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EXHIBIT 10.39
ASSET PURCHASE AGREEMENT
Agreement entered into as of January 30, 1995, by and among Clean
Harbors of Chicago, Inc., a Massachusetts corporation (the "Buyer"), Clean
Harbors, Inc., a Massachusetts corporation ("Harbors"), CWM Chemical Services,
Inc., a Delaware corporation (the "Seller"), and Chemical Waste Management,
Inc., a Delaware corporation ("CWM"). The Buyer, Harbors, the Seller and CWM
are referred to herein individually as a "Party" and collectively as the
"Parties."
CWM owns all of the outstanding capital stock of the Seller, and Harbors
owns all of the outstanding capital stock of the Buyer. This Agreement
contemplates a transaction in which: (i) the Buyer will acquire from the Seller
all of the Seller's right, title and interest in and to certain assets (the
"CWM Chicago Assets"), which include a leasehold interest under a lease (the
"Lease") with the Illinois International Port District (the "Port District"),
various leasehold improvements and the other business assets located at 11700
S. Stoney Island Avenue, Chicago, Illinois (the "Facility"), together with all
of CWM's permits, licenses, authorizations and approvals necessary for the
Buyer to operate the Facility as a facility for the transportation, storage and
disposal of hazardous wastes, (ii) the Buyer will (A) construct certain
improvements at the Facility ("New Construction Work"); (B) dismantle,
decommission and prepare for transportation from the Facility certain of the
CWM Chicago Assets ("D&D Work"); and (C) manage and comply with requirements
for RCRA facility investigations relating to the Facility and corrective or
cleanup action and closure requirements relating to the Facility or the
adjoining Lake Calumet arising therefrom ("RFI Work"); (iii) the Buyer and CWM
will agree, in the respective proportions described in this Agreement, to pay
for certain costs and to assume certain liabilities with respect to the CWM
Chicago Assets; and (iv) the Parties will agree to certain other matters as set
forth in this Agreement.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Adverse Consequences" means all damages, penalties, fines, costs,
reasonable amounts paid in settlement, Liabilities, obligations, Taxes, liens,
losses and expenses (including reasonable court costs and reasonable
attorneys' fees and expenses), including, without limitation, all such
consequences arising from suits, proceedings, hearings, investigations,
inspections, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees and rulings.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Applicable Rate" means the discount rate charged on loans to depository
institutions by the Federal Reserve Bank, as stated from time to time in The
Wall Street Journal.
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"Approvals" means all the permits, licenses, authorizations, leases and
approvals necessary for the Buyer to operate the Facility as a facility for the
transportation, storage and disposal of hazardous wastes in accordance with
applicable laws and regulations including, without limitation, the
Environmental, Health and Safety Laws. The Approvals shall include, without
limitation, the Transferable Licenses, the New Licenses, and the consent of the
Port District to the assignment to the Buyer of the Lease in accordance with
the Assignment and Assumption Agreement.
"Assignment and Assumption Agreement" has the meaning set forth in
[SECTION] 2(j) below.
"Buyer" has the meaning set forth in the preface above.
"Buyer's Direct Costs" means sixty (60%) percent of those charges listed
in the Buyer's Rate Schedule attached hereto as Exhibit E.
"Closing" has the meaning set forth in [SECTION] 2(c) below.
"Closing Date" has the meaning set forth in [SECTION] 2(c) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the businesses
and affairs of the respective Parties and the Facility which is in existence at
the time of the Closing, is not already generally available to the public, and
is marked "Confidential" or otherwise identified in writing as confidential by
the Party or Parties seeking to maintain the confidentiality thereof.
"CWM" has the meaning set forth in the preface above.
"CWM Chicago Assets" means the Transferable Licenses, the Facility, the
Personal Property, and all other business assets now owned or leased by the
Seller which are located on the premises leased by the Seller under the Lease.
The "CWM Chicago Assets" do not include those air emission offset credits
attributable to the Incinerator which are not required by the Buyer to operate
the Facility.
"CWM's Material Subsidiaries" means CWM of the Northwest, Inc. and CWM of
Indiana, Inc.
"D&D Costs" has the meaning set forth in [SECTION] 2(f) below.
"D&D Work" has the meaning set forth in [SECTION] 2(f) below.
"Disclosure Schedule" has the meaning set forth in [SECTION] 4 below.
