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EXHIBIT 10.43
[EXECUTION FORM]
PURCHASE AGREEMENT
BY AND AMONG
NEW HEIGHTS HOLDING CORPORATION
AS THE BUYER,
AND
KTI, INC.,
KTI OPERATIONS, INC.
AND
CASELLA WASTE SYSTEMS INC.,
AS THE SELLERS
DATED AS OF AUGUST 17, 2001
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT, dated as of August 17, 2001 (this "AGREEMENT"), is
made by and among New Heights Holding Corporation, a Delaware corporation (the
"BUYER"), and KTI, Inc., a New Jersey corporation ("KTI"), and KTI Operations,
Inc., a Delaware corporation and wholly owned subsidiary of KTI ("KTI
OPERATIONS"), and Casella Waste Systems, Inc., a Delaware corporation and the
parent company of KTI ("CASELLA", together with KTI and KTI Operations, the
"SELLERS"). Unless otherwise defined herein or the context clearly requires
otherwise, all capitalized terms herein shall have the meanings given to them in
ARTICLE I of this Agreement.
R E C I T A L S
WHEREAS, KTI is the holder of the Purchased Equity (as defined below);
WHEREAS, New Heights (as defined below) is engaged in, among other
activities, the business of collecting, processing and recycling automobile,
truck and other vehicle tires (as operated by New Heights, the business of
collection, processing and recycling such tires is referred to as the
"BUSINESS");
WHEREAS, the Buyer desires to purchase from the Sellers, and the Sellers
desire to sell, assign and transfer to the Buyer the Purchased Equity;
WHEREAS, concurrently herewith, Casella and KTI Environmental Group, Inc.,
a [Delaware] corporation ("KTI ENVIRONMENTAL GROUP") and Crumb Rubber Investors
Co., LLC ("RTG BUYER"), are entering into a certain Purchase Agreement, dated as
of the date hereof (the "RTG PURCHASE AGREEMENT"), with respect to the purchase
and sale of certain shares of common stock of Recovery Technologies Group, Inc.,
a Delaware corporation and an Affiliate of the Sellers ("RTG"); and
WHEREAS, it is a condition to each of the Sellers' and the Buyer's
obligations hereunder that the transactions contemplated by the RTG Purchase
Agreement and this Agreement are consummated simultaneously.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements hereinafter contained, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, unless the context clearly indicates
otherwise, the following terms shall have the following meanings:
"ACCOUNTS RECEIVABLE" means all accounts receivable (including, without
limitation, amounts due from customers whether recorded as accounts receivable
or reductions in accounts payable) and related deposits, security or collateral
therefor, including recoverable customer deposits, of any of the Purchased
Companies existing on the Closing Date.
"AFFILIATE" as to any Person means any other Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person, provided that any entity formed by AG
Special Situation Corp. in connection with this Agreement shall be deemed to be
an Affiliate of the Buyer. For purposes of this Agreement, on and after the
Closing,
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neither the Sellers nor any of their Affiliates shall be considered to be an
Affiliate of Holdco 2 LLC or any of the Purchased Companies.
"BENEFIT PLANS" has the meaning set forth in Section 5.18(a) of this
Agreement.
"BUSINESS" has the meaning set forth in the recitals to this Agreement.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banking institutions in the State of New York or State of
Vermont are authorized by law or executive order to close.
"BUSINESS EMPLOYEES" has the meaning set forth in Section 5.17(a) of this
Agreement.
"BUYER" has the meaning set forth in the introductory paragraph of this
Agreement.
"BUYER INDEMNITEES" has the meaning set forth in Section 12.1(a) of this
Agreement.
"BUYER LIABILITY CAP" means an aggregate of $4,000,000 with respect to (i)
the amounts (if any) due and payable by the Buyer pursuant Article XII of this
Agreement, and (ii) the amounts (if any) payable by RTG Buyer pursuant Article
XII of the RTG Purchase Agreement.
"BUYER'S EVENT OF BREACH" has the meaning set forth in Section 12.2(a) of
this Agreement.
"CASELLA" has the meaning set forth in the introductory paragraph of this
Agreement.
"CERCLA" has the meaning set forth in Section 5.21(b) of this Agreement.
"CERCLIS" has the meaning set forth in Section 5.21(e) of this Agreement.
"CLAIMS" means, whether or not formally asserted, all demands, claims,
actions or causes of action, assessments, suits, proceedings, disputes,
investigations, Losses, damages, costs, expenses, liabilities, judgments,
awards, fines, sanctions, penalties, charges, and/or amounts paid in settlement,
including, without limitation, costs, fees and expenses of attorneys, court
costs, experts, accountants, appraisers, consultants, witnesses, investigators
and/or any other Persons employed or retained in connection with any of the
foregoing.
"CLOSING" has the meaning set forth in Section 4.1 of this Agreement.
"CLOSING DATE" has the meaning set forth in Section 4.1 of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTIBLE" has the meaning set forth in Section 5.16 of this Agreement.
"CONFIDENTIAL INFORMATION" has the meaning set forth in Section 8.5(c) of
this Agreement.
"CONTRACTS" has the meaning set forth in Section 5.15(a) of this Agreement.
"EMPLOYEE POLICIES" has the meaning set forth in Section 5.17(i) of this
Agreement.
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"EMPLOYMENT AND LABOR AGREEMENTS" has the meaning set forth in Section
5.17(b) of this Agreement.
"ENVIRONMENT" has the meaning set forth in Section 5.21(g) of this
Agreement.
"ENVIRONMENTAL CONDITION" means a condition of the soil, subsoil, surface
waters, groundwater, stream sediments, air or other environmental media,
including the presence or Release of a Hazardous Substance, at, under, or
migrating from a property that, by virtue of Environmental Laws, (a) requires
investigatory, corrective or remedial measures of any Seller, any of the
Purchased Companies or the Buyer, and/or (b) comprises a basis for claims
against, demands of and/or liabilities of any Seller, any of the Purchased
Companies or the Buyer by any Person, including, without limitation, adjacent
land owners. "Environmental Condition" shall include those conditions identified
or discovered before or after the Closing Date resulting from any activity,
inactivity or operations of any Seller or any of the Purchased Companies before
the Closing Date.
"ENVIRONMENTAL LAWS" means all laws, regulations and other requirements of
any Governmental Authority and any judicial or administrative interpretation
thereof, any duties under the common law, any orders, decrees, judgments,
agreements or recorded covenants, conditions, restrictions or easements in any
way relating to the protection of the Environment, human health, public safety
or welfare, or natural resources.
"EQUIPMENT AND MACHINERY" means (a) all the equipment, machinery, fixtures
and improvements, tooling, spare parts, supplies, furniture, mobile equipment,
tractors, trailers, and vehicles owned or leased by any of the Purchased
Companies on the Closing Date, and all replacements for any of the foregoing,
(b) any rights of any of the Purchased Companies or their respective
Subsidiaries to the warranties (to the extent assignable) and licenses with
respect to the aforesaid items, and (c) any related Claims, credits, rights of
recovery and set-off with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATES" has the meaning set forth in Section 5.18(c) of this
Agreement.
"EXCESS PAYMENT" has the meaning set forth in Section 12.1(b) of this
Agreement.
"FILES AND RECORDS" means all files and records, whether in hard copy,
magnetic or electronic format, of any of the Purchased Companies and their
respective Subsidiaries relating to the Business, or the Business Employees
(whether owned or held by the Purchased Companies, their respective Subsidiaries
or the Sellers), including, without limitation, customer files, equipment
maintenance records, warranty records for equipment, maintenance records and
sales tax exemption certificates.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 5.6 of this
Agreement.
"FORMER REAL PROPERTY" has the meaning set forth in Section 5.21(a) of this
Agreement.
"GAAP" means the generally accepted accounting principles for financial
reporting in the United States.
"GOVERNMENTAL AUTHORITY" means any agency, department, court or any other
administrative, legislative or regulatory authority of any foreign, Federal,
state, provincial, local or municipal governmental body.
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"GOVERNMENTAL AUTHORIZATIONS" has the meaning set forth in Section 5.12 of
this Agreement.
"HAZARDOUS SUBSTANCE" means any pollutant, contaminant, hazardous
substance, radioactive substance, toxic substance, hazardous waste, medical
waste, radioactive waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls, or any hazardous or
toxic constituent thereof, and includes, but is not limited to, any substance or
material defined in or regulated under the Environmental Laws, or for which
levels are prescribed by any Environmental Laws.
"HOLDCO 1 CORP." means RTG Holding Corporation, a Delaware corporation.
"HOLDCO 2 INTEREST" means the interest in Holdco 2 LLC to be held by KTI or
its Affiliates in accordance with the terms of the Holdco 2 LLC Agreement.
"HOLDCO 2 LLC" means NH Investors Co., LLC, a Delaware limited liability
company.
"HOLDCO 2 LLC AGREEMENT" means the Amended and Restated Operating Agreement
of Holdco 2 LLC in the form of EXHIBIT A attached hereto.
"INSURANCE POLICIES" has the meaning set forth in Section 5.19 of this
Agreement.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 5.22 of this
Agreement.
"KTI" has the meaning set forth in the introductory paragraph of this
Agreement.
"KTI OPERATIONS" has the meaning set forth in the introductory paragraph
hereto.
"LEASED REAL PROPERTY" has the meaning set forth in Section 5.20(c) of this
Agreement.
"LEASES" has the meaning set forth in Section 5.20(c) of this Agreement.
"LICENSES AND PERMITS" has the meaning set forth in Section 5.12 of this
Agreement.
"LIEN" means any lien, mortgage, deed of trust, security interest, charge,
pledge, retention of title agreement, title defect, easement, encroachment,
condition, reservation, restriction, covenant, right of way or other encumbrance
affecting title.
"LOSSES" has the meaning set forth in Section 12.1(a) of this Agreement.
"NEW HEIGHTS" means New Heights Recovery and Power, LLC, a Delaware limited
liability company.
"NEW HEIGHTS LLC AGREEMENT" means the Limited Liability Company Operating
Agreement of New Heights, dated as of December 28, 1998, as amended, modified
and supplemented.
"NEW HEIGHTS POWER PLANT" means the power plant located in Ford Heights,
Illinois and owned by New Heights.
"NLRB" has the meaning set forth in Section 5.17(d) of this Agreement.
"NON-POWER PLANT ASSETS" has the meaning set forth in the Holdco 2 LLC
Agreement.
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"ORGANIZATIONAL DOCUMENTS" means the certificate or articles of
incorporation, memorandum or articles of association, certificate of formation,
operating, partnership or limited liability company agreement, by-laws or
similar organizational or governing documents or instruments, including all
amendments thereto of a Person.
"OUTSIDE DATE" has the meaning set forth in Section 15.1 of this Agreement.
"OWNED REAL PROPERTY" has the meaning set forth in Section 5.20(a)(i) of
this Agreement.
"PARTY'S EVENT OF BREACH" has the meaning set forth in Section 12.4 of this
Agreement.
"PARTY INDEMNITEE" has the meaning set forth in Section 12.4 of this
Agreement.
"PERMITTED LIENS" means (i) Liens for Taxes not yet due and payable, (ii)
Liens arising under worker's compensation, unemployment insurance, social
security, retirement, and similar legislation and (iii) Liens identified in
SCHEDULE A attached hereto.
"PERMITTED ENCUMBRANCES" has the meaning set forth in Section 5.20(a)(ii)
of this Agreement.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or any Governmental Authority.
"POWER PLANT ASSETS" has the meaning set forth in the Holdco 2 LLC
Agreement.
"PRE-CLOSING TAX PERIOD" means any taxable period ending on or before the
Closing Date and the portion ending as of the end of the Closing Date of any
taxable period that includes, but does not end until after, the Closing Date.
"PURCHASE PRICE" has the meaning set forth in Section 3.1(a) of this
Agreement.
"PURCHASED COMPANIES" means New Heights and all of its Subsidiaries.
"PURCHASED EQUITY" means 80.1% of the Units of New Heights beneficially
owned by Sellers, which Units represent 40.05% of the outstanding Units of New
Heights.
"PURCHASED INTELLECTUAL PROPERTY" has the meaning set forth in Section 5.22
of this Agreement.
"RECONCILED DISTRIBUTIONS" means the actual, aggregate amount paid by
Sellers on behalf of the Purchased Companies with respect to the payables and
payroll expenses of the Purchased Companies for which Seller Distributions were
made by the Purchased Companies.
"RELEASE" means the release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migrating into the indoor
or outdoor environment of any Hazardous Substance.
"RIGHTS" has the meaning set forth in Section 5.3 of this Agreement.
"RTG" has the meaning set forth in the recitals hereto.
"RTG BUSINESS" means the "Business" as defined in the RTG Purchase
Agreement.
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"RTG BUYER" has the meaning set forth in the recitals hereto.
"RTG PURCHASE AGREEMENT" has the meaning set forth in the recitals hereto.
"RTG PURCHASED COMPANIES" means the "Purchased Companies" as defined in the
RTG Purchase Agreement.
"RTG PURCHASED STOCK AND DEBT" means the "Purchased Stock and Debt" as
defined in the RTG Purchase Agreement.
"RTG SELLERS" means Casella and KTI Environmental Group.
"SELLER CONFIDENTIAL INFORMATION" has the meaning set forth in Section 9.2
of this Agreement.
"SELLER DISTRIBUTIONS" means all payments and other distributions made by
the Purchased Companies to Sellers from and after June 30, 2001 up to and
including the Closing Date to reimburse Sellers for the payments made by Sellers
in the ordinary course of business on behalf of the Purchased Companies with
respect to the payables and employee payroll expenses of the Purchased
Companies.
"SELLER GROUP" has the meaning set forth in Section 8.5(a) of this
Agreement.
"SELLER INDEMNITEES" has the meaning set forth in Section 12.2(a) of this
Agreement.
"SELLER LIABILITIES" shall mean all of the following liabilities,
obligations or commitments:
(a) all of the liabilities of the Purchased Companies, whether
known or unknown (including, without limitation, all contingent, unliquidated
and all other Claims against the Purchased Companies) in existence as of, or
arising prior to or on, the Closing (whether or not asserted on or prior to the
Closing) other than (i) liabilities reflected on the June 30, 2001 balance sheet
of the Purchased Companies, (ii) liabilities which have arisen since the date of
the June 30, 2001 balance sheet of the Purchased Companies in the ordinary
course of business consistent with past practices, (iii) contractual and other
liabilities which are incurred in the ordinary course of business consistent
with past practices, and not required by GAAP to be reflected on a balance
sheet, or (iv) any liabilities specifically disclosed in the exhibits and
schedules to this Agreement (except as otherwise specified in subclauses (b)
through (g) of this definition, all of which shall constitute Seller
Liabilities);
(b) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities relating to any litigation or
arbitrations against or involving the Purchased Companies in existence as of or
arising prior to or on the Closing;
(c) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the Losses (which, for purposes hereof, shall
include the costs of remediation of any violation of any Environmental Law or of
an Environmental Condition) of the Purchased Companies arising from or in any
way relating to any Environmental Condition, or any actual or alleged violation
of Environmental Law (including the failure to have or obtain Permits and
Governmental Authorizations required by any Environmental Law) existing,
occurring or commencing prior to or on the Closing Date, or in connection with
the transactions contemplated by this Agreement or otherwise necessary to
conduct the Business as currently conducted by the Purchased Companies and the
Sellers;
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(d) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities for, relating to or in respect of:
(i) Taxes payable with respect to, or as a result of, the
sale and transfer (or deemed transfer) of the Purchased Equity pursuant to this
Agreement, including, but not limited to, Transfer Taxes and other taxes, if
any, resulting from the sale and transfer of the Purchased Equity;
(ii) Taxes of any of the Purchased Companies for any
Pre-Closing Tax Period (including any Taxes resulting from the Closing);
(iii) Treasury Regulation Section 1.1502-6(a) or any
comparable provision of state, provincial, local, or foreign law for Taxes of
any of the Sellers or any other Person affiliated at any time before the Closing
with any of the Purchased Companies and any liability for Taxes of any Person by
contract, agreement or otherwise arising prior to, or in respect of conditions
existing as of, the Closing; and
(iv) breaches by Sellers of the representations and
warranties set forth in Section 5.8 and for breaches by Sellers of the
covenants, obligations and agreements set forth in Article VIII;
(e) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities in respect of the employment or
termination of current or former employees of the Sellers and their Affiliates
and the Purchased Companies, on or prior to the Closing (including, without
limitation, any Claims, civil penalty or other cause of action by any current or
former employee, governmental entity, or any other party against the Buyer with
respect to violations of WARN), except for liabilities relating to accrued but
unused vacation days and sick time with respect to employees who remain employed
by the Purchased Companies after the Closing;
(f) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities and obligations with respect to
the Owned Real Property or Leased Real Property arising or relating to any
condition existing prior to the Closing, or with respect to the Former Real
Property other than Permitted Encumbrances; or
(g) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities with respect to Benefit Plans
arising prior to the Closing Date.
"SELLER LIABILITY CAP" means an aggregate of $16,000,000 with respect to
(i) the amounts (if any) due and payable by the Sellers pursuant Article XII of
this Agreement, and (ii) the amounts (if any) payable by the RTG Sellers
pursuant Article XII of the RTG Purchase Agreement.
"SELLER MATERIAL ADVERSE EFFECT" means any material adverse effect on the
aggregate value of the Purchased Equity and the RTG Purchased Stock and Debt;
provided, however, that without limiting the foregoing, a reduction of five
percent (5%) or more in the aggregate value of the Purchased Equity and the RTG
Purchased Stock and Debt shall constitute a "Seller Material Adverse Effect."
