent with this Agreement.
(g) Section 338(h)(10) Elections and Forms. (i)
With respect to the Buyer's acquisition of the Stock hereunder,
the Buyer and the Sellers shall jointly make all available
Section 338(h)(10) Elections with respect to the Operating
Companies in accordance with applicable tax laws on a timely
basis and as set forth herein. The Buyer and the Sellers will
supply in advance to one another copies of all correspondence,
filings or communications (or memoranda setting forth the
substance thereof) to be sent or made by the Buyer and the
Sellers or their respective representatives to or with the
Internal Revenue Service relating to any Section 338(h)(10)
Elections. The Buyer and the Sellers agree to report the
transfers under this Agreement consistent with any Section
338(h)(10) Elections, and shall take no position contrary thereto
unless required to do so by applicable tax laws pursuant to a
"determination" (as described in Section 1313 of the Code).
(ii) The Buyer shall be responsible for the
preparation and filing of all Section 338 Forms in accordance
with applicable tax laws and the terms of this Agreement, and the
Buyer shall deliver such forms and related documents to the
Sellers at least forty (40) days prior to the date such Section
338 Forms are required to be filed under applicable tax laws.
The Sellers shall execute and deliver to the Buyer such documents
or forms as are reasonably requested by the Buyer and are
required by any tax laws to properly complete the Section 338
Forms, no more than twenty (20) days after the date such
documents or forms are requested by the Buyer.
(iii) The Buyer and the Sellers will allocate the
"Modified Agreement Deemed Sale Price," as computed under
applicable Treasury Regulations (or similar state law
provisions), among the assets of the Operating Companies for tax
purposes in accordance with the intended allocations set forth in
Schedule 6.12 hereto.
ARTICLE VII
[INTENTIONALLY OMITTED]
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Conditions Precedent to Obligations of Buyer. The
obligation of Buyer under this Agreement to consummate the
purchase of the Stock on the Closing Date shall be subject to the
satisfaction, at or prior to the Closing Date, of all of the
following conditions, any one or more of which may be waived by
Buyer:
(a) Representations and Warranties Accurate. The
representations and warranties of the Sellers contained in this
Agreement shall be true and correct in all material respects on
the Closing Date with the same force and effect as though made on
and as of the Closing Date, except for changes permitted or
contemplated by the terms of this Agreement.
(b) Performance by Sellers. Each of the Sellers shall
have performed and complied in all material respects with all
covenants and agreements required to be performed or complied
with by such parties hereunder on or prior to the Closing Date.
(c) [Intentionally Omitted]
(d) Consents. All Consents required in connection
with the purchase and sale of the Stock and the consummation of
the Closing (including those set forth on Exhibit 8.1(d) hereto)
shall have been duly obtained, made or given and shall be in full
force and effect, without the imposition upon Buyer, or any of
the Operating Companies, of any material condition, restriction
or required undertaking.
(e) No Legal Prohibition. No suit, action,
investigation, inquiry or other proceeding by any Governmental
Entity or other Person shall have been instituted or threatened
which arises out of or relates to this Agreement or the
transactions contemplated hereby and no injunction, order, decree
or judgment shall have been issued and be in effect or threatened
to be issued by any Governmental Entity of competent
jurisdiction, and no statute, rule or regulation shall have been
enacted or promulgated by any Governmental Entity and be in
effect, which in each case restrains or prohibits the
consummation of the purchase and sale of the Stock.
(f) Certificate. Buyer shall have received a
certificate, dated the Closing Date, signed by the Principal
Stockholder, to the effect that the conditions set forth in
Sections 8.1(a) and 8.1(b) have been satisfied.
(g) Opinion of Counsel for Sellers. Buyer shall have
received an opinion, dated the Closing Date, from Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), special counsel to the
Principal Stockholder, in form reasonably acceptable to Buyer.
(h) HSR Act. The required waiting period under the
HSR Act shall have expired or been earlier terminated.
