2/6/97
STOCK PURCHASE AGREEMENT
among
▇▇▇▇▇▇▇ Environmental Services, Inc.
and
▇▇▇▇▇▇▇ Inc.,
and
▇▇▇▇▇▇▇ Transportation, Inc.
dated as of
February 6, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
1.2 Interpretation . . . . . . . . . . . . . . . . . . . . 12
ARTICLE II
THE ACQUISITION. . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1 Sale and Purchase of Shares. . . . . . . . . . . . . . 13
2.2 Consideration for Chem-Waste Shares and Chem-Waste
Intercompany Indebtedness. . . . . . . . . . . . . . . 13
2.3 Total Consideration Allocation . . . . . . . . . . . . 13
2.4 Cash Management Cut-Off. . . . . . . . . . . . . . . . 13
ARTICLE III
THE CLOSING AND RELATED MATTERS. . . . . . . . . . . . . . . . . . 14
3.1 The Closing. . . . . . . . . . . . . . . . . . . . . . 14
3.2 Actions in Contemplation of Closing. . . . . . . . . . 15
3.3 Other Actions at the Closing . . . . . . . . . . . . . 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . 15
4.1 Organization of Seller and ▇▇▇▇▇▇▇ . . . . . . . . . . 15
4.2 Authority Relative to this Agreement . . . . . . . . . 16
4.3 Status of Chem-Waste Shares. . . . . . . . . . . . . . 16
4.4 No Violations. . . . . . . . . . . . . . . . . . . . . 16
4.5 Consents and Approvals . . . . . . . . . . . . . . . . 17
4.6 Acquired Subsidiaries. . . . . . . . . . . . . . . . . 17
4.7 No Other Subsidiaries. . . . . . . . . . . . . . . . . 18
4.8 Conduct of Hazardous and Industrial Waste Business . . 18
4.9 SEC Filings. . . . . . . . . . . . . . . . . . . . . . 19
4.10 Seller Financial Statements. . . . . . . . . . . . . . 19
4.11 Absence of Certain Changes . . . . . . . . . . . . . . 19
4.12 No Undisclosed Liabilities . . . . . . . . . . . . . . 20
4.13 Acquired Subsidiary Properties . . . . . . . . . . . . 20
4.14 Taxes and Tax Returns. . . . . . . . . . . . . . . . . 20
4.15 Litigation . . . . . . . . . . . . . . . . . . . . . . 21
4.16 Environmental Matters. . . . . . . . . . . . . . . . . 21
4.17 Governmental Licenses and Permits; Compliance with
Laws . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.18 Labor Matters. . . . . . . . . . . . . . . . . . . . . 24
4.19 Employee Benefit Plans . . . . . . . . . . . . . . . . 24
4.20 Brokers. . . . . . . . . . . . . . . . . . . . . . . . 26
4.21 Material Contracts . . . . . . . . . . . . . . . . . . 26
4.22 Bank Accounts. . . . . . . . . . . . . . . . . . . . . 28
4.23 Officers and Directors . . . . . . . . . . . . . . . . 28
4.24 Condition and Sufficiency of Assets. . . . . . . . . . 28
4.25 Affiliate Transactions . . . . . . . . . . . . . . . . 28
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . . . . . . . 29
5.1 Organization of Purchaser Parties. . . . . . . . . . . 29
5.2 Authority Relative to this Agreement . . . . . . . . . 29
5.3 Status of Purchaser Common Shares. . . . . . . . . . . 30
5.4 No Violations. . . . . . . . . . . . . . . . . . . . . 30
5.5 Consents and Approvals . . . . . . . . . . . . . . . . 30
5.6 Purchaser Capitalization . . . . . . . . . . . . . . . 31
5.7 Purchaser Subsidiaries . . . . . . . . . . . . . . . . 31
5.8 Conduct of Hazardous and Industrial Waste Business . . 32
5.9 SEC Filings. . . . . . . . . . . . . . . . . . . . . . 32
5.10 Purchaser Financial Statements . . . . . . . . . . . . 32
5.11 Absence of Certain Changes . . . . . . . . . . . . . . 33
5.12 No Undisclosed Liabilities . . . . . . . . . . . . . . 33
5.13 Purchaser Properties . . . . . . . . . . . . . . . . . 33
5.14 Taxes and Tax Returns. . . . . . . . . . . . . . . . . 33
5.15 Litigation . . . . . . . . . . . . . . . . . . . . . . 34
5.16 Environmental Matters. . . . . . . . . . . . . . . . . 34
5.17 Governmental Licenses and Permits; Compliance with
Laws . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.18 Labor Matters. . . . . . . . . . . . . . . . . . . . . 37
5.19 Employee Benefit Plans . . . . . . . . . . . . . . . . 38
5.20 Financing. . . . . . . . . . . . . . . . . . . . . . . 40
5.21 Brokers. . . . . . . . . . . . . . . . . . . . . . . . 40
5.22 Material Contracts . . . . . . . . . . . . . . . . . . 40
5.23 Bank Accounts. . . . . . . . . . . . . . . . . . . . . 41
5.24 Officers and Directors . . . . . . . . . . . . . . . . 41
5.25 Affiliate Transactions . . . . . . . . . . . . . . . . 42
5.26 Condition and Sufficiency of Assets. . . . . . . . . . 42
ARTICLE VI
SELLER AND ▇▇▇▇▇▇▇ COVENANTS PENDING CLOSING . . . . . . . . . . . 42
6.1 Conduct of Business. . . . . . . . . . . . . . . . . . 42
6.2 Forbearance by the Acquired Subsidiaries . . . . . . . 43
6.3 Access and Information . . . . . . . . . . . . . . . . 44
6.4 Supplemental Information . . . . . . . . . . . . . . . 45
6.5 Confidentiality. . . . . . . . . . . . . . . . . . . . 45
6.6 Consummation of Acquisition. . . . . . . . . . . . . . 45
6.7 Access for Environmental Report. . . . . . . . . . . . 45
6.8 Acquisitions of Purchaser Common Stock . . . . . . . . 46
6.9 Competition. . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VII
PURCHASER COVENANTS PENDING CLOSING. . . . . . . . . . . . . . . . 46
7.1 Conduct of Business. . . . . . . . . . . . . . . . . . 46
7.2 Forbearance by Purchaser and its Subsidiaries. . . . . 47
7.3 Access and Information . . . . . . . . . . . . . . . . 49
7.4 Supplemental Information . . . . . . . . . . . . . . . 49
7.5 Purchaser Stockholders' Meeting and Restated and
Amended Certificate of Incorporation . . . . . . . . . 50
7.6 Confidentiality. . . . . . . . . . . . . . . . . . . . 50
7.7 Consummation of Acquisitions . . . . . . . . . . . . . 50
7.8 Letter from Stockholders . . . . . . . . . . . . . . . 51
7.9 Access for Environmental Report. . . . . . . . . . . . 51
ARTICLE VIII
MUTUAL CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 51
8.1 No Adverse Proceedings . . . . . . . . . . . . . . . . 51
8.2 HSR Waiting Period . . . . . . . . . . . . . . . . . . 52
8.3 Purchaser Stockholder Approval . . . . . . . . . . . . 52
8.4 Competition Act Matters. . . . . . . . . . . . . . . . 52
8.5 Westinghouse Debt Retirement . . . . . . . . . . . . . 52
8.6 Reorganization . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF PURCHASER . . . . . . . . . . . . . . 52
9.1 Representations True at Closing. . . . . . . . . . . . 52
9.2 No Adverse Changes . . . . . . . . . . . . . . . . . . 52
9.3 Investment Canada Act. . . . . . . . . . . . . . . . . 53
9.4 Competition Act Matters. . . . . . . . . . . . . . . . 53
9.5 Acquisition Financing. . . . . . . . . . . . . . . . . 53
9.6 Opinion of Financial Advisor . . . . . . . . . . . . . 53
ARTICLE X
CONDITIONS TO SELLER'S AND ▇▇▇▇▇▇▇'▇ OBLIGATIONS . . . . . . . . . 53
10.1 Representations True at Closing. . . . . . . . . . . . 54
10.2 No Adverse Changes . . . . . . . . . . . . . . . . . . 54
10.3 Investment Canada Act. . . . . . . . . . . . . . . . . 54
10.4 Competition Act Matters. . . . . . . . . . . . . . . . 54
10.5 Waiver of Rights Plan. . . . . . . . . . . . . . . . . 54
10.6 Acquisition Financing. . . . . . . . . . . . . . . . . 54
ARTICLE XI
ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . 55
11.1 HSR Act Filings. . . . . . . . . . . . . . . . . . . . 55
11.2 Competition Act Filings. . . . . . . . . . . . . . . . 55
11.3 Investment Canada Act Filings. . . . . . . . . . . . . 55
11.4 Other Consents and Approvals . . . . . . . . . . . . . 55
11.5 Publicity. . . . . . . . . . . . . . . . . . . . . . . 56
11.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . 56
11.7 Securities Law Matters . . . . . . . . . . . . . . . . 56
11.8 Rule 144 Reports . . . . . . . . . . . . . . . . . . . 57
11.9 Seller Board Representation. . . . . . . . . . . . . . 57
11.10 Seller Guaranties. . . . . . . . . . . . . . . . . . . 58
11.11 Guarantees of Performance of Retained Subsidiaries . . 60
11.12 Pinewood Security. . . . . . . . . . . . . . . . . . . 60
11.13 Employees. . . . . . . . . . . . . . . . . . . . . . . 60
11.14 Purchaser Stock Option Plan. . . . . . . . . . . . . . 60
11.15 Affiliate Transactions and Business Combination. . . . 61
ARTICLE XII
TAX MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.1 Future Tax Returns . . . . . . . . . . . . . . . . . . 62
12.2 Tax Covenants. . . . . . . . . . . . . . . . . . . . . 63
12.3 Other Tax Matters, Post-Closing Cooperation. . . . . . 64
12.4 Tax Controversies. . . . . . . . . . . . . . . . . . . 65
ARTICLE XIII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . 66
13.1 Nature of Statements . . . . . . . . . . . . . . . . . 66
13.2 Survival of Representations, Warranties and
Covenants. . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XIV
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 67
14.1 Indemnification by ▇▇▇▇▇▇▇ and Seller. . . . . . . . . 67
14.2 Indemnification by Purchaser . . . . . . . . . . . . . 68
14.3 Third Party Claim. . . . . . . . . . . . . . . . . . . 69
14.4 Claims Between the Parties . . . . . . . . . . . . . . 71
ARTICLE XV
AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . . 71
15.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . 71
15.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . 71
15.3 Termination. . . . . . . . . . . . . . . . . . . . . . 72
15.4 Consequences of Termination. . . . . . . . . . . . . . 72
ARTICLE XVI
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 73
16.1 Non-Business Days. . . . . . . . . . . . . . . . . . . 73
16.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . 73
16.3 Entire Agreement . . . . . . . . . . . . . . . . . . . 73
16.4 Assignment; Binding Effect . . . . . . . . . . . . . . 73
16.5 Counterparts . . . . . . . . . . . . . . . . . . . . . 73
16.6 Governing Law; Jurisdiction. . . . . . . . . . . . . . 74
16.7 Severability of Provisions . . . . . . . . . . . . . . 74
16.8 Specific Performance . . . . . . . . . . . . . . . . . 74
16.9 Joint Drafting . . . . . . . . . . . . . . . . . . . . 74
16.10 Captions . . . . . . . . . . . . . . . . . . . . . . . 74
16.11 No Third-Party Beneficiaries . . . . . . . . . . . . . 74
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), is made as of
February 6, 1997, among ▇▇▇▇▇▇▇ Environmental Services, Inc., a
Delaware corporation ("Purchaser"), ▇▇▇▇▇▇▇ Inc., a Canadian
corporation ("▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ Transportation, Inc., a Delaware
corporation and indirect wholly-owned subsidiary of ▇▇▇▇▇▇▇ ("Seller").
W I T N E S S E T H:
WHEREAS, Seller, exclusively through ▇▇▇▇▇▇▇ Chem-Waste, Inc.,
a Delaware corporation and a wholly owned subsidiary of Seller ("Chem-
Waste") and Chem-Waste's direct and indirect subsidiaries, is engaged
in the Hazardous and Industrial Waste Business in the United States and
Canada; and
WHEREAS, Seller wishes to sell all of its United States and
Canadian Hazardous and Industrial Waste Business; and
WHEREAS, Purchaser, through the acquisition of all of the issued
and outstanding capital stock of Chem-Waste, wishes to purchase all of
the United States and Canadian Hazardous and Industrial Waste Business
of Seller;
NOW, THEREFORE, Purchaser, Seller and ▇▇▇▇▇▇▇ (collectively, the
"Parties") agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement:
"Acquired Canadian Subsidiaries" means those Acquired
Subsidiaries which are incorporated under the laws of Canada or a
Canadian province.
"Acquired Subsidiaries" means (i) Chem-Waste and (ii) the
direct and indirect wholly owned Subsidiaries of Chem-Waste listed
and identified on the attached Schedule I, collectively.
"Acquired U.S. Subsidiaries" means those Acquired
Subsidiaries which are incorporated under the laws of a state of
the United States.
"Acquisition" means the acquisition of the Chem-Waste Shares
and the Chem-Waste Intercompany Indebtedness.
"Additional Purchaser Common Shares" means shares of
Purchaser Common Stock which may be issued after the Closing
pursuant to the terms of the Purchaser Convertible Debenture.
"Advance Ruling Certificate" means an advance ruling
certificate issued by the Competition Act Director under Section
102 of the Competition Act.
"Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such
Person, with the terms "control" and "controlled" meaning for
purposes of this definition the power to direct the management and
policies of a Person, directly or indirectly, whether through the
ownership of voting securities or partnership or other ownership
interests, or by contract or otherwise.
"Ancillary Agreements" means, collectively, the Registration
Rights Agreement and the Purchaser Convertible Debenture.
"Antitrust Division" means the Antitrust Division of the
United States Department of Justice.
"Bond Indebtedness" has the meaning specified in Section 2.2.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in Toronto, Ontario or New York, New
York are authorized or obligated to close.
"Chem-Waste Group Financial Statements" means all financial
statements of the Acquired Subsidiaries delivered to Purchaser
under Section 4.10.
"Chem-Waste Group Taxes" means any and all Taxes incurred or
imposed on the Seller Group arising in a Pre-Closing Tax Period
including Seller's post-closing Taxes.
"Chem-Waste Intercompany Indebtedness" has the meaning
specified in Section 2.1.
"Chem-Waste Shares" means all of the issued and outstanding
capital stock of Chem-Waste, which stock as of the date hereof
consists solely of common shares, no par value per share, that are
100% owned by Seller.
"Closing" has the meaning specified in Section 3.1.
"Closing Date" means (i) the fifth Business Day immediately
following the earliest date upon or by which (a) the waiting
period under the HSR Act shall have expired or otherwise been
terminated, (b) either (I) the Competition Act Director shall have
issued and not subsequently withdrawn or threatened to withdraw,
an Advance Ruling Certificate relating to the Acquisition or
(II) Purchaser shall have received the advice from the Competition
Act Director specified in Section 9.4(ii), (c) the ICA Minister
shall have made the determination, or shall have been deemed to
have made the determination, specified in Section 9.3, and (d) all
other conditions to the respective obligations of the Parties set
forth in Articles VIII, IX and X shall have been satisfied or
waived, or (ii) such other date as Purchaser and Seller may agree.
"Closing Price" has the meaning specified in Section 12.2.
"Code" means the United States Internal Revenue Code of 1986,
as amended, and the regulations and rulings of the Internal
Revenue Service promulgated thereunder.
"Commitment Letter" means the letter dated December 10, 1996,
addressed to ▇▇▇▇▇▇▇, which can be assigned to Purchaser, relating
to senior credit facilities in an aggregate principal amount of
$650,000,000 to be provided by The Toronto-Dominion Bank, in
connection with, and conditioned upon consummation of, the
Acquisition, subject to the satisfaction of other conditions and
upon the terms set forth therein including attachments thereto.
"Competition Act" means the Canadian Federal Competition Act,
R.S.C. 1985, c. C-34, as amended.
"Competition Act Director" means the Canadian Director of
Investigation and Research appointed under the Competition Act.
"Confidentiality Agreement" means the confidentiality
agreement dated as of November 1, 1996, as amended, between
Purchaser and ▇▇▇▇▇▇▇.
"Damages" means all obligations, claims, liabilities,
damages, penalties, deficiencies, losses, investigations,
proceedings, judgments, fines, and reasonable costs and expenses
(including, but not limited to, reasonable costs and expenses
incurred in connection with the performance of obligations,
interest, bonding and court costs and attorneys', accountants',
engineers', consultants' and investigators' fees and
disbursements) incurred in connection with any investigation or
defense of any of the foregoing.
"Environmental Claim" means any claim by a Person alleging or
imposing actual or potential liability (including potential
liability for any investigatory cost, containment or oversight
cost, control cost, prevention cost, remediation cost, cleanup
cost, governmental response cost, natural resources damage, toxic
tort claim, property damage, personal injury or penalty) arising
out of, based on, resulting from or relating to (i) the presence,
storage, transport, disposal, use, discharge, release or
threatened release of any Hazardous Substance at any location,
whether or not owned by the Person against which the claim is
made, or (ii) circumstances forming the basis for any liability
under, or any violation or alleged violation of, any Environmental
Law.
"Environmental Laws" means all federal, foreign, state,
provincial, municipal and local statutes, codes, regulations,
rules, ordinances and other laws relating to the protection,
preservation or conservation of the environment and to public or
worker health and safety, as amended or reauthorized, including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. section 9601 et
seq., the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. section 6901 et seq., the Emergency Planning and Community Right
to Know Act, 42 U.S.C. section 11001 et seq., the Clean Air Act, 42
U.S.C. section 7401 et seq., the Federal Water Pollution Control Act, 33
U.S.C. section 1251 et seq., the Toxic Substances Control Act, 15 U.S.C.
section 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. section
300f et seq., and the Occupational Safety and Health Act, 29 U.S.C.
section 651 et seq.
"Environmental Liabilities" means any and all costs
(including remedial, removal, response, abatement, cleanup,
investigative and/or monitoring costs), damages, settlements,
expenses (including charges and assessments, and expenses and
costs of investigating, preparing or defending any action or
proceeding), liens, penalties, fines, prejudgment and post-
judgment interest, court costs and attorneys' fees incurred or
imposed (i) pursuant to any agreement, order, notice of
responsibility, directive (including requirements embodied in
Environmental Laws), injunction, judgment or similar documents
(including settlements) attributable to, connected with or arising
out of or under, Environmental Laws or (ii) pursuant to any claim
by a Governmental Entity or other entity or Person for personal
injury, property damage, damage to natural resources, remediation
or response costs arising out of, connected with or attributable
to, any Hazardous Substance.
"Environmental Permits" means all permits, licenses,
registrations, certifications, exemptions, approvals and other
authorizations of or by any Governmental Entity pursuant to any
Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means, with respect to any Person, any
trade or business, whether or not incorporated, which together
with that Person would be deemed a single employer within the
meaning of Section 4001 of ERISA or Section 414 of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
"FTC" means the United States Federal Trade Commission.
"Governmental Entity" means any U.S., Canadian or foreign,
state, territorial, federal, provincial or local court, executive
office, legislature, governmental agency or ministry, commission,
or administrative, regulatory or self-regulatory authority or
instrumentality.
"Hazardous and Industrial Waste Business" means the
transportation, treatment, storage and disposal of Hazardous
Substances and industrial wastes as presently conducted by the
Acquired Subsidiaries, but excluding the coal combustion by-
product management services conducted by the Retained
Subsidiaries.
"Hazardous Substances" means chemicals, pollutants,
contaminants, wastes (including ambient wastes, hazardous wastes
and liquid industrial wastes), or other substances (including
toxic, deleterious or hazardous substances), as defined, listed or
regulated pursuant to Environmental Laws, including, asbestos or
asbestos-containing materials, polychlorinated biphenyls,
pesticides and oils, and petroleum and petroleum products (as
those exemplary terms are defined in or regulated under the United
States National Oil and Hazardous Substances Pollution Contingency
Plan, 40 C.F.R. sections 300.1 et seq. and other Environmental Laws).
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"ICA Minister" means the Minister responsible for
administering the Investment Canada Act.
"Income Tax Act" means the Canadian federal Income Tax Act,
R.S.C. 1985 c. 1, as amended.
"Indebtedness" means with respect to any Person at any date,
(i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (ii)
any other indebtedness of such Person which is evidenced by a
note, bond, debenture, letter of credit or similar instrument,
(iii) all obligations of such Person with respect to guarantees,
(iv) all obligations of such Person under leases of property which
are required to be capitalized under U.S. GAAP, (v) all
obligations of such Person in respect of acceptances issued or
created for the account of such Person (other than endorsements in
the ordinary course of business), (vi) all obligations of such
Person in respect of interest rate swaps or other interest rate
hedging products or foreign currency exchange agreements or
exchange rate hedging arrangements, (vii) all obligations of such
Person in respect of reimbursement obligations under letters of
credit, and (viii) all liabilities of the type referred to in
clauses (i) through (vii) above that are secured by any lien,
charge, security interest or encumbrance on any property owned by
such Person even though such Person has not assumed or otherwise
become liable for the payment thereof.
"Intercompany Indebtedness" means, at any date, all amounts,
other than Recurring Charges, owed on that date by an Acquired
Subsidiary, or any obligation of an Acquired Subsidiary,
contingent or otherwise on that date, to Seller or any other
member of the Seller Group other than the Acquired Subsidiaries.
"Investment Canada Act" means the Investment Canada Act,
R.S.C. 1985, c. C-28, as amended.
"▇▇▇▇▇▇▇ SEC Filings" has the meaning specified in Section
4.9.
"Law" means a law, statute, ordinance, rule, code or
regulation enacted or promulgated, or order, permit, directive,
instruction or other legally binding guideline or policy issued or
rendered by, any Governmental Entity.