"SELLERS" has the meaning set forth in the introductory paragraph of this
Agreement.
"SELLERS' EVENT OF BREACH" has the meaning set forth in Section 12.1(a) of
this Agreement.
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"SELLERS' NEW HEIGHTS UNITS" means the Units of New Heights owned by KTI,
which Units shall represent fifty percent (50%) of the outstanding Units of New
Heights on a fully diluted basis.
"SELLERS' SENIOR MANAGEMENT" means John Casella, James Bohlig, Richard
Norris and Mike Brennan.
"STOCK" with respect to any Person, means shares of capital stock or any
other equity securities, and any other shares of stock issued or issuable
therefor, all membership or partnership interests, or any options, warrants or
other rights to acquire any of the above.
"STRADDLE PERIOD" means any taxable period that includes, but ends after,
the Closing Date.
"SUBSIDIARY" means any Person with respect to which a specified Person (or
a Subsidiary thereof) directly or indirectly owns a majority of the Stock or has
the power to vote or direct the voting of sufficient securities to elect 50% or
more of the members of the board of directors or similar governing body.
"TAXES" means any Federal, state, provincial, local, foreign, or other tax
of any kind whatsoever (together with any interest, penalties, or additions
imposed with respect thereto), including, without limitation, income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
service, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, intangible property,
sales, use, transfer, recording, registration, value added, alternative or
add-on minimum, estimated, rental, lease, ad valorem, or other tax.
"TAX RETURNS" means any return, report, information return or other
document filed or required to be filed with any governmental authority in
connection with the determination, assessment, collection or administration of
any Taxes.
"TRANSACTION EXPENSES" means the expenses incurred by the Sellers or Buyer
and their respective Affiliates, as the case may be, in connection with this
Agreement and the RTG Purchase Agreement and the transactions contemplated
hereby and thereby, including, without limitation, all reasonable legal fees
(both U.S. and foreign), accounting fees, fees and expenses of consultants and
travel and similar expenses.
"TRANSFER TAXES" means sales, use, transfer, transfer gains or similar
Taxes.
"UNITS" has the meaning set forth in the New Heights LLC Agreement.
"WARN" means the Worker Adjustment and Retraining Notification Act.
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ARTICLE II
PURCHASE AND SALE
SECTION 2.1 TRANSFER OF EQUITY
(a) Subject to the terms and conditions set forth in this
Agreement, the Sellers shall sell, convey, transfer, assign and deliver the
Purchased Equity to the Buyer, and the Buyer shall purchase and accept the
Purchased Equity from the Sellers, on the Closing Date.
(b) The sale, transfer, conveyance, assignment and delivery by
the Sellers of the Purchased Equity shall be made free and clear of all Liens.
ARTICLE III
PURCHASE PRICE
SECTION 3.1 PURCHASE PRICE. Subject to the terms and conditions set
forth in this Agreement, the aggregate purchase price to be paid to the Sellers
for the Purchased Equity shall be an amount equal to $250,000 (the "Purchase
Price").
SECTION 3.2 PAYMENT OF PURCHASE PRICE. Subject to the terms and
conditions set forth in this Agreement, the Buyer shall pay the Purchase Price
to the Sellers in cash by wire transfer in immediately available funds to an
account or accounts designated by KTI (which account or accounts shall be
designated not less than two (2) Business Days prior to the Closing Date).
SECTION 3.3 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated for Tax and accounting purposes among the Purchased Equity and the
covenants contained in Section 8.7 hereof, as provided in SCHEDULE 3.3. Such
schedule shall also set forth the manner in which the Purchase Price and the
Holdco 2 Interest are allocated among the acquired assets and covenants. The
Buyer and the Sellers shall not, at any time prior to or following the Closing
Date, take any position with respect to the allocation of the Purchase Price
that is inconsistent with the final SCHEDULE 3.3 that is attached hereto.
ARTICLE IV
CLOSING
SECTION 4.1 CLOSING. The closing of the sale and purchase of the
Purchased Equity contemplated hereby (the "CLOSING") shall take place at the
offices of Hale and Dorr LLP, 60 State Street, Boston, MA 02109 at 10:00 a.m. on
the later of (i) September 7, 2001 and (ii) the second Business Day following
the satisfaction or waiver by the party entitled to the benefit of such
condition of each of the conditions set forth in Articles XIII and XIV, or on
such other date and place as shall be mutually agreed upon by KTI and the Buyer
(the "CLOSING DATE").
SECTION 4.2 ITEMS TO BE DELIVERED BY THE SELLERS AT THE CLOSING.
In addition to the other deliveries or actions required to be delivered or
performed hereby, at the Closing, the Sellers shall deliver or cause to be
delivered to the Buyer the following:
(a) the officer's certificate required by Section 14.1;
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(b) evidence of all consents, waivers, novations, authorizations
and approvals required by Section 14.3;
(c) the certificates or other instruments representing all of
the Purchased Equity duly accompanied by stock powers assigned in blank or, if
such equity is not certificated, such other certificate, instrument or document
evidencing the Purchased Equity reasonably satisfactory to the Buyer,
(d) a counterpart of the Holdco 2 LLC Agreement, duly executed
by KTI or an Affiliate thereof;
(e) evidence reasonably satisfactory to the Buyer of the
approval of the transactions contemplated hereby by the board of directors of
each Seller;
(f) copies of the Organizational Documents of each of the
Purchased Companies, certified by the Secretary of State or other appropriate
official of its jurisdiction of incorporation;
(g) certificates from the Secretary of State or other
appropriate official of the respective jurisdictions of incorporation or
formation and the respective jurisdictions of qualification (as listed on
SCHEDULE 5.1) to the effect that each of the Purchased Companies is in good
standing and subsisting in such jurisdictions;
(h) an opinion of counsel to the Sellers, dated as of the
Closing Date, in the form of EXHIBIT B attached hereto; and
(i) such other certificates, agreements, documents and other
instruments and documents as are required to be delivered by the Sellers or any
of the Purchased Companies pursuant to this Agreement at or prior to the
Closing.
SECTION 4.3 ITEMS TO BE DELIVERED BY THE BUYER AT THE CLOSING.
In addition to the other deliveries or actions required to be delivered or
performed hereby, at the Closing, the Buyer shall deliver or cause to be
delivered to the Sellers the following:
(a) the officer's certificate contemplated by Section 13.1;
(b) evidence of all consents, waivers, novations, authorizations
and approvals required by Section 13.3;
(c) a counterpart of the Holdco 2 LLC Agreement, duly executed
by the Buyer;
(d) an opinion of the Buyer's counsel, dated as of the Closing
Date, in the form of EXHIBIT C attached hereto;
(e) a wire transfer of immediately available funds in an amount
equal to the Purchase Price to be paid on the Closing Date; and
(f) such other certificates and other instruments and documents
required to be delivered by the Buyer pursuant to this Agreement at or prior to
the Closing.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, hereby represent and warrant to the
Buyer that the statements contained in this Article V are true and correct,
except as set forth in the disclosure schedule provided by the Sellers to the
Buyer on the date hereof (the "DISCLOSURE SCHEDULE"). For purposes of this
Article V, the representations and warranties shall be deemed not to apply to,
or be affected in any way by, the New Heights Power Plant. Without limiting the
foregoing, references in this Article V to "Purchased Companies," "Business," or
"Purchased Equity" shall not include the New Heights Power Plant.
SECTION 5.1 CORPORATE ORGANIZATION. Each Seller and each of the
Purchased Companies is a corporation or limited liability company that is duly
incorporated or organized, as applicable, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, continuance or
organization, as applicable, and it has all requisite corporate or other power
and authority to own its properties and assets and to conduct its business as
now conducted. Each of the Purchased Companies is duly qualified to do business
as a foreign corporation or limited liability company in good standing in every
jurisdiction in which the character or location of the properties and other
assets owned or leased by it or the nature of the business conducted by it makes
such qualification necessary. SCHEDULE 5.1 lists every jurisdiction in which (a)
each of the Purchased Companies is incorporated or organized, as applicable, and
(b) each of the Purchased Companies is qualified to do business.
SECTION 5.2 AUTHORIZATION AND VALIDITY OF AGREEMENTS. Each Seller has
all requisite corporate or other power and authority to enter into, execute and
deliver this Agreement and the other agreements and instruments delivered by it
pursuant to this Agreement and to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by each Seller and the
other agreements and instruments delivered by such Seller pursuant to this
Agreement and the performance of its obligations hereunder and thereunder have
been duly authorized by all necessary corporate or other action by its board of
directors and sole shareholder and no other corporate or other proceedings on
its part are necessary to authorize such execution, delivery and performance.
This Agreement and the other agreements and instruments delivered by each Seller
pursuant to this Agreement have been duly executed and delivered by such Seller
and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with their respective terms.
SECTION 5.3 CAPITALIZATION. SCHEDULE 5.3 sets forth the authorized Stock
of each of the Purchased Companies and the owners of record of all of the issued
and outstanding Stock of each of the Purchased Companies. The Purchased
Companies are the record owners of all of the issued and outstanding Stock of
each of their respective Subsidiaries, and such ownership is free and clear of
any Lien. KTI is the record and beneficial owner of, and has full power and
authority to convey, the Purchased Equity free and clear of any Lien, and, upon
delivery of and payment for such Purchased Equity as herein provided, the Buyer
will acquire good and valid title thereto, free and clear of any Lien. New
Heights is the beneficial owner of all of the issued and outstanding common
stock of the other Purchased Companies on a fully diluted basis. There is no
other Stock outstanding and no other outstanding options, warrants, convertible
or exchangeable securities, subscriptions, rights (including any preemptive,
registration or anti-dilutive rights), stock appreciation rights, calls or
commitments, agreements or understandings of any character whatsoever
(collectively, "RIGHTS") requiring the issuance or sale of shares of any Stock
of the Purchased Companies, and there are no contracts or other agreements by
which any of the Purchased Companies may become bound to issue additional shares
of Stock or any Rights. None of the Sellers nor any of the Purchased Companies
is a party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any Stock of any of the Purchased Companies.
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SECTION 5.4 NO CONFLICT OR VIOLATION. The execution, delivery and
performance by each Seller of this Agreement and the other agreements and
instruments delivered by it pursuant to this Agreement do not and will not (a)
violate or conflict with any provision of such Seller's or any of the Purchased
Companies' Organization Documents or the Organization Documents of any
Subsidiary of a Seller or any of the Purchased Companies, (b) violate any
provision of law, or any order, judgment or decree of any Governmental Authority
applicable to any Seller, (c) violate or conflict with, or result in a breach of
or constitute (with due notice or lapse of time or both) a default under, or
result in the termination of, or accelerate the performance required by, any
contract, lease, loan agreement or other agreement or instrument to which any of
the properties or assets of any of the Purchased Companies is subject, (d)
result in the creation or imposition of any Lien upon any of the Purchased
Equity or (e) result in the cancellation, modification, revocation or suspension
of any of the Licenses and Permits.
SECTION 5.5 CONSENTS AND APPROVALS. Except as set forth on SCHEDULE 5.5
to this Agreement, there are no consents, waivers, authorizations, filings with
or approvals of any Governmental Authority or of any other Person that are
required in connection with the (a) the execution and delivery by the Sellers of
this Agreement and the other agreements and instruments required to consummate
the transactions contemplated by this Agreement and (b) the performance by the
Sellers of their respective obligations hereunder and pursuant to the other
agreements and instruments required to consummate the transactions contemplated
by this Agreement, except for those consents, waivers, authorizations, filings
and approvals, the absence of which would not have a material adverse effect on
the Business, any Purchased Company, any of the Purchased Equity or the ability
to consummate the transaction contemplated by this Agreement; provided, however,
that Sellers' failure to obtain any consent required to be obtained from Grace
Brothers, Ltd. in connection with the transaction contemplated by this Agreement
shall constitute a material adverse effect on the Purchased Companies; provided
further, however, that Sellers failure to obtain any of the consents described
in the preceding clause of this Section 5.5 shall not serve as the basis for
Buyer not consummating the transactions contemplated by this Agreement, and the
remedy for the failure to obtain any such consent shall be limited to Sellers'
obligation to indemnify any Buyer Indemnitee from and against any Losses arising
as a result of such failure as set forth in Section 12.1.
SECTION 5.6 FINANCIAL STATEMENTS. Attached as SCHEDULE 5.6 are true and
complete copies of (i) the unaudited balance sheets for New Heights as at June
30, 2001, and (ii) the statements of income and cash flows for New Heights for
the six months ended at June 30, 2001; in each case, together with the notes and
schedules thereto, as applicable. The financial statements described in this
Section 5.6, including the notes and schedules thereto, are referred to herein
collectively as the "FINANCIAL STATEMENTS." The Financial Statements (a) have
been prepared in accordance with GAAP, consistently with the accounting
practices previously employed by New Heights (except as indicated in the notes
thereto), (b) present fairly the financial position, results of operations and
cash flows of New Heights as of the dates thereof and for the periods then
ended, (c) are complete, correct and in accordance with the books of account and
records of New Heights, and (d) can be reconciled with the financial records
maintained and the accounting methods applied by New Heights for Federal income
tax purposes.
SECTION 5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Since June 30, 2001, there has not been:
(i) any material adverse change in the business,
operations, properties, condition (financial or other) or prospects of any of
the Purchased Equity or any of the Purchased Companies, and no factor or
condition exists and no event has occurred that would be likely to result in any
such change;
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(ii) any material loss, damage, or other casualty to the
Purchased Equity or the Purchased Companies, whether or not covered by
insurance; or
(iii) any loss of the employment, services or benefits of
any officer or key employee of any of the Purchased Companies.
(b) Since June 30, 2001, the Purchased Companies have operated
their respective Business in the ordinary course of business consistent with
past practices and have not:
(i) incurred or failed to pay or satisfy when due any
material obligation or liability (whether accrued, contingent or otherwise)
relating to the operations of the Business;
(ii) incurred or failed to discharge or satisfy any Lien
that is not a Permitted Lien;
(iii) transferred any of their assets with a value in
excess of $10,000 other than in the ordinary course of business and consistent
with past practices, or canceled any debts or Claims or waived any rights
material to the Business or relating to the operations of the Business;
(iv) intentionally defaulted on any obligation, or
unintentionally defaulted on any material obligation relating to the Business;
(v) entered into any transaction material to the
Business, or amended or terminated any arrangement material to the Business or
relating to the Business;
(vi) taken or omitted to take any other action, which
would, had it been taken subsequent to the date hereof, constitute a breach of
the provisions of Section 8.1; or
(vii) entered into any agreement or made any commitment to
do any of the foregoing.
(c) Notwithstanding the foregoing or any other provision in this
Agreement to the contrary, since June 30, 2001, none of the Sellers has caused
or permitted the Purchased Companies to distribute or pay, or authorize the
distribution or payment of, any cash or other assets or property to Sellers or
any of their Affiliates, except the Seller Distributions.
SECTION 5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of the
Purchased Companies, either separately or as a member of an affiliated group,
have been filed, and all such Tax Returns were correct and complete in all
material respects. All Taxes of the Purchased Companies (whether or not shown to
be due on any Tax Return) that were due (determined after taking into account
all applicable extensions) have been paid. None of the Purchased Companies
currently is the beneficiary of any extension of time within which to file any
Tax Return. None of the Sellers nor any of the Purchased Companies has carried
on business or performed any acts in a jurisdiction where Tax Returns were
required to be, but were not, filed which activity would cause it to be subject
to the taxing authority of such jurisdiction. No claim has been made by a taxing
authority in a jurisdiction where any of the Sellers or the Purchased Companies
does not file Tax Returns that any of the Sellers or the Purchased Companies is
or may be subject to taxation by that jurisdiction.
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(b) The Purchased Companies have withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third
party.
(c) There is no material, unresolved dispute or claim concerning
any liability for Tax in respect of any of the Purchased Companies either (A)
claimed or proposed by any representative of any taxing authority or (B) as to
which any of the Sellers or the Purchased Companies or the directors and
officers of any of the Sellers or the Purchased Companies has knowledge.
SCHEDULE 5.8 lists all Federal, state, local, and foreign income and franchise
Tax returns filed with respect to each of the Purchased Companies for taxable
periods ended after December 31, 1996, indicates any such Tax returns that have
been audited by any taxing authority, identifying such authority, indicates
those Tax returns that currently are the subject of audit by any taxing
authority, identifying such authority, and indicates those Tax returns that
remain open to future audit by any taxing authority. KTI has delivered, or has
caused to be delivered, to the Buyer correct and complete copies of all income
and franchise Tax returns, examination reports, and statements of deficiencies
assessed against or agreed to by or on behalf of any of the Purchased Companies
for taxable periods ending after December 31, 1996.
(d) There are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitations applicable to any
claim for, or the period for the collection or assessment of, Taxes due from or
with respect to any of the Purchased Companies.
(e) None of the Purchased Companies has made any payments, is
obligated to make any payments, nor is party to any agreement that could
obligate them to make any payments that will not be deductible under Code
Section 280G. None of the Purchased Companies is a party to, bound by, or
subject to, any Tax sharing, Tax allocation, Tax indemnification, or similar
agreement, other than (i) agreements for the benefit of one or more of the
Purchased Companies made in connection with the acquisition transactions whereby
the Purchased Companies were acquired by New Heights and (ii) agreements among
only some or all of the Purchased Companies. None of the Purchased Companies (A)
has been a member of an affiliated group filing a consolidated or combined
Federal, state, local, or foreign income or franchise Tax return (other than a
group the common parent of which was the Sellers) or (B) has any liability for
the Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise. No closing agreement pursuant to Code
Section 7121 or any similar provision of state, local, or foreign law has been
entered into by or with respect to any of the Purchased Companies. None of the
Purchased Companies has agreed to make any adjustment pursuant to Code Section
481(a) by reason of any change in any accounting method, and there is no
application pending with any taxing authority requesting permission for any
changes in any accounting method of any of the Purchased Companies. The Internal
Revenue Service has not proposed any such adjustment or change in accounting
method that has not been resolved.