(i) Repayment of Indebtedness. All indebtedness of
the Operating Companies (other than trade accounts payable
incurred in the ordinary course of business and equipment leases)
shall have been repaid in full and evidence of such repayment,
reasonably satisfactory to Buyer, shall have been delivered to
Buyer.
(j) Small Business Set Asides None of the customer
accounts of any of the Operating Companies shall have been
designated by the appropriate Governmental Entity as "small
business set-aside" contracts.
(k) Material Adverse Change. No material adverse
change shall have occurred in the business of the Operating
Companies and no other event, loss, damage, condition or state of
facts of any character shall exist which has a Material Adverse
Effect.
(l) [Intentionally Omitted]
(m) Resale Agreement. Sellers shall have executed
and delivered to Buyer the Resale Agreement in substantially the
form annexed hereto as Exhibit 8.1(m) (the "Resale Agreement").
(n) Non-Competition Agreement. The Principal
Stockholder shall have executed and delivered to Buyer the Non-
Competition Agreement in substantially the form annexed hereto as
Exhibit 8.1(n) (the "Non-Competition Agreement").
(o) Employment Agreements. The persons set forth on
Exhibit 8.1(o) shall have each executed and delivered the
Employment Agreement in substantially the form set forth on
Exhibit 8.1(o) (collectively, the "Employment Agreements").
(p) ▇▇▇▇▇▇▇ Agreement. The Principal Stockholder
shall have executed and delivered the ▇▇▇▇▇▇▇ Agreement in
substantially the form annexed hereto as Exhibit 8.1(p) (the
"▇▇▇▇▇▇▇ Agreement").
(q) Facility Lease. The Principal Stockholder shall
have executed and delivered the lease for the premises located in
Chicago, Illinois in substantially the form annexed hereto as
Exhibit 8.1(q) (the "Facility Lease").
(r) Additional Documents, Etc. Sellers shall have
delivered to Buyer such other documents, instruments and
certificates as shall be reasonably requested by Buyer or Buyer's
counsel for the purpose of effecting the transactions provided
for and contemplated by this Agreement.
8.2 Conditions Precedent To Obligations Of Sellers.
The obligations of the Sellers under this Agreement to consummate
the sale of the Stock on the Closing Date shall be subject to the
satisfaction, at or prior to the Closing Date, of all of the
following conditions, any one or more of which may be waived by
Sellers:
(a) Representations and Warranties Accurate. The
representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects on
the Closing Date with the same force and effect as though made on
and as of the Closing Date.
(b) Performance by Buyer. Buyer shall have performed
and complied in all material respect with all covenants and
agreements required to be performed or complied with by the Buyer
hereunder on or prior to the Closing Date.
(c) Consents. All Consents required in connection
with the purchase and sale of the Stock and the consummation of
the Closing shall have been duly obtained, made or given and
shall be in full force and effect, without the imposition upon
the Sellers of any material condition, restriction or required
undertaking.
(d) No Legal Prohibition. No suit, action,
investigation, inquiry or other proceeding by any Governmental
Entity or other Person shall have been instituted or threatened
which arises out of or relates to this Agreement, or the
transactions contemplated hereby and no injunction, order, decree
or judgment shall have been issued and be in effect or threatened
to be issued by any Governmental Entity of competent
jurisdiction, and no statute, rule or regulation shall have been
enacted or promulgated by any Governmental Entity and be in
effect, which in each case restrains or prohibits the
consummation of the purchase and sale of the Stock.
(e) Certificate. The Sellers shall have received a
certificate, dated the Closing Date, signed on behalf of Buyer by
a principal corporate officer of Buyer, to the effect that the
conditions set forth in Sections 8.2(a) and 8.2(b) have been
satisfied.
(f) Opinion of Counsel for Buyer. The Sellers shall
have received an opinion from Proskauer Rose LLP, special counsel
to the Buyer, dated the Closing Date, in form reasonably
acceptable to Sellers.