"Disposal Services Agreement" has the meaning set forth in [SECTION] 2(k)
below.
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"Environmental, Health and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, RCRA, and the
Occupational Safety and Health Act of 1970, each as amended, together with all
other laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof) concerning pollution or
protection of the environment, public health and safety, or employee health and
safety, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
"EPA" means the United States Environmental Protection Agency.
"Existing Licenses" has the meaning set forth in [SECTION] 4(d) below.
"Facility" means the approximately 30 acres of land and all leasehold
improvements thereon (including improvements made or to be made thereon as a
result of the New Construction Work) located at 11700 South Stoney Island
Avenue, Chicago, Illinois, which are leased by the Seller under the Lease as of
the date of this Agreement.
"Harbors" has the meaning set forth in the preface above.
"Illinois EPA" means the Illinois Environmental Protection Agency.
"Indemnified Party" has the meaning set forth in [SECTION] 10(d) below.
"Indemnifying Party" has the meaning set forth in [SECTION] 10(d) below.
"Knowledge" means actual knowledge of the executive officers of the
relevant Party or Parties after reasonable investigation.
"Lease" means the Lease and Option dated as of November 16, 1990, and any
amendments thereto, between the Port District, as Lessor, and the Seller, as
Lessee.
"Letter of Intent" means the amended letter of intent dated as of October
17, 1994 among the Parties with respect to the transactions described in this
Agreement.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including but not limited to any liability for Taxes.
"New Construction Work" has the meaning set forth in [SECTION] 2(e) below.
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"New Licenses" has the meaning set forth in [SECTION] 7(a)(vi) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"Original Signing Date" means March 10, 1994, which is the date on which
an earlier version of the Letter of Intent was signed by all of the Parties.
"Party" and "Parties" have the meanings set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Personal Property" means all personal property (other than corporate and
financial records) now owned or leased by the Seller which are located on the
premises leased by the Seller under the Lease including, without limitation,
the items of equipment and other personal property described in Exhibit B.
"Port District" has the meaning set forth in the preface above.
"Purchase Price" has the meaning set forth in [SECTION] 2(b) below.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended.
"Related Agreements" has the meaning set forth in [SECTION] 3(a)(ii)
below.
"RFI Costs" has the meaning set forth in [SECTION] 2(g) below.
"RFI Work" has the meaning set forth in [SECTION] 2(g) below.
"Scope of Work" has the meaning set forth in [SECTION] 2(e) below.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, charge, or other
security interest, other than (a) mechanic's, materialmen's, and similar liens,
(b) liens for Taxes not yet due and payable, (c) purchase money liens and liens
securing rental payments under capital lease arrangements, and (d) other liens
arising in the Ordinary Course of Business and not incurred in connection with
the borrowing of money.
"Seller" has the meaning set forth in the preface above.
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"Signing Date" means October 19, 1994 which is the date on which the
Letter of Intent was signed by all of the Parties.
"Subsidiary Guaranties" has the meaning set forth in [SECTION] 7(a)(xi)
below.
"Surface Impoundments" means the closed surface impoundment basins which
are present on the Facility as of the date of this Agreement.
"Survey" has the meaning set forth in [SECTION] 5(i) below.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, treatment or disposal fees
(including taxes under Code [SECTION] 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or
other tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
"Third Party Claim" has the meaning set forth in [SECTION] 10(d) below.
"Transferable Licenses" has the meaning set forth in [SECTION] 4(d) below.
"Vaults" means the underground vaults for the storage of wastes which are
present on the Facility as of the date of this Agreement.
"Work" means the New Construction Work, the D&D Work, and the RFI Work.
2. PURCHASE AND SALE OF CWM CHICAGO ASSETS.
(a) BASIC TRANSACTION. On and subject to the terms and conditions of
this Agreement, the Buyer agrees to purchase from the Seller, and the Seller
agrees to sell to the Buyer, all of the CWM Chicago Assets for the
consideration specified below in [SECTION] 2(b). Prior to such purchase and
sale, the Seller and CWM have had and will have certain New Construction Work
performed by the Buyer with respect to the CWM Chicago Assets as described in
[SECTION] 2(e) hereof, and the Seller and CWM have paid to the Buyer the
payments described in [SECTION] 2(e) in consideration for performing such New
Construction Work. The Parties agree that the Purchase Price to be paid for
the CWM Chicago Assets is based upon the agreed value of such Assets as
improved by the New Construction Work.