(f) None of the Sellers nor any of their respective Affiliates
has made, with respect to any of the Purchased Companies, or any property held
by any of the Purchased Companies, any consent under Section 341(f) of the Code.
No property of any of the Purchased Companies is "tax exempt use property"
within the meaning of Section 168(h) of the Code. None of the Purchased
Companies is a party to any lease made pursuant to Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended. There are no Liens on any of the
Purchased Equity or assets of any of the Purchased Companies that arose in
connection with any failure (or alleged failure) to pay any Tax.
(g) SCHEDULE 5.8 sets forth the estimated basis of each of the
Purchased Companies in their assets as of December 31, 2000.
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(h) No election under Section 754 of the Code has been made or
filed by or with respect to New Heights.
(i) No election has been made under Treasury Regulations Section
301.7701-3 to treat New Heights as a corporation for U.S. Federal income tax
purposes.
SECTION 5.9 OPERATION OF THE BUSINESS; SUFFICIENCY OF ASSETS. Except as
set forth on SCHEDULE 5.9, no part of the Business is operated by or through any
Person other than the Purchased Companies. The Purchased Companies have good and
marketable title to all of the assets owned or used by the Purchased Companies
and, upon consummation of the transactions contemplated by this Agreement, such
assets shall be free and clear of all Liens (other than Permitted Liens). The
Sellers have good and marketable title to the Purchased Equity and, upon
consummation of the transactions contemplated by this Agreement, the Buyer will
acquire good and marketable title to all of Sellers' right, title and interest
in and under the Purchased Equity free and clear of all Claims, Liens and
objections or equities of any kind. The assets owned or used by the Purchased
Companies comprise all assets and services required for the continued conduct of
the Business as now being conducted by the Purchased Companies. The assets owned
or used by the Purchased Companies in connection with the Business are adequate
for the purposes for which such assets are currently used or are held for use,
and are in working repair and operating condition and there are no facts or
conditions affecting such assets which could, individually or in the aggregate,
interfere materially with the use or operation thereof as currently used or
operated, or their adequacy for such use.
SECTION 5.10 EQUIPMENT AND MACHINERY. SCHEDULE 5.10 sets forth a complete
and correct list of each item of Equipment and Machinery and lists the owner
thereof. The Purchased Companies have good title, free and clear of all Liens
(other than Permitted Liens) and title defects of any kind to the Equipment and
Machinery. The Purchased Companies hold good and transferable leaseholds in all
of the Equipment and Machinery leased by the Purchased Companies, and each such
lease is valid and enforceable. The Purchased Companies are not in default with
respect to any item of leased Equipment and Machinery and no event has occurred
that constitutes, or with due notice or lapse of time or both may constitute, a
default under any lease thereof.
SECTION 5.11 CUSTOMER RELATIONSHIPS. SCHEDULE 5.11 contains a true,
accurate and complete list of the ten largest customer accounts, in terms of
revenues to each of the Purchased Companies (a) for the calendar year ended
December 31, 2000 and (b) for the six-month period ended June 30, 2001, together
with the dollar amount of revenue earned from each such customer during each of
such periods. With respect to any such customer listed on SCHEDULE 5.11, no such
customer has terminated or is expected to terminate a material portion of its
normal business (based on past practice) with any of the Purchased Companies. No
director or executive officer of any Seller or any Purchased Company, or any
Affiliate of any of the foregoing, has any direct or indirect interest, either
by way of equity ownership or otherwise, in any Person which competes with, is a
customer of, or is a sales agent for, or is a party to any Contract with, any of
the Purchased Companies.
SECTION 5.12 LICENSES AND PERMITS. SCHEDULE 5.12 sets forth a true and
complete list, including the owner or holder thereof, of all of the material
licenses, permits, franchises, authorizations, registrations, approvals and
certificates of occupancy (or their equivalent) ("GOVERNMENTAL AUTHORIZATIONS")
issued or granted to any of the Purchased Companies by any Governmental
Authority, including without limitation, those required under the Environmental
Laws (collectively, the "LICENSES AND PERMITS"), and all pending applications
therefor. Such scheduled Licenses and Permits comprise all of the Governmental
Authorizations necessary or required for the operation of the Business as
currently conducted. Except as set forth of SCHEDULE 5.12 Governmental
Authorizations held by the Purchased
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Companies or used in connection with the Business have been duly obtained, are
valid and in full force and effect, and are not subject to any pending or
threatened administrative or judicial proceeding to revoke, cancel, suspend or
declare any such Governmental Authorization invalid in any respect. Except as
set forth on SCHEDULE 5.12, the Governmental Authorizations are owned or held,
as applicable, by the applicable Purchased Company free and clear of all Liens.
SECTION 5.13 COMPLIANCE WITH LAW. The operations of the Purchased
Companies and their respective businesses have been conducted in accordance with
all applicable laws, regulations, orders and other requirements of all
Governmental Authorities having jurisdiction over the Purchased Companies and
their assets, properties and operations, except where the failure to do so would
not have a material adverse effect on any of the Purchased Companies or the
Purchased Equity or the ability to consummate the transactions contemplated by
this Agreement. Except as set forth on SCHEDULE 5.13, no Seller nor any
Purchased Company has received notice of any violation of any such law,
regulation, order or other legal requirement, or are in default with respect to
any order, writ, judgment, award, injunction or decree of any Governmental
Authority.
SECTION 5.14 LITIGATION. Except as set forth of SCHEDULE 5.14, there are
no Claims pending or, to the Sellers' knowledge, threatened, before any
Governmental Authority brought by or against any Sellers or any of the Purchased
Companies or any Sellers' or any of the Purchased Companies' respective
officers, directors, partners, employees, agents or Affiliates involving,
affecting or relating to the Business, the Purchased Companies, or any of the
Purchased Equity or the transactions contemplated by this Agreement. None of the
Sellers nor any of the Purchased Companies is named in, or otherwise bound by,
any order, writ, judgment, award, injunction or decree of any Governmental
Authority that affects or may reasonably be expected to affect the Business, any
of the Purchased Companies, any of the Purchased Equity, or that would interfere
with the transactions contemplated by this Agreement. SCHEDULE 5.14 lists all
pending or to the Seller's knowledge, threatened litigation brought by or
against the Sellers, any of the Purchased Companies or their respective
Subsidiaries with respect to the Business any of the Purchased Equity.
SECTION 5.15 CONTRACTS.
(a) SCHEDULE 5.15(a) sets forth a true and complete list of all
of the contracts, agreements and other instruments and arrangements (whether
written or oral) to which any of the Purchased Companies is a party or by which
any of the Purchased Companies or any of the Purchased Equity is bound, in each
case, which are of the nature described below or are otherwise material to the
Business (collectively, the "CONTRACTS"), including but not limited to:
(i) arrangements relating to providing collection,
transportation or disposal services for automobile, vehicle or other vehicle
tires involving in excess of $100,000 per year;
(ii) leases, licenses, permits, insurance policies,
service contracts and other arrangements concerning or relating to real estate;
(iii) employment, consulting, collective bargaining or
other similar arrangements relating to or for the benefit of current, future or
former employees, agents, and independent contractors or consultants of the
Purchased Companies;
(iv) agreements and instruments relating to the borrowing
of money or obtaining of or extension of credit;
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(v) material brokerage or finder's agreements;
(vi) contracts involving a sharing of profits or expenses;
(vii) material acquisition or divestiture agreements;
(viii) material service agreements;
(ix) manufacturer's representative, or distributorship
agreements;
(x) arrangements limiting or restraining it from engaging
or competing in any lines of business or with any Person; and
(xi) documents granting a power of attorney.
(b) All of the Contracts are in full force and effect and are
valid, binding and enforceable against the parties thereto in accordance with
their terms; provided that the agreements identified in Section 5.15(a)(x) may
not be enforceable under all circumstances. The Sellers, the Purchased Companies
and, to the best knowledge of the Sellers, each other party to the Contracts,
has performed all obligations required to be performed by it to date under, and
is not in default or delinquent in performance, status or any other respect
(claimed or actual) in connection with, the Contracts, and no event has occurred
which, with due notice or lapse of time or both, would constitute such a
default. The enforceability of the Contracts will not be affected in any manner
by the execution, delivery and performance of this Agreement or the other
documents and instruments delivered in connection with this Agreement. The
Sellers have delivered to the Buyer or its representatives true and complete
originals or copies of all of the Contracts.
SECTION 5.16 RECEIVABLES. All Accounts Receivable are reflected on
SCHEDULE 5.16, were legally and validly incurred pursuant to bona fide
transactions in the ordinary course of business consistent with past practices,
and are current and Collectible in amounts not less than the aggregate amount
thereof net of reserves reflected on the balance sheets of the Purchased
Companies included in the Financial Statements as set forth on SCHEDULE 5.16,
and are not subject to any counterclaims or set-offs. The term "COLLECTIBLE"
shall mean that not less than one hundred percent (100%) of the book value of
such Accounts Receivable are payable within ninety (90) days of the applicable
due date. None of the Sellers nor any Purchased Company has any knowledge of any
fact or circumstance generally that would result in any material increase in the
uncollectability of the Accounts Receivable as a class. SCHEDULE 5.16 sets
forth, as of June 30, 2001, all of the Accounts Receivable, the Purchased
Company to which such amount is owed, the amount owing and the aging of such
receivable, the name and last known address of the party from whom such
receivable is owing, and any security in favor of it for the repayment of such
receivable which the Purchased Companies purport to have.
SECTION 5.17 LABOR MATTERS.
(a) SCHEDULE 5.17(a) sets forth a true, accurate and complete
list containing the names of all employees who are employed by any of the
Purchased Companies, or who otherwise provide substantially all of their
services to the Purchased Companies, as of the date hereof (the "BUSINESS
EMPLOYEES"), the employer of such Business Employee, the job designations of
each such Business Employee, the compensation paid to each such Business
Employee and the basis for such compensation, currently and for calendar year
2000.
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(b) None of the Purchased Companies is a party to (i) any
employment agreement or consulting agreement with any Person, (ii) any
agreement, policy or past or present practice that requires it to pay
termination or severance pay to salaried, non-exempt or hourly employees (other
than as required by law), (iii) any collective bargaining agreement or other
labor union contract, nor does any Seller know of any activities or proceedings
of any labor union to organize any such employees of the Purchased Companies,
(iv) or subject to any conciliation agreements, consent decrees or settlements
with respect to their employees. The Sellers have furnished, or have caused to
be furnished, to the Buyer complete and correct copies of all such agreements,
contracts and policies (the "EMPLOYMENT AND LABOR AGREEMENTS"). None of the
Purchased Companies has breached or otherwise failed to comply with any
provisions of any of the Employment and Labor Agreements and there are no
grievances outstanding thereunder. The transactions contemplated hereby do not
cause or give rise to the payment of any severance or "change of control"
payments to any employee of the Purchased Companies.
(c) Each of the Purchased Companies is in compliance in all
material respects with all applicable laws relating to employment and employment
practices, wages, hours, and terms and conditions of employment.
(d) There is no unfair labor practice charge or complaint
pending or to the knowledge of the Sellers, threatened before the National Labor
Relations Board ("NLRB") or any other Governmental Authority relating to any of
the Purchased Companies.
(e) There is no labor strike, material slowdown or material work
stoppage or lockout pending or to the knowledge of the Sellers, threatened
against or affecting any of the Purchased Companies, and none of the Purchased
Companies has experienced any strike, material slowdown or material work
stoppage, lockout or other collective labor action by or with respect to their
employees.
(f) There is no representation, claim or petition pending before
the NLRB or any other Governmental Authority, and no question concerning
representation exists relating to the employees of any of the Purchased
Companies.
(g) There are no charges with respect to or relating to any of
the Purchased Companies pending before the Equal Employment Opportunity
Commission or any other Governmental Authority responsible for the prevention of
unlawful employment practices.
(h) None of the Sellers nor any Purchased Company has received
notice from any Governmental Authority responsible for the enforcement of labor
or employment laws of an intention to conduct an investigation of it relating to
the Business and no such investigation is in progress.
(i) Each Purchased Company has furnished to the Buyer a complete
and accurate list of all its employee manuals, policies, procedures and
work-related rules that apply to employees of any of the Purchased Companies
("EMPLOYEE POLICIES"). Each Purchased Company has provided the Buyer with copies
of all of the written Employee Policies and a written description of all
material unwritten Employee Policies. Each of the Employee Policies can be
amended or terminated at will by the applicable Purchased Company.
SECTION 5.18 EMPLOYEE PLANS.
(a) SCHEDULE 5.18(a) sets forth a complete and correct list of
all benefit plans and all employment, compensation, bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, retiree medical or
life insurance, supplemental retirement, severance, change of control or
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other benefit plans, programs or arrangements, in each case, which are
maintained, contributed to or sponsored by any Seller on behalf of any current
or former employees of the Business or by any of the Purchased Companies, or for
which any of the Purchased Companies have any liability, contingent or otherwise
(collectively, the "BENEFIT PLANS").
(b) The Benefit Plans have been operated and administered in all
material respects in accordance with their terms and the applicable requirements
of the Code and applicable law, except for such failures as would not reasonably
have a material adverse effect on any of the Purchased Companies. All
contributions and all payments required to have been made to or under any
Benefit Plan have been properly made, except for such failures as would not have
a material adverse effect on any of the Purchased Companies.
(c) No Benefit Plan is subject to Title IV of ERISA or is a
multi-employer plan within the meaning of Section 3(37)(A) of ERISA. Neither the
Sellers nor any of the Purchased Companies, nor any trade or business (whether
or not incorporated) which is or has ever been treated as a single employer with
the Purchased Companies under Section 414(b), (c), (m) or (o) of the Code
("ERISA AFFILIATES"), has incurred any liability under Title IV of ERISA or
Section 412 of the Code, except for such liability that has been paid in full.
(d) There is no Claim (excluding claims for benefits incurred in
the ordinary course consistent with past practices) that is pending or to the
Sellers' knowledge threatened with respect to any of the Benefit Plans.
(e) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any current or former employee or consultant of the any
of the Purchased Companies, (ii) increase any benefits under any Benefit Plan,
or (iii) result in the acceleration of the time of payment, vesting or other
rights with respect to any benefits under any Benefit Plan.
(f) All pension plans maintained or required to be maintained by
the Purchased Companies are duly registered under, and have been maintained in
accordance with, all applicable laws.
SECTION 5.19 INSURANCE. SCHEDULE 5.19 lists the fidelity bonds and the
aggregate coverage amount and type and generally applicable deductibles of all
insurance policies insuring, or maintained by, the Purchased Companies (the
"INSURANCE POLICIES") or the Sellers with respect to the Business. The Insurance
Policies (together with all riders and amendments thereto) are in full force and
effect and all premiums due on the Insurance Policies have been paid. The
Purchased Companies have complied with the provisions of the Insurance Policies.
Neither the Sellers nor any of the Purchased Companies has received any written
notice canceling or threatening to cancel or refusing to renew any of the
Insurance Policies. The rights of the insured under the Insurance Policies will
not be terminated or adversely affected by the transactions contemplated hereby.
The Purchased Companies shall maintain the coverage under all Insurance Policies
in full force and effect through and including the Closing Date. The Sellers
have delivered to the Buyer or its representatives true and complete originals
or copies of all of the Insurance Policies. The Insurance Policies are
sufficient to comply with all requirements of applicable law, Contracts and
Licenses and Permits, and are in amounts and coverages customary in the industry
for similarly situated companies.
SECTION 5.20 OWNED REAL PROPERTY; LEASED REAL PROPERTY.
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(a) (i) SCHEDULE 5.20(a)(i) sets forth a complete and
accurate description of the real property owned by any of the Purchased
Companies (the "OWNED REAL PROPERTY"). Except as may be indicated on the title
insurance policies covering the Owned Real Property, the applicable Purchased
Company has good, indefeasible and marketable fee simple title to the Owned Real
Property. The Sellers have delivered to the Buyer or its representatives true
and complete originals or copies of all of the existing title insurance policies
covering the Owned Real Property.
(ii) Except as set forth in the title policies covering
the Owned Real Property, (the "PERMITTED ENCUMBRANCES"), the Owned Real Property
is not subject to any Liens (other than Permitted Liens). All Liens listed on
SCHEDULE 5.20(a)(ii) shall be satisfied and discharged on or prior to the
Closing Date unless otherwise indicated on SCHEDULE 5.20(a)(ii). All building,
structures and improvements on the Owned Real Property and the operations
therein conducted conform in all material respects to all applicable zoning and
building laws, Environmental Laws, ordinances and administrative regulations,
and neither the Sellers nor any of the Purchased Companies has received any
notice of violation of the foregoing from any Governmental Authority, and all
such buildings, structures, improvements and fixtures are in good order,
condition and repair.
(iii) None of the Sellers nor any of the Purchased
Companies has received any written notice (and none of Sellers' Senior
Management has received notice of any kind, whether written or otherwise), nor
has any knowledge that any operations on or uses of the Owned Real Property
constitute non-conforming uses under any applicable building, zoning, land use
or other similar statutes, laws, ordinances, regulations, permits or other
requirements. None of the Sellers nor any of the Purchased Companies has
knowledge of or has received any written notice (and none of Sellers' Senior
Management has received notice of any kind, whether written or otherwise) of any
pending or contemplated rezoning proceeding affecting the Owned Real Property.