"Lien" means a lien, mortgage, deed of trust, deed to secure
debt, pledge, hypothecation, assignment, deposit arrangement,
easement, preference, priority, assessment, security interest,
lease, sublease, charge, claim, adverse claim, levy, interest of
other Persons, or other encumbrance of any kind (including any
conditional sale or other title retention agreement having the
same economic effect as any of the foregoing).
"Mailing Date" has the meaning specified in Section 7.5.
"Material Adverse Effect" means (i) when used with reference
to the Acquired Subsidiaries, a material adverse effect on the
financial condition, business, assets, prospects or results of
operations of the Acquired Subsidiaries taken as a whole, (ii)
when used with reference to Purchaser, to Seller or to ▇▇▇▇▇▇▇, a
material adverse effect on its ability to perform its obligations
under this Agreement or any Ancillary Agreement to which it is a
party and (iii) when used with reference to Purchaser and its
Subsidiaries, a material adverse effect on the financial
condition, business, assets, prospects or results of operations of
Purchaser and its Subsidiaries (including from and after the
Closing, the Acquired Subsidiaries) taken as a whole.
"Notice" means any written citation, directive, order, claim,
litigation, investigation, proceeding, judgment, letter or other
communication from any person, including any governmental agency
or employee thereof.
"Ontario Securities Act" means the Securities Act (Ontario),
R.S.O. 1990, c.S.5, as amended.
"Permitted Liens" means (i) those Liens set forth in Section
4.13 of the Seller Disclosure Schedule or Section 5.13 of the
Purchaser Disclosure Schedule, as applicable, (ii) those Liens
reflected in the Purchaser SEC Filings, in the case of the
Purchaser and its assets or properties, (iii) any Lien that is set
forth in the title reports or title insurance binders that have
been made available to the Purchaser by Seller relating to any
interest in real property owned by an Acquired Subsidiary, (iv)
Liens for water and sewer charges and current taxes not yet due
and payable or being contested in good faith, and (v) other Liens
(including mechanics', couriers', workers', repairers',
materialmen's, warehousemen's and other similar Liens) arising in
the ordinary course of business as would not in the aggregate
materially adversely affect the value of, or materially adversely
interfere with the use of, the property subject thereto.
"Person" means an individual, corporation, partnership,
association, joint stock company, limited liability company,
Governmental Entity, business trust, unincorporated organization
or other legal entity.
"Policies" has the meaning specified in Section 11.15.
"Post-Closing Tax Period" means any Tax period (or portion
thereof) beginning after the close of business on the Closing
Date.
"Pre-Closing Seller Insurance Claims" means any liability,
personal injury, property damage, workers compensation or other
similar claim (other than health and welfare insurance claims)
made against any Acquired Subsidiary by any Person with respect to
a loss, damage, claim, incident or occurrence which occurred
before the time of Closing, including any such matter which was
incurred but not reported on or before the time of Closing.
"Pre-Closing Tax Period" means any Tax period (or portion
thereof) ending on or before the close of business on the Closing
Date.
"Purchaser Balance Sheet" has the meaning specified in
Section 5.10.
"Purchaser Common Shares" means the 120,000,000 shares of
Purchaser Common Stock issuable to Seller under Section 2.2 as
consideration for the Chem-Waste Shares and, to the extent
required, the Chem-Waste Intercompany Indebtedness.
"Purchaser Common Stock" means the Common Stock, $1.00 par
value per share, of Purchaser.
"Purchaser Contracts" has the meaning specified in Section
5.22.
"Purchaser Convertible Debenture" means the 5% 12 year $350
million principal amount, convertible, pay-in-kind debenture
substantially in the form of Exhibit A, which is to be issued by
Purchaser to Seller under Section 2.2.
"Purchaser Disclosure Schedule" means the Disclosure Schedule
signed for identification purposes only by the President, Chief
Executive Officer or Chief Financial Officer of Purchaser, which
Purchaser has delivered to Seller on or before the date of this
Agreement, and which contains information relevant to the
representations and warranties made by Purchaser in Article V.
"Purchaser Employee Plans" has the meaning specified in
Section 5.19.
"Purchaser Fairness Opinion" means the opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇ & Associates, Inc. referred to in Section 9.6.
"Purchaser Intercompany and Affiliate Agreements" means all
contracts, agreements, policies, practices and understandings,
whether written or oral, between any one or more of the Affiliates
of the Purchaser other than its Subsidiaries, on the one hand, and
any one or more of Purchaser and its Subsidiaries on the other
hand.
"Purchaser Pension Plan" has the meaning specified in Section
5.19.
"Purchaser Property" means real or personal property or other
asset owned, leased or operated by Purchaser.
"Purchaser Proxy Statement" has the meaning specified in
Section 7.5.
"Purchaser Reorganization Transaction" means: (i) any merger,
consolidation, recapitalization, liquidation or other business
combination transaction involving Purchaser; (ii) any tender offer
or exchange offer for any securities of Purchaser; or (iii) any
sale or other disposition of assets of Purchaser or any of its
Subsidiaries in a single transaction or in a series of related
transactions.
"Purchaser Rights Plan" means the Rights Agreement dated as
of June 14, 1989, as amended, between Purchaser and its registrar
and transfer company.
"Purchaser Securities" means, collectively, the Purchaser
Common Shares, the Purchaser Convertible Debenture and the
Additional Purchaser Common Shares.
"Purchaser SEC Filings" has the meaning specified in Section
5.9.
"Purchaser Stockholders' Meeting" means the meeting of
Purchaser's stockholders referred to in Section 7.5, as originally
convened and as it may be continued following any temporary
adjournment or adjournments thereof.
"Recurring Charges" means expenses for services provided to
the Acquired Subsidiaries by ▇▇▇▇▇▇▇ and Seller and their
Affiliates other than the Acquired Subsidiaries consisting of
insurance premiums, corporate overhead, bank service fees and
guarantee fees.
"Registration Rights Agreement" means the Registration Rights
Agreement substantially in the form of Exhibit B to be entered
into at the Closing among Purchaser and Seller as provided in
Section 3.3.
"Release" means releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping.
"Retained Subsidiaries" means JTM Industries, Inc. ("JTM")
and its Subsidiary, KBK Enterprises, Inc.
"Revenue Canada" means Revenue Canada, Customs, Excise and
Taxation, the Canadian Federal Taxing Authority.
"SEC" means the United States Securities and Exchange
Commission or any successor agency.
"Securities Act" means the United States Securities Act of
1933, as amended, and the rules and regulations of the SEC
promulgated thereunder.
"Seller Consolidated Tax Group" means the affiliated group of
corporations within the meaning of Section 1504(c) of the Code, of
which Seller is the common parent corporation, which files a
consolidated Tax Return for U.S. federal income Tax purposes, and
which includes Seller, the Acquired U.S. Subsidiaries, the
Retained Subsidiaries and the other U.S. Subsidiaries of Seller.
"Seller Disclosure Schedule" means the Disclosure Schedule
signed for identification purposes only by the President, Chief
Executive Officer or Senior Vice President of Seller, which Seller
has delivered to Purchaser on or before the date of this
Agreement, and which contains information relevant to the
representations and warranties made by Seller in Article IV.
"Seller Employee Plans" has the meaning specified in Section
4.19.
"Seller Group" means, at any date, Seller and all of its
Affiliates at that date (but excluding after the Closing, the
Acquired Subsidiaries), and "member of the Seller Group" refers to
Seller or any such Affiliates.
"Seller Guaranty" means any guaranty, performance guaranty,
bond, performance bond, suretyship arrangement, surety bond,
credit, letter of credit, reimbursement agreement or other
undertaking, deposit commitment or arrangement by which any member
of the Seller Group is or may be primarily, secondarily,
contingently or conditionally liable for or in respect of (or
which creates, constitutes or evidences a Lien on any of the
assets or properties of any member of the Seller Group which
secures the payment or performance of) any present or future
liability or obligation of any Acquired Subsidiary as set forth in
Section 4.16 of the Seller Disclosure Schedule.
"Seller Pension Plan" has the meaning specified in Section
4.19.
"Seller's Post-Closing Taxes" has the meaning specified in
Section 12.1.
"Stock Option Plan" means collectively the ▇▇▇▇▇▇▇
Environmental Services, Inc. 1982 and 1993 Stock Option Plans.
"Subsidiary" of a Party means an Affiliate of that Party more
than 50% of the aggregate voting power (or of any other form of
voting equity interest in the case of a Person that is not a
corporation) of which is beneficially owned by that Party directly
or indirectly through one or more other Persons.
"Tax" means any tax of any kind, however denominated,
including any interest, penalties (civil or criminal), fines or
other additions to tax that may become payable in respect thereof
or in respect of a failure to comply with any requirement relating
to any Tax Return, imposed by any federal, territorial, state,
county, provincial or local Governmental Entity, including all
income, gross income, gross receipts, profits, goods and services,
social security, health, old age security, Canadian Pension Plan,
Quebec Pension Plan, sales and use, ad valorem, fees, excise,
custom, franchise, business license, property, capital stock,
production, occupation, real property gains, payroll and employee
withholding, unemployment or employment insurance, real and
personal property, stamp, environmental, transfer, workers'
compensation, payroll, severance, alternative minimum, windfall,
and capital taxes, premiums, surtaxes, charges, levies,
assessments, reassessments, and other obligations of the same or
a similar nature to any of the foregoing and any expenses incurred
in connection with the determination, settlement or litigation of
any Tax Controversy.
"Tax Allocation Agreements" means all contracts, agreements,
policies, practices, intercompany procedures and understandings,
whether written or oral, between any Acquired Subsidiary and any
other Person (including another Acquired Subsidiary) by which all
or any portion of any federal, state, provincial or local income
Tax is allocated to or shared or required to be paid by any
Acquired Subsidiary.
"Tax Benefit" means any credit carryover, carryback or other
reduction in otherwise required Tax payments. Such term does not
include a decrease in any Tax in one Tax period that results from
an adjustment in another Tax period, such as an increase in a
deduction for depreciation that results from a determination that,
in a previous Tax period, an expenditure is capitalized and not
deducted or an item of gain is recognized.
"Tax Controversy" means an audit, review, examination or any
other administrative or judicial proceeding (including any
determination with respect to a claim for refund) with the purpose
or effect of redetermining Taxes.
"Tax Liability Issue" has the meaning specified in Section
12.4.
"Tax Proceeding" has the meaning specified in Section 12.4.
"Tax Refund" means any rebate, refund or return of Taxes.
"Tax Returns" means all tax returns, declarations, reports,
estimates, information returns and statements required to be filed
with any Taxing Authority, or provided to any partner,
shareholder, joint venturer or member under U.S., Canadian or
foreign federal, state, provincial or local Laws (including
reports with respect to backup withholding and payments to Persons
other than Taxing Authorities and, where permitted or required,
combined or consolidated returns for any group of entities), and
annual tax returns or information returns on behalf of employee
benefit plans sponsored by Seller or Purchaser, as the case may
be, or any of their respective ERISA Affiliates.
"Taxing Authority" means any Governmental Entity responsible
for the imposition, assessment, enforcement or collection of any
Tax.
"Third-Party Claim" has the meaning specified in Section
14.3.
"Total Consideration" has the meaning specified in
Section 2.2.
"Transfer Taxes" has the meaning specified in Section 12.3.
"$" or "U.S. dollars" refers to lawful currency of the United
States.
"U.S. GAAP" means United States generally accepted accounting
principles consistently applied throughout the specified period
and the immediately preceding comparable period.
"Wages" has the meaning given such term by Section 3401(a) of
the Code.
"WARN Act" means the United States Worker Adjustment and
Retraining Notification Act of 1988.
"Westinghouse Debt" means the Purchaser's 7.75% Senior
Unsecured Debentures due March 31, 2005 and the Purchaser's 7.25%
Convertible Subordinated Debentures due March 31, 2005.
1.2 Interpretation. Capitalized terms defined in this Agreement
are equally applicable to both their singular and plural forms.
References to a designated "Article" or "Section" refer to an Article
or Section of this Agreement, unless otherwise specifically indicated.
In this Agreement, "including" is used only to indicate examples,
without limitation to the indicated examples, and without limiting any
generality which precedes it.
ARTICLE II
THE ACQUISITION
NCE Sale and Purchase of Shares. On the terms and subject to the
conditions of this Agreement, Seller agrees to sell, convey, assign and
transfer, free and clear of all Liens, and Purchaser agrees to
purchase, the Chem-Waste Shares, together with the Intercompany
Indebtedness of the U.S. Acquired Subsidiaries (the "Chem-Waste
Intercompany Indebtedness").
2.2 Consideration for Chem-Waste Shares and Chem-Waste
Intercompany Indebtedness. The consideration payable by Purchaser for
the Chem-Waste Shares and the Chem-Waste Intercompany Indebtedness (the
"Total Consideration") shall be:
(i) $225,000,000 payable in cash at the Closing (less the
principal amount at the Closing of the Bond Indebtedness specified in
Section 4.13 of Seller's Disclosure Schedule (the "Bond
Indebtedness"));
(ii) the Purchaser Common Shares to be issued and delivered
by Purchaser to Seller at the Closing; and
(iii) the Purchaser Convertible Debenture to be issued
and delivered by Purchaser to Seller at the Closing.
2.3 Total Consideration Allocation. The Total Consideration
shall be allocated to the Chem-Waste Intercompany Indebtedness at the
face value of such debt on the Closing Date in the following order to
the extent required: (i) the cash portion of the purchase price; (ii)
the Purchaser Convertible Debenture, which the parties agree shall be
valued at $350,000,000; and (iii) the Purchaser Common Shares; and the
remainder to the Chem-Waste Shares.
2.4 Cash Management Cut-Off. ▇▇▇▇▇▇▇ and Seller act as bankers
for the Acquired Subsidiaries and provide cash funding to the Acquired
Subsidiaries on a day-to-day basis with net positions, deposits and
withdrawals being incorporated into the amount of Intercompany
Indebtedness of the Acquired Subsidiaries. Purchaser, ▇▇▇▇▇▇▇ and
Seller agree that this procedure will continue in the normal course of
business to the close of business on the Closing Date and that any cash
receipts, remittances and collection advices received by the Acquired
Subsidiaries or the bank collection agencies prior to such time will be
for the account of ▇▇▇▇▇▇▇ and Seller and reduce the amount of
Intercompany Indebtedness of the Acquired Subsidiaries and any checks,
transfers, debit notices, drafts or other payment demands presented to
the counters of the bank disbursement agents for the Acquired
Subsidiaries prior to such time will be for the account of the Acquired
Subsidiaries and increase the amount of Intercompany Indebtedness of
the Acquired Subsidiaries.
2.5 Recurring Charges. ▇▇▇▇▇▇▇ and Seller and their Affiliates
incur Recurring Charges in the normal course of business, for which the
Acquired Subsidiaries reimburse ▇▇▇▇▇▇▇ and Seller and their Affiliates
on a monthly basis. Purchaser, ▇▇▇▇▇▇▇ and Seller agree that the
Recurring Charges for periods ending at the close of business on the
Closing Date shall be excluded from the amount of Intercompany
Indebtedness of the Acquired Subsidiaries on the Closing Date and shall
be paid by the Acquired Subsidiaries to ▇▇▇▇▇▇▇ and Seller and their
Affiliates in the normal course of business after closing.
ARTICLE III
THE CLOSING AND RELATED MATTERS
3.1 The Closing. The sale and purchase of the Chem-Waste Shares,
together with the Chem-Waste Intercompany Indebtedness (the "Closing")
shall take place at the offices of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
L.L.P. in New York, New York at 10:00 a.m. local time on the Closing
Date. At the Closing:
(i) Seller shall deliver to Purchaser:
(a) the certificates evidencing the Chem-Waste Shares,
duly endorsed in blank or accompanied by duly executed
stock powers, and in proper form for registration in the
name of Purchaser; and
(b) the assignment of the Chem-Waste Intercompany
Indebtedness, and
(ii) Purchaser shall deliver to Seller:
(a) $225,000,000 payable in cash (less the principal
amount at the Closing of the Bond Indebtedness);
(b) the Purchaser Common Shares; and
(c) the Purchaser Convertible Debenture.
All cash amounts payable by Purchaser at the Closing shall be
payable by wire transfers, to accounts designated in writing by Seller
at least two Business Days before the Closing Date, of U.S. dollar
funds immediately available in Toronto.
3.2 Actions in Contemplation of Closing. On or before the
Closing Date, and in any event not later than immediately before the
Closing:
(i) Purchaser and Seller shall have retired the Westinghouse
Debt in accordance with that certain Letter of Intent dated
January 6, 1997 by and among Purchaser, ▇▇▇▇▇▇▇ and Westinghouse
Electric Corporation.
(ii) The reorganization of Seller shall have occurred
substantially as described in Schedule II whereby Chem-Waste shall
own the entire Hazardous and Industrial Waste Business of Seller
and its Affiliates.
(iii) Chem-Waste shall have transferred to Seller as a
dividend on Chem-Waste's Shares all of the issued and outstanding
shares of JTM, a Retained Subsidiary.
(iv) Except as provided in Sections 2.5 and 3.3(ii), ▇▇▇▇▇▇▇
shall have contributed to the capital of each of the Canadian
Acquired Subsidiaries, in exchange for common shares, any and all
Intercompany Indebtedness of each of the Canadian Acquired
Subsidiaries as of the Closing Date.
3.3 Other Actions at the Closing. In addition to the
consummation of the Acquisition, the following actions shall take place
at the Closing:
(i) Purchaser and Seller shall enter into a Registration
Rights Agreement pertaining to the registration of the Purchaser
Common Shares, the Additional Purchaser Common Shares and the
Purchaser Convertible Debenture.
(ii) Purchaser shall cause the Canadian Acquired Subsidiaries
to repay to ▇▇▇▇▇▇▇ Intercompany Indebtedness owing to it in an
amount not to exceed $175,000,000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SELLER
The Seller and ▇▇▇▇▇▇▇ jointly and severally represent and warrant
to Purchaser that:
4.1 Organization of Seller and ▇▇▇▇▇▇▇. Seller is a corporation
duly organized, validly existing and in good standing under the Laws of
the State of Delaware. ▇▇▇▇▇▇▇ is a corporation duly organized,
validly existing and in good standing under the Laws of Canada. Seller
and ▇▇▇▇▇▇▇ each has full authority and corporate power to conduct its
business as it is currently being conducted and as to be conducted
following consummation of the Acquisition. Seller and ▇▇▇▇▇▇▇ are each
duly qualified to do business, and in good standing, in each
jurisdiction where the nature of its properties or business requires
such qualification.
4.2 Authority Relative to this Agreement. Seller and ▇▇▇▇▇▇▇
each has the requisite corporate power and authority to enter into and
perform its respective obligations under this Agreement and each
Ancillary Agreement to which each will be a party. The execution and
delivery of this Agreement and each Ancillary Agreement to which Seller
or ▇▇▇▇▇▇▇ will be a party, the consummation of the Acquisition, and
the other transactions contemplated in Articles II and III, have been
duly authorized by the Boards of Directors of Seller and ▇▇▇▇▇▇▇, and
no other corporate proceedings on the part of Seller or ▇▇▇▇▇▇▇,
including any approval by the stockholders of Seller or ▇▇▇▇▇▇▇, are
necessary to authorize this Agreement, any Ancillary Agreement to which
Seller or ▇▇▇▇▇▇▇ will be a party, the consummation of the Acquisition,
or the other transactions contemplated in Articles II and III. This
Agreement has been duly executed and delivered by Seller and ▇▇▇▇▇▇▇.
Each Ancillary Agreement required to be executed and delivered by
Seller or ▇▇▇▇▇▇▇ at the Closing will be, upon its or their execution
and delivery as provided in Section 3.3 or elsewhere in this Agreement
duly executed and delivered by Seller or ▇▇▇▇▇▇▇. Assuming the valid
authorization, execution and delivery of this Agreement (and each
Ancillary Agreement to which Purchaser will be a party) by Purchaser,
this Agreement is, and each Ancillary Agreement which to Seller or
▇▇▇▇▇▇▇ is a party will be, upon its execution and delivery at the
Closing as provided in Section 3.3 or elsewhere in this Agreement, a
valid and binding obligation of Seller or ▇▇▇▇▇▇▇, enforceable in
accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
Laws relating to or affecting creditors' rights generally or by
equitable principles.
4.3 Status of Chem-Waste Shares. Upon their transfer as provided
in Section 2.1, the Chem-Waste Shares will be duly authorized, validly
issued, fully paid and nonassessable. Seller has good and marketable
title to the Chem-Waste Shares, free and clear of any Liens, and the
transfer of the Chem-Waste Shares as provided in Section 2.1 will pass
good and marketable title to the Chem-Waste Shares, free and clear of
any Liens, other than any Liens granted in connection with the
financing specified in Section 9.5.
4.4 No Violations. The execution, delivery and performance of
this Agreement and the applicable Ancillary Agreements by Seller and
▇▇▇▇▇▇▇ and the consummation of the Acquisition and the other
transactions contemplated in Articles II and III will not:
(i) constitute a breach or violation of or default under the
charter or bylaws (or similar organizational documents) or
internal rules or regulations governing the conduct of corporate
actions of Seller, ▇▇▇▇▇▇▇ or any Acquired Subsidiary or any Law
applicable to Seller, ▇▇▇▇▇▇▇ or any Acquired Subsidiary; or
(ii) except as accurately reflected in Section 4.4 of the
Seller Disclosure Schedule, violate or conflict with, or result in
a breach of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination
under, or result in the creation of any Lien upon the Chem-Waste
Shares or any of the assets or properties of any Acquired
Subsidiary under, any contract, indenture, loan document, license,
permit, order, decree or instrument to which Seller, ▇▇▇▇▇▇▇ or
any Acquired Subsidiary is a party or by which any of them or
their assets or properties are bound.