(b) PURCHASE PRICE. In consideration for the CWM Chicago Assets, the
Buyer agrees: (i) to enter into the Assignment and Assumption Agreement and, in
accordance with the provisions thereof, to perform the obligations of the
tenant under the Lease arising on and after the Closing Date; and (ii) to pay
after the Closing the Buyer's portion of the D&D Costs and the RFI Costs as
specified in [SECTION] 2(f) and [SECTION] 2(g) below. The Parties agree that
the purchase price
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paid by the Buyer and received by the Seller for the CWM Chicago Assets (the
"Purchase Price") shall be equal to the aggregate amount of the Buyer's portion
of the D&D Costs and RFI Costs as such share shall ultimately be determined in
accordance with [SECTION] 2(f) and [SECTION] 2(g) of this Agreement, and as
such amount shall (i) be reduced by the dollar amount of the credit actually
received by CWM in accordance with [SECTION] 2(l) hereof, and (ii) be either
increased or reduced in accordance with [SECTION] 10 of this Agreement to
reflect any indemnification payments made by any Party.
(c) THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Clean Harbors of
Chicago, Inc., 11800 South Stoney Island Avenue, Chicago, Illinois, commencing
at 9:00 a.m. local time on such date as shall be five business days after the
Buyer shall have received all of the Approvals, or at such other place and on
such other date as the Parties may mutually determine (the "Closing Date").
(d) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller and CWM
will deliver to the Buyer and Harbors the various certificates, instruments,
and documents referred to in [SECTION] 7(a) below, and one or more assignments,
bills of sale and other instruments of transfer which shall be sufficient to
vest in the Buyer title to the CWM Chicago Assets; (ii) the Buyer will deliver
to the Seller and CWM the various certificates, instruments, and documents
referred to in [SECTION] 7(b) below; and (iii) CWM will pay to the Buyer by
wire transfer an aggregate of $2,000,000 as an advance payment of a
portion of CWM's share of the D&D Costs and RFI Costs as specified in
[SECTION] 2(f) and [SECTION] 2(g) below.
(e) NEW CONSTRUCTION WORK. In order to expedite receipt of the
Approvals, the Parties have agreed in the Letter of Intent that the Buyer would
commence certain New Construction Work immediately after the Signing Date,
which commencement therefore occurred prior to the completion of this Agreement
and prior to the Closing Date. The New Construction Work consists of the
modifications to the Facility and related work which are described in Tables 1
and 2 of the Scope of Work attached as Exhibit A to this Agreement (the "Scope
of Work"). In consideration for the New Construction Work, CWM has previously
paid to the Buyer a total of $2,825,000 in cash, which amount has been paid
regardless of the Buyer's costs with respect to the New Construction Work.
However, in the event that the Closing shall not occur or this Agreement shall
have been terminated by mutual consent of the Parties in accordance with
[SECTION] 11(a) hereof, any of such funds not then spent or committed by the
Buyer for New Construction Work shall be refunded to CWM. The Parties
acknowledge that the Buyer has been fully authorized by the Seller and CWM to
commence the New Construction Work prior to the Closing Date, and that there
will be no recourse against the Buyer in respect thereof in the event that the
Closing does not occur. However, in the event that the Closing does not occur,
the Buyer will thereupon remove its construction equipment and materials from
the Facility and will take the necessary steps to prevent damage or waste to
the CWM Chicago Assets which might otherwise occur as a result of the New
Construction Work.
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(f) DECONTAMINATION AND DISMANTLING. Following the Closing, the Buyer
shall decontaminate and dismantle (collectively, the "D&D Work") certain of the
CWM Chicago Assets in accordance with Table 3 of the Scope of Work. The costs
of the D&D Work ("D&D Costs") shall be equal to the Buyer's Direct Costs
incurred in connection with performing such services and shall be borne as
follows: (i) CWM shall be responsible for the first $1,000,000 or less of D&D
Costs; (ii) the Buyer shall be responsible for D&D Costs in excess of
$1,000,000 and up to $2,000,000; (iii) the Buyer and CWM shall each be
responsible for 50% of D&D Costs in excess of $2,000,000 and up to $4,000,000;
and (iv) CWM shall be responsible for any D&D Costs in excess of $4,000,000.