(iv) The Owned Real Property has access to public roads,
streets or the like or valid easements over private streets, roads or other
private property providing ingress to and egress from such Owned Real Property.
(v) None of the Sellers nor any of the Purchased
Companies has received any written notice (and none of Sellers' Senior
Management has received notice of any kind, whether written or otherwise) from
any utility company or municipality of any fact or condition which could
reasonably be expected to result in the discontinuation of presently available
or otherwise necessary sewer, water, electric, gas, telephone or other utilities
or services for the Owned Real Property. The Owned Real Property has adequate
rights of access to all water, sewer, sanitary sewer and storm drain facilities
and community services. All public utilities necessary or convenient to the full
use, occupancy, disposition and enjoyment of the Owned Real Property are located
in the public right-of-way abutting the Owned Real Property and all such
utilities are connected so as to serve the Owned Real Property without passing
over other property.
(vi) Neither the Sellers nor any of the Purchased
Companies have knowledge of any proposed reassessment of the Owned Real Property
by the local taxing agencies, and there is no pending or threatened special
assessment, tax reduction proceeding or other action which could reasonably be
expected to increase or decrease real property taxes or assessments against the
Owned Real Property.
(b) The Owned Real Property is not subject to any right or
option of any other Person to purchase or lease or otherwise obtain title to an
interest in the Owned Real Property. No Person
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other than the applicable Purchased Companies has any right to use, occupy or
lease any of the Owned Real Property.
(c) A list of all of the leases (the "LEASES") affecting any
real property with respect to which any of the Purchased Companies is a lessor
or lessee is set forth on SCHEDULE 5.20(c) (the "LEASED REAL PROPERTY").
SCHEDULE 5.20(c) sets forth the lessor, lessee, commencement date, termination
date, renewal or expansion options (if any), options to purchase such Leased
Real Property and annual rents for each Lease and the amount of any security
deposit delivered pursuant to such Lease. Each of the Leases is valid and
enforceable in accordance with its terms and is in full force and effect. The
Sellers have delivered to the Buyer true and complete copies of each Lease and
all documents relating to such Leases including, without limitation, any
non-disturbance and recognition agreements, subordination agreements, attornment
agreements and agreements regarding the term or rental of any of the Leases.
None of the Purchased Companies, nor any other party to any Lease, is in default
of its obligations thereunder or has delivered or received any written notice
(and none of Sellers' Senior Management has delivered or received notice of any
kind, whether written or otherwise) of default under any Lease, nor has any
event occurred which, with the giving of notice, the passage of time or both,
would constitute a default under any Lease.
(d) The plumbing, electrical, heating, air conditioning,
ventilating and all other mechanical or structural systems of all buildings and
structures located on the Owned Real Property and the Leased Real Property are
in good order, condition and repair and the roof, basement and foundation walls
of all buildings and structures located on the Owned Real Property and the
Leased Real Property are free of leaks and other defects that would have an
adverse effect on their continued use and are suitable for their actual current
use. The applicable Purchased Companies are in possession of valid certificates
of occupancy with respect to all buildings and structures located on the Owned
Real Property and the Leased Real Property.
(e) There are no proceedings in eminent domain or other similar
proceedings pending which affect any of the Owned Real Property and the Leased
Real Property nor, to the knowledge of the Sellers, is any such matter
threatened. Except as disclosed on SCHEDULE 5.20(e), there exists no writ,
injunction, decree, order or judgment outstanding relating to the ownership,
lease, use, occupancy or operation of any Owned Real Property or any Leased Real
Property, nor to the knowledge of the Sellers, is any such matter threatened.
(f) None of the Sellers nor any of the Purchased Companies has
received written notice (and none of Sellers' Senior Management has received
notice of any kind, whether written or otherwise) of any violation of any
applicable statutes, laws, ordinances, regulations, permits or other
requirements of any government, or any agency body or subdivision thereof,
pertaining to the use, operation, or construction of the Owned Real Property or
the Leased Real Property (including, without limitation, those relating to
zoning, building, fire, health and safety, environmental control and safety, or
the Americans with Disabilities Act or other similar state, provincial, local or
foreign legislation) and no such violations exist.
(g) None of the Sellers nor any of the Purchased Companies has
received written notice (and none of Sellers' Senior Management has received
notice of any kind, whether written or otherwise) from any of its insurance
carriers of any defects or inadequacies in any Owned Real Property or any Leased
Real Property which, if not corrected, would result in termination of any
Insurance Policy or insurance coverage therefore or an increase in the cost
thereof.
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(h) The buildings, driveways and all other structures and
improvements upon the Owned Real Property and the Leased Real Property are
within the boundary lines of such property or have the benefit of valid
easements and there are no encroachments thereon that would adversely affect the
use thereof.
SECTION 5.21 ENVIRONMENTAL MATTERS. The Buyer and the Sellers each agree
that the only representations and warranties of the Sellers herein as to any
environmental matters are those contained in this Section 5.21. Without limiting
the generality of the foregoing, the Buyer specifically acknowledges that the
representations and warranties contained in Sections 5.12, 5.13 and 5.14 do not
relate to environmental matters.
(a) All of the Licenses and Permits required under Environmental
Laws for the operation of the Business have been obtained and maintained in
effect in good standing by the Purchased Companies. No material change in the
facts or circumstances reported or assumed in the applications for such Licenses
and Permits exists. The Purchased Companies are in compliance, and at all times
have complied, with all Environmental Laws applicable to the operations
associated with the Business, the transactions contemplated by this Agreement,
the Owned Real Property, the Leased Real Property and each of the properties
formerly owned, leased or operated by them with respect to the periods during
which such entities owned, leased or operated such properties (the "FORMER REAL
PROPERTY") and with all of the Licenses and Permits (including, without
limitation, all filing and reporting requirements under all applicable
Environmental Laws). Except as set forth on SCHEDULE 5.21(a-1), no Seller or
Purchased Company, nor any of their respective Subsidiaries has received any
notice of any violation with respect to any of such Licenses or Permits, which
violations are outstanding or uncured as of the date hereof, and no proceeding
is pending, or to the knowledge of the Sellers, threatened, to revoke or limit
any of such Licenses or Permits. All of such Licenses and Permits are listed on
SCHEDULE 5.21(a-2).
(b) None of the Purchased Companies has performed or suffered
any act which could give rise to, or has otherwise incurred, liability to any
Person, including itself, under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. ("CERCLA") or any
other Environmental Law, nor do the Sellers or any of the Purchased Companies
have notice of any such liability or any Claim therefore or submitted notice
pursuant to Section 103 of CERCLA to any governmental agency nor provided
information in response to a request for information pursuant to Section 104(e)
of CERCLA or any analogous state or local information gathering authority.
(c) No Hazardous Substance has been Released on, placed, dumped,
disposed of, manufactured, stored or otherwise come to be located in, on, at,
beneath or near any of the Owned Real Property, the Leased Real Property or the
Former Real Property or any surface waters or groundwaters thereon or thereunder
in excess of the levels prescribed or permitted under Environmental Laws.
(d) Except as set forth on SCHEDULE 5.21(d), there have not been
and are no aboveground or underground storage tanks, polychlorinated biphenyls
or asbestos-containing materials located at or within the Owned Real Property,
the Leased Real Property or the Former Real Property.
(e) None of the Owned Real Property, the Leased Real Property or
the Former Real Property is identified or, to the Sellers' knowledge, proposed
for listing on the National Priorities List under 40 C.F.R. Section 300 Appendix
B, the Comprehensive Environmental Response Compensation and Liability Inventory
System ("CERCLIS") or any analogous list of any Government Authority and none of
the Sellers nor any of the Purchased Companies is aware of any conditions on
such properties which, if known to a Governmental Authority, would qualify such
properties on any such list.
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(f) The Sellers have furnished, or caused to be furnished, to
the Buyer copies of all environmental studies, assessments or reports relating
to any of the Purchased Companies, the Leased Real Property, the Owned Real
Property and the Former Real Property in its possession or under its control.
(g) Except as set forth of SCHEDULE 5.21(g), none of the Owned
Real Property, the Leased Real Property or the Former Real Property, or any
current or previous business operations conducted by any of the Purchased
Companies, is the subject of any pending or threatened investigation or judicial
or administrative proceeding, notice, decree or settlement respecting any
actual, potential or alleged violation of any Environmental Law, or any Releases
of Hazardous Substances into any surface water, ground water, drinking water
supply, soil, land surface, subsurface strata, or ambient air, or in the
workplace at a level that exceeds standards established by an applicable
Governmental Authority (collectively, the "ENVIRONMENT"). None of the Sellers,
nor any Purchased Company, nor any of their respective Subsidiaries has received
from any Governmental Authority, insurance company or other Person: any request
for information that a Seller, Purchased Company or Subsidiary thereof is the
subject of an investigation under Environmental Laws; notice of any potential or
alleged violations of any Environmental Laws or of any proposed order under any
Environmental Laws; or any order or proposed order requiring any of such parties
to prepare studies, action plans, or clean-up strategies as required by any
Environmental Law because of any Environmental Condition on any of the Owned
Real Property, the Leased Real Property or the Former Real Property.
(h) None of the Sellers, with respect to the Business, nor any
of the Purchased Companies has reported any violation of any applicable
Environmental Law to any Governmental Authority; and no Releases have occurred
on any of the Owned Real Property, Leased Real Property or Former Real Property,
which would require the Purchased Companies to report to any Governmental
Authority under any Environmental Laws.
(i) None of the Purchased Companies has sent, transported, or
directly arranged for the transport of any garbage, solid waste or Hazardous
Substance, whether generated by the Purchased Companies or another Person, to
any site listed on the National Priorities List or, proposed for listing on the
National Priorities List or to a site included on the CERCLIS list or any
analogous state list of sites.
(j) Except as set forth on SCHEDULE 5.21(j), there is not now,
nor has there ever been, on or in any Owned Real Property, Leased Real Property
or Former Real Property, any generation, treatment, recycling, storage or
disposal of any hazardous waste, as that term is defined under 40 C.F.R. Part
261 or any state or foreign equivalent, except in accordance with Environmental
Laws.
SECTION 5.22 INTELLECTUAL PROPERTY AND OTHER TANGIBLE ASSETS. Except as
indicated on SCHEDULE 5.22, the applicable Purchased Companies own, or have a
valid license to use all domestic and foreign patents, patent rights, patents
pending, patent applications and registrations, industrial designs, trademarks,
trademark rights, trademark applications, trademark registrations, trade names,
trade name rights, domain names, service marks, copyrights, computer software,
databases, licenses and other proprietary rights and all know how relating to
the foregoing (collectively, the "INTELLECTUAL PROPERTY") owned, licensed or
used by any of the Purchased Companies (the "PURCHASED INTELLECTUAL PROPERTY"),
in the manner currently used by them. Schedule 5.22 contains a list of the
Purchased Intellectual Property which is registered and indicates the owner
and/or licensee and registration status and registration number thereof. The
Purchased Intellectual Property is valid and none of the Sellers nor any of the
Purchased Companies has received, or has knowledge of, any challenges to the
validity thereof. To the knowledge of the Sellers, none of the Purchased
Companies is infringing upon or in violation of the Intellectual Property of any
other Person. To the knowledge of the Sellers and the Purchased Companies, none
of the
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Purchased Intellectual Property is being infringed upon by any Person or is
otherwise used or available for use by any Person other than the Purchased
Companies.
SECTION 5.23 ORGANIZATIONAL DOCUMENTS. Copies of the certificates of
incorporation or articles or certificates of formation, as applicable, of each
of the Purchased Companies (as certified by a Governmental Authority of the
jurisdiction of their respective organization) and copies of the by-laws or
operating agreements of each of the Purchased Companies and all amendments
thereto and all other Organizational Documents of each of the Purchased
Companies have been delivered to the Buyer, and such copies, as so amended, are
true, complete and accurate. None of the Purchased Companies is in violation of
any of its respective Organizational Documents.
SECTION 5.24 UNLAWFUL OR UNDISCLOSED PAYMENTS. None of the Sellers, with
respect to the conduct of the Business, nor any of the Purchased Companies, nor
any Person acting on behalf of any of them, has made any payments or otherwise
provided any benefits, direct or indirect, to any customer, supplier,
Governmental Authority or otherwise, or to any employee or agent thereof, for
the purpose of acquiring purchase or sales relationships, or otherwise, that:
(a) may be unknown or undisclosed to the employers of any
Persons who received any such payments;
(b) are unlawful, in any respect; or
(c) are not fully disclosed as such on the books and records of
the Sellers or the Purchased Companies (and have been disclosed in writing to
the Buyer).
SECTION 5.25 DISCLOSURE OF CONFIDENTIAL INFORMATION TO OTHERS;
NON-COMPETITION AGREEMENTS.
(a) There are no currently existing and effective Contracts to
which any Seller or any of the Purchased Companies is a party and which restrict
any of them from engaging in the Business as currently, or currently proposed to
be, conducted or from competing with any other Person.
(b) There are no non-disclosure or similar such agreements to
which any of the Purchased Companies is a party that binds any of them with
respect to information provided to a Purchased Company.
(c) There are no non-disclosure, non-competition or similar such
agreements with respect to which any of the Purchased Companies is a
beneficiary.
SECTION 5.26 ACCURACY OF INFORMATION. None of the representations,
warranties or statements contained in this Article V, or in any of the exhibits
hereto or any certificate delivered to Buyer pursuant to this Agreement contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make any of such representations, warranties or
statements, in light of the circumstances under which they were made, not
misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers as follows:
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SECTION 6.1 CORPORATE ORGANIZATION. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite power and authority to own its properties and
assets as now conducted.
SECTION 6.2 CAPITALIZATION OF THE BUYER. Other than the Stock held by
RTG Buyer, there is no other Stock outstanding and no other Rights requiring the
issuance or sale of shares of any Stock of Buyer, and there are no contracts or
other agreements by which Buyer may become bound to issue additional Stock or
any Rights relating to such shares. Neither the Buyer nor, to the Buyer's
knowledge, its stockholders, is a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any Stock of Buyer.
SECTION 6.3 AUTHORIZATION AND VALIDITY OF AGREEMENTS. The Buyer has all
requisite corporate power and authority to enter into this Agreement and the
other agreements and instruments delivered by the Buyer under this Agreement and
to carry out its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the other agreements and instruments delivered by
the Buyer under this Agreement and the performance of the Buyer's obligations
hereunder and thereunder have been duly authorized by all necessary action by
the board of directors and stockholders of the Buyer, and no other corporate
proceedings on the part of the Buyer is necessary to authorize such execution,
delivery and performance. This Agreement and the other agreements and
instruments delivered by the Buyer under this Agreement have been duly executed
by the Buyer and constitute its legal, valid and binding obligations,
enforceable against it in accordance with their respective terms.
SECTION 6.4 NO CONFLICT OR VIOLATION. The execution, delivery and
performance by the Buyer under this Agreement and the other agreements and
instruments delivered by it pursuant to this Agreement do not and will not
violate or conflict with any provision of the Organizational Documents of the
Buyer and do not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority ,
nor violate nor will result in a breach of or constitute (with due notice or
lapse of time or both) a default under any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
to which the Buyer is a party or by which it is bound or to which any of its
properties or assets is subject.
SECTION 6.5 CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement on behalf of the Buyer do not require the consent,
waiver, authorization or approval of any Governmental Authority or of any other
Person.
SECTION 6.6 INVESTMENT PURPOSES. The Buyer is acquiring the Purchased
Equity for its own account for investment and not with a view to the
distribution thereof, and agrees that it shall not make any sale, transfer or
other disposition of such Stock in violation of the Securities Act of 1933, as
amended, or the rules and regulations thereunder.
ARTICLE VII
[INTENTIONALLY OMITTED]
ARTICLE VIII
COVENANTS OF THE SELLERS
SECTION 8.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE.
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(a) Without the prior written consent of the Buyer, between the
date hereof and the Closing Date, the Sellers shall not, and shall cause the
Purchased Companies not to, except (1) as required or expressly permitted
pursuant to the terms hereof, (2) as set forth on SCHEDULE 8.1(a), or (3) the
prior written consent of the Buyer:
(i) make any material change in the conduct of the
Business or enter into any transaction other than in the ordinary course of
business consistent with past practices;
(ii) make any sale, transfer, or other conveyance of any
assets of any of the Purchased Companies in an amount greater than $10,000,
other than in the ordinary course of business consistent with past practices
(except as otherwise provided in subclause (xii) of this SECTION 8.1(a));
(iii) subject any of the assets owned by the Purchased
Companies to any Lien;
(iv) pay, lend or advance any amount to, or sell, transfer
or lease any properties or assets to, or enter into any agreement or arrangement
with, any of its Affiliates with respect to the Purchased Companies, other than
in the ordinary course of business consistent with past practices (except as
otherwise provided in subclause (xii) of this SECTION 8.1(a));
(v) take any action that would cause any of the
representations and warranties made by it in this Agreement not to remain true
and correct;
(vi) write down or write off as uncollectable any of the
Accounts Receivable;
(vii) settle, release or forgive any Claim or litigation or
waive any right thereto with respect to the Purchased Companies or the Business
except claims that are Seller Liabilities (provided, however, that any liability
resulting from any such settlement, release or forgiveness shall constitute a
Seller Liability);
(viii) make, enter into, modify, amend in any material
respect or terminate any of the Contracts, bids or expenditures with respect to
the Business involving an expenditure of more than $50,000, other than as set
forth in Section (viii) of SCHEDULE 8.1(a), which agreements the Sellers may
continue to negotiate and enter into for so long as they exercise commercially
reasonable judgment and keep the Buyer informed as to progress and terms;
(ix) make, change or revoke any election or method of
accounting with respect to the Taxes affecting or relating to the Purchased
Companies;
(x) enter into, or permit to be entered into, any closing
or other agreement or settlement with respect to the Taxes affecting or relating
to the Purchased Companies;
(xi) adopt any new employee benefit plan or arrangement
for Business Employees, or increase the compensation of Business Employees;
(xii) cause or permit the Purchased Companies to distribute
or pay, or authorize the distribution or payment by the Purchased Companies of,
any cash or other assets or property to Sellers or any of their Affiliates,
except with respect to (A) amounts payable to Sellers in repayment of amounts
that Sellers or their Affiliates contributed or advanced to the Purchased
Companies on or after June 1, 2001 to fund the operating expenses of the
Purchased Companies if, but only to the extent that,
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such contributed or advanced amounts exceeded Sellers' 50% pro rata share of
such operating expenses; and (B) Seller Distributions; or
(xiii) commit to do any of the foregoing.