(g) HSR Act. The required waiting period under the
HSR Act shall have expired or been earlier terminated.
(h) Material Adverse Change. No material adverse
change shall have occurred in the business of the Buyer and no
other event, loss, damage, condition or state of facts of any
character shall exist which has a material adverse effect on the
business, results of operations or financial condition of Buyer
and its Subsidiaries considered as a single enterprise.
(i) Nasdaq The Buyer Shares to be delivered to the
Sellers at the Closing shall have been authorized for inclusion
on the Nasdaq National Market System, upon official notice of
issuance.
(j) [Intentionally Omitted]
(k) Effective Registration Statement. The issuance of
the Buyer Shares pursuant to Section 2.2(a) above shall have been
effected pursuant to an effective Registration Statement under
the Securities Act.
(l) Employment Agreements. Buyer shall have executed
and delivered the Employment Agreements.
(m) ▇▇▇▇▇▇▇ Agreement. The ▇▇▇▇▇▇▇ Agreement shall
have been executed and delivered by the parties thereto.
(n) Facility Lease. The Principal Stockholder shall
have executed and delivered the Facility Lease.
(o) Additional Documents, Etc. Buyer shall have
delivered to Sellers such other documents, instruments and
certificates as shall be reasonably requested by Sellers or
Sellers' counsel for the purpose of effecting the transactions
provided for and contemplated by this Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 Survival of Representations and Warranties. All
representations and warranties contained in Articles IV and V
shall survive the Closing and shall remain in full force and
effect through the last day of the 18th calendar month following
the calendar month in which the Closing Date occurred; provided,
however, that the representations and warranties contained in
Sections 4.3(c), 4.3(d) and 5.10 shall remain in full force and
effect indefinitely and the representations and warranties
contained in Section 4.9 shall remain in full force and effect
until the expiration of the applicable statute of limitations.
9.2 Indemnification by Sellers. Subject to the limits
set forth in this Article IX, from and after the Closing, Sellers
shall jointly and severally indemnify and save Buyer, its
Affiliates and their respective directors, officers and agents,
(collectively "Buyer Claimants" and individually "Buyer
Claimant") harmless from and defend each of them from and against
any and all demands, claims, actions, liabilities, losses, costs,
damages or reasonable expenses whatsoever (including without
limitation reasonable attorneys' fees and expenses)
(collectively, "Claims") incurred by the Buyer Claimants
resulting from or arising out of (i) any inaccuracy or breach of
any representation or warranty of the Principal Stockholder
contained herein; and (ii) any breach of any covenant or
obligation of Sellers contained herein; provided, however, that
if the Closing occurs, all written amendments or supplements to
the Disclosure Schedule made prior to the Closing shall be deemed
to have been made a part of the Disclosure Schedule as of the
date hereof. Notwithstanding anything contained herein to the
contrary, (a) Sellers shall not be required to indemnify a Buyer
Claimant hereunder unless the aggregate cumulative sum of all
amounts for which indemnity would otherwise be due hereunder to
any and all Buyer Claimants exceeds $250,000, in which case
Sellers shall only be responsible for the excess; (b) the
aggregate liability of the Sellers under this Article IX shall
not exceed an amount equal to $6,000,000; (c) any indemnification
liability arising hereunder shall be limited to the amount of
actual damages sustained by any Buyer Claimant by reason of such
breach, net of any insurance proceeds with respect thereto
payable to or for the benefit of the Buyer Claimant; and (d)
Buyer Claimants' indemnification for any Claims pursuant to this
Section 9.2 shall be calculated net of any net (giving effect to
the payment of any additional taxes that may be incurred by Buyer
Claimants from the treatment of such indemnification payments as
taxable income or gain to Buyer Claimants) tax benefit to Buyer
Claimants (utilized by Buyer Claimants against income of Buyer
Claimants in the year that Buyer Claimants deducts such
liability, loss, claim, cost or expense in its income tax
returns, regardless of whether Buyer Claimants receives any tax
benefits in any other year by reason of any net operating loss or
other available income tax carryforwards or carrybacks),
resulting from such Claims. The provisions of this Section 9.2
shall not apply to the Sellers' obligations under Section 6.12
hereof.