CWM shall be entitled to a credit against its share of D&D Costs in an amount
equal to $1,000,000 (which shall have been paid at the Closing in accordance
with [SECTION] 2(d)(iii) hereof), plus interest accruing thereon at 6% per
annum from the Closing Date until such D&D Costs would otherwise be due and
payable by CWM. In addition, CWM shall be responsible for all profiling
(analytical) costs, and for the costs of the transportation (except as set
forth in the following sentence below) and disposal of all materials to be
disposed of resulting from the D&D Work, as set forth in Table 4 of the Scope
of Work. The Buyer shall bear transportation costs only for materials disposed
of at the Seller' CID disposal facility. To the extent (if any) that CWM's
share of D&D Costs is less than $1,000,000 in the aggregate as of the date on
which the Buyer either (i) completes the decontamination and dismantling of the
specified CWM Chicago Assets according to a plan approved by the Illinois EPA,
or (ii) ceases pursuit of the approvals necessary to decontaminate and
dismantle such CWM Chicago Assets, the Buyer shall refund to CWM an amount
equal to the sum of the difference between $1,000,000 and CWM's share of the
aggregate D&D Costs theretofore incurred.
(g) FACILITY INVESTIGATION; CORRECTIVE ACTION; CLOSURE. At the time of
the Closing, the Buyer shall assume responsibility for (i) management of the
RCRA facility investigation respecting the Chicago CWM Assets and acting to
comply with the terms of any corrective or cleanup action required by any
public agency or court of competent jurisdiction with respect to the Facility
or the adjoining Lake Calumet (collectively, the "RFI Work") which shall be
done at the Buyer's Direct Costs, and (ii) closure costs relating to the CWM
Chicago Assets as described under [SECTION] 2(h) below. Such management,
closure and corrective action shall be as specified in one or more agreements
to be entered into by the Buyer and the Illinois EPA and/or the EPA, as
appropriate. The cost of such RFI Work ("RFI Costs") shall be shared as
follows: (i) the Buyer and CWM shall each be responsible for 50% of the first
$4,000,000 of RFI Costs; (ii) the Buyer shall be responsible for RFI Costs in
excess of $4,000,000 and up to $7,000,000; (iii) the Buyer and CWM shall each
be responsible for fifty (50%) percent of RFI Costs in excess of $7,000,000 and
up to $11,000,000; and (iv) CWM shall be responsible for RFI Costs in excess of
$11,000,000. CWM shall be entitled to a credit against its share of RFI Costs
in an amount equal to $1,000,000 (which shall have been paid at Closing in
accordance with [SECTION] 2(d)(iii) hereof), plus interest accruing thereon at
6% per annum from the Closing Date until such RFI Costs would otherwise be due
and payable by CWM. The Buyer's right to make claims against CWM for payment
of RFI Costs shall terminate on the date which is fifteen (15) years after the
Closing Date, except that the Buyer's right to make claims against CWM for
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payment of RFI Costs with regard to the adjoining Lake Calumet shall terminate
on the date which is twenty-five (25) years after the Closing Date. In the
event that the Buyer makes any claim for payment by CWM of RFI Costs during the
specified 15-year or 25-year period, CWM shall remain liable thereafter for any
payment for which claims were made in writing by the Buyer prior to the
expiration of such period. To the extent (if any) that CWM's share of RFI
Costs is less than $1,000,000 in the aggregate as of the date which is fifteen
(15) years after the Closing Date, the Buyer shall refund to CWM an amount
equal to (i) the difference between the sum of $1,000,000 and the aggregate of
CWM's share of RFI Costs theretofore incurred, plus (ii) interest accrued on
such amount at 6% per annum from the Closing Date until the date of refund.
The Parties agree that all actions necessary to comply with closure plans
approved by the Illinois EPA shall be considered "D&D Costs" and that all
actions necessary to perform other site study or remediation activities shall
be considered "RFI Costs."