(b) From and after the date hereof through the Closing Date, the
Sellers shall, and shall cause the Purchased Companies, to:
(i) continue to maintain, in all material respects, the
Business in accordance with present practice in a condition suitable for their
current use;
(ii) file, when due or required, its Federal, state,
foreign and other Tax Returns required to be filed and pay when due all the
Taxes, unless the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted;
(iii) keep, and cause the Purchased Companies to keep, the
Files and Records in the ordinary course consistent with past practices;
(iv) use commercially reasonable efforts to continue, and
to cause the Purchased Companies to continue, to maintain existing business
relationships with customers with respect to the Business;
(v) pay and satisfy when due all payables and payroll
expenses of the Purchased Companies as and when due consistent with past
practice; and
(vi) notify the Buyer no later than three (3) Business
Days following the date of any notice or other communication from any
Governmental Authority, in connection with the transactions contemplated by this
Agreement.
(c) Notwithstanding anything in this Section 8.1 to the
contrary, nothing contained in this Section 8.1 shall prevent, inhibit or delay
the ability of any Seller from taking any and all action to enforce all of its
rights under the New Heights LLC Agreement and under that certain Operation and
Maintenance Agreement, dated as of December 29, 1998, by and between KTI
Operations, Inc. and New Heights.
SECTION 8.2 CONSENTS AND APPROVALS. Prior to the Closing, the Sellers
(a) shall, at their own cost and expense, use commercially reasonable efforts to
obtain all necessary consents, waivers, authorizations, and approvals of all
Governmental Authorities and all other Persons required in connection with the
execution, delivery and performance by the Sellers of this Agreement and the
other agreements and instruments required to consummate the transactions
contemplated hereby, and (b) shall diligently assist and cooperate with the
Buyer in preparing and filing all documents, including permits, transfers,
modifications and applications required to be submitted by the Buyer to any
Governmental Authority, in connection with such transactions and in obtaining
any governmental consents, waivers, authorizations or approvals which may be
required to be obtained by the Buyer in connection with such transactions (which
assistance and cooperation shall include, without limitation, timely furnishing
to the Buyer all information concerning the Sellers that counsel to the Buyer
determines is required to be included in such documents or would be helpful in
obtaining any such consent, waiver, notation, authorization or approval).
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SECTION 8.3 ACCESS TO PROPERTIES AND RECORDS. The Sellers shall afford
to the Buyer, and to its accountants, counsel, prospective lenders, agents and
representatives, upon reasonable notice, full access during normal business
hours throughout the period from the date hereof through the Closing Date to all
Owned Real Property, Leased Real Property, operations, books, Contracts and
Files and Records (including but not limited to Tax Returns and correspondence
with accountants) of the Purchased Companies and, during such period, shall
furnish promptly to the Buyer all other information concerning the Business and
its properties and personnel as the Buyer may reasonably request; provided, that
no investigation or receipt of information pursuant to this Section 8.3 shall
qualify any representation or warranty of the Sellers or the conditions to the
obligations of the Buyer.
SECTION 8.4 GOVERNMENTAL FILINGS. As soon as practicable, the Sellers
and the Buyer shall make any and all filings and submissions to any Governmental
Authority which are required to be made in connection with the transactions
contemplated hereby. The Sellers shall furnish to the Buyer such information and
assistance as the Buyer may reasonably request in connection with the
preparation by them of any such filings or submissions. The Sellers shall supply
the Buyer and the Buyer shall supply the Sellers with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or its representatives, on the one hand,
and any Governmental Authority or members of their respective staffs, on the
other hand, with respect to this Agreement or the transactions contemplated
hereby.
SECTION 8.5 NON-COMPETE AND NON-SOLICITATION PROVISIONS;
CONFIDENTIALITY.
(a) Each of the Sellers, for itself and on behalf of each of its
direct and indirect Subsidiaries (the "SELLER GROUP"), agree that, without the
prior written consent of the Buyer, for a period of five (5) years after the
Closing Date, none of the Seller Group shall, within the United States, Canada
or Mexico, directly or indirectly (whether as a stockholder, director, officer,
employee, principal, member, manager, agent, trustee, partner, joint venturer,
financing source, consultant or employee or in any other capacity whatsoever),
engage in the business of collecting, processing and recycling automobile, truck
and other vehicle tires, provided that the Sellers shall be entitled to (i)
collect and shred automobile, truck and other vehicle tires to the extent
permitted by the Holdco 2 LLC Agreement and (ii) collect and dispose of
automobile, truck and other vehicle tires in connection with and incidental to
their municipal solid waste programs.
(b) The Sellers acknowledge and agree that the value to the
Buyer of the transactions contemplated by this Agreement would be substantially
diminished if the Sellers or any member of the Seller Group were to solicit the
employment of any employees of a Seller or a Purchased Company on the date
hereof or on or after the Closing Date. The Sellers and each member of the
Seller Group agree, that, without the prior written consent of the Buyer, for
the five (5) year period commencing on the Closing Date, they will not, except
by general advertising not targeted or directed at any employees of the
Purchased Companies, make, offer, solicit or induce to enter into, any written
or oral arrangement, agreement or understanding regarding employment or
retention as a consultant with any person who is, on the date hereof or on or
after the Closing Date, an employee of any of the Purchased Companies.
(c) The Sellers recognize and acknowledge that information about
the Purchased Companies and the Business or relating to the services provided by
the Purchased Companies or any phase of their operations or business or
financial affairs that is not a matter of public record, including, without
limitation, techniques, know-how, plans, contracts, business methods,
strategies, technologies, trade secrets, customers, subscribers, distributors,
suppliers, inventions and computer programs (collectively, the "CONFIDENTIAL
INFORMATION"), is not generally known to its competitors. Notwithstanding the
foregoing, Confidential Information shall not include any information which is
or becomes generally
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available to the public other than as a result of disclosure in violation of
this Agreement. Accordingly, the Sellers will not, at any time after the date
hereof, directly or indirectly, without the prior written consent of the Buyer:
(i) use any Confidential Information for its own benefit; or (ii) except as may
be required by law, divulge, disclose or make accessible any of the Confidential
Information or any part thereof to any Person for any reason or purpose
whatsoever. In the event that a Seller becomes legally compelled to disclose any
of the Confidential Information, such Seller will provide the Buyer with prompt
notice so that the Buyer may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Section 8.5(c). In the event
that such protective order or other remedy is not obtained, or that the Buyer
waives compliance with this Section 8.5(c), the Sellers will furnish only that
portion of the Confidential Information which is legally required.
(d) The Sellers specifically acknowledge and agree that the
value to the Buyer of the transactions contemplated by this Agreement would be
substantially diminished if any of the Sellers or any member of the Seller Group
does not comply in all respects with this Section 8.5, and the Sellers have
agreed to the covenants set forth in this Section 8.5 as an inducement to the
Buyer to enter into this Agreement. The Sellers acknowledge that the Buyer would
not purchase the Purchased Equity but for the agreements and covenants of the
Sellers set forth in this Section 8.5. The Sellers acknowledge and agree that
the covenants set forth in this Section 8.5 are commercially reasonable and
reasonably necessary to protect the interests the Buyer intends to acquire
hereunder. The Buyer and the Sellers agree that the Buyer will suffer
substantial damages in the event of a breach of the provisions of this Section
8.5, the amount of which may be difficult to establish promptly and with
certainty. The Sellers acknowledge and agree that a monetary remedy for a breach
of the covenants set forth in this Section 8.5 hereof may be inadequate and
further agree that such a breach would cause the Buyer irreparable harm, and
that the Buyer shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages.
(e) If a court of competent jurisdiction determines that any of
the provisions of this Section 8.5 is unenforceable because of the scope,
duration or area of applicability of such provision(s), it is the intention of
the parties that the court making such determination (i) shall modify such
scope, duration or area, or all of them, only to the extent required to cause
such provisions to be deemed enforceable; and (ii) that such provision(s) as so
modified shall then be deemed by such court to be applicable and enforceable in
such modified form and shall be enforced.
SECTION 8.6 DISCLOSURE. Until the Closing, the Sellers shall have the
continuing obligation to promptly supplement or amend the written disclosures
being made pursuant to this Agreement with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described in such written
disclosures; provided, however, that for the purpose of the rights and
obligations of the parties hereunder, any such supplemental disclosure shall not
be deemed to have been disclosed as of the date of this Agreement for purposes
of Section 14.1 (in which case Sellers shall reimburse Buyer for all of its
Transaction Expenses pursuant to Section 16.4 if the transactions contemplated
by this Agreement are not consummated as a result of any of the matters not
disclosed in writing to Buyer pursuant to this Agreement as of the date hereof),
but if the Closing occurs, such disclosure shall be deemed to have been
disclosed for purposes of Section 12.1. Until the Closing, the Sellers shall
promptly give to the Buyer written notice upon learning of or having knowledge
of any matter that may constitute a breach of any representation, warranty,
agreement or covenant contained in this Agreement, which notice shall identify
and describe the breach in reasonable detail.
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SECTION 8.7 RECONCILED DISTRIBUTIONS. Sellers shall provide to Buyer all
information necessary or otherwise requested by Buyer to determine the amount of
the Reconciled Distributions and the Seller Distributions.
SECTION 8.8 CONTINUED USE OF SELLERS' FACILITIES. Sellers shall permit
Buyer and the Purchased Companies (without any cost to the Buyer or any of the
Purchased Companies) to use all of the Intellectual Properties of the Sellers
(including, without limitation, the management information systems of the
Sellers) currently being used by the Purchased Companies for a period of 90 days
after the Closing Date in the same manner as currently being used by the
Purchased Companies.
ARTICLE IX
COVENANTS OF THE BUYER
SECTION 9.1 ACTIONS PRIOR TO THE CLOSING DATE. Between the date hereof
and the Closing Date, the Buyer shall not take any action which shall cause it
to be in breach of any of its representations, warranties, covenants or
agreements contained in this Agreement. The Buyer shall use its commercially
reasonable efforts to perform all its obligations and satisfy all conditions to
Closing to be performed or satisfied by it under this Agreement as soon as
practicable, but in no event later than the Closing Date. Until the Closing, the
Buyer shall promptly give to KTI written notice upon learning of or having
knowledge of any matter that may constitute a breach of any representation,
warranty, agreement or covenant of the Buyer contained in this Agreement, which
notice shall identify and describe the breach in reasonable detail.
SECTION 9.2 CONFIDENTIALITY. The Buyer recognizes and acknowledges that
all information about the Purchased Companies and the Business or relating to
the services provided by the Purchased Companies or any phase of their
operations or business or financial affairs that is not a matter of public
record, including, without limitation, techniques, know-how, plans, contracts,
business methods, strategies, technologies, trade secrets, customers,
subscribers, distributors, suppliers, inventions and computer programs
(collectively, the "SELLER CONFIDENTIAL INFORMATION"), is not generally known to
its competitors. Notwithstanding the foregoing, Seller Confidential Information
shall not include any information which is or becomes generally available to the
public other than as a result of disclosure in violation of this Agreement.
Accordingly, the Buyer will not, at any time prior to the Closing Date, except
as necessary for the consummation of the transactions contemplated hereby,
directly or indirectly, without the prior written consent of KTI: (i) use the
Seller Confidential Information for its own benefit; (ii) except as may be
required by law, divulge, disclose or make accessible the Seller Confidential
Information or any part thereof to any Person for any reason or purpose
whatsoever; or (iii) render any services to any Person to whom the Seller
Confidential Information, in whole or in part, has been disclosed or is
threatened to be disclosed by or at the instance of the Buyer. In the event that
the Buyer becomes legally compelled to disclose any of the Seller Confidential
Information, the Buyer will provide KTI with prompt notice so that the Sellers
may seek a protective order or other appropriate remedy and/or waive compliance
with the provisions of this Section 9.2. In the event that such protective order
or other remedy is not obtained, or that KTI waives compliance with this Section
9.2, the Buyer will furnish only that portion of the Seller Confidential
Information which is legally required. The Buyer acknowledges and agrees that
the covenants set forth in this Section 9.2 are commercially reasonable and
reasonably necessary to protect the interests of the Sellers hereunder. The
Buyer agrees that the Sellers will suffer substantial damages in the event of a
breach of the provisions of this Section 9.2, the amount of which may be
difficult to establish promptly and with certainty. The Buyer acknowledges and
agrees that a monetary remedy for a breach of the covenants set forth in this
Section 9.2 hereof may be inadequate and
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further agrees that such a breach would cause the Sellers irreparable harm, and
that the Sellers shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages. If a court of competent
jurisdiction determines that any of the provisions of this Section 9.2 is
unenforceable because of the scope, duration or area of applicability of such
provision(s), it is the intention of the parties that the court making such
determination (i) shall modify such scope, duration or area, or all of them,
only to the extent required to cause such provisions to be deemed enforceable;
and (ii) that such provision(s) as so modified shall then be deemed by such
court to be applicable and enforceable in such modified form and shall be
enforced.
SECTION 9.3 CONSENTS AND APPROVALS. The Buyer shall, at its cost and
expense, use reasonable efforts to obtain all necessary consents and approvals
of third parties required to be obtained by it to effect the transactions
contemplated by this Agreement.
SECTION 9.4 ACCESS TO PROPERTIES. The Sellers, its agents, employees,
consultants and representatives shall have access to the Leased Real Property
and Owned Real Property during normal business hours (or such other times as the
parties hereto may mutually agree) subsequent to the Closing with right to
conduct inspections, surveys, sampling, test borings, well installation,
removal, containment, treatment or remediation of Hazardous Substances
(hereafter, "Work") to the extent such Work is required by applicable law and
pursuant to this Agreement; provided, however, that the Seller shall provide the
Buyer with reasonable prior notice of the Work (but not less than 5 Business
Days), and any such Work shall be performed in a manner that does not
unreasonably interfere with the Buyer's ownership or use of the Lease Real
Property and Owned Real Property. Seller shall provide Buyer a copy of each
final report prepared in connection with the Work.
ARTICLE X
TAXES
SECTION 10.1 TAX RETURNS.
(a) For any Pre-Closing Tax Period that is not part of a
Straddle Period, the Sellers shall or shall cause the Purchased Companies to,
timely prepare and file with the appropriate authorities all income Tax Returns
required to be filed by or with respect to the Purchased Companies regardless of
the due date of such Tax Returns, and shall pay or cause to be paid all Taxes
shown to be due or required to be paid on such Tax Returns. The Sellers also
shall prepare and timely file, or cause the Purchased Companies to prepare and
timely file, all other Tax Returns required to be filed by or with respect to
the Purchased Companies that are due on or before the Closing Date, and the
Sellers shall pay all Taxes shown to be due or required to be paid on such Tax
Returns. The Buyer shall timely prepare and file, or cause the Purchased
Companies to prepare and timely file, all other Tax Returns required to be filed
by or with respect to the Purchased Companies, and shall pay, or cause the
Purchased Companies or the appropriate Subsidiary thereof to pay, all Taxes
shown to be due or required to be paid on those Tax Returns. Each party that
prepares Tax Returns pursuant to this Section 10.1 shall permit the other party
a reasonable opportunity to review and comment on such Tax Returns and shall
make such changes as are reasonably requested. Notwithstanding the foregoing,
the Sellers' obligation to pay any Taxes of the Purchased Companies pursuant to
this Section 10.1(a) shall be limited to 50% of such Taxes.
(b) In the case of any Straddle Period, to the extent that Taxes
of the Purchased Companies are based on or measured by income or gross receipts
in lieu of income and not on a transaction basis (which are subject to
indemnification by the Sellers to the extent set forth in this Section 10.1 and
Article XII of this Agreement), such Taxes shall be computed using a
closing-of-the-books
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method as if such taxable period ended as of the end of the Closing Date, with
all standard deductions, exemptions, progressivity in rates, and other items
calculated with respect to the full Straddle Period apportioned to the
Pre-Closing Tax Period based upon the ratio of the number of days during the
Straddle Period that are in the Pre-Closing Tax Period to the total number of
days in the Straddle Period; provided, however, that any transactions not in the
ordinary course of a Purchased Company's business that occur on the Closing Date
but after the Closing shall be considered to occur on the day following the
Closing Date. In the case of any Straddle Period, to the extent that Taxes are
not based on or measured by income or gross receipts in lieu of income, such
Taxes for the Pre-Closing Tax Period shall be (i) for any Tax that is determined
based upon specific transactions (including, but not limited to, value added,
sales and use Taxes), all Taxes applicable to transactions that have been
consummated during the period through the Closing Date and (ii) for any Tax that
is not based upon specific transactions (including, but not limited to, license,
real property, personal property, franchise and doing business Taxes), an amount
equal to the full amount of such Tax for the entire Straddle Period multiplied
by a fraction, the numerator of which is the number of days during the Straddle
Period that are in the Pre-Closing Tax Period and the denominator of which is
the total number of days in the Straddle Period (as such amount shall be
equitably adjusted to reflect material acquisitions or disposition during the
Straddle Period).