4.5 Consents and Approvals. No consent, order, approval, waiver
or authorization of, or registration, application, declaration or
filing with, any Governmental Entity or other Person is required with
respect to Seller, ▇▇▇▇▇▇▇ or any Acquired Subsidiary in connection
with the execution and delivery of this Agreement or any Ancillary
Agreement, the consummation of the Acquisition, or the other
transactions contemplated in Articles II and III, except for:
(i) the HSR Act, Competition Act and Investment Canada Act
filings and approvals contemplated in this Agreement;
(ii) the consents and approvals described in Section 4.5 of
the Seller Disclosure Schedule; and
(iii) other cases, considered individually and in the
aggregate, in which any failure to make any such registration,
application, declaration or filing or to obtain any such consent,
order, approval, waiver or other authorization could not have a
Material Adverse Effect on the Acquired Subsidiaries, Seller or
▇▇▇▇▇▇▇.
4.6 Acquired Subsidiaries. Section 4.6 of the Seller Disclosure
Schedule sets forth with respect to each Acquired Subsidiary (i) its
jurisdiction of formation, (ii) each jurisdiction in which it is
qualified to do business as a foreign entity, (iii) its authorized,
issued and outstanding shares of capital stock or units and (iv) the
holder or holders of all of its issued and outstanding shares of
capital stock or units. Each Acquired Subsidiary is a corporation (or
a limited liability company in the case of ECDC Environmental, L.C.)
duly organized, validly existing and in good standing under the laws of
its jurisdiction of formation and has full authority and corporate
power to conduct its business as it is currently being conducted. Each
Acquired Subsidiary is duly qualified to do business, and in good
standing, in each jurisdiction where the nature of its properties or
business requires such qualification, except for failures to be so
qualified which could not, individually or in the aggregate, have a
Material Adverse Effect on the Acquired Subsidiaries.
All of the issued and outstanding shares of capital stock or units
of each Acquired Subsidiary are validly issued, fully paid and
nonassessable, and are owned of record and beneficially, and free of
any Liens, by Chem-Waste or another Acquired Subsidiary (as reflected
in Section 4.6 of the Seller Disclosure Schedule). Except as disclosed
in Section 4.6 of the Seller Disclosure Schedule, there are no
preemptive rights or outstanding subscriptions, options, warrants,
calls, rights, convertible securities, obligations to make capital
contributions or advances, voting trust arrangements, shareholders'
agreements or other agreements, commitments or understandings relating
to the capital stock or units of any Acquired Subsidiary.
Seller will deliver to Purchaser prior to Closing true and correct
copies of the charter and bylaws (or similar organizational documents)
of each Acquired Subsidiary. Each Acquired Canadian Subsidiary is a
"private company" within the meaning of the Ontario Securities Act.
4.7 No Other Subsidiaries. No Acquired Subsidiary has any
Subsidiary which is not another Acquired Subsidiary or a Retained
Subsidiary. Except as described in Section 4.7 of the Seller
Disclosure Schedule, and except for other Acquired Subsidiaries and
Retained Subsidiaries, no Acquired Subsidiary, directly or indirectly,
owns or is obligated to acquire any investment in any other
corporation, partnership, joint venture or other business entity.
ATA Conduct of Hazardous and Industrial Waste Business. The
Seller Group is engaged in the Hazardous and Industrial Waste Business
only through the Acquired Subsidiaries, and neither Seller, any
Retained Subsidiary, nor any member of the Seller Group other than the
Acquired Subsidiaries conducts any operations associated with, or owns
any assets or properties used in, or holds any permits or licenses used
in, the Hazardous and Industrial Waste Business. None of the Acquired
Subsidiaries is or has been engaged in any business other than the
Hazardous and Industrial Waste Business or owns or has owned any assets
or properties which are used in any business other than the Hazardous
and Industrial Waste Business.
4.9 SEC Filings. ▇▇▇▇▇▇▇ has filed all forms, reports and
documents required to be filed with the SEC since August 31, 1995 and
▇▇▇▇▇▇▇ has made available to the Purchaser true and complete copies of
(i) ▇▇▇▇▇▇▇'▇ Annual Report on Form 10-K for the year ended August 31,
1995, and (ii) all other reports, statements and registration
statements (including Current Reports on Form 8-K) filed by ▇▇▇▇▇▇▇
with the SEC since September 1, 1995 (collectively, the "▇▇▇▇▇▇▇ SEC
Filings"). The ▇▇▇▇▇▇▇ SEC Filings (including all financial statements
or schedules included in them) (i) were prepared in compliance in all
material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time of
filing (or if amended, supplemented or superseded by a later filing, on
the date of the later filing) contain any untrue statement of a
material fact or omit 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.
4.10 Seller Financial Statements. Seller and ▇▇▇▇▇▇▇ have
delivered to Purchaser combined balance sheets of the Acquired
Subsidiaries (prepared as a separate combined group of corporations for
financial reporting purposes) audited at August 31, 1996 and August 31,
1995 and unaudited at November 30, 1996 and November 30, 1995, and the
related combined statements of operations and cash flows audited for
the respective years ended August 31, 1996, 1995 and 1994 and unaudited
for the three-month periods ended November 30, 1996 and 1995 (the
"Chem-Waste Group Financial Statements").
The Chem-Waste Group Financial Statements have been prepared in
accordance with U.S. GAAP and have been prepared by combining the
relevant financial statements in accordance with U.S. GAAP applicable
to the preparation of combined financial statements.
The Chem-Waste Group Financial Statements fairly present in all
material respects the combined financial position of the Acquired
Subsidiaries covered thereby at the respective dates thereof, and the
results of their combined operations and cash flows for the Acquired
Subsidiaries covered thereby for the respective periods indicated, in
accordance with U.S. GAAP except for the omission of explanatory
footnote disclosures with respect to the interim period Chem-Waste
Group Financial Statements ended and as of November 30, 1996 and
November 30, 1995.
4.11 Absence of Certain Changes. Except as set forth in Section
4.11 of the Seller Disclosure Schedule, since November 30,1996, the
Acquired Subsidiaries have conducted their businesses only in the
ordinary course, consistent with past practice, and there has not
occurred a Material Adverse Effect with respect to the Acquired
Subsidiaries or any event that could result in a Material Adverse
Effect with respect to the Acquired Subsidiaries.
4.12 No Undisclosed Liabilities. Except as disclosed on the
August 31, 1996 and the November 30, 1996 Acquired Subsidiaries balance
sheets or as set forth in Sections 4.12 and 4.15 of the Seller
Disclosure Schedule, no Acquired Subsidiary has any liabilities or
obligations, known or unknown, fixed or contingent, other than (i)
those liabilities and obligations arising since August 31, 1996 in the
ordinary course of its business and consistent with its past practice,
(ii) liabilities and obligations arising after the date of this
Agreement without violation of Sections 6.1 and 6.2, or (iii)
liabilities and obligations that, individually or in the aggregate,
could not result in a Material Adverse Effect on the Acquired
Subsidiaries.
4.13 Acquired Subsidiary Properties. The Acquired Subsidiaries
have good and marketable title to their respective Seller Properties
and assets, including those reflected in the Chem-Waste Group Combined
Financial Statements (other than properties and assets disposed of in
the ordinary course of business since August 31, 1996, which in the
aggregate are not material), free of all Liens except Permitted Liens
and Liens disclosed in Section 4.13 of the Seller Disclosure Schedule.
4.14 Taxes and Tax Returns. Except as described in Section 4.14
of the Seller Disclosure Schedule:
(i) all Tax Returns required to be filed with any Taxing
Authority with respect to any Pre-Closing Tax Period by or on
behalf of the Acquired Subsidiaries have been duly filed on a
timely basis in accordance with all applicable Laws, or will be
timely filed in accordance with Section 12.1;
(ii) at the time of their filings all such Tax Returns were
or will be, in all respects, true, complete and correct;
(iii) Seller and the Acquired Subsidiaries have, and
within the time and in the manner prescribed by Law, paid all
Taxes that are due and payable;
(iv) the reserves for Taxes reflected in the Chem-Waste Group
Financial Statements are adequate (in accordance with U.S. GAAP)
to cover all Taxes that have not been paid, but which under U.S.
GAAP were accruable, through the date of the Chem-Waste Group
Financial Statements;
(v) there are no Liens for Taxes upon any assets of any
Acquired Subsidiary, except Liens for Taxes not yet due for
current Tax periods ending on or after the Closing Date;
(vi) there are no outstanding deficiencies, assessments or
written proposals for the assessment of Taxes proposed, pending,
asserted or assessed against any Acquired Subsidiary, or for which
any Acquired Subsidiary could be directly or indirectly liable and
there is no basis for any additional assessment or reassessment
for any Taxes for which adequate provision has not been made in
the books and records of the Acquired Subsidiaries;
(vii) no extension of the statute of limitations or
waiver of normal reassessment periods on the assessment of any
Taxes has been requested or granted to or on behalf of any
Acquired Subsidiary.
4.15 Litigation. Except as disclosed in Section 4.15 of the
Seller Disclosure Schedule, there is no suit, action, investigation or
proceeding pending or, to the knowledge of Seller or ▇▇▇▇▇▇▇,
threatened against any of the Acquired Subsidiaries at law or in equity
before or by any Governmental Entity or before any arbitrator or
mediator of any kind, that could have a Material Adverse Effect on the
Acquired Subsidiaries, and there is no judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator or mediator to
which any Acquired Subsidiary (or any of its assets or properties) is
subject that could have a Material Adverse Effect on the Acquired
Subsidiaries. There is no suit, action, investigation or proceeding
pending or, to the knowledge of Seller or ▇▇▇▇▇▇▇, threatened against
any Acquired Subsidiary at law or in equity before or by any
Governmental Entity or before any arbitrator or mediator of any kind,
that could have a Material Adverse Effect on any Acquired Subsidiary,
and there is no judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator or mediator to which any Acquired
Subsidiary is subject that could have a Material Adverse Effect on any
Acquired Subsidiary. Neither Seller nor ▇▇▇▇▇▇▇ has knowledge of any
grounds on which any suit, action, investigation or proceeding of the
nature referred to in this Section 4.15 might be commenced with any
reasonable likelihood of success.
4.16 Environmental Matters.
(i) To the knowledge of Seller or ▇▇▇▇▇▇▇, no Acquired
Subsidiary has transported, stored, received, treated or disposed
of, nor has any Acquired Subsidiary arranged for any third parties
to transport, receive, store, treat or dispose of, waste to or at
(a) any location other than a site where the receipt of such waste
for such purposes was not at the time of such receipt unlawful or
(b) any location designated for remedial action pursuant to the
United States Comprehensive Environmental Response, Compensation
and Liability Act, as from time to time amended, or any similar
Law assigning responsibility for the cost of investigating or
remediating releases of Hazardous Substances into the environment,
except to the extent such action would not have a Material Adverse
Effect on the business, results of operations or financial
condition of the Acquired Subsidiaries, or as set forth in Section
4.16 of the Seller Disclosure Schedule.
(ii) Except as set forth in Section 4.16 of the Seller
Disclosure Schedule, no Acquired Subsidiary has received written
notice that any location to which waste has been transported,
stored or disposed of by any Acquired Subsidiary has been
designated for remedial action pursuant to any applicable Law
relating to responsibility for the cost of investigating or
remediating releases of Hazardous Substances into the environment.
Set forth in Section 4.16 of the Seller Disclosure Schedule is, to
the knowledge of Seller or ▇▇▇▇▇▇▇, a complete and accurate list
of locations to which any Acquired Subsidiary has ever
transported, or ever caused to be transported, allowed or arranged
for any third party to transport, any type of waste material
generated by customers of any Acquired Subsidiary for storage,
treatment, burning, recycling or disposal.
(iii) Compliance. To Seller's or ▇▇▇▇▇▇▇'▇ knowledge,
each Acquired Subsidiary and their respective processes,
operations, transportation, storage and disposal activities and
undertakings have been and are in compliance with all
Environmental Laws (including reporting and record keeping
requirements), except to the extent any such noncompliance would
not have a Material Adverse Effect on the business, results of
operations or financial condition of the Acquired Subsidiaries or
as set forth in Section 4.16 of the Seller Disclosure Statement or
noncompliances that have been fully and finally resolved. To
Seller's or ▇▇▇▇▇▇▇'▇ knowledge, the Acquired Subsidiaries have
received no Notice of noncompliance, and neither Seller nor
▇▇▇▇▇▇▇ has knowledge of any facts which could give rise to a
Notice of noncompliance, with any Environmental Laws, except to
the extent any such noncompliance would not have a Material
Adverse Effect on the business, results of operations or financial
condition of the Acquired Subsidiaries, or as set forth in Section
4.16 of the Seller Disclosure Schedule.
(iv) Environmental Permits. Except as set forth on Section
4.16 of the Seller Disclosure Schedule and except to the extent
that the failure to obtain an Environmental Permit would not have
a Material Adverse Effect on the business, results of operations
or financial condition of the Acquired Subsidiaries, the Acquired
Subsidiaries have obtained all Environmental Permits which are
required for the operation of the Acquired Subsidiaries' business
as presently conducted, all of which Environmental Permits are
listed in Section 4.16 of the Seller Disclosure Schedule. To the
knowledge of Seller or ▇▇▇▇▇▇▇, all such Environmental Permits are
valid and in full force and effect, and no violations thereof have
been experienced, noted or recorded by any administrative or
regulatory agency, except for violations that have been fully and
finally resolved and violations which would not have a Material
Adverse Effect on the business, results of operations or financial
condition of the Acquired Subsidiaries, or as set forth in Section
4.16 of the Seller Disclosure Schedule, and no proceeding is
pending or, to the knowledge of Seller or ▇▇▇▇▇▇▇, threatened to
revoke or limit any of them.
(v) No Offenses. Except as disclosed in Section 4.16 of the
Seller Disclosure Schedule, within the past seven (7) years, the
Acquired Subsidiaries have never been convicted of a criminal
offense for noncompliance with any Environmental Laws, or been
fined or otherwise sentenced in or settled any such criminal
prosecution short of conviction.
(vi) No Release of Hazardous Substances. Except as disclosed
in Section 4.16 of the Seller Disclosure Schedule, to the
knowledge of Seller or ▇▇▇▇▇▇▇, no Acquired Subsidiary has
received any Notice which alleges that any Acquired Subsidiary is
liable for (a) the Release of any Hazardous Substances on or off-
site of its property in a manner that fails to comply with
applicable Environmental Laws or (b) any Environmental Release
from a facility owned or operated by third parties.
(vii) Disposal Sites. Except as set forth in Section
4.16 of the Seller Disclosure Schedule, to the knowledge of Seller
or ▇▇▇▇▇▇▇, no Acquired Subsidiary has received Notice that any
Acquired Subsidiary is a potentially responsible party for a
federal, state, provincial or local clean-up site or for
corrective action under any Environmental Law. Except as set
forth in Section 4.16 of the Seller Disclosure Schedule, to the
knowledge of Seller or ▇▇▇▇▇▇▇, no Acquired Subsidiary has
received any written request for information from a regulatory
agency with respect to a disposal or contaminated site.
(viii) Environmental Audits. To Seller's or ▇▇▇▇▇▇▇'▇
knowledge, each of the Acquired Subsidiaries has made available to
Purchaser all environmental audits, evaluations and assessments in
their possession which concern any Acquired Subsidiary.
(ix) Financial Assurances. Section 4.16 of the Seller
Disclosure Schedule sets forth a list of each Seller Guaranty
currently maintained pursuant to the requirements of applicable
Environmental Laws with regard to the assets and activities of any
Acquired Subsidiary.
(x) Landfills. Section 4.16 of the Seller Disclosure
Schedule lists each Seller Group landfill and accurately describes
each such landfill by its city or county and state or province of
location, total acreage, permitted acreage, estimated remaining
permitted capacity in cubic yards, estimated or mandated closure
date, and estimated closure, post-closure and reclamation
liability at its projected or mandated closure date (computed at
the closure date with and without discount to present value) and
any other recorded or unrecorded accruals, contingent or
otherwise, or reserves related to landfill liabilities of any
type.
4.17 Governmental Licenses and Permits; Compliance with Laws.
Except as described in Section 4.17 of the Seller Disclosure Schedule,
no Acquired Subsidiary has received any notice of any revocation or
modification of any license, certification, tariff, permit,
registration, exemption, approval or other authorization by any
Governmental Entity which remains outstanding. The conduct of the
business of each Acquired Subsidiary complies and has been conducted in
compliance with all applicable Laws, except for violations or failures
to comply, if any, that, individually or in the aggregate, could not
have a Material Adverse Effect on the Acquired Subsidiaries.
4.18 Labor Matters. Section 4.18 of the Seller Disclosure
Schedule lists and describes each collective bargaining agreement
covering employees of any Acquired Subsidiary. Except as disclosed in
Section 4.18 of the Seller Disclosure Schedule, (i) no Acquired
Subsidiary is a party to or bound by any collective bargaining or
similar agreement with any labor organization applicable to employees
of any Acquired Subsidiary, (ii) there is no labor strike, dispute,
slowdown, work stoppage, unresolved material labor union grievance or
labor arbitration proceedings pending or, to the knowledge of Seller,
threatened against any Acquired Subsidiary, and (iii) to the knowledge
of Seller or ▇▇▇▇▇▇▇, there are no current union organizing activities
among employees of any Acquired Subsidiary.
Since the enactment of the WARN Act, no Acquired Subsidiary has
effectuated (i) a "plant closing" (as defined in the WARN Act)
affecting any site of employment or one or more facilities or operating
units within any site of any employment or facility of an Acquired
Subsidiary. No Acquired Subsidiary has been affected by any
transaction or engaged in layoffs or employment terminations sufficient
in number to trigger application of any similar Canadian federal,
state, provincial or local Law. Except as set forth in Section 4.18 of
the Seller Disclosure Schedule, no employees of any Acquired Subsidiary
have suffered an "employment loss" (as defined in the WARN Act) since
December 31, 1995.
4.19 Employee Benefit Plans. Section 4.19 of the Seller
Disclosure Schedule sets forth each retirement, pension, bonus, stock
purchase, profit sharing, stock option, deferred compensation,
severance or termination pay, insurance, medical, hospital, dental,
vision care, drug, sick leave, disability, salary continuation, legal
benefits, unemployment benefits, vacation, incentive or other
compensation plan or arrangement or other employee benefit which is
maintained, or otherwise contributed to or required to be contributed
to, by any of the Acquired Subsidiaries, any member of the Seller Group
or any ERISA Affiliate of Seller for the benefit of employees or former
employees and directors or former directors of any of the Acquired
Subsidiaries and their spouses, dependents or beneficiaries (the
"Seller Employee Plans"). True and correct copies of each of the
Seller Employee Plans have been delivered to Purchaser, along with the
most recent annual report for each Seller Employee Plan, any trust
agreement relating to each Seller Employee Plan and the most recent
summary plan description, actuarial report and determination letter for
each Seller Employee Plan. Each of the Acquired Subsidiaries has
complied, and currently is in compliance, both as to form and
operation, in all material respects, with the applicable provisions of
ERISA and each other Law or regulation imposed or administered by any
Governmental Entity with respect to each of the Seller Employee Plans.
Except as set forth in Section 4.19 of the Seller Disclosure Schedule,
none of the Acquired Subsidiaries has at any time maintained, adopted,
established, contributed to or been required to contribute to,
otherwise participated in or been required to participate in, or had
any liability with respect to, any "employee benefit plan" within the
meaning of section 3(3) of ERISA. All Seller Employee Plans providing
pension or retirement benefits or obligations to current or former
employees or their spouses, dependents and beneficiaries are referred
to collectively as "Seller Pension Plan" and identified in Section 4.19
of the Seller Disclosure Schedule. Except as set forth in Section 4.19
of the Seller Disclosure Schedule, no provision concerning the Seller
Pension Plan is contained in any collective bargaining agreement
affecting any current or former employees of any Acquired Subsidiary.
Each Seller Pension Plan that is required to be qualified under Section
401(a) and Section 501(a) of the Code has received a determination
letter to such effect and no event has occurred which is reasonably
likely to result in the disqualification of any such Seller Pension
Plan. The Seller Pension Plan is registered under, and is in material
compliance with, applicable Law. All contributions to, and payments
from, each Seller Employee Plan which may have been required to be made
in accordance with the terms of any such Seller Employee Plan and,
where applicable, the Laws which govern such Seller Employee Plan, have
been made in a timely manner, and each Seller Employee Plan has
otherwise at all times been administered in accordance with its terms
and applicable Law in all material respects. All material reports, Tax
Returns and similar documents with respect to any Seller Employee Plan
required to be filed with any Governmental Entity or distributed to any
Seller Employee Plan participant have been duly filed on a timely basis
or distributed. There are no pending investigations by any
Governmental Entity involving or relating to any Seller Employee Plan,
no threatened or pending claims (except for claims for benefits payable
in the normal operation of the Seller Employee Plans), suits or
proceedings against any Seller Employee Plan or asserting any rights or
claims to benefits under any Seller Employee Plan which could give rise
to a liability nor, to the knowledge of Seller or ▇▇▇▇▇▇▇, are there
any facts that could give rise to any liability in the event of any
such investigation, claim, suit or proceeding. No Notice has been
received by Seller or any of the Acquired Subsidiaries of any
complaints or other proceedings of any kind involving any of the
Acquired Subsidiaries or any of the employees of any of the Acquired
Subsidiaries or other potential claimants before any Governmental
Entity relating to any Seller Employee Plan or to any of the Acquired
Subsidiaries and to the knowledge of Seller or ▇▇▇▇▇▇▇, there is no
basis for any such claims. Except as set forth in Section 4.19 of the
Seller Disclosure Schedule, the assets of each Seller Employee Plan are
at least equal to the liabilities, contingent or otherwise, of such
Seller Employee Plan on a plan termination basis, and each Seller
Pension Plan is fully funded on a going concern and solvency basis in
accordance with its terms, applicable actuarial recommendations and
applicable Law. Neither Seller, ▇▇▇▇▇▇▇ nor any of the Acquired
Subsidiaries contribute to or have an obligation to contribute to, and,
to the knowledge of Seller or ▇▇▇▇▇▇▇, have not within 6 years prior to
the date of this Agreement contributed to or had an obligation to
contribute to, a multi-employer plan within the meaning of Section
3(37) of ERISA. No event has occurred and, to the knowledge of Seller
or ▇▇▇▇▇▇▇, there exists no condition or set of circumstances in
connection with which Purchaser, any of its Affiliates or the Acquired
Subsidiaries could be subject to any liability under the terms of each
Seller Employee Plan or under any applicable law of any Governmental
Entity, other than any condition or set of circumstances that could not
have a Material Adverse Effect on the Acquired Subsidiaries. In
connection with the consummation of the transactions contemplated by
this Agreement, no payments have or will be made under a Seller
Employee Plan which, in the aggregate, would be nondeductible under
Section 280G of the Code.