(h) FINANCIAL ASSURANCE. The Parties shall share responsibility for
providing the funds or security necessary to satisfy government imposed closure
requirements relating to the CWM Chicago Assets and the costs thereof as
follows:
(i) Post closure financial assurance for the Surface Impoundments and
the Vaults (if any) shall be provided by CWM and CWM shall charge
the Buyer CWM's reasonable costs for providing such assurance;
(ii) Financial assurance for the RFI Work and corrective action shall be
provided by CWM and CWM shall charge the Buyer CWM's reasonable
costs for providing such assurance for the Buyer's share of the
related RFI Costs;
(iii) Financial assurance for the CWM Chicago Assets to be operated by
the Buyer after the D&D Work is completed shall be provided by CWM
for 180 days after the Closing but paid for by the Buyer at CWM's
reasonable costs within such period, and financial assurance for
such CWM Chicago Assets shall be both provided and paid for by the
Buyer after the expiration of such 180-day period;
(iv) Financial assurance for the CWM Chicago Assets which are to be
closed and are subject to the D&D Work shall be provided and paid
for by CWM until such CWM Chicago Assets are certified closed by
the Illinois EPA or the EPA, as appropriate;
(v) CWM shall provide such support as is required to assist the Buyer
in obtaining the approvals from the EPA and the Illinois EPA for
the closure financial assurances referred to above, but it shall be
the Buyer's responsibility to obtain such approvals; and
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(vi) All financial assurances provided by CWM in accordance with this
[SECTION] 2(h) shall be provided under the least costly alternative
acceptable to the Illinois EPA or the EPA, as appropriate.
(i) CONTROL OF WORK. The Parties recognize that during the course of
all of the Work to be performed at the Facility there may be decisions to be
made which involve the weighing of costs versus operating efficiencies. In
view of the fact that the Buyer shall be performing the Work, the Buyer shall
be delegated the final authority to make decisions as to construction and
methods and to deal with the EPA and the Illinois EPA in the determination of
waste code classifications and appropriate RFI studies and corrective action.
Such decisions shall be made in good faith, after general input from CWM, and
the Buyer shall endeavor to use the least cost alternative consistent with
approved closure plans and scheduling demands of the Work. The Buyer will
notify CWM's General Counsel of the plans to be submitted, will provide copies
of such plans for CWM review, and will establish deadlines for CWM comments.
The Buyer shall give due consideration to any CWM comments provided in a timely
manner.
(j) PORT DISTRICT PAYMENTS. The Buyer, the Seller and the Port
District shall enter into an assignment and assumption agreement with respect
to the Lease effective as of the Closing in a mutually satisfactory form to be
negotiated prior to the Closing (the "Assignment and Assumption Agreement").
In consideration for its signing of the Assignment and Assumption Agreement and
approval of certain permit applications and other authorizations required in
connection with the development and operation of the Facility and the New
Construction Work, the Parties understand that the Port District is requiring
the payment to it of an aggregate of $1,000,000 on or prior to the Closing.
Under the Assignment and Assumption Agreement, the Port District will thereby
consent to the modification of certain of the terms of the Lease including,
among other matters, an extension of the term until December 31, 2020, and
confirmation that closure in place of the Surface Impoundments and the Vaults
will be recorded on the deed for the Facility held by the Port District. On or
prior to the Closing, each of the Buyer and CWM agree to pay a total of
$500,000 of this required amount directly to the Port District, of which the
Buyer has already paid $250,000 of its share.
(k) OTHER BUSINESS. The Buyer and Harbors shall enter into a five year
agreement with the Seller and CWM at the Closing in a mutually satisfactory
form to be negotiated prior to the Closing (the "Disposal Services Agreement").
Under the Disposal Services Agreement, CWM will be the exclusive provider of
disposal services to the Buyer (other than disposal services which are provided
by the Buyer itself or by the Buyer's Affiliates) for all those waste streams
acceptable for disposal by CWM and approved by the customers of the Buyer after
reasonable efforts to secure such approval, and CWM will provide such disposal
services to the Buyer at the discount therein specified from CWM rates for
disposal of applicable waste streams to commercial, non-governmental customers.
Under the Disposal Services Agreement, Harbors shall also cause its Baltimore
and Cleveland facilities to provide CWM with drum handling, processing and
disposal services at prices 10% less than those prices offered currently by the
Buyer to CWM, for the term set forth in such Agreement.
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(l) CREDIT. CWM shall be entitled to a credit against the costs of
disposal and other services to be provided in the future to CWM by the Buyer
and its Affiliates, such credit to be (i) utilized over the 48 months following
the Closing Date and (ii) in an amount equal to the Seller's direct actual
operating costs incurred at the Facility, not including any corporate overhead
or other markup and not to exceed $100,000 per month, for the period commencing
on the Original Signing Date and terminating upon the Closing Date. Such
credit shall not exceed $700,000 in total, and CWM's use of such credit shall
not exceed $75,000 in any one month without prior written approval from the
Buyer.