(c) The Sellers' indemnity obligations for Taxes for a Straddle
Period of any Purchased Company shall initially be effected by its payment to
the Buyer of 50% of the excess of (a) such Taxes for the Pre-Closing Tax Period,
over (b) the sum of (i) the amount of such Taxes paid by the Sellers or any of
their respective affiliates (other than such Purchased Company) at any time,
plus (ii) the amount of such Taxes paid by such Purchased Company before the
Closing. The Sellers shall initially pay such excess to the Buyer within fifteen
(15) days after the Tax Return with respect to the liability for such Taxes is
required to be filed (or, if later, is actually filed). If the amount of such
Taxes paid to Buyer by the Sellers or any of their respective Affiliates (other
than a Purchased Company) pursuant to this Section 10.1(c) at any time exceeds
50% of the excess of any of (x) the amount of such Taxes for the Pre-Closing
Period, over (y) the amount of such Taxes paid by the Purchased Companies, the
Buyer shall pay to the Sellers the amount of such excess, within fifteen (15)
days after the Tax Return with respect to the liability for such Taxes is
required to be filed. The payments to be made under this paragraph by the
Sellers or the Buyer with respect to any Straddle Period shall be appropriately
adjusted to reflect any final determination with respect to Taxes for such
Straddle Period.
SECTION 10.2 COOPERATION. The Sellers, the Buyer, and each of the
Purchased Companies shall reasonably cooperate, and shall cause their respective
Affiliates, officers, employees, agents, auditors, and other representatives to
reasonably cooperate, in preparing and filing all Tax Returns relating to Taxes
of the Purchased Companies, including maintaining and making available to each
other all records necessary in connection with such Taxes and in resolving all
disputes and audits with respect to all taxable periods relating to such Taxes.
The Buyer and the Sellers recognize and agree that the other party and its
Affiliates will need access from time to time after the Closing to certain
accounting and Tax records and information held by such party and its respective
Affiliates to the extent such records and information pertain to events
occurring on or before the Closing Date. Therefore, each of the Buyer and the
Sellers shall, and the Buyer shall cause each of the Purchased Companies to, (a)
properly retain and maintain such records and information in accordance with the
past custom and practice of such Person until such time as such retention and
maintenance is no longer reasonably necessary, provided that such records and
information shall be retained and maintained until the expiration of the
applicable statute of limitations, and (b) allow the other party, its Affiliates
and their agents and representatives, at times and dates mutually acceptable to
the parties, to inspect, review and make copies of such records and information
as such other party may deem necessary or appropriate from time to time, such
activities to be conducted during normal business hours and at the other party's
expense. Notwithstanding anything to
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the contrary in this Agreement, the provisions of this Section 10.2 shall be
effective until the expiration of the applicable statute of limitations.
SECTION 10.3 REFUNDS. Except as otherwise provided in this Section 10.3,
any refunds or credits of Taxes of the Purchased Companies for any Pre-Closing
Tax Period that is distributed to Holdco 2 LLC that is not part of a Straddle
Period shall be for the account of the Sellers. Any refunds or credits of Taxes
of the Purchased Companies for any Straddle Period that is distributed to Holdco
2 LLC shall be equitably apportioned between the Sellers and the Buyer (based on
each party's respective indemnification obligations with respect to such Taxes).
Fifty percent of any other refunds or credits of Taxes of the Purchased
Companies that is distributed to Holdco 2 LLC shall be for the account of the
Buyer.
SECTION 10.4 AMENDED RETURNS. The Sellers shall be responsible for filing
any amended consolidated, combined, or unitary income Tax Returns for
Pre-Closing Tax Periods that are not part of a Straddle Period that are required
as a result of examination adjustments made by the Internal Revenue Service or
by the applicable state, local, or foreign taxing authorities for such taxable
years as finally determined. For those jurisdictions in which separate income
Tax Returns are filed by any of the Purchased Companies, any required amended
income Tax Returns resulting from such examination adjustments, as finally
determined, shall be prepared by the Sellers and furnished to the Buyer for
approval (which shall not be unreasonably withheld), signature and filing at
least ten (10) days before the due date for filing such amended income Tax
Returns.
SECTION 10.5 AUDITS. The Sellers shall allow the Buyer and its counsel to
participate in any audits of the Sellers' consolidated or combined income Tax
Returns to the extent that such returns relate to the Purchased Companies. The
Sellers shall not settle any such audit in a manner that would adversely affect
the Buyer or any of the Purchased Companies after the Closing Date without the
consent of the Buyer (which shall not be unreasonably withheld or delayed). The
Buyer shall allow the Sellers and their counsel to participate in any audits of
any Purchased Companies to the extent that such audits pertain to Taxes for
which the Sellers are liable pursuant to Section 10.1 hereof. The Buyer shall
not settle or cause to have settled any such audit without the consent of the
Sellers (which shall not be unreasonably withheld or delayed.)
SECTION 10.6 TAX SHARING AGREEMENTS. All Tax sharing, Tax allocation, Tax
indemnity or other similar agreements in effect prior to the Closing to which
any of the Purchased Companies is a party or by which any of them is bound shall
be terminated as of the Closing Date and, after the Closing Date, each of the
Purchased Companies shall not be bound thereby or have any liability thereunder
except those tax indemnifications disclosed on SCHEDULE 10.6.
SECTION 10.7 CERTIFICATE OF NON-FOREIGN STATUS. At the Closing, the
Sellers shall deliver to the Buyer, pursuant to Section 1445(b)(2) of the Code
and Treasury Regulation Section 1.1445-2(b)(2), a duly executed certification of
non-foreign status. Such certification shall conform to the model certification
provided in Treasury Regulation Section 1.1445-2(b)(2)(iii)(B).
SECTION 10.8 GOVERNING PROVISIONS. To the extent that any amounts are
payable to Buyer or Sellers pursuant to this Article X, the provisions of this
Article X shall solely govern the payment of such amounts; provided, however,
that the provisions of Article XII of this Agreement shall govern the remedies
available to Buyer and Sellers as a result of any breach of the provisions of
this Article X.
ARTICLE XI
EMPLOYEE BENEFITS
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SECTION 11.1 EMPLOYMENT MATTERS.
(a) Notwithstanding anything to the contrary contained herein,
SCHEDULE 11.1 sets forth a list of those current employees of, and consultants
to, the Purchased Companies who will be employees of or consultants to the
Purchased Companies as of the Closing and no other person shall have any right
to become an employee of or consultant to any of the Purchased Companies after
the Closing nor shall any other person have any right to any payment from any of
the Purchased Companies.
(b) Nothing contained herein shall restrict Holdco 2 LLC in the
future in the exercise of its independent business judgment as to the terms and
conditions under which the employment of the employees of any of the Purchased
Companies shall continue, the duration of such employment, the basis on which
such employment is terminated or the benefits provided to such employees.
SECTION 11.2 SELLERS' EMPLOYEE BENEFITS INDEMNIFICATION. Neither Holdco 2
LLC nor any of the Purchased Companies shall assume or otherwise be responsible
for any Benefit Plan or liability or obligation under any plan, contract,
payroll practice or other arrangement that the Sellers sponsor, contribute to,
or participate in on the date hereof, or that they have or may have any
liability or obligation under, whether or not disclosed under this Agreement or
in any schedule or exhibit hereto.
ARTICLE XII
INDEMNIFICATION
SECTION 12.1 INDEMNIFICATION BY THE SELLERS.
(a) Subject to Section 12.1(b), notwithstanding the Closing and
regardless of any investigation at any time made by or on behalf of the Buyer or
any knowledge or information that the Buyer may have, the Sellers shall, jointly
and severally, indemnify and fully defend, save and hold harmless the Buyer, any
Affiliate of the Buyer (excluding Holdco 2 LLC, the Purchased Companies and the
Sellers), and their respective directors, officers, employees, members,
partners, shareholders, representatives, agents and attorneys (the "BUYER
INDEMNITEES"), from and against any damage, liability, loss, cost, expense
(including all costs of any investigation and reasonable attorneys', experts'
and consultants' fees), deficiency, interest, penalty, impositions, assessments
or fines (collectively, "LOSSES") arising out of or resulting from, any Seller
Liabilities and/or Sellers' Event of Breach. As used herein, "SELLERS' EVENT OF
BREACH" shall be and mean any one or more of the following:
(i) any untruth or inaccuracy in any representation or
warranty of the Sellers in this Agreement or in any certificate delivered by the
Sellers at Closing;
(ii) any failure of the Sellers to duly perform or observe
any term, provision, covenant, agreement or condition contained in this
Agreement on the part of such Seller to be performed or observed;
(iii) any Claim for Taxes or interest or penalty thereon
resulting from the failure of the Buyer to withhold Taxes owed by the Sellers
from the Purchase Price under any applicable Law;
(iv) any Claim or cause of action by any party against any
Buyer Indemnitee (x) relating to the Power Plant Assets or (y) arising from any
action or inaction on or after the Closing by
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Sellers or their Affiliates or any of their officers, directors, employees,
members, shareholders, partners, representatives, agents or consultants with
respect to the Power Plant Assets; and
(v) any Claim or cause of action by any unrelated third
party against any Buyer Indemnitee with respect to the Seller Liabilities.
(b) The collective liability of (i) the Sellers in connection
with or arising out of this Agreement and (ii) the RTG Sellers in connection
with or arising out of the RTG Purchase Agreement, shall be limited to an
aggregate amount equal to the Seller Liability Cap plus the aggregate amount of
the reasonable legal fees, costs and expenses incurred by the Sellers and (to
the extent provided herein) the Buyers Indemnitees in connection with any Seller
Liabilities and/or any Sellers' Event of Breach; provided that the Sellers shall
not be liable under this Section 12.1 unless and until the aggregate amount of
Losses under this Section 12.1 and under Section 12.1 of the RTG Purchase
Agreement exceed $100,000 (at which point the Sellers shall become liable for
the aggregate amount of Losses, and not just amounts in excess of $100,000, but
subject to the limitations on Sellers' liability set forth in this Section
12.1). Notwithstanding the foregoing or anything to the contrary in this
Agreement: (A) if any Buyer Indemnitee becomes liable (pursuant to any statute,
rule, regulation or other law or any judicial, agency or governmental ruling or
action, in each case as a result of any condition, event or circumstance that
existed or occurred prior to the Closing, other than solely due to the action or
inaction of any Buyer Indemnitee) for any liabilities of any Purchased Company
that result in such Buyer Indemnitee being required to make an out-of-pocket
payment of any kind to a person or entity who is not a Buyer Indemnitee (any
such payment, an "EXCESS PAYMENT") and specifically excluding any diminution or
reduction in the value of Buyer's equity investment in Holdco 2 LLC, then such
Excess Payment shall not be subject to the Seller Liability Cap, and the Sellers
shall indemnify and fully defend, save and hold harmless the Buyer Indemnitees
from and against all such liabilities; and (B) the Seller Liability Cap shall
not apply to, or be reduced by or limit Sellers' obligations to indemnify Buyer
Indemnitees from and against Losses incurred by them as a result of any Sellers'
Event of Breach described in clause 12.1(a)(ii), (iii) or (iv) and, to the
extent arising out of any Sellers' Event of Breach described in clause
12.1(a)(ii), (iii) or (iv), clause 12.1(a)(v); and (C) if any Purchased Company
incurs or suffers any Loss, or any such Loss exists, because of any Seller
Liability not being paid or discharged in full prior to the Closing or because
of the occurrence or existence of any Sellers' Event of Breach, and if such Loss
is subject to the Seller Liability Cap pursuant to Section 12.1(b) of this
Agreement, then, subject to the Seller Liability Cap, the Sellers shall be
obligated to pay the Buyer, and the Sellers' indemnification obligations to the
Buyer Indemnitees with respect to such Loss shall be satisfied upon payment to
the Buyer of, an amount equal to the sum of (1) the product of 50% of the amount
of such Losses and the percentage of Buyer's equity interest in Holdco 2 LLC as
of the date on which such indemnification or payment obligation is paid in full
to such Buyer Indemnitees, and (2) to the extent permitted herein, the aggregate
amount of the reasonable legal fees, costs and expenses incurred by the Buyer
Indemnitees in connection with such Loss; all of which shall be in addition to
any legal fees, costs or expenses incurred or payable by the Sellers in
connection with such Loss.
(c) Except as provided under Section 12.1(b), the Sellers shall
not be responsible or liable for any Losses that are consequential, in the
nature of lost profits, diminution in value, damage to reputation or the like,
special or punitive or otherwise not actual Losses; provided, however, that
Sellers shall be liable for consequential damages resulting from (i) any breach
by Sellers of their representations and warranties in this Agreement that any
Seller knew was not true and correct in all material respects when made or as of
the Closing, and (ii) any willful or intentional breach by any of the Sellers of
any of the covenants or agreements in this Agreement of which any Seller has
knowledge.
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(d) In determining the amounts for any Losses hereunder for
which a Buyer Indemnitee is entitled to assert a claim for indemnification, the
amount of any such Losses shall be determined after deducting therefrom the
amount of any insurance proceeds received by such Buyer Indemnitee in respect of
such Losses (which recoveries the Buyer agrees to use its commercially
reasonable efforts to obtain or cause to be obtained). If an indemnification
payment is received by a Buyer Indemnitee and such Buyer Indemnitee later
receives insurance proceeds in respect of the related Loss, the Buyer shall
immediately pay to the Sellers a sum equal to the lesser of (i) the actual
amount of insurance proceeds received, or (ii) the actual amount of the
indemnification repayment previously paid by the Sellers with respect to such
Losses.
SECTION 12.2 INDEMNIFICATION BY THE BUYER.
(a) Subject to Section 12.2(b), notwithstanding the Closing or
the delivery of the Purchased Equity, the Buyer shall indemnify and fully
defend, save and hold harmless the Sellers, any Affiliate of the Sellers
(excluding Holdco 2 LLC, the Purchased Companies and the Buyer) and their
respective officers, directors, employees, members, partners, shareholders,
representative, agents and attorneys), and their respective officers, directors,
employees, members, partners, shareholders, representatives, agents and
attorneys (the "SELLER INDEMNITEES") from and against any Losses arising out of
or resulting from any Buyer's Event of Breach. As used herein, "BUYER'S EVENT OF
BREACH" shall be and mean any one or more of the following:
(i) any untruth or inaccuracy in any representation or
warranty of the Buyer in this Agreement or in any certificate delivered by Buyer
at Closing;
(ii) all Claims against Seller Indemnitees arising out of
or relating to occurrences of any nature relating to the Purchased Companies,
the Purchased Equity and the Business after the Closing Date, whether in
contract or tort (excluding, however, all Claims relating to the Power Plant
Assets or arising from any action or inaction by Sellers or their Affiliates or
any of their officers, directors, employees, members, shareholders, partners,
representatives, agents or consultants with respect to the Power Plant Assets);
and
(iii) any failure of the Buyer to duly perform or observe
any term, provision, covenant, agreement or condition contained in this
Agreement on the part of the Buyer to be performed or observed.
(b) The collective liability of (i) the Buyer in connection with
or arising out of this Agreement and (ii) RTG Buyer in connection with or
arising out of the RTG Purchase Agreement, shall be limited to an aggregate
amount equal to the Buyer Liability Cap plus the aggregate amount of the
reasonable legal fees, costs and expenses incurred by the Buyer and (to the
extent provided herein) the Seller Indemnitees in connection with any Buyer's
Event of Breach; provided that the Buyer shall not be liable under this Section
12.2 unless and until the aggregate amount of Losses under this Section 12.2 and
under Section 12.2 of the RTG Purchase Agreement exceed $100,000 (at which point
the Buyer shall become liable for the aggregate amount of Losses, and not just
amounts in excess of $100,000, but subject to the limitations on Buyer's
liability to Seller Indemnitees set forth in this Section 12.2). Notwithstanding
the foregoing or anything to the contrary in this Agreement: (A) if any Seller
Indemnitee incurs any out-of-pocket cash Loss due to a Buyers' Event of Breach
(which shall exclude any diminution or reduction in the value of Sellers' equity
interest in Holdco 2 LLC that does not involve or require any cash payment by a
Seller Indemnitee to any person or entity), for purposes of determining the
obligations of the Buyer under this Section 12.2 with respect to such Loss, the
Buyer Liability Cap shall be deemed to be $16,000,000; and (B) the Buyer
Liability Cap shall not apply to, or be reduced by or
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limit Buyer's obligations to fully indemnify Seller Indemnitees against Losses
incurred by them as a result of any Buyer's Event of Breach described in clause
12.2(a)(ii) or (iii).
(c) The Buyer shall not be responsible or liable for any Losses
that are consequential, in the nature of lost profits, diminution in value,
damage to reputation or the like, special or punitive or otherwise not actual
Losses.
(d) In determining the amounts for any Losses hereunder for
which a Seller Indemnitee is entitled to assert a claim for indemnification, the
amount of any such Losses shall be determined after deducting therefrom the
amount of any insurance proceeds received by such Indemnitee in respect of such
Losses (which recoveries the Sellers agree to use their commercially reasonable
efforts to obtain or cause to be obtained). If an indemnification payment is
received by a Seller Indemnitee and such Seller Indemnitee later receives
insurance proceeds in respect of the related Loss, the Sellers shall immediately
pay to the Buyer a sum equal to the lesser of (i) the actual amount of insurance
proceeds received, or (ii) the actual amount of the indemnification repayment
previously paid by the Buyer with respect to such Losses.