The beneficiaries under all Seller Employee Plans shall consist
only of employees or former employees and directors or former directors
of any of the Acquired Subsidiaries and their spouses, dependents or
beneficiaries. No Acquired Subsidiary shall have any liability under
the Seller Employee Plans.
4.20 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission from Seller,
▇▇▇▇▇▇▇ or any Acquired Subsidiary in connection with this Agreement or
the Acquisition based upon arrangements made by or on behalf of Seller.
4.21 Material Contracts. Section 4.21 of the Seller Disclosure
Schedule lists all of the following written or oral contracts,
agreements and commitments (collectively, the "Seller Group
Contracts"):
(i) all employment, consulting or personal services
agreements or contracts with any present or former officer,
director or employee of any Acquired Subsidiary who has an annual
salary of $250,000 or more (determined by using the currency in
which they are paid);
(ii) all hazardous waste management agreements and contracts
(including those relating to the receipt, transport, disposal or
other management of waste) between any Acquired Subsidiary and any
municipality or other Governmental Entity or Person which resulted
in annual payments in the 1996 fiscal year to or by any Acquired
Subsidiary of $2,000,000 or more, which list includes the term of
such agreements or contracts;
(iii) all contracts, agreements, agreements in principle,
letters of intent and memoranda of understanding which call for or
contemplate the future disposition (including restrictions on
transfer and rights of first offer or refusal) or acquisition of
(or right to acquire) any interest in any business enterprise, and
all contracts, agreements and commitments relating to the future
disposition of a material portion of the assets and properties of
any Acquired Subsidiary other than in the ordinary course of
business;
(iv) all contracts, agreements with, or commitments to, any
Person containing any provision or covenant relating to the
indemnification or holding harmless by any Acquired Subsidiary of
any Person which could result in a liability to an Acquired
Subsidiary of $250,000 or more;
(v) all leases or subleases of real property used in the
conduct of business of any Acquired Subsidiary providing for
annual rental payments to be paid by or on behalf of an Acquired
Subsidiary of more than $250,000 in each case;
(vi) all contracts or agreements committing any Acquired
Subsidiary to make a capital expenditure in excess of $250,000;
(vii) all guaranties or other commitments or undertakings
under which any Acquired Subsidiary may be primarily, secondarily,
contingently or conditionally liable for or in respect of (or
which creates, constitutes or evidences a Lien on) any of the
assets or properties of any Acquired Subsidiary which secures the
payment or performance on any present or future liability or
obligation of or to any member of the Seller Group or any officer
or director of the Seller Group; and
(viii) all Seller Guaranties.
Seller and ▇▇▇▇▇▇▇ shall make available to Purchaser within 15
days of the Closing a true and correct copy of each Seller Group
Contract. Each of the Seller Group Contracts is in full force and
effect and constitutes a legal, valid and binding obligation of the
Acquired Subsidiary which is a party to it, and, to the knowledge of
Seller or ▇▇▇▇▇▇▇, of each other Person that is a party to it. Except
as set forth in Section 4.21 of the Seller Disclosure Schedule, no
Acquired Subsidiary is, and, to the knowledge of Seller or ▇▇▇▇▇▇▇, no
other party to any Seller Group Contract is, in violation, breach or
default of such Seller Group Contract or, with or without notice or
lapse of time or both, would be in violation, breach or default of any
such Seller Group Contract, except for any violation, breach or default
which, individually or in the aggregate, could not result in a Material
Adverse Effect on the Acquired Subsidiaries. Except as set forth in
Section 4.21 of the Seller Disclosure Schedule, no Seller Group
Contract provides that any party thereto other than the Acquired
Subsidiary which is a party to such Seller Group Contract may terminate
such Seller Group Contract by reason of the execution of this Agreement
or the consummation of the Acquisitions.
4.22 Bank Accounts. Section 4.22 of the Seller Disclosure
Schedule lists each bank, trust company or similar institution with
which any Acquired Subsidiary maintains an account or safe deposit box,
and accurately identifies each such account or safe deposit box by its
number or other identification and the names of all individuals
authorized to draw thereon or have access thereto.
4.23 Officers and Directors. Section 4.23 of the Seller
Disclosure Schedule accurately lists by name and title all officers and
directors of each Acquired Subsidiary.
4.24 Condition and Sufficiency of Assets. The buildings, plants,
structures, and equipment of the Acquired Subsidiaries are structurally
sound, are in good operating condition and repair, and are adequate for
the uses to which they are being put, and none of such buildings,
plants, structures or equipment is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are not
material in nature or cost. The building, plants, structures and
equipment of the Acquired Subsidiaries are sufficient for the continued
conduct of the Acquired Subsidiaries' businesses after the Closing Date
in substantially the same manner as conducted prior to the Closing
Date.
4.25 Affiliate Transactions. Neither ▇▇▇▇▇▇▇, nor Seller, nor any
Affiliate of ▇▇▇▇▇▇▇ or Seller, has entered into directly or indirectly
any transaction (including without limitation the purchase, lease, sale
or exchange of property of any kind or the rendering of any service)
with any Acquired Subsidiary, except in the ordinary course and
pursuant to the reasonable requirements of such Acquired Subsidiary's
business and upon fair and reasonable terms no less favorable to such
Acquired Subsidiary than would be obtainable in a comparable arm's-
length transaction with a Person not ▇▇▇▇▇▇▇, Seller or an Affiliate of
▇▇▇▇▇▇▇ or Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF
PURCHASER
Purchaser represents and warrants to Seller and ▇▇▇▇▇▇▇ that:
5.1 Organization of Purchaser Parties. Purchaser is a
corporation duly organized, validly existing and in good standing under
the Laws of the State of Delaware. Purchaser has full authority and
corporate power to conduct its business as it is currently being
conducted and as to be conducted following consummation of the
Acquisition. Purchaser is duly qualified to do business, and in good
standing, in each jurisdiction where the nature of its properties or
business requires such qualification.
5.2 Authority Relative to this Agreement. Purchaser has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and each Ancillary Agreement to which
it will be a party. The execution and delivery of this Agreement and
each Ancillary Agreement to which Purchaser will be a party, the
consummation of the Acquisition, the issuance or delivery of Purchaser
Securities, and the other transactions contemplated in Articles II and
III, have been duly authorized by the Board of Directors of Purchaser,
and except for the approval by Purchaser's stockholders of the
Acquisition, the issuance by Purchaser in connection with the
Acquisition of the Purchaser Common Shares and the Additional Purchaser
Common Shares, no other corporate proceedings on the part of Purchaser
are necessary to authorize this Agreement, any Ancillary Agreement to
which Purchaser will be a party, the issuance and delivery of the
Purchaser Securities, the consummation of the Acquisition, or the other
transactions contemplated in Articles II and III. This Agreement has
been duly executed and delivered by Purchaser. The Purchaser
Convertible Debenture, and each Ancillary Agreement required to be
executed and delivered by Purchaser at the Closing will be, upon its or
their execution and delivery as provided in Section 3.3 or elsewhere in
this Agreement, duly executed and delivered by Purchaser. Assuming the
valid authorization, execution and delivery of this Agreement (and each
Ancillary Agreement to which Seller or ▇▇▇▇▇▇▇ will be a party) by
Seller and by ▇▇▇▇▇▇▇, this Agreement is, and upon its issuance and
delivery at the Closing, the Purchaser Convertible Debenture will be,
and upon its execution and delivery by Purchaser, each Ancillary
Agreement to which Purchaser is a party will be, a valid and binding
obligation of Purchaser, enforceable in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other Laws relating to or affecting
creditors' rights generally or by equitable principles.
5.3 Status of Purchaser Common Shares. Upon their issuance as
provided in Section 2.2, the Purchaser Common Shares will be, and upon
any issuance thereof by the Purchaser, the Additional Purchaser Common
Shares will be, duly authorized, validly issued, fully paid and
nonassessable.
5.4 No Violations. The execution, delivery and performance of
this Agreement and the applicable Ancillary Agreements by the
Purchaser, the issuance and delivery by Purchaser of the Purchaser
Securities, and the consummation of the Acquisition and the other
transactions contemplated in Articles II and III will not:
(i) constitute a breach or violation of or default under the
charter or bylaws of Purchaser or any of its Subsidiaries or any
Law applicable to Purchaser or any of its Subsidiaries; or
(ii) except as accurately reflected in Section 5.4 of the
Purchaser Disclosure Schedule, violate or conflict with, or result
in a breach of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the
performance by, or result in a right of termination under, or
result in the creation of any Lien upon the assets or properties
of Purchaser or any of its Subsidiaries under, any contract,
indenture, loan document, license, permit, order, decree or
instrument to which Purchaser or any of its Subsidiaries is a
party or by which any of them or their assets or properties are
bound.
5.5 Consents and Approvals. No consent, order, approval, waiver,
authorization of, or registration, application, declaration or filing
with, any Governmental Entity or other Person is required with respect
to Purchaser or any Subsidiary of Purchaser in connection with the
execution and delivery of this Agreement, the issuance of the Purchaser
Securities, the consummation of the Acquisition, or the other
transactions contemplated in Articles II and III, except for:
(i) the HSR Act, Competition Act and Investment Canada Act
filings and approvals contemplated in this Agreement;
(ii) the consents and approvals described on Section 5.5 of
the Purchaser Disclosure Schedule;
(iii) the approval by Purchaser's stockholders, as
contemplated in Section 7.5; and
(iv) other cases, considered individually and in the
aggregate, in which any failure to make any such registration,
application, declaration or filing or to obtain any such consent,
order, approval, waiver or other authorization could not have a
Material Adverse Effect on Purchaser and its Subsidiaries.
5.6 Purchaser Capitalization. The authorized capital stock of
Purchaser consists of (i) 120 million shares of Purchaser Common Stock
and (ii) 1 million shares of Preferred Stock, $1.00 par value, of
Purchaser ("Purchaser Preferred Stock"). At September 30, 1996,
60,375,811 shares of Purchaser Common Stock, and no shares of Purchaser
Preferred Stock, were issued and outstanding, all of which were duly
and validly issued, fully paid and nonassessable. Except as set forth
in the Purchaser SEC Filings or Section 5.6 of the Purchaser Disclosure
Schedule, no subscription, warrant, option, convertible security, stock
appreciation or other right (contingent or other) to purchase or
acquire any shares of any class of capital stock of Purchaser or any of
its Subsidiaries is authorized or outstanding and there is not
outstanding any commitment of Purchaser or any of its Subsidiaries to
issue any shares, warrants, options or other such rights or to
distribute to holders of any class of its capital stock any evidences
of indebtedness or assets. Except as set forth in the Purchaser SEC
Filings, neither Purchaser nor any of its Subsidiaries has any
contingent or other obligation to purchase, redeem or otherwise acquire
any shares of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof. Except as
set forth in the Purchaser SEC Filings, Purchaser is not a party to any
voting agreement, voting trust or similar agreement or arrangement
relating to its capital stock or any agreement or arrangement relating
to or providing for registration rights with respect to its capital
stock.
5.7 Purchaser Subsidiaries. Section 5.7 of the Purchaser
Disclosure Schedule sets forth with respect to each Subsidiary (i) its
jurisdiction of incorporation, (ii) each jurisdiction in which it is
qualified to do business as a foreign corporation, (iii) its
authorized, issued and outstanding shares of capital stock, and (iv)
the holder or holders of all of its issued and outstanding shares of
capital stock. Each Subsidiary of Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full authority and corporate
power to conduct its business as it is presently being conducted. Each
Subsidiary of Purchaser is duly qualified to do business, and in good
standing, in each jurisdiction where the nature of its properties or
business requires such qualification, except for failures to be so
qualified which could not, individually or in the aggregate, have
Material Adverse Effect on Purchaser and its Subsidiaries.
Except as accurately disclosed in Section 5.7 of the
Purchaser Disclosure Schedule, all of the issued and outstanding shares
of capital stock of each Subsidiary of Purchaser are validly issued,
fully paid and nonassessable and are owned of record and beneficially
by Purchaser or a wholly owned direct or indirect Subsidiary of
Purchaser. Except as set forth in Section 5.7 of the Purchaser
Disclosure Schedule, there are no preemptive rights or outstanding
subscriptions, options, warrants, calls, rights, convertible
securities, obligations to make capital contributions or advances,
voting trust arrangements, shareholders' agreements or other
agreements, commitments or understandings relating to the issued and
outstanding capital stock of any Subsidiary of Purchaser. Except as
described in Section 5.7 of the Purchaser Disclosure Schedule,
Purchaser does not, directly or indirectly, have any equity investment
in any corporation, partnership or joint venture or other business
entity.
5.8 Conduct of Hazardous and Industrial Waste Business.
Purchaser is engaged in the Hazardous and Industrial Waste Business.
Purchaser is not currently nor has been engaged in any business other
than the Hazardous and Industrial Waste Business or owns or has owned
any assets or properties which are used in any business other than the
Hazardous and Industrial Waste Business.
5.9 SEC Filings. Purchaser has filed all forms, reports and
documents required to be filed with the SEC since January 1, 1993 and
Purchaser has made available to the Seller true and complete copies of
(i) Purchaser's Annual Report on Form 10-K for the year ended September
30, 1995, and (ii) all other reports, statements and registration
statements (including Current Reports on Form 8-K) filed by Purchaser
with the SEC since January 1, 1993 (collectively, the "Purchaser SEC
Filings"). The Purchaser SEC Filings (including all financial
statements or schedules included in them) (i) were prepared in
compliance in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (ii) did
not at the time of filing (or if amended, supplemented or superseded by
a later filing, on the date of the later filing) contain any untrue
statement of a material fact or omit 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.
5.10 Purchaser Financial Statements. The consolidated balance
sheets and consolidated statements of operations, stockholder's equity
and cash flows of Purchaser and its Subsidiaries included in the
Purchaser SEC Filings fairly present in all material respects the
consolidated financial position of Purchaser and its Subsidiaries at
their respective dates and the consolidated results of operations of
Purchaser and its Subsidiaries for the respective periods then ended,
in accordance with U.S. GAAP. Purchaser's audited consolidated balance
sheet at September 30, 1996 included in the Purchaser SEC Filings is
herein called the "Purchaser Balance Sheet."
5.11 Absence of Certain Changes. Except as set forth in Section
5.11 of the Purchaser Disclosure Schedule, since September 30, 1996,
Purchaser and its Subsidiaries have conducted their businesses only in
the ordinary course, consistent with past practice, and there has not
occurred a Material Adverse Effect with respect to Purchaser and its
Subsidiaries or any event that could result in a Material Adverse
Effect on Purchaser and its Subsidiaries.
5.12 No Undisclosed Liabilities. Except as disclosed in the
Purchaser Balance Sheet or in Sections 5.12 and 5.15 of the Purchaser
Disclosure Schedule, Purchaser and its Subsidiaries have no liabilities
or obligations, known or unknown, fixed or contingent, other than (i)
those liabilities and obligations arising since September 30, 1996 in
the ordinary course of business and consistent with past practice, (ii)
liabilities and obligations arising after the date of this Agreement
without violation of Sections 7.1 and 7.2, or (iii) liabilities and
obligations that, individually or in the aggregate, could not result in
a Material Adverse Effect on Purchaser and its Subsidiaries.
5.13 Purchaser Properties. Purchaser and its Subsidiaries have
good and marketable title to the owned properties and assets used in
the conduct of their business that are reflected in the Purchaser
Balance Sheet (other than properties and assets disposed of in the
ordinary course of business since September 30, 1996, which, in the
aggregate, are not material), free of all Liens except Permitted Liens
and Liens disclosed in Section 5.13 of the Purchaser Disclosure
Schedule.
5.14 Taxes and Tax Returns. Except as described in Section 5.14
of the Purchaser Disclosure Schedule:
(i) all Tax Returns required to be filed with any Taxing
Authority with respect to any Pre-Closing Tax Period by or on
behalf of Purchaser and its Subsidiaries have been or will be duly
filed on a timely basis in accordance with all applicable Laws;
(ii) at the time of their filings all such Tax Returns were
or will be, in all respects, true, complete and correct;
(iii) Purchaser and its Subsidiaries have, and within the
time and in the manner prescribed by Law, paid all Taxes that are
due and payable;
(iv) the reserves for Taxes reflected in the Purchaser
Balance Sheet are adequate (in accordance with U.S. GAAP) to cover
all Taxes that have not been paid, but which under U.S. GAAP were
accruable, through the date of the Purchaser Balance Sheet;
(v) there are no Liens for Taxes upon any assets of
Purchaser or any of its Subsidiaries, except Liens for Taxes not
yet due for current Tax periods ending on or after the Closing
Date;
(vi) there are no outstanding deficiencies, assessments or
written proposals for the assessment of Taxes proposed, pending,
asserted or assessed against Purchaser or any Subsidiary of
Purchaser and there is no basis for any additional assessments or
reassessments for any Taxes for which adequate provision has not
been made in the books and records of Purchaser or its
Subsidiaries, as the case may be; and
(vii) no extension of the statute of limitations or
waiver of normal reassessment periods on the assessment of any
Taxes has been requested or granted to Purchaser or any Subsidiary
of Purchaser.
5.15 Litigation. Except as disclosed in the Purchaser SEC Filings
or in Section 5.15 of the Purchaser Disclosure Schedule, there is no
suit, action, investigation or proceeding pending or, to the knowledge
of Purchaser, threatened against Purchaser or any of its Subsidiaries
at law or in equity before or by any Governmental Entity or before any
arbitrator or mediator of any kind, that could have a Material Adverse
Effect on Purchaser and its Subsidiaries, and there is no judgment,
decree, injunction, rule or order of any Governmental Entity,
arbitrator or mediator to which Purchaser or any Purchaser Subsidiary
(or any of its assets or properties) is subject that could have a
Material Adverse Effect on Purchaser and its Subsidiaries. There is no
suit, action, investigation or proceeding pending or, to the knowledge
of Purchaser, threatened against Purchaser at law or in equity before
or by any Governmental Entity or before any arbitrator or mediator of
any kind, that could have a Material Adverse Effect on Purchaser, and
there is no judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator or mediator to which Purchaser is
subject that could have a Material Adverse Effect on Purchaser.
Purchaser has no knowledge of any grounds on which any suit, action,
investigation or proceeding of the nature referred to in this Section
5.15 might be commenced with any reasonable likelihood of success.
5.16 Environmental Matters.
(i) To the knowledge of Purchaser, no Purchaser or Purchaser
Subsidiary has transported, stored, received, treated or disposed
of, nor has Purchaser or any Purchaser Subsidiary arranged for any
third parties to transport, receive, store, treat or dispose of,
waste to or at (a) any location other than a site where the
receipt of such waste for such purposes was not at the time of
such receipt unlawful or (b) any location designated for remedial
action pursuant to the United States Comprehensive Environmental
Response, Compensation and Liability Act, as from time to time
amended, or any similar Law assigning responsibility for the cost
of investigating or remediating releases of Hazardous Substances
into the environment, except to the extent such action would not
have a Material Adverse Effect on the business, results of
operations or financial condition of Purchaser and the Purchaser
Subsidiaries or as set forth in Section 5.16 of the Purchaser
Disclosure Schedule.
(ii) Except as set forth in Section 5.16 of the Purchaser
Disclosure Schedule, neither Purchaser nor any Purchaser
Subsidiary has received written notice that any location to which
waste has been transported, stored or disposed of by Purchaser or
any Purchaser Subsidiary has been designated for remedial action
pursuant to any applicable Law relating to responsibility for the
cost of investigating or remediating releases of Hazardous
Substances into the environment. Set forth in Section 5.16 of the
Purchaser Disclosure Schedule is, to the knowledge of Purchaser,
a complete and accurate list of locations to which Purchaser or
any Purchaser Subsidiary has ever transported, or ever caused to
be transported, allowed or arranged for any third party to
transport, any type of waste material generated by customers of
Purchaser or any Purchaser Subsidiary for storage, treatment,
burning, recycling or disposal.