9.3 Indemnification by Buyer. Subject to the limits
set forth in this Article IX from and after the Closing, Buyer
shall indemnify and save Sellers, their Affiliates and their
respective directors, officers and agents, (collectively "Seller
Claimants" and individually "Seller Claimant") harmless from and
defend each of them from and against any and all Claims incurred
by the Seller Claimants resulting from or arising out of (i) any
inaccuracy or breach of any representation or warranty of Buyer
contained herein, and (ii) any breach of any covenant or
obligation of Buyer contained herein; provided, however, that
Buyer shall not be required to indemnify a Seller Claimant
hereunder unless the aggregate cumulative sum of all amounts for
which indemnity would otherwise be due hereunder to any and all
Seller Claimants exceeds $250,000, in which case Buyer shall only
be responsible for the excess; and provided, further, that the
aggregate liability of the Buyer under this Article IX shall not
exceed the sum of $6,000,000. Notwithstanding anything contained
herein to the contrary, (a) any indemnification liability arising
hereunder shall be limited to the amount of actual damages
sustained by any Seller Claimant by reason of such breach, net of
any insurance proceeds with respect thereto payable to or for the
benefit of the Seller Claimant; and (b) Seller Claimants'
indemnification for any Claims pursuant to this Section 9.3 shall
be calculated net of any net (giving effect to the payment of any
additional taxes that may be incurred by Seller Claimants from
treatment of such indemnification payments as taxable income or
gain to Seller Claimants) tax benefit to Seller Claimants
(utilized by Seller Claimants against income of Seller Claimants
in the year that Seller Claimants deducts such liability, loss,
claim, cost or expense in its income tax returns, regardless of
whether Seller Claimants receives any tax benefits in any other
year by reason of any net operating loss or other available
income tax carryforwards or carrybacks), resulting from such
Claims.
9.4 Exclusive Remedy. Any indemnity obligations of
the Sellers pursuant to Section 9.2 hereof (other than indemnity
obligations arising from a breach of Sections 4.3(c) or 4.3(d)
hereof after the last day of the 18th calendar month following
the calendar month in which the Closing Date occurred), shall be
satisfied solely by payment from the Escrow Account, upon the
terms and subject to the conditions set forth in Section 9.2
hereof and in the Escrow Agreement, and the extent of any such
payments shall be the Buyer Claimants' sole and exclusive remedy
in the event of any Claims for indemnification under such Section
9.2. The provisions of Section 9.2 and section 9.3 hereof shall
not apply to the claims, obligations, liabilities, covenants and
representations regarding Taxes, which shall be governed solely
by the terms of Section 6.12 hereof. The parties acknowledge and
agree that the remedies provided in this Agreement are their
exclusive remedies with respect to actions, occurrences or events
that took place on or prior the Closing Date, whether or not an
equitable, legal or administrative action has been commenced as
of the Closing Date with respect to such actions, occurrences or
events.
9.5 Terms and Conditions of Indemnification. The
respective obligations and liabilities of Sellers and of Buyer to
indemnify pursuant to this Article IX shall be subject to the
following terms and conditions:
(a) The party seeking indemnification (the "Claimant")
must give the other party or parties, as the case may be (the
"Indemnitor"), written notice of any such claim promptly. The
Claimant's failure to give prompt notice, however, shall not
serve to eliminate or limit the Claimant's right to
indemnification hereunder except to the extent such failure
prejudices the rights of the Indemnitor.
(b) The respective obligations and liabilities of
Sellers and of Buyer to indemnify pursuant to this Article IX in
respect of any Claim by a third party shall be subject to the
following additional terms and conditions:
(i) The Indemnitor shall have the right to undertake,
by counsel or other representatives of its own choosing
reasonably satisfactory to Claimant, the defense, compromise, and
settlement of such Claim.