SECTION 12.3 TERM OF INDEMNIFICATION. Except as set forth below, the
obligations to indemnify under Section 12.1 and Section 12.2 hereof for breaches
of representations and warranties shall only apply in respect of Losses asserted
on or before the date that is two (2) years following the Closing Date.
Notwithstanding the foregoing, (a) the obligation to indemnify under Section
12.1 hereof in respect of the corporate or other authority of the Sellers,
Taxes, violations of Environmental Laws (or otherwise in respect of a breach of
or untruth or inaccuracy in the representation contained in Section 5.21) and
ERISA, shall apply in respect of Losses asserted prior to the end of the
statutory period for bringing such claims, and (b) the obligation to indemnify
under Section 12.2 hereof in respect of the authority of the Buyer shall apply
in respect of Losses asserted prior to the end of the statutory period for
bringing such claims.
SECTION 12.4 PROCEDURES FOR INDEMNIFICATION. If the Sellers' Event of
Breach or a Buyer's Event of Breach (a "PARTY'S EVENT OF BREACH") occurs or is
alleged and a Buyer Indemnitee or a Seller Indemnitee (a "PARTY INDEMNITEE")
asserts that the other party has become obligated to it pursuant to Section 12.1
or Section 12.2, or if any Claim is begun, made or instituted as a result of
which the other party may become obligated to a Party Indemnitee hereunder, such
Party Indemnitee shall give prompt notice to the other party. The Party
Indemnitee shall permit the other party (at its expense) to assume the defense
of any Claim; PROVIDED, HOWEVER, that (a) the counsel for the other party who
shall conduct the defense shall be reasonably satisfactory to the Party
Indemnitee (it being understood that if the Sellers are required to defend a
Claim hereunder that Hale and Dorr LLP is satisfactory for such purpose, and
that if the Buyer is required to defend a Claim hereunder that Duval &
Stachenfeld LLP is satisfactory for such purpose), (b) the Party Indemnitee may
participate in such defense at its own expense, and (c) the omission by the
Party Indemnitee to give notice as provided herein shall not relieve the other
party of its indemnification obligation except to the extent that such omission
results in a failure of actual notice to the other party and the other party is
damaged as a result of such failure to give notice. Except with the prior
written consent of the Party Indemnitee, the other party shall not, in the
defense of any such Claim, consent to entry of any judgment or enter into any
settlement that provides for injunctive or other nonmonetary relief affecting
the Party Indemnitee or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Party Indemnitee of a release
from all liability with respect to such Claim or litigation. In the event that
the Party Indemnitee shall in good faith determine that the conduct of any
defense of any Claim subject to indemnification hereunder or any proposed
settlement of any such Claim by the other party might reasonably be expected to
affect adversely the ability of the Party Indemnitee to conduct the Business or
that the Party Indemnitee may have available to
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it one or more defense or counterclaims that are inconsistent with one or more
of those that may be available to the other party in respect of such Claim
relating thereto, the Party Indemnitee shall have the right at all times to take
over and assume control over the defense, settlement, negotiations or litigation
relating to any such Claim at the sole cost of the other party (including
without limitation reasonable attorneys' fees and disbursements and other
amounts paid as the result of such Claim). In the event that the Party
Indemnitee does so take over and assume control over the defense of a Claim
pursuant to the immediately preceding sentence, the Party Indemnitee (i) shall
be entitled to satisfy or settle any such Claim on a reasonable basis, without
prior notice to or consent from the other party, (ii) may subsequently make a
claim for indemnification with respect to such satisfaction or settlement of
such Claim in accordance with the provisions of this Article XII, and (iii)
shall be reimbursed, in accordance with the provisions of this Article XII, for
any such Losses satisfied or settled and for which the Party Indemnitee
establishes that it is entitled to indemnification pursuant to this Article XII.
In any such claim for indemnification, the Party Indemnitee agrees that the
amount paid to any such third party shall not be determinative of the amount of
Losses suffered by the Party Indemnitee or introduced as evidence of the amount
of such Losses in any such claim for indemnification, and the other party shall
have the right to dispute the Party Indemnitee's entitlement to indemnification
and the amount for which it is entitled to indemnification under the terms of
this Article XII. In the event that the other party does not accept and continue
the defense of any matter as provided above, the Party Indemnitee shall have the
full right to defend against any such Claim, and to satisfy or settle any such
Claim, without prior notice to or consent from the other party, subject in each
case to the limitations set forth in the prior two sentences of this Section
12.4. In any other event, the Party Indemnitee shall have no right to settle or
agree to pay any claim to which it is entitled to indemnification hereunder.
SECTION 12.5 PURCHASE PRICE ADJUSTMENT. The Buyer and the Sellers shall
treat any payments under this Article XII as an adjustment to the Purchase Price
for all Federal, provincial, state and local income tax purposes.
SECTION 12.6 EXCLUSIVE REMEDIES. The remedies available to the Sellers
and Buyer shall be the exclusive remedies available to them for monetary
damages; provided, however, that the Sellers and the Buyer shall be entitled to
pursue any equitable remedies (including specific performance) to the extent
available to them.
SECTION 12.7 ARTICLE X. To the extent that any amounts are payable to
Buyer or Sellers pursuant to Article X of this Agreement, the provisions of
Article X shall solely govern the payment of such amounts; provided, however,
that the provisions of this Article XII shall govern the remedies available to
Buyer or Sellers as a result of any breach of the provisions of Article X.
ARTICLE XIII
CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLERS
The obligations of the Sellers to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, at or before the Closing Date,
of the following conditions, any one or more of which may be waived by KTI in
its sole discretion:
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF THE BUYER. The
representations and warranties of the Buyer contained in this Agreement shall be
true and correct (i) at and as of the date hereof, and (ii) on and as of the
Closing Date with the same effect as though made on and as of the Closing Date,
except in either such case (i) or (ii) where the failure of the representations
and warranties of Buyer in this Agreement or of the RTG Buyer in the RTG
Purchase Agreement to be true and correct,
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individually or in the aggregate, could not reasonably be expected to (x) have a
material adverse effect on the Buyer, or (y) have a material adverse effect on
the ability of Buyer or RTG Buyer to perform their obligations under this
Agreement and the RTG Purchase Agreement; and the Sellers shall have received a
certificate dated the Closing Date and signed by any officer of the Buyer to
that effect.
SECTION 13.2 PERFORMANCE OF THE OBLIGATIONS OF THE BUYER. The Buyer shall
have performed in all material respects all obligations required under this
Agreement to be performed by the Buyer on or before the Closing Date, and the
Sellers shall have received a certificate dated the Closing Date and signed by
any officer of the Buyer to that effect.
SECTION 13.3 CONSENTS AND APPROVALS. All consents, waivers,
authorizations and approvals of any Governmental Authority required or desired
in connection with the execution, delivery and performance of this Agreement
shall have been duly obtained and shall be in full force and effect on the
Closing Date.
SECTION 13.4 NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other order issued by any Governmental Authority, nor any statute,
rule, regulation, decree or executive order promulgated or enacted by any
Governmental Authority, that declares this Agreement invalid or unenforceable in
any respect or that prevents the consummation of the transactions contemplated
hereby shall be in effect, and no action or proceeding before any Governmental
Authority shall have been instituted or threatened by any government or
Governmental Authority which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, and which in any such case has a reasonable
likelihood of success in the opinion of counsel to the Sellers.
SECTION 13.5 DELIVERY OF DOCUMENTS. Each document required to be
delivered pursuant to Section 4.3 must have been delivered.
SECTION 13.6 RTG PURCHASE AGREEMENT. The transactions contemplated by the
RTG Purchase Agreement shall have been consummated simultaneously herewith.
ARTICLE XIV
CONDITIONS PRECEDENT TO PERFORMANCE BY THE BUYER
The obligations of the Buyer to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, at or before the Closing Date, of
the following conditions, any one or more of which may be waived by the Buyer in
its sole discretion:
SECTION 14.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The
representations and warranties of the Sellers contained in this Agreement shall
be true and correct (i) at and as of the date hereof, and (ii) on and as of the
Closing Date with the same effect as though made on and as of the Closing Date,
except in either such case (i) or (ii) where the failure of the representations
and warranties of the Sellers in this Agreement and the RTG Sellers under the
RTG Purchase Agreement to be true and correct, individually or in the aggregate,
could not reasonably be expected to (x) have a Seller Material Adverse Effect,
or (y) have a material adverse effect on the ability of the Sellers or the RTG
Sellers to perform their obligations under this Agreement and the RTG Purchase
Agreement; provided, however, that notwithstanding the foregoing, in the event
that the representation made by Sellers in Section 5.7(c) of this Agreement is
not true and correct on and as of the Closing Date, the condition set forth in
this Section 14.1 shall be deemed to have not been satisfied. The Buyer shall
have received certificates dated
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the Closing Date and signed by the Chief Executive Officer or Chief Operating
Officer of each Seller stating that the condition set forth in this Section 14.1
has been satisfied.
SECTION 14.2 PERFORMANCE OF THE OBLIGATIONS OF THE SELLERS. The Sellers
shall have performed in all material respects all obligations required under
this Agreement to be performed by them on or before the Closing Date, and the
Buyer shall have received certificates dated as of the Closing Date and signed
by the Chief Executive Officer or Chief Operating Officer of each Seller to that
effect; provided, however, that notwithstanding the foregoing, in the event that
the Sellers are in breach of Section 8.1(a)(xii) or Section 8.1(b)(v) of this
Agreement, the condition set forth in this Section 14.2 shall be deemed to have
not been satisfied.
SECTION 14.3 CONSENTS AND APPROVALS. All consents, waivers, novations,
authorizations and approvals of any Governmental Authority and all of the
consents, waivers, novations, authorizations and approvals set forth on SCHEDULE
5.5 of this Agreement shall have been duly obtained and shall be in full force
and effect on the Closing Date
SECTION 14.4 NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other order issued by any Governmental Authority, nor any statute,
rule, regulation, decree or executive order promulgated or enacted by any
Governmental Authority, that declares this Agreement invalid in any respect or
that prevents the consummation of the transactions contemplated hereby, or that
materially and adversely affects the assets, properties, operations, prospects,
net income or financial condition of the Purchased Companies or the Business
shall be in effect, and no action or proceeding before any Governmental
Authority shall have been instituted or threatened by any government or
Governmental Authority which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, and which in any such case has a reasonable
likelihood of success in the opinion of counsel to the Buyer.
SECTION 14.5 NO MATERIAL ADVERSE CHANGE. During the period from July 1,
2001 through the Closing, there shall not have been any change in the business,
operations, or financial condition of the Purchased Companies, the RTG Purchased
Companies, the Business and/or the RTG Business that, individually or in the
aggregate, could reasonably be expected to have a Seller Material Adverse
Effect.
SECTION 14.6 DELIVERY OF DOCUMENTS. Each document required to be
delivered pursuant to Section 4.2 must have been delivered.
SECTION 14.7 LICENSES AND PERMITS. All Licenses and Permits shall be in
full force and effect.
SECTION 14.8 PURCHASE AGREEMENT. The transactions contemplated by the RTG
Purchase Agreement shall have been consummated simultaneously herewith.
SECTION 14.9. MARTY SERGI. Marty Sergi shall not have died.
ARTICLE XV
TERMINATION
SECTION 15.1 CONDITIONS OF TERMINATION. Notwithstanding anything to the
contrary contained herein, this Agreement may be terminated at any time before
the Closing: (a) by mutual consent of KTI and the Buyer, (b) by either KTI or
the Buyer if the other party shall have breached this Agreement in any material
respect and such breach cannot be cured by September 30, 2001 (the "OUTSIDE
DATE") (c) by KTI if at the Outside Date, any of the conditions set forth in
Article XIII shall not have been
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met, unless a Seller's breach of this Agreement is the reason for the failure of
such conditions to be satisfied, or (d) by the Buyer if at the Outside Date, any
of the conditions set forth in Article XIV shall not have been met, unless the
Buyer's breach of this Agreement is the reason for the failure of such
conditions to be satisfied. Notwithstanding the foregoing, this Agreement may
not be terminated by either party unless the RTG Purchase Agreement is also
terminated in accordance with its terms.
SECTION 15.2 PROCEDURE UPON TERMINATION. In the event of termination by
KTI and/or the Buyer pursuant to Section 15.1 and written notice thereof shall
forthwith be given to the other party and the transactions contemplated by this
Agreement are terminated as provided herein:
(a) the Sellers and the Buyer each will return all documents,
work papers and other material of the other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same;
(b) all Confidential Information received by the Sellers or the
Buyer with respect to the business of the other party or its subsidiaries shall
be treated in accordance with Section 8.5; and
(c) such termination shall not in any way limit or restrict the
rights and remedies of the Sellers or the Buyer against the other party hereto
which has violated or breached any of the representations, warranties,
agreements or other provisions of this Agreement prior to the termination
hereof.
SECTION 15.3 EFFECT OF TERMINATION. In the event of termination pursuant
to Section 15.1, or as otherwise provided in this Agreement, this Agreement
shall become null and void and have no effect, with no liability on the part of
the parties, or their directors, officers, agents or stockholders, with respect
to this Agreement, except for (a) the liability of a party for expenses pursuant
to Section 16.4, (b) liability for breach of this Agreement, and (c) the
provisions of Section 8.5(c) and Section 9.2.
ARTICLE XVI
MISCELLANEOUS
SECTION 16.1 SURVIVAL OF PROVISIONS. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
made herein or in any certificate or other instrument delivered by one of the
parties to this Agreement (except covenants and agreements which are expressly
required to be performed and are performed in full on or before the Closing
Date), shall be considered to have been relied upon by the other party to this
Agreement, as the case may be, and shall survive the Closing Date for a period
of two (2) years following the Closing Date, provided that the representations
and warranties regarding the corporate or other authority of the Sellers, Taxes
and violations of Environmental Laws (or otherwise contained in Section 5.21
hereof) and ERISA, shall survive until the end of the statutory period for
bringing Claims related thereto. Notwithstanding any investigation by the Buyer
of the affairs of the Sellers and their respective Subsidiaries and
notwithstanding any knowledge of the facts determined or determinable by the
Buyer pursuant to such investigation, the Buyer has the right to rely fully upon
the representations, warranties, covenants and agreements of the Sellers
contained in this Agreement.
SECTION 16.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect; provided, however that the Buyer shall
be permitted to assign
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some or all of its rights hereunder to one or more of its Affiliates. This
Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the parties hereto.
SECTION 16.3 GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED, PERFORMED AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS
OF LAWS THEREOF. THE PARTIES HERETO IRREVOCABLY ELECT AS THE SOLE JUDICIAL FORUM
FOR THE ADJUDICATION OF ANY MATTERS ARISING UNDER OR IN CONNECTION WITH THIS
AGREEMENT, AND CONSENT TO THE JURISDICTION OF, THE COURTS OF THE SOUTHERN
DISTRICT OF NEW YORK.
SECTION 16.4 EXPENSES. In the event the transactions contemplated by this
Agreement are consummated, the fees, costs and expenses of each party hereto in
connection with this Agreement and the transactions contemplated hereby,
including without limitation, any legal fees (both U.S. and foreign), accounting
fees, brokers' fees and commissions, fees and expenses of consultants and travel
and similar expenses (collectively, the "TRANSACTION EXPENSES"), shall be paid
by Holdco 2 LLC as and to the extent provided in the Holdco 2 LLC Agreement and
all of the other Transactional Expenses shall be paid by the party that incurred
such expenses. Except as otherwise provided in this Section 16.4, in the event
the transactions contemplated by this Agreement are not consummated, each of the
parties hereto shall pay its own Transaction Expenses. In the event that this
Agreement is terminated by KTI pursuant to Section 15.1(c) due to a breach of
this Agreement by Buyer, Buyer shall pay all of the reasonable Transaction
Expenses and other reasonable fees, costs and expenses incurred by the Sellers
and their Affiliates in connection with this Agreement and the RTG Purchase
Agreement, and the transactions contemplated hereby and thereby, promptly (but
in no event later than five days) upon delivery by KTI to Buyer of reasonably
specific summary or invoice of such Transaction Expenses and other fees, costs
expenses. In the event that this Agreement is terminated by Buyer pursuant to
Section 15.1(d) due to a breach of this Agreement by Sellers, the Sellers shall
pay all of the reasonable Transaction Expenses and other reasonable fees, costs
and expenses incurred by the Buyer and its Affiliates in connection with this
Agreement and the RTG Purchase Agreement, and the transactions contemplated
hereby and thereby, promptly (but in no event later than five days) upon
delivery by the Buyer to KTI of reasonably specific summary or invoice of such
Transaction Expenses. The Sellers shall pay all recording and filing fees that
may be imposed by reason of the sale, transfer, assignment and delivery of the
Purchased Equity. In the event of a dispute as to the amount of fees payable
pursuant to this Section 16.4, the parties agree to submit such dispute to
binding arbitration in front of a single arbitrator in New York, New York
designated by both the Buyer and the Sellers, under the commercial arbitration
rules of the American Arbitration Association with expedited procedures in
effect on the date thereof.; provided, however, if the parties fail to agree
upon an arbitrator within 30 days from the date on which such dispute arose, the
arbitrator shall be selected in accordance with commercial arbitration rules of
the American Arbitration Association. The costs of any such arbitration shall be
determined by the arbitrator.
SECTION 16.5 BROKER'S AND CONSULTANT'S FEES. Except as set forth on
SCHEDULE 16.5 to this Agreement, each of the parties represents and warrants
that it has not dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement and, insofar as it knows, no broker
or other Person is entitled to any commission or finder's fee in connection with
any of the transactions contemplated hereby.