(iii) Compliance. To Purchaser's knowledge, Purchaser
and the Purchaser Subsidiaries and their respective processes,
operations, transportation, storage and disposal activities and
undertakings have been and are in compliance with all
Environmental Laws (including reporting and record keeping
requirements), except to the extent any such noncompliance would
not have a Material Adverse Effect on the business, results of
operations or financial condition of Purchaser and the Purchaser
Subsidiaries or as set forth in Section 5.16 of the Purchaser
Disclosure Schedule or noncompliances that have been fully and
finally resolved. To Purchaser's knowledge, Purchaser and the
Purchaser Subsidiaries have received no Notice of noncompliance
and Purchaser has no knowledge of any facts which could give rise
to a Notice of noncompliance, with any Environmental Laws, except
to the extent any such noncompliance would not have a Material
Adverse Effect on the business, results of operations or financial
condition of Purchaser and the Purchaser Subsidiaries taken as
whole, or as set forth in Section 5.16 of the Purchaser Disclosure
Schedule
(iv) Environmental Permits. Except as set forth in Section
5.16 of the Purchaser Disclosure Schedule and except to the extent
that the failure to obtain an Environmental Permit would not have
a Material Adverse Effect on the business, results of operations
or financial condition of Purchaser and the Purchaser
Subsidiaries, Purchaser and the Purchaser Subsidiaries have
obtained all Environmental Permits which are required for the
operation of the Purchaser's business as presently conducted, all
of which Environmental Permits are listed in Section 5.16 of the
Purchaser Disclosure Schedule. To the knowledge of Purchaser, all
such Environmental Permits are valid and in full force and effect,
and no violations thereof have been experienced, noted or recorded
by any administrative or regulatory agency, except for violations
that have been fully and finally resolved and violations which
would not have a Material Adverse Effect on the business, results
of operations or financial condition of Purchaser and the
Purchaser Subsidiaries, or as set forth in Section 5.16 of the
Purchaser Disclosure Schedule, and no proceeding is pending or, to
the knowledge of Purchaser, threatened to revoke or limit any of
them.
(v) No Offenses. Except as disclosed in Section 5.16 of the
Purchaser Disclosure Schedule, within the past seven (7) years,
Purchaser and the Purchaser Subsidiaries have never been convicted
of a criminal offense for noncompliance with any Environmental
Laws, or been fined or otherwise sentenced in or settled any such
criminal prosecution short of conviction.
(vi) No Release of Hazardous Substances. Except as disclosed
in Section 5.16 of the Purchaser Disclosure Schedule, to the
knowledge of Purchaser, neither of Purchaser nor any of the
Purchaser Subsidiaries has received any Notice which alleges that
Purchaser or any of the Purchaser Subsidiaries is liable for (a)
the Release of any Hazardous Substances on or off-site of its
property in a manner that fails to comply with applicable
Environmental Laws or (b) any Release from a facility owned or
operated by third parties.
(vii) Disposal Sites. Except as set forth in Section
5.16 of the Purchaser Disclosure Schedule, to the knowledge of
Purchaser, neither Purchaser nor any of the Purchaser Subsidiaries
has received Notice that Purchaser or any of the Purchaser
Subsidiaries is a potentially responsible party for a federal,
state, provincial or local clean-up site or for corrective action
under any Environmental Law. Except as set forth in Section 5.16
of the Purchaser Disclosure Schedule, to the knowledge of
Purchaser, neither Purchaser nor any of the Purchaser Subsidiaries
has received any written request for information from a regulatory
agency with respect to a disposal or contaminated site.
(viii) Environmental Audits. To Purchaser's knowledge,
Purchaser and the Purchaser Subsidiaries have made available to
Seller all environmental audits, evaluations and assessments in
their possession which concern Purchaser or any of its
Subsidiaries.
P51D Financial Assurances. Section 5.16 of the Purchaser
Disclosure Schedule sets forth a list of each guaranty or other
financial security currently maintained pursuant to the
requirements of applicable Environmental Laws with regard to the
assets and activities of Purchaser or any of its Subsidiaries.
(x) Landfills. Section 5.16 of the Purchaser Disclosure
Schedule lists each landfill owned or operated by Purchaser and
its Subsidiaries and accurately describes each such landfill by
its city or county and state or province of location, total
acreage, permitted acreage, estimated remaining permitted capacity
in tons, estimated or mandated closure date, and estimated
closure, post-closure and reclamation liability at its projected
or mandated closure date (computed at the closure date with and
without discount to present value).
5.17 Governmental Licenses and Permits; Compliance with Laws.
Except as described in the Purchaser SEC Filings or Section 5.17 of the
Purchaser Disclosure Schedule, neither Purchaser nor any of its
Subsidiaries has received notice of any revocation or modification of
any license, certification, tariff, permit, registration, exemption,
approval or other authorization by any Governmental Entity which
remains outstanding. The conduct of the business of Purchaser and its
Subsidiaries complies and has been conducted in compliance with all
applicable Laws, except for violations or failures to comply, if any,
that, individually or in the aggregate, could not have a Material
Adverse Effect on Purchaser and its Subsidiaries.
5.18 Labor Matters. Section 5.18 of the Purchaser Disclosure
Schedule lists and describes each collective bargaining agreement
covering employees of Purchaser. Except as disclosed in Section 5.18
of the Purchaser Disclosure Schedule, (i) neither Purchaser nor any
Subsidiary is a party to or bound by any collective bargaining or
similar agreement with any labor organization applicable to employees
of Purchaser, (ii) there is no labor strike, dispute, slowdown, work
stoppage, unresolved material labor union grievance or labor
arbitration proceedings pending or, to the knowledge of Purchaser,
threatened against Purchaser or any Subsidiary, and (iii) to the
knowledge of Purchaser, there are no current union organizing
activities among employees of Purchaser or any Subsidiary.
Since the enactment of the WARN Act, neither Purchaser nor any
Subsidiary has effectuated (i) a "plant closing" (as defined in the
WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of any employment or facility of any
Subsidiary. Neither Purchaser nor any Subsidiary has been affected by
any transaction or engaged in layoffs or employment terminations
sufficient in number to trigger application of any similar Canadian
federal, state, provincial or local Law. Except as set forth in
Section 5.18 of the Purchaser Disclosure Schedule, no employees of
Purchaser or any Subsidiary have suffered an "employment loss" (as
defined in the WARN Act) since December 31, 1995.
5.19 Employee Benefit Plans. Section 5.19 of the Purchaser
Disclosure Schedule sets forth each retirement, pension, bonus, stock
purchase, profit sharing, stock option, deferred compensation,
severance or termination pay, insurance, medical, hospital, dental,
vision care, drug, sick leave, disability, salary continuation, legal
benefits, unemployment benefits, vacation, incentive or other
compensation plan or arrangement or other employee benefit which is
maintained, or otherwise contributed to or required to be contributed
to, by Purchaser, any Purchaser Subsidiary or any ERISA Affiliate of
Purchaser for the benefit of employees or former employees and
directors or former directors of any of the Subsidiaries and their
spouses, dependents or beneficiaries (the "Purchaser Employee Plans").
True and correct copies of each of the Purchaser Employee Plans have
been delivered to the Seller, along with the most recent annual report
for each Purchaser Employee Plan, any trust agreement relating to each
Purchaser Employee Plan and the most recent summary plan description,
actuarial report and determination letter for each Purchaser Employee
Plan. Purchaser has complied, and currently is in compliance, both as
to form and operation, in all material respects, with the applicable
provisions of ERISA and each other Law or regulation imposed or
administered by any Governmental Entity with respect to each of the
Purchaser Employee Plans. Except as set forth in Section 5.19 of the
Purchaser Disclosure Schedule, Purchaser has at no time maintained,
adopted, established, contributed to or been required to contribute to,
otherwise participated in or been required to participate in, or had
any liability with respect to, any "employee benefit plan" within the
meaning of section 3(3) of ERISA. All Purchaser Employee Plans
providing pension or retirement benefits or obligations to current or
former employees or their spouses, dependents and beneficiaries are
referred to collectively as "Purchaser Pension Plan" and identified in
Section 5.19 of the Purchaser Disclosure Schedule. Except as set forth
in Section 5.19 of the Purchaser Disclosure Schedule, no provision
concerning the Purchaser Pension Plan is contained in any collective
bargaining agreement affecting any current or former employees of any
Purchaser Subsidiary. Each Purchaser Pension Plan that is required to
be qualified under Section 401(a) and Section 501(a) of the Code has
received a determination letter to such effect and no event has
occurred which is reasonably likely to result in the disqualification
of any such Purchaser Pension Plan. The Purchaser Pension Plan is
registered under, and is in material compliance with, applicable Law.
All contributions to, and payments from, each Purchaser Employee Plan
which may have been required to be made in accordance with the terms of
any such Purchaser Employee Plan and, where applicable, the Laws which
govern such Purchaser Employee Plan, have been made in a timely manner,
and each Purchaser Employee Plan has otherwise at all times been
administered in accordance with its terms and applicable Law in all
material respects. All material reports, Tax Returns and similar
documents with respect to any Purchaser Employee Plan required to be
filed with any Governmental Entity or distributed to any Purchaser
Employee Plan participant have been duly filed on a timely basis or
distributed. There are no pending investigations by any Governmental
Entity involving or relating to any Purchaser Employee Plan, no
threatened or pending claims (except for claims for benefits payable in
the normal operation of the Purchaser Employee Plans), suits or
proceedings against any Purchaser Employee Plan or asserting any rights
or claims to benefits under any Purchaser Employee Plan which could
give rise to a liability nor, to the knowledge of Purchaser, are there
any facts that could give rise to any liability in the event of any
such investigation, claim, suit or proceeding. No Notice has been
received by Purchaser or any of its Subsidiaries of any complaints or
other proceedings of any kind involving any of the Purchaser
Subsidiaries or any of the employees of any of the Purchaser
Subsidiaries or other potential claimants before any Governmental
Entity relating to any Purchaser Employee Plan or to any of the
Purchaser Subsidiaries and to the knowledge of Purchaser, there is no
basis for any such claims. Except as set forth in Section 5.19 of the
Purchaser Disclosure Schedule, the assets of each Purchaser Employee
Plan are at least equal to the liabilities, contingent or otherwise, of
such Purchaser Employee Plan on a plan termination basis, and each
Purchaser Pension Plan is fully funded on a going concern and solvency
basis in accordance with its terms, applicable actuarial
recommendations and applicable Law. Neither Purchaser nor any of its
Subsidiaries contribute to or have an obligation to contribute to, and,
to the knowledge of Purchaser, have not within 6 years prior to the
date of this Agreement contributed to or had an obligation to
contribute to, a multi-employer plan within the meaning of Section
3(37) of ERISA. No event has occurred and, to the knowledge of
Purchaser, there exists no condition or set of circumstances in
connection with which Seller, any of its Affiliates or Subsidiaries
could be subject to any liability under the terms of each Purchaser
Employee Plan or under any applicable law of any Governmental Entity,
other than any condition or set of circumstances that could not have a
Material Adverse Effect on the Subsidiaries. In connection with the
consummation of the transactions contemplated by this Agreement, no
payments have or will be made under a Purchaser Employee Plan which, in
the aggregate, would be nondeductible under Section 280G of the Code.
The beneficiaries under all Purchaser Employee Plans consist only
of employees or former employees and directors or former directors of
any of Purchaser and its Subsidiaries and their spouses, dependents or
beneficiaries.
5.20 Financing. The funds committed to be made available to
Purchaser under the Commitment Letter, together with Purchaser's funds
and funds otherwise available to Purchaser, are sufficient to
consummate the Acquisition.
5.21 Brokers. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc., which
has acted as financial advisor to Purchaser in connection with the
Acquisition, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this
Agreement or the Acquisition based upon arrangements made by or on
behalf of Purchaser.
5.22 Material Contracts. Section 5.22 of Purchaser Disclosure
Schedule lists all of the following written or oral contracts,
agreements and commitments (collectively, the "Purchaser Contracts"):
(i) all employment, consulting or personal services
agreements or contracts with any present or former officer,
director or employee of Purchaser who has an annual salary of
$250,000 or more (determined by using the currency in which they
are paid);
(ii) all hazardous waste management agreements and contracts
(including those relating to the receipt, transport, disposal or
other management of waste) between Purchaser and any municipality
or other Governmental Entity or Person which resulted in annual
payments in the 1996 fiscal year to or by Purchaser of $2,000,000
or more, which list includes the term of such agreements or
contracts;
(iii) all contracts, agreements, agreements in principle,
letters of intent and memoranda of understanding which call for or
contemplate the future disposition (including restrictions on
transfer and rights of first offer or refusal) or acquisition of
(or right to acquire) any interest in any business enterprise, and
all contracts, agreements and commitments relating to the future
disposition of a material portion of the assets and properties of
Purchaser other than in the ordinary course of business;
(iv) all contracts, agreements with, or commitments to, any
Person containing any provision or covenant relating to the
indemnification or holding harmless by Purchaser of any Person
which could result in a liability to Purchaser of $250,000 or
more;
(v) all leases or subleases of real property used in the
conduct of business of Purchaser providing for annual rental
payments to be paid by or on behalf of Purchaser of more than
$250,000 in each case;
(vi) all contracts or agreements committing Purchaser to make
a capital expenditure in excess of $250,000;
(vii) all guaranties or other commitments or undertakings
under which Purchaser may be primarily, secondarily, contingently
or conditionally liable for or in respect of (or which creates,
constitutes or evidences a Lien on) any of the assets or
properties of Purchaser which secures the payment or performance
on any present or future liability or obligation of or to
Purchaser or its Subsidiaries or any officer or director of
Purchaser or its Subsidiaries; and
(viii) all Purchaser Intercompany and Affiliate
Agreements.
Purchaser shall make available to Seller within 15 days of the
Closing a true and correct copy of each Purchaser Contract. Each of
the Purchaser Contracts is in full force and effect and constitutes a
legal, valid and binding obligation of the Purchaser, and, to the
knowledge of Purchaser, of each other Person that is a party to it.
Except as set forth in Section 5.22 of the Purchaser Disclosure
Schedule, Purchaser is not, and, to the knowledge of Purchaser, no
other party to any Purchaser Contract is, in violation, breach or
default of such Purchaser Contract or, with or without notice or lapse
of time or both, would be in violation, breach or default of any such
Purchaser Contract, except for any violation, breach or default which,
individually or in the aggregate, could not result in a Material
Adverse Effect on the Purchaser. Except as set forth in Section 5.22
of the Purchaser Disclosure Schedule, no Purchaser Contract provides
that any party thereto other than Purchaser may terminate such
Purchaser Contract by reason of the execution of this Agreement or the
consummation of the Acquisition.
5.23 Bank Accounts. Section 5.23 of the Purchaser Disclosure
Schedule lists each bank, trust company or similar institution with
which Purchaser maintains an account or safe deposit box, and
accurately identifies each such account or safe deposit box by its
number or other identification and the names of all individuals
authorized to draw thereon or have access thereto.
5.24 Officers and Directors. Section 5.24 of the Purchaser
Disclosure Schedule accurately lists by name and title all officers and
directors of Purchaser.
5.25 Affiliate Transactions. Purchaser has not entered into
directly or indirectly any transaction (including without limitation
the purchase, lease, sale or exchange of property of any kind or the
rendering of any service) with any Affiliate, except in the ordinary
course and pursuant to the reasonable requirements of such Affiliate's
business and upon fair and reasonable terms no less favorable to such
Affiliate than would be obtainable in a comparable arm's-length
transaction with a Person not Purchaser or any Affiliate of Purchaser.
5.26 Condition and Sufficiency of Assets. The buildings, plants,
structures, and equipment of Purchaser are structurally sound, are in
good operating condition and repair, and are adequate for the uses to
which they are being put, and none of such buildings, plants,
structures or equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in
nature or cost. The building, plants, structures, and equipment of
Purchaser are sufficient for the continued conduct of Purchaser's
businesses after the Closing Date in substantially the same manner as
conducted prior to the Closing Date.
ARTICLE VI
SELLER AND ▇▇▇▇▇▇▇ COVENANTS PENDING CLOSING
Seller and ▇▇▇▇▇▇▇ jointly and severally agree that pending the
Closing, without the prior written consent of Purchaser:
6.1 Conduct of Business. Each Acquired Subsidiary shall conduct
its operations according to its ordinary and usual course of business,
comply with applicable Laws, comply with the terms of Seller Employee
Plans (including by making all contributions required by the terms of
the Seller Pension Plan, applicable actuarial recommendations and
applicable Laws), and use its best efforts to preserve intact its
business organization, keep available the services of its officers and
employees and maintain normal business relationships with customers,
suppliers and others having business relationships with it. Seller and
▇▇▇▇▇▇▇ shall confer on a regular and frequent basis with one or more
designated representatives of Purchaser to report on operational
matters of materiality and to report the general status of on-going
operations of the Acquired Subsidiaries. Seller or ▇▇▇▇▇▇▇ shall
notify Purchaser of:
(i) any unexpected material emergency or other material
change in the normal course of business or in the operation of the
properties of the Acquired Subsidiaries;
(ii) the instigation of or any significant development in any
regulatory proceedings or complaints, investigations or hearings
of Governmental Entities (or communications indicating that any
may be contemplated) involving either Seller or any Acquired
Subsidiary, which instigation or development could have a Material
Adverse Effect on the Acquired Subsidiaries, ▇▇▇▇▇▇▇ or Seller;
(iii) proposed budgets, capital expenditures,
acquisitions and dispositions of assets and other decisions
involving material properties of the Acquired Subsidiaries; and
(iv) any matter or event which comes to the knowledge of
Seller or ▇▇▇▇▇▇▇ and which makes or could make any representation
and warranty made by Seller or ▇▇▇▇▇▇▇ in Article IV untrue or
inaccurate.
Seller and ▇▇▇▇▇▇▇ shall keep Purchaser fully informed of such
events and permit Purchaser's representatives access to all materials
prepared in connection with such events.
6.2 Forbearance by the Acquired Subsidiaries. Neither Seller nor
▇▇▇▇▇▇▇ shall cause or permit any Acquired Subsidiary to (except as
contemplated in Section 3.2):
(i) amend its charter or bylaws (or other similar
organizational documents);
(ii) issue, sell, pledge, dispose of or encumber any shares
of its capital stock or securities convertible into any such
shares, or enter into any agreement or commitment with respect to
the issuance or purchase of any such shares or securities;
(iii) pay any dividend or other distribution in respect
of the Chem-Waste Shares or redeem, purchase or acquire any Chem-
Waste Shares;
(iv) incur any indebtedness for borrowed money other than
Intercompany Seller Indebtedness;
(v) make or commit to make any capital investment, capital
expenditure, capital addition or capital improvement, except to
the extent that any single capital expenditure (or series of
related capital expenditures) made or committed to be made by any
Acquired Subsidiary and all capital expenditures made or committed
to be made by all Acquired Subsidiaries do not exceed the amounts
set forth in the budget of capital expenditures included in
Section 6.2 of the Seller Disclosure Schedule;
(vi) except in the ordinary course of business, and except
for settlements made by insurers, enter into any compromise or
settlement of any litigation, proceeding or governmental
investigation relating to such Acquired Subsidiary or its
respective properties which requires such Acquired Subsidiary to
make a payment in excess of $250,000 or which would result in the
imposition of any restriction upon the operations of such Acquired
Subsidiary or the disposition of any of its properties, except for
restrictions or dispositions which could not have a Material
Adverse Effect on the Acquired Subsidiaries;
(vii) sell real property or any interest in or
improvement upon real property or any other capital asset the book
value or sales price of which is more than $250,000;
(viii) amend the Seller Pension Plan or Seller Employee
Plans or make any statement relating to any anticipated or
proposed increase in benefits under the Seller Pension Plan or
Seller Employee Plans for current, future or former employees of
any of the Acquired Subsidiaries other than strictly in accordance
with the terms of the Seller Pension Plan or Seller Employee Plans
as currently constituted;
(ix) transfer, license, lease, sell, dispose, mortgage or
encumber any assets or properties other than in the ordinary
course of business; or
51D increase compensation, benefits or severance for
employees of any Acquired Subsidiary except as required by any
collective bargaining agreements entered into by the Acquired
Subsidiaries as in effect on the date of this Agreement and except
as set forth in Section 6.2 of the Seller Disclosure Schedule.
6.3 Access and Information. Seller and ▇▇▇▇▇▇▇ shall give to
Purchaser and its representatives (including its lenders and their
representatives) full access during normal business hours to all the
properties, books, contracts, commitments, records, Tax Returns,
personnel and advisors of Seller, ▇▇▇▇▇▇▇ and the Acquired Subsidiaries
so that Purchaser may have full opportunity to make such investigation
of the Acquired Subsidiaries as it shall reasonably request in advance.
Seller and ▇▇▇▇▇▇▇ will cause Coopers & ▇▇▇▇▇▇▇ to permit KPMG Peat
Marwick to review and examine the work papers of Coopers & ▇▇▇▇▇▇▇
relating to Seller, ▇▇▇▇▇▇▇ and the Acquired Subsidiaries. Seller and
▇▇▇▇▇▇▇ will promptly furnish to Purchaser all information with respect
to the Acquired Subsidiaries which Purchaser may reasonably request.
Additionally, Seller and ▇▇▇▇▇▇▇ will promptly furnish Purchaser all
information concerning the Acquired Subsidiaries required for inclusion
in any application, filing, statement or notice to be made by Purchaser
to, or filed or joined in by Purchaser with, any Governmental Entity in
connection with this Agreement or the Acquisition, including the
Purchaser Proxy Statement, and none of such information shall, at the
date furnished, contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were made,
not misleading. Seller and ▇▇▇▇▇▇▇ shall prior to the Mailing Date
promptly inform Purchaser on becoming aware that any information
concerning any of the Acquired Subsidiaries furnished to Purchaser
pursuant to this Section 6.3 contains any such material misstatement or
omission.
6.4 Supplemental Information. ▇▇▇▇▇▇▇ shall, within five days
following each such filing, furnish Purchaser with a copy of each
Current Report on Form 8-K, each Quarterly Report on Form 10-Q and each
Annual Report on Form 10-K filed by ▇▇▇▇▇▇▇ with the SEC. Seller shall
also furnish to Purchaser copies of interim monthly financial
statements for the Acquired Subsidiaries (prepared using the format
customarily used by Seller for such internal reports and, no less
frequently than each fiscal quarter, prepared for the Acquired
Subsidiaries for such fiscal quarter on a combined basis) as soon as
practicable but in any event within 35 days after the end of each month
or quarter, as the case may be, together with any information
ordinarily prepared in connection with such financial statements. All
such interim financial statements shall fairly present in all material
respects in accordance with U.S. GAAP, consistently applied, the
combined financial position of the Acquired Subsidiaries covered
thereby at the respective dates thereof, and the results of their
operations, and cash flows for the Acquired Subsidiaries covered
thereby for the respective periods covered thereby, subject to year-end
adjustments (consisting of normal recurring accruals) and the omission
of explanatory footnote materials required by U.S. GAAP.