(ii) In the event that the Indemnitor shall elect not
to undertake such defense, or within a reasonable time after
notice of any such claim from the Claimant shall fail to defend,
the Claimant (upon further written notice to the Indemnitor)
shall have the right to undertake the defense, compromise or
settlement of such claim, by counsel or other representatives of
its own choosing, on behalf of and for the account and risk of
the Indemnitor.
(iii) Notwithstanding anything in this Section 9.4 to
the contrary, (A) if there is a reasonable probability that a
Claim may materially and adversely affect the Claimant other than
as a result of money damages or other money payments, the
Claimant shall have the right, at its own cost and expense, to
participate in the defense, compromise or settlement of the
Claim, (B) the Indemnitor shall not, without the Claimant's
written consent, settle or compromise any Claim or consent to
entry of any judgment which does not include as an unconditional
term thereof the giving by the claiming party or the plaintiff to
the Claimant of a release from all liability in respect of such
claim, and (C) in the event that the Indemnitor undertakes
defense of any Claim, the Claimant by counsel or other
representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the Indemnitor and
its counsel or other representatives concerning such claim and
the Indemnitor and the Claimant and their respective counsel or
other representatives shall cooperate with respect to such claim,
subject to the execution and delivery of a mutually satisfactory
joint defense agreement.
9.6 Treatment of Payments. The Buyer and the Sellers
agree to treat all payments pursuant to Sections 2.2, 9.2 and 9.3
as adjustments (i.e., reductions or increases, as the case may
be) of the Purchase Price for income tax purposes and file all
income Tax Returns in a manner consistent with such treatment,
unless (i) otherwise required by a court of competent
jurisdiction or (ii) such party receives a written opinion from a
nationally recognized law firm (which opinion and law firm shall
be reasonably acceptable to the other party) that there is no
substantial authority (within the meaning of Section
6662(d)(2)(B)(i) of the Code) for such position.
ARTICLE X
ESCROW
10.1 Establishment of Escrow Account. The Principal
Stockholder and the Buyer shall, on or prior to the Closing Date,
establish the Escrow Account.
10.2 Funding of and Withdrawals From Escrow Account.
At the Closing, Buyer shall cause the cash comprising the Escrow
Amount to be deposited into the Escrow Account. Withdrawals of
amounts from the Escrow Account may only be made by Buyer to
indemnify any of the Buyer Claimants for any Claims asserted
against, imposed upon or incurred by such Buyer Claimants in
accordance with the terms and conditions set forth in Section 9.2
hereof and the Escrow Agreement. Any cash remaining in the
Escrow Account on the last day of the 18th calendar month
following the calendar month in which the Closing Date occurred
for which claims have not theretofore been made by Buyer shall be
remitted to the Principal Stockholder in accordance with the
terms and conditions set forth in the Escrow Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 Termination; Liquidated Damages. (a) This
Agreement may be terminated and abandoned by Buyer or Sellers, by
written notice to the other party, if the transactions
contemplated by this Agreement have not been consummated by
October 1, 1997, unless the failure of such consummation shall be
due to the failure of the party seeking to terminate this
Agreement to comply in all material respects with the agreements
and covenants contained herein to be performed by such party on
or before such date. This Agreement may be terminated by mutual
consent of the parties at any time.
(b) Buyer understands that the damages which may be
suffered by Sellers if Buyer fails to complete the Closing in a
timely fashion as a result of its breach of this Agreement shall
be difficult to ascertain and the parties therefore agree that
the Sellers shall be entitled (in addition to the expenses to be
paid by Buyer pursuant to Section 11.2 below) (i)to liquidated
damages in an amount equal to that number of Buyer Shares
determined by dividing (A) $2,000,000 by (B) the average last
reported sale price ADS Common Stock for the twenty trading days
immediately preceding the date of breach and (ii) a certified
copy of the Financial Statements. Under the circumstances
described in this Section, Buyer will issue such Buyer Shares to
Seller. The liquidated damages and Financial Statements referred
to in this Section 11.1(b) shall be Sellers' only remedy in the
event of Buyer's failure to complete the Closing in a timely
manner as a result of Buyer's breach of this Agreement and
Sellers hereby waive any further rights in connection therewith.