SECTION 16.6 FURTHER ASSURANCES. The Sellers shall, at any time and from
time to time after the Closing Date, upon the request of the Buyer and at the
expense of the Sellers, do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, all such further
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deeds, assignments, transfers and conveyances as may be required for the better
assigning, transferring, granting, conveying and confirming to the Buyer or its
successors and assigns, or for aiding and assisting in collecting and reducing
to possession, any or all of the Purchased Equity.
SECTION 16.7 PUBLIC ANNOUNCEMENTS. Following the execution and delivery
of this Agreement, the Sellers may announce publicly that it has reached an
agreement with respect to the transactions contemplated herein; provided,
however, such announcement shall have been approved by Buyer in writing prior to
being made by Sellers, which approval shall not be unreasonably withheld.
Thereafter, prior to the Closing Date, no party hereto shall (and each party
hereto shall cause each of its Subsidiaries, Affiliates, successors and assigns
not to) furnish any communication (written or oral) to any third party or to the
public generally if the subject matter thereof relates to the existence of this
Agreement or the other party's involvement herein or to the transactions
contemplated hereby without the prior approval of the other party hereto as to
the content thereof, which approval may be granted or withheld in the other
party's sole discretion; PROVIDED HOWEVER, that the foregoing shall not be
deemed to prohibit any disclosure required by any applicable law or Governmental
Authority having jurisdiction over such matters, although in any event, the
disclosing party shall provide the other party the content of the proposed
disclosure and shall reflect all reasonable comments thereon made by the other
party. After the Closing Date, the Sellers and the Buyer shall consult with each
other before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law or government regulation or decree, court
process or by obligations pursuant to any listing agreement with any national
securities exchange.
SECTION 16.8 SEVERABILITY. In the event that any part of this Agreement
is declared by any court or other judicial or administrative body to be null,
void or unenforceable, said provision shall survive to the extent it is not so
declared, and all of the other provisions of this Agreement shall remain in full
force and effect.
SECTION 16.9 NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served personally on the
party to whom notice is to be given, (b) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, (c) on the day after
delivery to an overnight courier service, or (d) on the fifth day after mailing,
if mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid and properly addressed, to the party as
follows:
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If to the Sellers:
Casella Waste Systems, Inc.
25 Green Hill Lane
Rutland, VT 05701
Attention: Mr. James W. Bohlig
Telecopier: (802) 775-6198
with a copy (which shall not constitute notice) to:
Casella Waste Systems, Inc.
25 Green Hill Lane
Rutland, VT 05701
Attention: Michael Brennan, Esq.
Telecopier: (802) 770-5030
If to the Buyer:
New Heights Holding Corporation
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, New York 10167
Attention: Mr. Josh Brain
Telecopier: (212) 599-2920
with a copy (which shall not constitute notice) to:
Duval & Stachenfeld LLP
300 East 42nd Street, 3rd Floor
New York, New York 10017
Attention: Bruce Stachenfeld, Esq.
Telecopier: (212) 883-8883
Any party may change its address for the purpose of this Section 16.9 by
giving the other party written notice of its new address in the manner set forth
above.
SECTION 16.10 AMENDMENTS; WAIVERS. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties hereto, or in the case of a waiver, by the party waiving compliance. Any
waiver by any party of any condition, or of the breach of any provision, term,
covenant, representation or warranty contained in this Agreement, in any one or
more instances, shall not be deemed to be nor construed as a further or
continuing waiver of any such condition, or of the breach of any other
provision, term, covenant, representation or warranty of this Agreement.
SECTION 16.11 ENTIRE AGREEMENT. This Agreement and the other documents
referred to herein contain the entire understanding between the parties hereto
with respect to the transactions contemplated hereby and supersede and replace
all prior and contemporaneous agreements and understandings, oral or written,
with regard to such transactions.
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SECTION 16.12 SECTION AND PARAGRAPH HEADINGS. The section and paragraph
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
SECTION 16.13 NO THIRD PARTY BENEFICIARIES. This Agreement does not create
and shall not be construed as creating any rights enforceable by any Person who
or which is not a party to this Agreement.
SECTION 16.14 GENDER; NUMBER. As used in this Agreement, the masculine
shall include the feminine and the neuter, the singular shall include the plural
and the plural shall include the singular as the context may require.
SECTION 16.15 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
NEW HEIGHTS HOLDING CORPORATION
By: /s/ Joshua Brain
--------------------------------------------
Name: Joshua Brain
Title: Co-President
KTI, INC.
By: /s/ James W. Bohlig
--------------------------------------------
Name: James W. Bohlig
Title: Vice President
KTI OPERATIONS, INC.
By: /s/ James W. Bohlig
--------------------------------------------
Name James W. Bohlig
Title: Vice President
CASELLA WASTE SYSTEMS, INC.
By: /s/ James W. Bohlig
--------------------------------------------
Name James W. Bohlig
Title: President
Signature Page to Purchase Agreement
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
AG Equity Partners, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 40% of all of the obligations of the Buyer set forth in
this Agreement and up to 40% of all of the obligations of the RTG Buyer set
forth in the RTG Purchase Agreement; PROVIDED, HOWEVER, the obligations of the
Buyer's Parent hereunder is limited to, and under no circumstances shall the
Buyer's Parent be required to guarantee or pay more than, 40% of the sum of the
Purchase Price and the Purchase Price (as defined in the RTG Purchase
Agreement). This guarantee is an irrevocable guarantee of payment (and not just
of collection) and shall continue in effect notwithstanding any extension or
modification of the terms of this Agreement, any assumption of any such
guaranteed obligation by any other party or any other act or event that might
otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
AG EQUITY PARTNERS, L.P.
By: AG Equity LLC, General Partner
By: /s/ Michael L. Gordon
------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
AG Super Fund, L.P., a Delaware limited partnership (the "BUYER'S PARENT"),
hereby unconditionally guarantees the due and punctual payment and performance
of up to 23% of all of the obligations of the Buyer set forth in this Agreement
and up to 23% of all of the obligations of the RTG Buyer set forth in the RTG
Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's Parent
hereunder is limited to, and under no circumstances shall the Buyer's Parent be
required to guarantee or pay more than, 23% of the sum of the Purchase Price and
the Purchase Price (as defined in the RTG Purchase Agreement). This guarantee is
an irrevocable guarantee of payment (and not just of collection) and shall
continue in effect notwithstanding any extension or modification of the terms of
this Agreement, any assumption of any such guaranteed obligation by any other
party or any other act or event that might otherwise operate as a legal or
equitable discharge of the Buyer's Parent hereunder. This guarantee is in no way
conditioned upon any requirement that the Sellers first attempt to collect or
enforce any guaranteed obligation from or against the Buyer. So long as any
obligation of the Buyer to the Sellers under this Agreement remains unpaid or
undischarged, the Buyer's Parent hereby waives (but only with respect to the
Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
AG SUPER FUND, L.P.
By: Angelo, Gordon & Co., L.P., General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
AG Super Fund International Partners, L.P., a Delaware limited partnership
(the "BUYER'S PARENT"), hereby unconditionally guarantees the due and punctual
payment and performance of up to 9% of all of the obligations of the Buyer set
forth in this Agreement and up to 9% of all of the obligations of the RTG Buyer
set forth in the RTG Purchase Agreement; PROVIDED, HOWEVER, the obligations of
the Buyer's Parent hereunder is limited to, and under no circumstances shall the
Buyer's Parent be required to guarantee or pay more than, 9% of the sum of the
Purchase Price and the Purchase Price (as defined in the RTG Purchase
Agreement). This guarantee is an irrevocable guarantee of payment (and not just
of collection) and shall continue in effect notwithstanding any extension or
modification of the terms of this Agreement, any assumption of any such
guaranteed obligation by any other party or any other act or event that might
otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
AG SUPER FUND INTERNATIONAL PARTNERS,
L.P.
By: Angelo, Gordon & Co., L.P., General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
Nutmeg Partners, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 8% of all of the obligations of the Buyer set forth in this
Agreement and up to 8% of all of the obligations of the RTG Buyer set forth in
the RTG Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's
Parent hereunder is limited to, and under no circumstances shall the Buyer's
Parent be required to guarantee or pay more than, 8% of the sum of the Purchase
Price and the Purchase Price (as defined in the RTG Purchase Agreement). This
guarantee is an irrevocable guarantee of payment (and not just of collection)
and shall continue in effect notwithstanding any extension or modification of
the terms of this Agreement, any assumption of any such guaranteed obligation by
any other party or any other act or event that might otherwise operate as a
legal or equitable discharge of the Buyer's Parent hereunder. This guarantee is
in no way conditioned upon any requirement that the Sellers first attempt to
collect or enforce any guaranteed obligation from or against the Buyer. So long
as any obligation of the Buyer to the Sellers under this Agreement remains
unpaid or undischarged, the Buyer's Parent hereby waives (but only with respect
to the Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
NUTMEG PARTNERS, L.P.
By: Angelo, Gordon & Co., L.P., General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
Angelo, Gordon & Co., L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 5% of all of the obligations of the Buyer set forth in this
Agreement and up to 5% of all of the obligations of the RTG Buyer set forth in
the RTG Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's
Parent hereunder is limited to, and under no circumstances shall the Buyer's
Parent be required to guarantee or pay more than, 5% of the sum of the Purchase
Price and the Purchase Price (as defined in the RTG Purchase Agreement). This
guarantee is an irrevocable guarantee of payment (and not just of collection)
and shall continue in effect notwithstanding any extension or modification of
the terms of this Agreement, any assumption of any such guaranteed obligation by
any other party or any other act or event that might otherwise operate as a
legal or equitable discharge of the Buyer's Parent hereunder. This guarantee is
in no way conditioned upon any requirement that the Sellers first attempt to
collect or enforce any guaranteed obligation from or against the Buyer. So long
as any obligation of the Buyer to the Sellers under this Agreement remains
unpaid or undischarged, the Buyer's Parent hereby waives (but only with respect
to the Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
ANGELO, GORDON & CO., L.P.
By: /s/ Michael L. Gordon
-------------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
PHS Bay Colony Fund, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 3% of all of the obligations of the Buyer set forth in this
Agreement and up to 3% of all of the obligations of the RTG Buyer set forth in
the RTG Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's
Parent hereunder is limited to, and under no circumstances shall the Buyer's
Parent be required to guarantee or pay more than, 3% of the sum of the Purchase
Price and the Purchase Price (as defined in the RTG Purchase Agreement). This
guarantee is an irrevocable guarantee of payment (and not just of collection)
and shall continue in effect notwithstanding any extension or modification of
the terms of this Agreement, any assumption of any such guaranteed obligation by
any other party or any other act or event that might otherwise operate as a
legal or equitable discharge of the Buyer's Parent hereunder. This guarantee is
in no way conditioned upon any requirement that the Sellers first attempt to
collect or enforce any guaranteed obligation from or against the Buyer. So long
as any obligation of the Buyer to the Sellers under this Agreement remains
unpaid or undischarged, the Buyer's Parent hereby waives (but only with respect
to the Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
PHS BAY COLONY FUND, L.P.
By: Angelo, Gordon & Co., L.P., General
Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
AG CNG Fund, L.P., a Delaware limited partnership (the "BUYER'S PARENT"),
hereby unconditionally guarantees the due and punctual payment and performance
of up to 3% of all of the obligations of the Buyer set forth in this Agreement
and up to 3% of all of the obligations of the RTG Buyer set forth in the RTG
Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's Parent
hereunder is limited to, and under no circumstances shall the Buyer's Parent be
required to guarantee or pay more than, 3% of the sum of the Purchase Price and
the Purchase Price (as defined in the RTG Purchase Agreement). This guarantee is
an irrevocable guarantee of payment (and not just of collection) and shall
continue in effect notwithstanding any extension or modification of the terms of
this Agreement, any assumption of any such guaranteed obligation by any other
party or any other act or event that might otherwise operate as a legal or
equitable discharge of the Buyer's Parent hereunder. This guarantee is in no way
conditioned upon any requirement that the Sellers first attempt to collect or
enforce any guaranteed obligation from or against the Buyer. So long as any
obligation of the Buyer to the Sellers under this Agreement remains unpaid or
undischarged, the Buyer's Parent hereby waives (but only with respect to the
Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
AG CNG FUND, L.P.
By: Angelo, Gordon & Co., L.P., General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
AG MM, L.P., a Delaware limited partnership (the "BUYER'S PARENT"), hereby
unconditionally guarantees the due and punctual payment and performance of up to
3% of all of the obligations of the Buyer set forth in this Agreement and up to
3% of all of the obligations of the RTG Buyer set forth in the RTG Purchase
Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's Parent hereunder is
limited to, and under no circumstances shall the Buyer's Parent be required to
guarantee or pay more than, 3% of the sum of the Purchase Price and the Purchase
Price (as defined in the RTG Purchase Agreement). This guarantee is an
irrevocable guarantee of payment (and not just of collection) and shall continue
in effect notwithstanding any extension or modification of the terms of this
Agreement, any assumption of any such guaranteed obligation by any other party
or any other act or event that might otherwise operate as a legal or equitable
discharge of the Buyer's Parent hereunder. This guarantee is in no way
conditioned upon any requirement that the Sellers first attempt to collect or
enforce any guaranteed obligation from or against the Buyer. So long as any
obligation of the Buyer to the Sellers under this Agreement remains unpaid or
undischarged, the Buyer's Parent hereby waives (but only with respect to the
Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
AG MM, L.P.
By: Angelo, Gordon & Co., L.P., Investment
Manager
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
AG Super Advantage, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 2% of all of the obligations of the Buyer set forth in this
Agreement and up to 2% of all of the obligations of the RTG Buyer set forth in
the RTG Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's
Parent hereunder is limited to, and under no circumstances shall the Buyer's
Parent be required to guarantee or pay more than, 2% of the sum of the Purchase
Price and the Purchase Price (as defined in the RTG Purchase Agreement). This
guarantee is an irrevocable guarantee of payment (and not just of collection)
and shall continue in effect notwithstanding any extension or modification of
the terms of this Agreement, any assumption of any such guaranteed obligation by
any other party or any other act or event that might otherwise operate as a
legal or equitable discharge of the Buyer's Parent hereunder. This guarantee is
in no way conditioned upon any requirement that the Sellers first attempt to
collect or enforce any guaranteed obligation from or against the Buyer. So long
as any obligation of the Buyer to the Sellers under this Agreement remains
unpaid or undischarged, the Buyer's Parent hereby waives (but only with respect
to the Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
AG SUPER ADVANTAGE, L.P.
By: AG Super Advantage GP, LLC
General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
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GUARANTEE OF BUYER'S OBLIGATIONS
PHS Patriot Fund, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 2% of all of the obligations of the Buyer set forth in this
Agreement and up to 2% of all of the obligations of the RTG Buyer set forth in
the RTG Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's
Parent hereunder is limited to, and under no circumstances shall the Buyer's
Parent be required to guarantee or pay more than, 2% of the sum of the Purchase
Price and the Purchase Price (as defined in the RTG Purchase Agreement). This
guarantee is an irrevocable guarantee of payment (and not just of collection)
and shall continue in effect notwithstanding any extension or modification of
the terms of this Agreement, any assumption of any such guaranteed obligation by
any other party or any other act or event that might otherwise operate as a
legal or equitable discharge of the Buyer's Parent hereunder. This guarantee is
in no way conditioned upon any requirement that the Sellers first attempt to
collect or enforce any guaranteed obligation from or against the Buyer. So long
as any obligation of the Buyer to the Sellers under this Agreement remains
unpaid or undischarged, the Buyer's Parent hereby waives (but only with respect
to the Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
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IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
PHS PATRIOT FUND, L.P.
By: Angelo, Gordon & Co., L.P., General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
<Page>
GUARANTEE OF BUYER'S OBLIGATIONS
AG Princess, L.P., a Delaware limited partnership (the "BUYER'S PARENT"),
hereby unconditionally guarantees the due and punctual payment and performance
of up to 2% of all of the obligations of the Buyer set forth in this Agreement
and up to 2% of all of the obligations of the RTG Buyer set forth in the RTG
Purchase Agreement; PROVIDED, HOWEVER, the obligations of the Buyer's Parent
hereunder is limited to, and under no circumstances shall the Buyer's Parent be
required to guarantee or pay more than, 2% of the sum of the Purchase Price and
the Purchase Price (as defined in the RTG Purchase Agreement). This guarantee is
an irrevocable guarantee of payment (and not just of collection) and shall
continue in effect notwithstanding any extension or modification of the terms of
this Agreement, any assumption of any such guaranteed obligation by any other
party or any other act or event that might otherwise operate as a legal or
equitable discharge of the Buyer's Parent hereunder. This guarantee is in no way
conditioned upon any requirement that the Sellers first attempt to collect or
enforce any guaranteed obligation from or against the Buyer. So long as any
obligation of the Buyer to the Sellers under this Agreement remains unpaid or
undischarged, the Buyer's Parent hereby waives (but only with respect to the
Buyer and its Affiliates and not as to any other parties) all rights to
subrogation arising out of any payment by the Buyer's Parent under this
Agreement.
The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.
The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.
The Buyer's Parent acknowledges that each of the waivers set forth above is
made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.
This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.
The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.
<Page>
IN WITNESS WHEREOF, the undersigned has executed this guarantee as of the
17th day of August, 2001.
AG PRINCESS, L.P.
By: Angelo, Gordon & Co., L.P., General Partner
By: /s/ Michael L. Gordon
-------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
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EXHIBIT A
[FORM OF NH INVESTORS LLC AGREEMENT]
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EXHIBIT B
[FORM OF HALE AND DORR OPINION]
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EXHIBIT C
[FORM OF DUVAL & STACHENFELD LLP OPINION]