6.5 Confidentiality. All information and data furnished by
Purchaser to Seller or ▇▇▇▇▇▇▇ under Section 7.3 or any other provision
of this Agreement shall be received, held, treated and, if applicable,
returned to Purchaser, in accordance and compliance with the
Confidentiality Agreement.
6.6 Consummation of Acquisition. Seller and ▇▇▇▇▇▇▇ shall use
their best efforts to perform and fulfill, and shall use their best
efforts to cause the Acquired Subsidiaries to perform and fulfill, all
conditions and obligations on their part to be performed and fulfilled
under this Agreement, to the end that the Acquisition shall be
consummated.
6.7 Access for Environmental Report. Seller shall cause the
Acquired Subsidiaries to each give to The Toronto-Dominion Bank
environmental consultants, full access to the facilities, personnel and
records of the Acquired Subsidiaries as such consultants shall
reasonably request (including for physical inspection of sites and the
drilling of ▇▇▇▇▇ and the conducting of soil borings and other Phase II
investigatory techniques) in order to conduct Phase I and II
environmental assessments of each parcel of real property owned, or
under the management or control of, or operated, leased or occupied by,
an Acquired Subsidiary, and to prepare a report reflecting the findings
and recommendations of such consultants concerning such Phase I and
Phase II environmental assessments. Seller shall use its best efforts
to ensure that all information provided to The Toronto-Dominion Bank
environmental consultants in the course of its conduct of such
environmental assessments is accurate, complete and not misleading
(including by omissions). Seller will provide, and will cause the
Acquired Subsidiaries to provide, upon written request therefor, all
consents, approvals and directions (and waivers of privacy, freedom of
information and similar Laws) so as to permit such consultants to have
prompt and unrestricted access to all relevant information in the
possession or under the control of Governmental Entities.
6.8 Acquisitions of Purchaser Common Stock. ▇▇▇▇▇▇▇ and its
Affiliates for a period of three years from the Closing Date shall not
purchase any issued and outstanding shares of Purchaser Common Stock
(other than the Purchaser Common Shares and Additional Purchaser Common
Shares), unless ▇▇▇▇▇▇▇ or its Affiliate, as the case may be, shall
have received the consent of a majority of those members of the Board
of Directors of Purchaser appointed jointly by Purchaser and ▇▇▇▇▇▇▇.
Notwithstanding anything in this Section 6.8 to the contrary, the
shares of Purchaser Common Stock purchased by employees of Purchaser or
any Purchaser Subsidiary upon exercise of options issued to any of such
employees pursuant to the Purchaser Employee Plans shall not be
aggregated with any shares of Purchaser Common Stock purchased by
▇▇▇▇▇▇▇ or its Affiliates subsequent to the Closing Date for purposes
of determining whether ▇▇▇▇▇▇▇ or its Affiliates have complied with the
limitation on purchases of shares of Purchaser Common Stock set forth
in the immediately preceding sentence.
6.9 Competition. None of ▇▇▇▇▇▇▇ or its Affiliates for a period
of five years after the Closing Date shall compete with Purchaser or
any Purchaser Affiliate with respect to owning, operating, constructing
or otherwise engaging in the Hazardous and Industrial Waste Business.
ARTICLE VII
PURCHASER COVENANTS PENDING CLOSING
Purchaser agrees that pending the Closing, without the prior
written consent of ▇▇▇▇▇▇▇ and Seller:
7.1 Conduct of Business. Purchaser and its Subsidiaries shall
conduct their operations according to their ordinary and usual course
of business, comply with all applicable Laws, comply with the terms of
the Purchaser Employee Plans (including by making all contributions
required by the terms of the Purchaser Pension Plan, applicable
actuarial recommendations and applicable Laws), and shall use their
best efforts to preserve intact their business organization, keep
available the services of their officers and employees and maintain
normal business relationships with customers, suppliers and others
having business relationships with it. Purchaser shall confer on a
regular and frequent basis with one or more designated representatives
of ▇▇▇▇▇▇▇ and Seller to report on operational matters of materiality
and to report the general status of on-going operations of Purchaser.
Purchaser shall notify ▇▇▇▇▇▇▇ and Seller of:
(i) any unexpected material emergency or other material
change in the normal course of business or in the operation of the
properties of Purchaser and its Subsidiaries;
(ii) the instigation of or any significant development in any
regulatory proceedings or complaints, investigations or hearings
of Governmental Entities (or communication indicating that any may
be contemplated) involving Purchaser and its Subsidiaries, which
instigation or development could have a Material Adverse Effect on
Purchaser and its Subsidiaries;
(iii) proposed budgets, capital expenditures,
acquisitions and dispositions of assets and other decisions
involving material properties of Purchaser and its Subsidiaries;
and
(iv) any matter or event which comes to the knowledge of
Purchaser and which makes or could make any representation and
warranty made by Purchaser in Article V untrue or inaccurate.
Purchaser shall keep ▇▇▇▇▇▇▇ and Seller fully informed of such
events and permit Seller's representatives access to all materials
prepared in connection with such events.
7.2 Forbearance by Purchaser and its Subsidiaries. Purchaser
shall not nor shall it cause or permit any of its Subsidiaries to:
51D amend or propose to amend its certificate of
incorporation (except as contemplated in Section 7.5) or bylaws;
(ii) issue any shares of Purchaser Common Stock or shares of
any Subsidiary or securities convertible into or exchangeable for
shares of Purchaser Common Stock or shares of any Subsidiary, or
enter into any agreement or commitment with respect to the
issuance or purchase of any such shares or securities, except that
Purchaser may (a) issue shares of Purchaser Common Stock upon any
exercise of any presently outstanding convertible indebtedness of
Purchaser which are, in each such case, described in the Purchaser
SEC Filings and (b) issue shares of Purchaser Common Stock
issuable upon any exercise of any options granted under any
presently existing director and employee stock option plans;
(iii) split, combine or reclassify any outstanding shares
of Purchaser Common Stock or shares of any Subsidiary;
(iv) declare, pay or set aside for payment any dividend or
other distribution in respect of any outstanding shares of
Purchaser Common Stock or redeem, purchase or acquire any
Purchaser Common Stock;
(v) incur any Indebtedness for borrowed money other than
Indebtedness to Purchaser or another Purchaser Subsidiary; or
(vi) make or commit to make any capital investment, capital
expenditure, capital addition or capital improvement, except to
the extent that any single capital expenditure (or series of
related capital expenditures) made or committed to be made by
Purchaser or any Purchaser Subsidiary and all capital expenditures
made or committed to be made by Purchaser or any Purchaser
Subsidiary do not exceed the amounts set forth in the budget of
capital expenditures included in Section 7.2 of the Purchaser
Disclosure Schedule.
(vii) except in the ordinary course of business, and
except for settlements made by insurers, enter into any compromise
or settlement of any litigation, proceeding or governmental
investigation relating to Purchaser or any Purchaser Subsidiary or
its respective properties which requires Purchaser or such
Purchaser Subsidiary to make a payment in excess of $250,000 or
which would result in the imposition of any restriction upon the
operations of Purchaser or any Purchaser Subsidiary or the
disposition of any of its properties, except for restrictions or
dispositions which could not have a Material Adverse Effect on
Purchaser and its Subsidiaries;
(viii) sell real property or any interest in or
improvement upon real property or any other capital asset the book
value or sales price of which is more than $250,000;
(ix) amend the Purchaser Pension Plan or Purchaser Employee
Plans or make any statement relating to any anticipated or
proposed increase in benefits under the Purchaser Pension Plan or
Purchaser Employee Plans for current, future or former employees
of Purchaser or its Subsidiaries other than strictly in accordance
with the terms of the Purchaser Pension Plan or Purchaser Employee
Plans as currently constituted;
(x) transfer, license, lease, sell, dispose, mortgage or
encumber any assets or properties other than in the ordinary
course of business; or
(xi) increase compensation, benefits or severance for
employees of Purchaser or any Purchaser Subsidiary except as
required by any collective bargaining agreements entered into by
Purchaser or such Purchaser Subsidiary as in effect on the date of
this Agreement and except as set forth in Section 7.2 of the
Purchaser Disclosure Schedule.
7.3 Access and Information. Purchaser shall give ▇▇▇▇▇▇▇, Seller
and its representatives full access during normal business hours to all
the properties, books, contracts, commitments, Tax Returns, personnel
and advisors, and records of Purchaser and its Subsidiaries so that the
▇▇▇▇▇▇▇ and Seller may have full opportunity to make such investigation
of Purchaser and its Subsidiaries as they shall reasonably request in
advance. Purchaser will cause KPMG Peat Marwick to permit Coopers &
▇▇▇▇▇▇▇ to review and examine the workpapers of KPMG Peat Marwick
relating to Purchaser and its Subsidiaries. Purchaser will furnish
▇▇▇▇▇▇▇ and Seller all information concerning Purchaser and its
Subsidiaries which ▇▇▇▇▇▇▇ or Seller may reasonably request.
Additionally, the Purchaser will promptly furnish to ▇▇▇▇▇▇▇ and Seller
all information concerning Purchaser and its Subsidiaries required for
inclusion in any application, filing, statement or notice made by
▇▇▇▇▇▇▇ or Seller to, or filed or joined in by ▇▇▇▇▇▇▇ or Seller with,
any Governmental Entity in connection with this Agreement or the
Acquisition, and none of such information shall, at the date furnished,
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not
misleading. Purchaser shall prior to the Mailing Date promptly inform
▇▇▇▇▇▇▇ and Seller on becoming aware that any information concerning
the Purchaser furnished to ▇▇▇▇▇▇▇ and Seller pursuant to this Section
7.3 contains any such material misstatement or omission.
7.4 Supplemental Information. Purchaser shall, within five days
following each such filing, furnish ▇▇▇▇▇▇▇ and Seller with a copy of
each Current Report on Form 8-K, each Quarterly Report on Form 10-Q and
each Annual Report on Form 10-K filed by Purchaser with the SEC.
Purchaser shall also furnish ▇▇▇▇▇▇▇ and Seller copies of Purchaser's
interim monthly consolidated financial statements as soon as
practicable but in any event within 35 days after the end of each
month, together with any information ordinarily prepared in connection
with such financial statements. All financial statements included in
each such Quarterly Report on Form 10-Q and Annual Report on Form 10-K
shall be prepared in conformity with U.S. GAAP, shall present fairly in
all material respects, in accordance with U.S. GAAP, the consolidated
financial position of Purchaser and its Subsidiaries at the end of the
periods covered thereby and the results of their consolidated
operations for the periods covered thereby, subject, in the case of
unaudited interim financial statements, to year-end adjustments
(consisting of normal recurring accruals) and the omission of
explanatory footnote materials required by U.S. GAAP.
7.5 Purchaser Stockholders' Meeting and Restated and Amended
Certificate of Incorporation. Purchaser shall call a special meeting
of the holders of Purchaser Common Stock to be held to vote to approve
the Agreement, the issuance of the Purchaser Common Shares, the
Additional Purchaser Common Shares, and to approve the Restated and
Amended Certificate of Incorporation of the Purchaser, which shall
provide for the authorization of additional shares of authorized
Purchaser Common Stock, for the change of the name of the Purchaser to
"▇▇▇▇▇▇▇ Environmental Services, Inc." and the increase in the size of
the Board of Directors to ten members and that the Board of Directors
shall consist of the individuals in Section 7.5 of the Seller
Disclosure Schedule. Purchaser will use its best efforts to hold the
Purchaser Stockholders' Meeting no later than 40 days following the
date of mailing of the definitive proxy statement to be furnished to
its stockholders in connection with such meeting (the "Purchaser Proxy
Statement"). Subject to fiduciary duties under applicable Laws,
Purchaser will recommend to its stockholders approval of the matters
referred to above, and agrees to take all lawful action to solicit and
use its best efforts to obtain a favorable vote thereon. In connection
with the Purchaser Stockholders' Meeting, Purchaser shall prepare and
file with the SEC, as soon as practicable following the delivery to
Purchaser of the Chem-Waste Group Audited Financial Statements, a
preliminary copy of the Purchaser Proxy Statement. As soon as
practicable thereafter, Purchaser will cause to be mailed to each
holder of Purchaser Common Stock a copy of the Purchaser Proxy
Statement complying in all material respects with the Exchange Act.
All information concerning Purchaser or any of its Subsidiaries
included in the Purchaser Proxy Statement will be, on the date of
commencement of the mailing of the Purchaser Proxy Statement (the
"Mailing Date"), true and correct in all material respects without
omission of any material fact required to be stated to make the
information set forth therein, in light of the circumstances under
which they were made, not misleading.
7.6 Confidentiality. All information and data furnished by
Seller or ▇▇▇▇▇▇▇ to Purchaser under Section 6.3 or any other provision
of this Agreement shall be received, held, treated and, if applicable,
returned to Seller, in accordance and compliance with the
Confidentiality Agreement.
7.7 Consummation of Acquisitions. Purchaser shall use its best
efforts to perform and fulfill, and shall use its best efforts to cause
its Subsidiaries to perform and fulfill, all conditions and obligations
on their part to be performed and fulfilled under this Agreement, to
the end that the Acquisition shall be consummated.
7.8 Letter from Stockholders. On or before the date of this
Agreement, Purchaser has received, and has delivered to ▇▇▇▇▇▇▇ and
Seller copies of, a letter from ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ agreeing to vote all shares of Purchaser Common
Stock held by them for approval of the matters to be submitted to
Purchaser's stockholders for approval pursuant to Section 7.5 of this
Agreement.
7.9 Access for Environmental Report. Purchaser shall and shall
cause its Subsidiaries give to The Toronto-Dominion environmental
consultants, full access to the facilities, personnel and records of
the Purchaser and its Subsidiaries as such consultants shall reasonably
request (including for physical inspection of sites and the drilling of
▇▇▇▇▇ and the conducting of soil borings and other Phase II
investigatory techniques) in order to conduct Phase I and II
environmental assessments of each parcel of real property owned, or
under the management or control of, or operated, leased or occupied by,
Purchaser and its Subsidiaries, and to prepare a report reflecting the
findings and recommendations of such consultants concerning such Phase
I and Phase II environmental assessments. Purchaser shall and shall
cause its Subsidiaries to use its best efforts to ensure that all
information provided to The Toronto-Dominion Bank environmental
consultants in the course of its conduct of such environmental
assessments is accurate, complete and not misleading (including by
omissions). The Purchaser will and will cause its Subsidiaries to
provide, upon written request therefor, all consents, approvals and
directions (and waivers of privacy, freedom of information and similar
Laws) so as to permit such consultants to have prompt and unrestricted
access to all relevant information in the possession or under the
control of Governmental Entities.
ARTICLE VIII
MUTUAL CONDITIONS
The respective obligations of all Parties to consummate the
Acquisition and to take the other actions called for under Articles II
and III are subject to the fulfillment of each of the following
conditions on or before the Closing Date:
8.1 No Adverse Proceedings. No order entered or Law promulgated
or enacted by any Governmental Entity shall be in effect which would
prevent consummation of the Acquisition, and no proceeding brought by
a Governmental Entity or any other Person shall have been commenced and
be pending which seeks to restrain, enjoin, prevent or materially delay
or restructure the Acquisition.
8.2 HSR Waiting Period. The waiting period under the HSR Act
shall have expired or otherwise been terminated.
8.3 Purchaser Stockholder Approval. The matters to be submitted
to Purchaser's stockholders as set forth in Section 7.5 of this
Agreement shall have been approved by the requisite vote of the holders
of Purchaser Common Stock.
8.4 Competition Act Matters. Either (i) the Competition Act
Director shall have issued an Advance Ruling Certificate in respect of
the Acquisition and shall not have subsequently withdrawn the Advance
Ruling Certificate or indicated that he has obtained new information as
result of which the Competition Act Director is no longer satisfied
that he would not have sufficient grounds on which to make an
application under Section 92 of the Competition Act with respect to the
Acquisition, (ii) the applicable time period under Section 123 of the
Competition Act shall have expired or (iii) the Parties determine that
the Competition Act does not apply to the Acquisition.
8.5 Westinghouse Debt Retirement. The Westinghouse Debt shall be
retired in accordance with that certain Letter of Intent dated January
6, 1997 by and among Purchaser, ▇▇▇▇▇▇▇ and Westinghouse Electric
Corporation.
8.6 Reorganization. Seller shall have reorganized such that
Chem-Waste shall own the entire Hazardous and Industrial Waste Business
of Seller and its Affiliates.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser to consummate the Acquisition and to
take the other actions called for under Articles II and III are subject
to the fulfillment of each of the following conditions on or before the
Closing Date:
9.1 Representations True at Closing. Seller and ▇▇▇▇▇▇▇ shall
have performed and complied in all material respects with all
obligations and agreements required to be performed or complied with by
them under this Agreement at or prior to the Closing, and the
representations and warranties of Seller and ▇▇▇▇▇▇▇ contained in this
Agreement shall be true and correct when made and at and as of the
Closing as if made at and as of such date and time; and the Purchaser
shall have received certificates, each dated the Closing Date, of the
President or a Vice President of each of Seller and ▇▇▇▇▇▇▇, to the
effect set forth in this Section 9.1.
9.2 No Adverse Changes. Since the date of this Agreement, no
event or series of events taken in the aggregate shall have occurred
which could have a Material Adverse Effect on the Acquired Subsidiaries
or Seller.
INA Investment Canada Act. Purchaser shall have received from
the ICA Minister a notice, satisfactory in form and substance to the
Purchaser, under subsection 21(l) of the Investment Canada Act, stating
that the Acquisition is likely to be of net benefit to Canada, or the
ICA Minister shall have been deemed, under Section 21(2) of the
Investment Canada Act, to be satisfied that the Acquisition is likely
to be of net benefit to Canada and Purchaser shall have received a
notice from the ICA Minister to that effect, or the Parties shall have
determined that the Investment Canada Act does not apply to the
Acquisition.
9.4 Competition Act Matters. Either (i) the Competition Act
Director shall have issued an Advance Ruling Certificate in respect of
the Acquisition and shall not have subsequently withdrawn the Advance
Ruling Certificate or indicated that he has obtained new information as
a result of which the Competition Act Director is no longer satisfied
that he would not have sufficient grounds on which to make an
application under Section 92 of the Competition Act in respect of the
Acquisition, (ii) the Competition Act Director or his representative
shall have advised the Purchaser (on terms and in form satisfactory to
them) that the Competition Act Director does not currently intend to
make an application under Section 92 of the Competition Act in respect
of the Acquisition, and such advice shall not have been amended or
rescinded or (iii) the Parties determine that the Competition Act does
not apply to the Acquisition.
9.5 Acquisition Financing. Purchaser shall have received the
proceeds of the financings contemplated in the Commitment Letter, or
proceeds from other financing with respect to the Acquisition which are
satisfactory to Purchaser, in an aggregate amount of at least
$650,000,000.
9.6 Opinion of Financial Advisor. On the date of this Agreement,
Purchaser has received the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
to the effect that on the basis of the assumptions referred to therein,
the consideration payable by Purchaser in connection with the
Acquisition, taken as a whole, is fair to Purchaser.
ARTICLE X
CONDITIONS TO SELLER'S AND ▇▇▇▇▇▇▇'▇ OBLIGATIONS
The respective obligations of Seller and ▇▇▇▇▇▇▇ to consummate the
Acquisition and to take the other actions called for under Articles II
and III are subject to the fulfillment of each of the following
conditions on or before the Closing Date:
10.1 Representations True at Closing. Purchaser shall have
performed and complied in all material respects with all obligations
and agreements required to be performed or complied with by them under
this Agreement at or prior to the Closing and the representations and
warranties of Purchaser contained in this Agreement shall be true and
correct when made and at and as of the Closing as if made at and as of
such date and time; and Seller shall have received a certificate, dated
the Closing Date, of the President or Vice President of Purchaser, to
the effect set forth in this Section 10.1.
10.2 No Adverse Changes. Since the date of this Agreement, no
event or series of events taken in the aggregate shall have occurred
which could have a Material Adverse Effect on Purchaser and its
Subsidiaries.
10.3 Investment Canada Act. Seller shall have received from the
ICA Minister a notice, satisfactory in form and substance to Seller,
under subsection 21(l) of the Investment Canada Act, stating that the
Acquisition is likely to be of net benefit to Canada, or the ICA
Minister shall have been deemed, under Section 21(2) of the Investment
Canada Act, to be satisfied that the Acquisition is likely to be of net
benefit to Canada and Seller shall have received a notice from the ICA
Minister to that effect, or the Parties determine that the Investment
Canada Act does not apply to the Acquisition.
10.4 Competition Act Matters. Either (i) the Competition Act
Director shall have issued an Advance Ruling Certificate in respect of
the Acquisition and shall not have subsequently withdrawn the Advance
Ruling Certificate or indicated that he has obtained new information as
a result of which the Competition Act Director is no longer satisfied
that he would not have sufficient grounds on which to make an
application under Section 92 of the Competition Act in respect of the
Acquisition, (ii) the Competition Act Director or his representative
shall have advised Seller (on terms and in form satisfactory to them)
that the Competition Act Director does not currently intend to make an
application under Section 92 of the Competition Act in respect of the
Acquisition, and such advice shall not have been amended or rescinded
or (iii) the Parties determine that the Competition Act does not apply
to the Acquisition.
10.5 Waiver of Rights Plan. Purchaser shall have exempted the
sale of Purchaser Securities from Purchaser's Rights Plan.