11.2 Expense. Except for sales, transfer and other
similar taxes, levies and charges that may be imposed, levied or
assessed in connection with the consummation of the transactions
contemplated hereby, which will be paid 1/2 by Buyer and 1/2 by
Sellers, and the fees and expenses incurred in connection with
the preparation of the Financial Statements, which will be paid
by Buyer, each party hereto shall pay its own expenses incurred
in connection with this Agreement and the transactions
contemplated hereby.
11.3 Amendment. This Agreement may not be modified,
amended, altered or supplemented except by a written agreement
executed by Buyer and Sellers.
11.4 Entire Agreement. This Agreement, together with
the Exhibits and Schedules hereto, the other Transaction
Documents and the instruments and other documents delivered
pursuant to this Agreement and the other Transaction Documents,
contain the entire agreement of the parties relating to the
subject matter hereof, and supersede all prior agreements,
understandings, representations, warranties and covenants of any
kind between the parties. All others are specifically waived.
11.5 Waivers. Waiver by any party of any breach of or
failure to comply with any provision of this Agreement by the
other party shall not be construed as, or constitute, a
continuing waiver of such provision, or a waiver of any other
breach of, or failure to comply with, any other provision of this
Agreement. No waiver of any such breach or failure or of any
term or condition of this Agreement shall be effective unless in
a written notice signed by the waiving party and delivered, in
the manner required for notices generally, to each affected
party.
11.6 Notices. All notices and other communications
hereunder shall be validly given or made if in writing, when
delivered personally (by courier service or otherwise), when sent
by telecopy with confirmation by postage-prepaid first class
mail, or when actually received when mailed by first-class
certified or registered United States mail, postage-prepaid and
return receipt requested, and all legal process with regard
hereto shall be validly served when served in accordance with
applicable law, in each case to the address of the party to
receive such notice or other communication set forth below, or at
such other address as any party hereto may from time to time
advise the other parties pursuant to this Subsection:
If to Sellers:
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Buyer:
American Disposal Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
11.7 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same document.
11.8 Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the
State of Illinois (i.e., without regard to its conflicts of law
rules).
11.9 Binding Effect; Third Party Beneficiaries;
Assignment. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their
respective legal representatives, successors, heirs,
distributees, devisees, legatees and permitted assigns. Except
as expressly set forth herein, nothing expressed or referred to
in this Agreement is intended or shall by construed to give any
Person other than the parties to this Agreement, or their
respective legal representatives, successors, heirs,
distributees, devisees, legatees and permitted assigns, any legal
or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein. Neither party may
assign this Agreement nor any of its rights hereunder, other than
any right to payment of a liquidated sum, nor delegate any of its
obligations hereunder, without the prior written consent of the
other, except that (i) Buyer may, at the Closing, assign title to
the Stock to one or more of its Subsidiaries and (ii) Buyer may
assign its rights to receive payments under this Agreement to any
Affiliate or to any Person providing financing to Buyer.
11.10 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall
not invalidate the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction, and any such provision, to the extent invalid or
unenforceable, shall be replaced by a valid and enforceable
provision which comes closest to the intention of the parties
underlying such invalid or unenforceable provision.
11.11 Headings. The headings contained in this
Agreement are for reference purposes only and shall not modify
define, limit, expand or otherwise affect in any way the meaning
or interpretation of this Agreement.
11.12 No Agency. No party hereto shall be deemed
hereunder to be an agent of, or partner or joint venturer with,
any other party hereto.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
Sellers:
__________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
Buyer:
AMERICAN DISPOSAL SERVICES, INC.
By:______________________________