10.6 Acquisition Financing. Purchaser shall have received the
proceeds of the financings contemplated in the Commitment Letter, or
proceeds from other financing with respect to the Acquisition which are
satisfactory to ▇▇▇▇▇▇▇ and Seller, in an aggregate amount of at least
$650,000,000.
ARTICLE AN
ADDITIONAL AGREEMENTS
11.1 HSR Act Filings. ▇▇▇▇▇▇▇, Seller and Purchaser shall use
their best efforts to respond as promptly as practicable to all
requests received from the FTC or the Antitrust Division for additional
information or documentation with respect to notification and reports
filed under the HSR Act.
11.2 Competition Act Filings. Purchaser and Seller agree to file
with the Competition Act Director, within 10 Business Days after the
date of this Agreement, the information set out in Section 121 of the
Competition Act, certified in accordance with Section 118 of the
Competition Act. If the Competition Act Director, before the
expiration of seven days after the date of filing of such information,
requires the information set out in Section 122 of the Competition Act,
Purchaser and Seller shall file the required information with the
Competition Act Director within 10 Business Days after the date the
information is required by him. Purchaser shall prepare and file with
the Competition Act Director, and Seller shall cooperate with Purchaser
in their preparation and filing of, an Advance Ruling Certificate in
respect to the Acquisition, and all Parties will provide to the
Competition Act Director all information requested by him in connection
with the Advance Ruling Certificate application.
11.3 Investment Canada Act Filings. Purchaser agrees to prepare
and file with the ICA Minister, within 10 Business Days after the date
of this Agreement, an application for review under the Investment
Canada Act in connection with the Acquisition, and Seller agrees to
cooperate with Purchaser in connection with such application.
11.4 Other Consents and Approvals. All Parties shall use their
best efforts to obtain before the Closing, in addition to the approvals
and consents referred to in Section 4.5, and all other consents and
approvals listed and disclosed in Section 4.5 of the Seller Disclosure
Schedule, Section 4.17 of the Seller Disclosure Schedule or Section 5.5
of the Purchaser Disclosure Schedule; provided, however, that nothing
in this Section 11.4 or Sections 11.1, 11.2 or 11.3 shall require
Purchaser or any Acquired Subsidiary to (i) dispose of or hold
separately all or any material portion of the assets, properties or
businesses of the Acquired Subsidiaries or the assets, properties or
business of Purchaser and its Subsidiaries or agree to the imposition
of any material limitation on the ability of Purchaser and its
Subsidiaries after the Closing (including the Acquired Subsidiaries) to
conduct their business and own their assets and properties after the
Closing in substantially the same manner as before the Closing, or (ii)
in the case of Section 11.2 or 11.3 and the applications referred to
therein, make any undertaking relating to any Acquired Canadian
Subsidiary or its assets, properties, business, operations, employees
or practices, which in the reasonable judgment of Purchaser, would or
could have, after the Closing, a Material Adverse Effect on such
Acquired Subsidiaries.
11.5 Publicity. No Party other than Purchaser, ▇▇▇▇▇▇▇ or Seller
shall issue any press release or public announcement pertaining to the
Acquisition. Purchaser, ▇▇▇▇▇▇▇ and Seller shall consult with each
Party concerning any such press release or public announcement and
shall use their best efforts to agree on its text before its public
dissemination and before making any filings with any Governmental
Entity or national securities exchange with respect to any such press
release or public announcement. In cases where Purchaser and ▇▇▇▇▇▇▇
and Seller are unable to agree on a press release or public
announcement, the Party proposing it will not issue or make it unless
the proposing Party is required to do so by Law, in which case the
Party so obligated shall use its reasonable efforts to provide a copy
of the press release or public announcement to the other Party before
its filing or public dissemination.
11.6 Expenses. Except as otherwise provided in Article XIV, each
Party shall pay its own costs and expenses incurred in connection with
the Acquisition, whether or not the Acquisition is consummated. No
such costs or expenses shall be paid by or charged to any Acquired
Subsidiary.
11.7 Securities Law Matters. Seller represents and warrants to
Purchaser that the Purchaser Securities to be issued to Seller under
this Agreement are being acquired, and any Purchaser Common Stock
issued pursuant to this Agreement or Additional Purchaser Common Shares
will be acquired, by Seller for investment, for its own account and not
with a view to, or for resale in connection with, any distribution of
Purchaser Securities within the meaning of the Securities Act. No
Purchaser Securities may be sold, transferred, or otherwise disposed of
without registration under the Securities Act and any applicable state
or provincial securities Laws, rules, regulations or policies.
Notwithstanding such representations, and subject to the provisions of
this Agreement and the terms of such securities, Purchaser agrees to
permit a sale or transfer of such securities if Purchaser obtains
satisfactory assurances that the sale or transfer may be made without
registration under the Securities Act and related rules and regulations
(and all applicable state or provincial securities Laws, rules,
regulations or policies) including, without limitation, receipt by
Purchaser of an opinion to such effect from counsel reasonably
satisfactory to Purchaser, or compliance by Seller with the
requirements of Rule 144, Rule 144A or Regulation S under the
Securities Act.
Seller agrees that the Purchaser Convertible Debenture may be
inscribed with the legend set forth on the form thereof attached as
Exhibit D to this Agreement, and that all certificates evidencing
Additional Purchaser Common Shares and Purchaser Common Shares, but
only if required under the Securities Act and applicable state or
provincial securities Laws at the time of their issuance, will be
inscribed with the following restrictive legend:
"The shares represented by this certificate have
not been registered (or qualified by prospectus)
under the United States Securities Act of 1933, as
amended, or the securities laws of any state of
the United States or any province of Canada. Such
shares may not be offered, sold, transferred,
pledged, hypothecated or otherwise disposed of in
the absence of such a registration thereunder
other than pursuant to an exemption from such
registration or prospectus requirements and
delivery to ▇▇▇▇▇▇▇ Environmental Services, Inc.
of an opinion of counsel reasonably satisfactory
to it to the effect that such transfer is exempt
from registration under those laws."
11.8 Rule 144 Reports. For as long as Seller or any Affiliate of
Seller owns shares of Purchaser Common Stock representing at least 10%
of total number of shares of Purchaser Common Stock issued and
outstanding from time to time, Purchaser will
(i) make and keep "current public information" "available"
(as both those terms are defined in Rule 144) at all times;
(ii) timely file with the SEC in accordance with all
applicable rules and regulations, all reports and other documents
(a) required of Purchaser for Rule 144, as it may be amended from
time to time (or any rule, regulation, or statute replacing Rule
144) to be available and (b) required to be filed under Section
15(d) of the Exchange Act even if Purchaser's duty to file those
reports or documents is suspended or otherwise terminated under
the terms of Section 15(d); and
(iii) furnish Seller annually a written statement by
Purchaser that it has complied with the reporting requirements of
the Exchange Act and Rule 144, together with a copy of the most
recent annual or quarterly report of Purchaser and such reports
and documents filed by Purchaser with the SEC as may reasonably be
requested by Seller.
11.9 Seller Board Representation. At or prior to the Closing,
Purchaser shall increase the size of its Board of Directors to ten (10)
members. At Closing, Purchaser and Seller, as set forth below, shall
use their best efforts to cause to be elected the following individuals
to Purchaser's Board of Directors: (i) the President and Chief
Executive Officer of Purchaser; (ii) three individuals who shall be
designated by Purchaser; (iii) three individuals who shall be
designated by Seller; and (iv) three individuals who shall be
designated jointly by Purchaser and Seller. The Board of Directors
shall consist of three classes of directors. The term of office of the
first class shall expire at the next annual meeting of the Board of
Directors, of the second class one year thereafter and of the third
class two years thereafter, and at each annual meeting of the Board of
Directors held after such classification, directors shall be chosen for
a full three year term to succeed those whose terms expire. Each class
of directors shall have at least one representative who has been
nominated solely by the Purchaser, solely by the Seller and by the
Purchaser and Seller acting jointly.
11.10 Seller Guaranties. Except as provided in Section 11.12
and except in so far as any member of the Seller Group shall incur any
liability or obligation under Article XIV of this Agreement, Purchaser
and Chem-Waste agree to use best efforts, and to cause all other
Acquired Subsidiaries to use best efforts, to cause each member of the
Seller Group to be fully and finally released and discharged from all
further liability or obligation in respect of all Seller Guaranties in
respect of which such member of the Seller Group is an obligated party,
within six months following the Closing Date, and to that end,
Purchaser and Acquired Subsidiaries agree to use best efforts to:
(i) cause all liabilities and obligations of each Acquired
Subsidiary which are guaranteed or secured by a Seller Guaranty to
be fully and faithfully performed on a timely basis and in
accordance with their terms;
(ii) secure the surrender of and the return to each Seller
issuer bank of each letter of credit which is a Seller Guaranty
which is outstanding at the Closing Date, without draw thereon by
any beneficiary thereof;
(iii) secure the cancellation and return to Seller or to
the issuer thereof, as appropriate, without payment thereunder, of
all Seller Guaranties which are performance, suretyship or other
bonds; and
(iv) cause to be delivered to the respective members of the
Seller Group written releases, duly executed by all necessary
releasing parties, evidencing the full and final release of each
member of the Seller Group liable thereon or thereunder, from all
liabilities and obligations under each Seller Guaranty which is a
guaranty or other direct undertaking or commitment on the part of
such member of the Seller Group.
For purposes of this Section 11.10, "best efforts" on the part of
Purchaser includes:
(i) the offering of a substitution of a like guaranty of
Purchaser for any Seller Guaranty which is a guaranty of Seller;
and
(ii) the offering to the beneficiary or beneficiaries of any
letter of credit which is a Seller Guaranty, a substitute letter
of credit having an expiry date no earlier than the expiry date of
such Seller Guaranty and issued by a bank having credit ratings by
each of Standard & Poor's Ratings Services and ▇▇▇▇▇'▇ Investors
Services, Inc. which are at least as high as the credit ratings
given by such credit rating organizations for the Seller issuer
bank which is the issuer of such Seller Guaranty.
If at the end of six months following the Closing Date any Seller
Guaranty remains outstanding, then no later than the fifth Business Day
following the expiration of such six-month period, Purchaser shall
cause to be delivered to Seller a letter of credit which shall:
(i) name Seller as the beneficiary thereof;
(ii) be in an amount at least equal to the aggregate
outstanding and undrawn balances of all such outstanding Seller
Guaranties;
(iii) be issued by a bank having credit ratings by each
of Standard & Poor's Ratings Services and ▇▇▇▇▇'▇ Investors
Services, Inc. which are at least as high as the credit ratings
given by such credit rating organizations for the Seller issuer
banks;
(iv) have an expiry date no earlier than the expiry date of
the last to expire of the Seller Guaranties; provided, however,
that if the letter of credit to be obtained by the Purchaser for
the benefit of Seller pursuant hereto is to be issued with respect
to more than one Seller Guaranty, the amount of such letter of
credit will reduce automatically and without any action by any
party upon the expiring date of each Seller Guaranty by the amount
thereof or upon the acceptance by the beneficiary of such Seller
Guaranty of a substitute letter of credit provided by Purchaser;
and
(v) be payable at sight to Seller upon presentation of a
written, sworn affidavit of an officer of Seller stating that the
Seller reclamation credit issued by such Seller issuer bank has
been drawn upon by the beneficiary thereof in an amount not less
than the draw being made by Seller on such letter of credit.
Notwithstanding any provisions of this Section 11.10, any liabilities
or obligations of any member of the Seller Group under Section 11.12 or
Article XIV of this Agreement shall remain in full force and effect and
shall not be reduced or replaced by any substitute hereunder.
11.11 Guarantees of Performance of Retained Subsidiaries.
▇▇▇▇▇▇▇ and Seller shall use all reasonable efforts to cause each
Acquired Subsidiary to be fully and finally released and discharged
from all further liability or obligation in respect of any guarantee
given by any Acquired Subsidiary for obligations of any Retained
Subsidiary and agree to indemnify and hold harmless Purchaser and each
Acquired Subsidiary from and against any and all Damages suffered by
Purchaser or the Acquired Subsidiaries in connection with any such
guarantee and any and all other liabilities or obligations relating to
the Retained Subsidiaries.
11.12 Pinewood Security. ▇▇▇▇▇▇▇ has provided its corporate
guarantee to provide financial assurance for the costs of clean-up
and/or environmental impairment restoration incurred following closure
or following a final order to cease operations and commence closure of
the hazardous waste management facility operated by ▇▇▇▇▇▇▇
Environmental Services of South Carolina, Inc. in Pinewood, South
Carolina. This financial assurance required by the South Carolina
Department of Health and Environmental Control is comprised of the
corporate guarantee, the State Permitted Sites Fund and the GSX
Contribution Fund. ▇▇▇▇▇▇▇ shall maintain, solely at its expense,
until the tenth anniversary of the Closing Date, the corporate
guarantee or such other form of financial mechanism as may be permitted
by the relevant Environmental Laws to provide the required financial
assurance. This commitment shall not extend to any amounts released
from the GSX Contribution Fund. Notwithstanding this Section 11.11,
Purchaser shall be responsible for the costs of any clean-up and/or
environmental restoration incurred.
11.13 Employees. Unless and until the Closing shall have
occurred, neither Party shall for a period of 18 months beginning
January 6, 1997, without the prior written consent of the other Party,
solicit the employment of, or employ or offer to employ, any employees
of the other Party. This prohibition shall only extend to employees in
senior management, or key employees in operations, regulatory,
financial, marketing and sales or permitting aspect of a Party's
business. This prohibition shall not apply to any employee 90 days
after such employee has left the employ of either Party.
11.14 Purchaser Stock Option Plan. Notwithstanding any other
provision of this Agreement, on or prior to the Closing Date the
Purchaser may amend its Stock Option Plan to permit the immediate
vesting of stock options held by any employee of Purchaser or any of
its Subsidiaries, and ▇▇▇▇▇▇▇, Seller and the Purchaser agree that the
Purchaser shall within 60 days after the Closing Date file with the SEC
and use its best efforts to have declared effective a registration
statement with respect to the Purchaser Common Stock to be issued upon
the exercise of options granted under the Stock Option Plan.
11.15 Affiliate Transactions and Business Combination.
▇▇▇▇▇▇▇ and Seller agree with Purchaser that neither ▇▇▇▇▇▇▇, nor
Seller, nor any Affiliate of ▇▇▇▇▇▇▇ or Seller,
(i) shall enter into directly or indirectly any transaction
(including without limitation the purchase, lease, sale or
exchange or property of any kind or the rendering of any service)
with Purchaser or any of its Subsidiaries, except in the ordinary
course and pursuant to the reasonable requirements of Purchaser's
or such Subsidiary's business and upon fair and reasonable terms
no less favorable to Purchaser or such Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person
not ▇▇▇▇▇▇▇, Seller or an Affiliate of ▇▇▇▇▇▇▇ or Seller. Any
agreement approved by a majority of the independent director of
Purchasers shall be deemed to be upon fair and reasonable terms.
(ii) shall engage in any business combination (as such term
is defined in Section 203 of the Delaware General Corporation Law)
with Purchaser or any of its Subsidiaries unless the stockholders
of the Purchaser (other than Seller or its Affiliates) receive
consideration and are otherwise treated on terms no less favorable
than the consideration and terms received by Seller or its
Affiliates in connection with such business combination.
11.16 Directors and Officers. Purchaser shall, and ▇▇▇▇▇▇▇
and Seller shall cause Purchaser, and any successor of Purchaser, to
maintain in effect for a period of six years after the Closing Date the
identical provisions currently set forth in the Restated Certificate of
Incorporation and Bylaws of Purchaser with respect to the limitation on
the personal liability of directors and the indemnification of
directors and officers of Purchaser and its Subsidiaries, except for
revisions that would increase the protection afforded thereunder.
Seller, and any Affiliate of Seller that is the record or beneficial
owner of shares of Purchaser Common Stock, shall vote to authorize, and
shall cause any member of the Board nominated by Seller or any of its
Affiliates to authorize, any indemnification made by Purchaser or any
successor of Purchaser to such directors and officers to the extent
that any such approval may be required by Section 145 of the Delaware
General Corporation Law. In addition, Purchaser shall, and ▇▇▇▇▇▇▇ and
Seller shall cause Purchaser or its successors to maintain in effect
Purchaser's current directors and officers' liability insurance
policies (or policies providing comparable directors and officers'
liability insurance coverage) (the "Policies") covering current and
former members of the Board of Directors and officers of Purchaser (for
liabilities resulting from or arising out of this Agreement or events
that occurred on or prior to the Closing Date) for a period of at least
six years after the Closing Date and continuing members of the Board of
Directors of the Purchaser (for liabilities resulting from or arising
out of events that occurred on or prior to the third anniversary of the
Closing Date) for a period of at least nine years. Notwithstanding
anything in the immediately preceding sentence to the contrary, in the
event that Purchaser determines that the Policies can only be
maintained or procured, as the case may be, at too great an expense to
Purchaser or its successor, Purchaser or its successor shall be
permitted to substitute, and Seller and ▇▇▇▇▇▇▇ shall cause Purchaser
or its successor to substitute, in lieu of the Policies, self-insurance
or other insurance pursuant to which such members of the Board of
Directors shall be provided with similar directors and officers'
liability coverage; provided, however, that any such substitution shall
not cause a lapse of the directors and officers' liability coverage.
ARTICLE XII
TAX MATTERS
12.1 Future Tax Returns.
(i) Seller shall prepare and file, or cause to be prepared
and filed, in a timely fashion and at its sole expense all Tax
Returns of the Acquired Subsidiaries for the periods ended August
31, 1996 and the Closing Date (which shall include the income of
the U.S. Acquired Subsidiaries for the periods ended August 31,
1996 and the Closing Date). The Tax Return for the period ending
on the Closing Date shall include the results of operations of the
Acquired Subsidiaries for the Pre-Closing Tax Period beginning
September 1, 1996, and ending on the Closing Date. Seller shall
prepare all Tax Returns in a manner consistent with prior periods.
Seller shall pay or discharge any and all U.S. Tax reflected on
such Tax Returns, including the tax liability of any member or
former member of the Seller Group, however measured, for which any
Acquired Subsidiary is or may be held liable. Each such payment
shall be made on or before the date any such payment is due.
Seller shall receive any tax refunds reflected on such returns.
The Acquired Subsidiaries will promptly provide the information to
Seller to prepare such returns.
(ii) Purchaser shall prepare and file in a timely fashion,
all corporate federal and provincial Tax Returns of the Acquired
Canadian Subsidiaries for the period ended August 31, 1997 (which
shall include the income of the Acquired Canadian Subsidiaries for
the periods ended prior to the Closing Date, and the period ended
August 31, 1997). At least 15 days prior to the filing of any Tax
Returns required under this Section 12.1(ii), ▇▇▇▇▇▇▇ shall pay
the Acquired Canadian Subsidiaries or the Purchaser for any and
all taxes reflected on such Tax Returns attributable to Taxes
accrued or recognized prior to the Closing Date, for which any
Acquired Canadian Subsidiary is or may be held liable. ("Seller's
Post-Closing Taxes") The Purchaser or the Acquired Canadian
Subsidiary shall reimburse ▇▇▇▇▇▇▇ for any Tax Refunds reflected
on such returns attributable to Taxes recoverable, accrued or
recognized prior to the Closing Date, determined on an after-tax
basis.
(iii) With respect to all taxable periods including any
Pre-Closing Tax Period, the Seller Group, Purchaser, and the
Acquired Subsidiaries will make all computations, allocations,
determinations and elections affecting the Seller Group, and the
Acquired Subsidiaries in accordance with the provisions of the
regulations promulgated under Section 1502 of the Code, the
provisions of the Income Tax Act and state, provincial and local
income tax rules. Unless one of the preceding provisions requires
otherwise, the Seller Group's share of income to be reported on
such Acquired Subsidiaries' return will be computed as of the
Closing Date.
12.2 Tax Covenants.
(i) Without the prior written consent of Purchaser, neither
the Seller Group nor any Affiliate of the Seller Group shall, to
the extent it may affect or relate to any of the Acquired
Subsidiaries, make or change any tax election, change any annual
tax accounting period, adopt or change any method of tax
accounting, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim, assessment or proposed
assessment, surrender any right to claim a Tax Refund, consent to
any extension or waiver of the limitation period applicable to any
Tax claim or assessment or take or omit to take any other action,
if any such action or omission would have the effect of increasing
any post-closing Tax liability of any Acquired Subsidiary,
Purchaser or any Affiliate of Purchaser.
(ii) Without the prior written consent of Seller, neither
Purchaser nor its Affiliates shall, to the extent it may affect or
relate to any of the Acquired Subsidiaries, make or change any tax
election, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim, assessment or proposed
assessment, surrender any right to claim a Tax Refund, consent to
any extension or waiver of the limitation period applicable to any
Tax claim or assessment or take or omit to take any other action,
if any such action or omission would affect a Pre-Closing Tax
Period.
(iii) Purchaser and the Seller Group agree that so long
as any books, records and files retained by the Seller Group and
their Affiliates relating to the business of the Acquired
Subsidiaries, or the books, records and files delivered to the
control of Purchaser pursuant to this Agreement to the extent they
relate to the operations of the Acquired Subsidiaries prior to the
Closing Date, remain in existence and available, each Party (at
its own expense) shall have the right upon prior reasonable notice
to inspect and to make copies of the same at any time during
business hours for any proper purpose. Purchaser and the Seller
Group and their Affiliates shall use reasonable efforts not to
destroy or allow the destruction of any such books, records and
files until the later of the expiration of all applicable statutes
of limitation and extensions thereof, or the conclusion of
administrative or judicial proceedings with respect to Taxes for
such period.
(iv) Purchaser will make its personnel or that of the
Acquired Subsidiaries available to answer requests related to Tax
Proceedings as defined in Section 12.4(ii). Purchaser will either
provide documents needed to respond to federal and state
information requests or queries for such proceedings within 30
days or allow Seller to take possession of records necessary to
answer such requests.
(v) For income Tax purposes, each share of Purchaser Common
Stock shall be valued at the average the daily Closing Prices per
share of Purchaser Common Stock for the five consecutive trading
days preceding the Closing Date. The "Closing Price" for each
trading day shall be the reported last sale price of the New York
Stock Exchange.
12.3 Other Tax Matters, Post-Closing Cooperation.
(i) If Purchaser receives any Tax Refund (including interest
and penalties refunded) for a Pre-Closing Tax Period of an
Acquired Subsidiary, other than any such Tax Refund arising from
the application of a loss or Tax credit arising in a Post-Closing
Tax Period, then such persons shall pay to Seller Group the actual
amount of such Tax Refund as and when received, on an after-tax
basis.
(ii) Seller and Seller Group agree to cooperate with
Purchaser in the preparation and filing of any application to
carryback a loss or Tax credit arising in a Post-Closing Tax
period to Pre-Closing Tax Period and Seller or Seller Group shall
pay to Purchaser and the actual amount of any Tax Refund as and
when received on an after-tax basis.
(iii) All transfer, real property transfer, recording,
gains, stock transfer, documentary, sales, use, stamp,
registration, goods and services, value added and other such Taxes
and fees (including any penalties and interest) incurred in
connection with the sale of the stock of the Acquired
Subsidiaries, or otherwise in connection with the transactions
effected pursuant to this Agreement (collectively, the "Transfer
Taxes") shall be borne and paid by the Seller Group. To the
extent permissible under Tax Laws, the Seller Group shall
undertake all actions and file such Tax Returns or other forms or
instruments as may be necessary to make payment of any Transfer
Taxes due prior to or on the Closing Date, and present evidence of
such payment at the Closing Date to Purchaser.
(iv) Any payment to be made to any party under Section 12
shall be made within 15 days of demand (or receipt in the event of
a refund of any overpayment). Payment after that time shall bear
interest at the rate of interest prescribed by IRC Sec 6621(a)(1)
and (z).
12.4 Tax Controversies.
(i) Purchaser and Seller shall each use reasonable efforts
to keep the other advised as to the status of Tax audits and
litigation involving any direct, indirect or contingent Taxes
which could give rise to a liability of the Seller Group to
Purchaser under this Agreement for any pre-closing period (a "Tax
Liability Issue"). Seller agrees to timely notify Purchaser
regarding any proposed written communication (i.e., communications
not relating to inquiries or requests for information) by Seller
to any such Taxing Authority with respect to a Tax Liability Issue
to the extent that the issue would impact a post-closing period of
Purchaser or the Acquired Subsidiaries. Purchaser shall have the
right to consult with Seller regarding any response to such
communications.
(ii) Seller shall have full responsibility for and discretion
in handling any Tax Controversy including, without limitation, an
audit, a protest to the appeals division of the IRS, or similar
state or local appellate division, and litigation in the U.S. Tax
Court, or any other court of competent jurisdiction (a "Tax
Proceeding") for any pre-closing period. Purchaser or the
Acquired Subsidiaries shall give the Seller Group the ability to
handle any Tax Controversy whether by power of attorney or as
otherwise required by the Taxing Authority. However, upon request
by Purchaser and with the consent of Seller, Purchaser at its own
expense shall have full responsibility and discretion in handling
any Tax Proceeding for any Pre-closing tax period.
(iii) In the event that any one of the Acquired
Subsidiaries is required or elects to pay any Tax, file any bond
or deposit any amount in connection with a Tax Proceeding, Seller
shall loan to Purchaser no later than three (3) Business Days
before such payment is required to be made, without interest and
until a final determination with respect to such Tax has occurred,
one hundred percent of the amount to be paid or deposited by
Purchaser. Within three (3) Business Days of the receipt by
Purchaser of a refund of any amount loaned to it by Seller
(including any interest received by Purchaser), Purchaser shall
pay such refunded amount to Seller net of any Tax cost incurred by
Purchaser and its Affiliates as a result of such refund.
(iv) If the completion or settlement of any Tax Proceeding
relating to a Pre-Closing Tax Period, tax controversy or amended
Tax Return gives rise to a Tax Benefit for any Post-Closing Tax
Period to Purchaser, the Acquired Subsidiaries and any Affiliates,
then such persons shall pay to Seller the actual amount of such
Tax Benefit realized by such persons as it relates to such Pre--
Closing Tax Period as and when received on an after-tax basis. No
payment will be made under this paragraph for less than $50,000
per period or for a period of more than ten years.
(v) If the completion or settlement of any Tax Proceeding
relating to a Pre-Closing Tax Period, tax controversy or amended
Tax Return gives rise to a tax liability for any Post-Closing Tax
Period to Purchaser, the Acquired Subsidiaries and any Affiliates,
then Seller shall pay to such persons the actual amount of such
tax liability on an after-tax basis as and when paid. No payment
will be made under this paragraph for less than $50,000 per period
or for a period of more than ten years.
(vi) By written notice to Seller, Purchaser shall have the
right to instruct Seller to forego proceedings with respect to one
or more items for which Seller may be liable to indemnify
Purchaser. Such notice shall constitute a waiver of the right of
Purchaser to indemnification for any Taxes arising out of such
item for the period or periods involved, but shall not otherwise
waive any rights of Seller to any refund of a deposit under
Section 12.4(iii).
ARTICLE XIII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
13.1 Nature of Statements. All, but only those, statements
contained in this Agreement or any Disclosure Schedule or certificate
delivered or by on behalf of a Party under this Agreement shall be
deemed representations and warranties made by that Party in connection
with the transactions contemplated by this Agreement.
13.2 Survival of Representations, Warranties and Covenants.
Regardless of any investigation made at any time by or on behalf of any
Party or of any information any Party may have as a result of any such
investigation, all representations and warranties made in or pursuant
to this Agreement (including in any Disclosure Schedule or certificate
delivered under this Agreement) shall, except as otherwise provided in
this Section 13.2, terminate on the Closing Date. The representations
and warranties made by ▇▇▇▇▇▇▇ and Seller in Sections 4.12 and 4.16 and
the representations and warranties made by Purchaser in Sections 5.12
and 5.16 shall survive until the sixth anniversary of the Closing Date.
The representations and warranties made by ▇▇▇▇▇▇▇ and Seller in
Sections 4.2, 4.3, the second paragraph of 4.6, 4.13 and 4.14 and the
representations and warranties made by Purchaser in Sections 5.2, 5.3,
5.13 and 5.14 shall survive indefinitely. If a bona fide claim is
asserted before the expiration of the survival period of a
representation or warranty, such representation, warranty, covenant,
obligation or agreement shall continue in effect until the claim is
settled, adjudicated or otherwise resolved. With respect to this
Section 13.2, "known" means with respect to any matter referred to
above that (i) the matter is known to any Person who is or was an
officer, director, employee or agent of, or consultant to, ▇▇▇▇▇▇▇ or
any member of the Seller Group (including the Acquired Subsidiaries) or
Purchaser or any of its Subsidiaries on or before the Closing Date or
(ii) any such Person is aware of facts which would have led a
reasonable Person to have conducted an investigation or inquiry likely
to have led to discovery of such matter.
ARTICLE XIV
INDEMNIFICATION
The respective indemnification obligations of (i), ▇▇▇▇▇▇▇ and
Seller and (ii) Purchaser are as follows:
14.1 Indemnification by ▇▇▇▇▇▇▇ and Seller. ▇▇▇▇▇▇▇ and Seller
jointly and severally agree to pay and to indemnify and hold harmless
Purchaser and each Acquired Subsidiary and their respective Affiliates
(but, in the case of the Acquired Subsidiaries, only their respective
Affiliates after the Closing), successors and assigns from and against
any and all Damages suffered by Purchaser or the Acquired Subsidiaries
which are caused by, arising out of or in respect of:
(i) any and all Chem-Waste Group Taxes attributable to any
Pre-Closing Tax Period (including any transaction consummated in
such Pre-Closing Tax Period);
(ii) any Pre-Closing Seller Insurance Claims;
(iii) any breach or default in the performance by ▇▇▇▇▇▇▇
or Seller of (a) any covenant or agreement contained in this
Agreement to be performed on or after the Closing Date or (b) any
representation or warranty made pursuant to Article IV, but only
to the extent such representation or warranty survives the Closing
pursuant to Section 13.2; or
(iv) any Environmental Liability or Environmental Claim
arising as a result of any act or omission, including any Release,
occurring prior to the Closing Date, but only to the extent such
Environmental Liability or Environmental Claim
(a) was known to ▇▇▇▇▇▇▇ or a member of the Seller
Group and not disclosed in writing to Purchaser; or
(b) arose with respect to the treatment of waste at the
facility operated by Marine Shale Processors or the
remediation of contaminated soils and water arising from the
former lagoon sites and operation of the incinerator at
Mercier, Quebec, but only to the extent that the aggregate
cash expenditures with respect to any such Environmental
Liabilities or Environmental Claims exceeds in the aggregate
(I) $1,000,000 during such year and (II) since the Closing
Date an amount equal to the product of $1,000,000 times the
number of years that have elapsed since the Closing Date;
provided, however, that there shall be no liability under
this paragraph (iv)(b) for any cash expenditures incurred
more than six years after the Closing Date.
The amount of any damages that ▇▇▇▇▇▇▇ and Seller are
required to indemnify Purchaser against under (iii)(b) above,
shall be the amount by which the aggregate of all such
damages exceeds $2 million.
14.2 Indemnification by Purchaser. Purchaser agrees to pay and to
indemnify and hold harmless and defend each of ▇▇▇▇▇▇▇, Seller and
their Affiliates (but not any Acquired Subsidiary after the Closing),
and their respective successors and assigns from and against any and
all Damages suffered by Seller which are caused by or arising out of or
in respect of:
(i) all Chem-Waste Group Taxes attributable to any Post-
Closing Tax Period (including, any transaction considered in such
Post-Closing Tax Period);
(ii) any breach or default in the performance by Purchaser of
any (a) covenant or agreement contained in this Agreement to be
performed after the Closing Date or (b) any representation or
warranty made pursuant to Article V, but only to the extent such
representation or warranty survives the Closing pursuant to
Section 13.2 of this Agreement; or
(iii) any Environmental Liability or Environmental Claim
of any Acquired Subsidiary, but only to the extent that such
Environmental Liability or Environmental Claim
(a) was known to Purchaser and not disclosed in writing
to ▇▇▇▇▇▇▇ and Seller; or
(b) arose solely as a result of an act or omission,
including any Release, occurring after the Closing Date;
provided, however, that there shall be no liability under this
paragraph (iii) for any Environmental Liability or Environmental
Claim asserted more than six years after the Closing Date.
(iv) Seller Guaranties listed and identified in Section 4.21
of the Seller Disclosure Schedule.
The amount of any damages that Purchaser is required to
indemnify ▇▇▇▇▇▇▇, Seller and their Affiliates against under
(ii)(b) shall be the amount by which the aggregate of all such
damages exceeds $2 million.
14.3 Third Party Claim. If any Party (for purposes of this
Section 14.3, an "Indemnified Party") becomes aware of a fact,
circumstance, claim, situation, demand or other matter for which it or
any other Indemnified Party has been indemnified under this Article XIV
and which has resulted or could result in a liability owed by the
Indemnified Party to a third party or a claim otherwise advanced by a
third party against the Indemnified Party (any such items being herein
called a "Third Party Claim"), the Indemnified Party, shall give prompt
written notice of the Third Party Claim to the Party obligated to
provide indemnity with respect to such Third Party Claim (for purposes
of this Section 14.3, the "Indemnifying Party"), requesting
indemnification therefor, specifying the nature of and specific basis
for the Third Party Claim and the amount or estimated amount thereof to
the extent then feasible; provided, however, a failure to give such
notice will not waive any rights of the Indemnified Party except to the
extent the rights of the Indemnifying Party are actually materially
prejudiced by such failure. The Indemnifying Party shall have the
right to assume the defense or investigation of such Third Party Claim
and to retain counsel and other experts to represent the Indemnified
Party and shall pay the fees and disbursements of such counsel and
other experts. If within 30 days after receipt of the request (or five
days if litigation is pending) the Indemnifying Party fails to give
notice to the Indemnified Party that the Indemnifying Party assumes the
defense or investigation of the Third Party Claim, an Indemnified Party
may retain counsel and other experts (whose fees and disbursements
shall be at the expense of the Indemnifying Party) to file any motion,
answer or other pleading and take such other action which the
Indemnified Party reasonably deems necessary to protect its interests
or those of the Indemnifying Party until the date on which the
Indemnified Party receives such notice from the Indemnifying Party. If
an Indemnifying Party assumes the defense or investigation and retains
such counsel and other experts, any Indemnified Party shall have the
right to retain its own counsel and other experts, but the fees and
expenses of such counsel and other experts shall be at the expense of
the Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party mutually agree to the retention of such counsel and
other experts or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party and representation of both parties by the
same counsel would, in the opinion of counsel retained by the
Indemnifying Party, be inappropriate due to actual or potential
differing interests between them.
If requested by the Indemnifying Party, the Indemnified Party
agrees to cooperate with the Indemnifying Party and its counsel in
contesting any Third Party Claim which the Indemnifying Party defends,
or, if appropriate and related to Third Party Claim in question, in
making any counterclaim against the person asserting the Third Party
Claim, or any cross-complaint against any Person. No Third Party Claim
may be settled by the Indemnified Party without the consent of the
Indemnifying Party, which consent will not be unreasonably withheld.
Unless the Indemnifying Party agrees in writing that the Damages to the
Indemnified Party resulting from such settlement are fully covered by
the indemnities provided herein and that such Damages are fully
compensable in money, no Third Party Claim may be settled without the
consent of the Indemnified Party, which consent will not be
unreasonably withheld. Except with respect to settlements entered
without the Indemnified Party's consent pursuant to the immediately
preceding sentence, to the extent it is determined that the Indemnified
Party has no right under this Article XIV to be indemnified by the
Indemnifying Party, shall promptly pay to the Indemnifying Party any
amounts previously paid or advanced by the Indemnifying Party with
respect to such matters pursuant to this Article XIV.
After the delivery of notice of a Third Party Claim hereunder, at
the reasonable request of the Indemnifying Party the Indemnified Party
shall grant the Indemnifying Party and its representatives full and
complete access to the books, records and properties of the Indemnified
Party to the extent reasonably related to the matters to which the
notice relates. The Indemnifying Party will not disclose to any third
person (except its representatives) any information obtained pursuant
to the preceding sentence which is designated as confidential by the
Indemnified Party and which is not otherwise generally available to the
public, except as may be required by applicable law. The Indemnifying
Party shall request its representatives not to disclose any such
information (except as may be required by applicable law). All such
access shall be subject to the normal safety regulations of the
Indemnified Party, and shall be granted under conditions which will not
unreasonably interfere with the business and operations of the
Indemnified Party.
14.4 Claims Between the Parties. If any Party (for purposes of
this Section 14.4, an "Indemnified Party") becomes aware of a fact,
circumstance, claim, situation, demand or other matter (other than a
Third Party Claim) for which it or any other Indemnified Party has been
indemnified under this Article XIV and which has resulted or could
result in a liability (any such items being herein called a "Claim")
being owed to the Indemnified Party by another Party (the "Indemnifying
Party"), the Indemnified Party shall give prompt written notice to the
Indemnifying Party of the Claim, stating the nature and basis of the
Claim and the amount claimed thereunder, together with supporting
information to the Claim, if any. If the Indemnifying Party does not
notify the Indemnified Party within 30 days from the date such Claim
notice is given that it disputes the Claim, the amount of the Claim
shall conclusively be deemed to be a liability of the Indemnifying
Party hereunder.
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment. This Agreement may be amended by the Parties, by
or pursuant to action taken by their respective Boards of Directors, at
any time before or after approval by Purchaser's stockholders of the
matters specified in Section 7.5, but after such approval, no amendment
shall be made which materially increases the amount or materially
alters the terms of the Purchaser Securities without the further
approval of Purchaser's stockholders. This Agreement may be amended
only by a written instrument executed by all of the Parties.
15.2 Waiver. At any time on or before the Closing Date, each
Party may (i) extend the time for the performance of any of the
obligations or other acts of any other Party, (ii) waive any
inaccuracies in the representations and warranties made in this
Agreement or in a Disclosure Schedule of any other Party, (iii) waive
compliance with any of the agreements or conditions of this Agreement
which may be legally waived, and (iv) grant consents under this
Agreement; provided, however, that no such extension, waiver or grant
shall be effective until all Parties, other than the Party receiving
the extension, waiver or grant, shall have given such extension, waiver
or grant. Any such extension, waiver or grant shall be valid only if
evidenced by a written instrument executed by the Party giving it.
15.3 Termination. This Agreement may be terminated at any time
before the Closing by:
(i) the mutual consent of the Boards of Directors of Seller
and Purchaser;
(ii) by either Purchaser or Seller if the Acquisition has not
been consummated on or before the later to occur of April 30, 1997
or the 61st day after the SEC has approved the Purchaser Proxy
Statement (or any later date which may be agreed to by the mutual
written consent of Purchaser and Seller); provided, however, that
such right to terminate this Agreement shall not be available to
any Party that has breached in any material respect its
obligations under this Agreement in any manner that has
proximately contributed to the failure of the Acquisition to occur
on or before such date; or
(iii) by either Seller or Purchaser if the stockholders
of Purchaser shall have failed to approve at the Purchaser
Stockholders' Meeting the matters specified in Section 7.5.
15.4 Consequences of Termination.
(i) If this Agreement is terminated as provided in Section
15.3, it shall forthwith become void and, except as otherwise
hereinafter provided in this Section 15.4, there shall be no
liability or obligation on the part of any Party or their
respective officers or directors. Notwithstanding the foregoing,
the Confidentiality Agreement shall also survive such a
termination. Nothing in this Section 15.4 shall, however, relieve
any Party from any liability for any breach of this Agreement.
(ii) Notwithstanding paragraph (i) of this Section 15.4, if
this Agreement is terminated solely because the stockholders of
Purchaser fail to approve the matters referred to in Section 7.5
hereof, and the failure to receive such stockholder approval
directly results from the existence of a third party offer to
acquire at least 51% of Purchaser's stock or assets (whether in
the form of a tender offer, merger proposal, asset purchase or
otherwise), then Purchaser will pay to Seller within 10 days of
such termination of this Agreement an amount equal to $10 million.
(iii) Notwithstanding paragraph (i) of this Section 15.4,
if this Agreement is terminated because of the breach or default
under this Agreement of ▇▇▇▇▇▇▇ or Seller, then Seller will pay to
Purchaser within 10 days of such termination of this Agreement an
amount equal to $10 million.
ARTICLE XVI
GENERAL PROVISIONS
16.1 Non-Business Days. If the date on which any action
(including the delivery of notices) to be taken under this Agreement is
to occur falls on a day which is not a Business Day, such action will
be deemed timely taken if taken on the first Business Day following.
16.2 Notices. All notices or other communications which are
required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered in person or
transmitted by telecopier (with receipt confirmed) to a Party at the
address or telecopy number, as applicable, set forth below (as any such
address or telecopier number may be changed from time to time by notice
similarly given):
(1) if to Seller or ▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(2) if to Purchaser, to:
▇▇▇▇▇▇▇ Environmental Services, Inc.
One ▇▇▇▇▇▇▇ Plaza
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
16.3 Entire Agreement. This Agreement, its Exhibits, the
Disclosure Schedules, all documents delivered under this Agreement and
the Confidentiality Agreement constitute, and together with the
Ancillary Agreements upon their execution and delivery as herein
provided will constitute, the entire agreement, and supersede all of
the prior agreements and undertakings, both written and oral among the
Parties, or any of them, with respect to the subject matter of this
Agreement.
16.4 Assignment; Binding Effect. This Agreement may not be
assigned by any of the Parties. Subject to the preceding sentence,
this Agreement shall be binding upon the Parties and their respective
successors and assigns.
16.5 Counterparts. This Agreement may be executed in counterparts
which together shall constitute a single agreement.
16.6 Governing Law; Jurisdiction. This Agreement and the rights
and obligations of the parties created hereby shall be governed by the
internal Laws of the State of Delaware without regard to its conflict
of law rules. The Parties irrevocably consent to the non-exclusive
jurisdiction of the courts of the State of Delaware in connection with
any dispute between or among them arising under this Agreement or any
Ancillary Agreement.
16.7 Severability of Provisions. If a provision of this Agreement
or its application to any Person or circumstance, is held invalid or
unenforceable in any jurisdiction, to the extent permitted by Law, such
provision or the application of such provision to Persons or
circumstances other than those as to which it is held invalid or
unenforceable and in other jurisdictions, and the remaining provisions
of this Agreement, shall not be affected.
16.8 Specific Performance. Each Party agrees that one or more
other Parties would be irreparably damaged if any provision of this
Agreement were not performed in accordance with its specific terms or
was otherwise breached. Therefore, the Parties agrees that each Party
shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement or any of its provisions and to specifically enforce
this Agreement its terms and provisions in any action instituted in the
courts of the State of Delaware subject matter jurisdiction, in
addition to any other remedy to which a Party may be entitled, at law
or in equity.
16.9 Joint Drafting. This Agreement and its Exhibits have been
jointly drafted by the Parties and their counsel. Neither this
Agreement nor any of its Exhibits shall be construed against any Party
based on its authorship.
16.10 Captions. The article and section headings in this
Agreement are for convenience only, and shall not affect the meaning or
interpretation of this Agreement.
16.11 No Third-Party Beneficiaries. There are no third-party
beneficiaries of this Agreement, except that the respective Affiliates
and current or former directors and officers of the Parties are
entitled to the benefits of the respective indemnification obligations
of the Parties under Article XIV.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have duly executed this Agreement,
all as of the date first written above.
▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and General Counsel
▇▇▇▇▇▇▇ TRANSPORTATION, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ENVIRONMENTAL SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice Chairman of the Board