(m) STOCK SALES. At the Closing, CWM will terminate any then existing
right of first refusal with respect to future sales of capital stock of Harbors
which is now held by CWM under the Stock Purchase Agreement dated April 19,
1985, as amended on October 6, 1987. Unless such right of first refusal shall
already have terminated in accordance with such Agreement, such termination
shall be made by the <BKP> execution and delivery by CWM and Harbors at the
Closing of a Termination Agreement in a mutually satisfactory form.<BKP>
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
(a) REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER AND CWM. The
Seller and CWM represent and warrant to the Buyer and Harbors that the
statements contained in this [SECTION] 3(a) are correct and complete in all
material respects (as defined in [SECTION] 10(g) below) as of the date of this
Agreement and will be correct and complete in all material respects as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this [SECTION] 3(a)).
(i) ORGANIZATION OF THE SELLER, CWM AND CWM'S MATERIAL SUBSIDIARIES.
Each of the Seller and CWM is duly organized, validly existing, and in
good standing under the laws of the State of Delaware. The Seller is
duly qualified to conduct business and is in good standing as a foreign
corporation in the State of Illinois. Each of CWM's Material
Subsidiaries is duly organized, validly existing, and in good standing
under the laws of its respective state of incorporation.
(ii) AUTHORIZATION OF TRANSACTION. Each of the Seller and CWM has
full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and each of the agreements or
instruments contemplated in or related to this Agreement or the
transactions contemplated thereunder (collectively the "Related
Agreements") and to perform its respective obligations hereunder and
thereunder. Each of CWM's Material Subsidiaries has full power and
authority (including full corporate power and authority) to execute and
deliver its respective Subsidiary Guaranty and to perform its respective
obligations thereunder. This Agreement constitutes, and when executed and
delivered at the Closing the Related Agreements will constitute, the valid
and legally binding obligations of the Seller and/or of CWM, as specified
herein and therein, enforceable in accordance with their respective terms
and conditions. When executed and delivered at the Closing by CWM's
Material Subsidiaries, the Subsidiary
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Guaranties will constitute the valid and legally binding obligations of
CWM's Material Subsidiaries, as specified therein, enforceable in
accordance with their respective terms and conditions. Except as made or
obtained or to be made or obtained by the Seller in connection with the
Approvals, the Seller and CWM need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government
or governmental agency which is required of the Seller or CWM in order to
consummate the transactions contemplated by this Agreement or the Related
Agreements.
(iii) NONCONTRAVENTION. Provided the conditions to the Closing set
forth in [SECTION] 7 hereof are satisfied, neither the execution and the
delivery of this Agreement or the Related Agreements, nor the consummation
of the transactions contemplated hereby or thereby, will (A) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or
court to which the Seller or CWM is subject or any provision of its
charter or by-laws or (B) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel any material agreement,
contract, lease, license, instrument, or other arrangement to which the
Seller or CWM is a party or by which it is bound or to which any of its
assets is subject.
(iv) BROKERS' FEES. Neither the Seller nor CWM has any
Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement or the Related Agreements for which the Buyer or Harbors could
become liable or obligated.
(v) OUTSTANDING SHARES OF THE SELLER. CWM holds of record and
owns beneficially all of the outstanding shares of the Seller's capital
stock.
(b) REPRESENTATIONS AND WARRANTIES CONCERNING THE BUYER AND HARBORS.
The Buyer and Harbors represent and warrant to the Seller and CWM that the
statements contained in this [SECTION] 3(b) are correct and complete in all
material respects as of the date of this Agreement and will be correct and
complete in all material respects (as defined in [SECTION] 10(g) below) as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this [SECTION] 3(b)).
(i) ORGANIZATION OF THE BUYER AND HARBORS. Each of the Buyer
and Harbors is a corporation duly organized, validly existing, and in good
standing under the laws of The Commonwealth of Massachusetts. The Buyer
is duly qualified to conduct business and is in good standing as a foreign
corporation in the State of Illinois.
(ii) AUTHORIZATION OF TRANSACTION. Each of the Buyer and Harbors
has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and the Related
Agreements and to perform its respective obligations hereunder and
thereunder. This Agreement constitutes, and when executed and delivered
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at the Closing the Related Agreements will constitute, the valid and
legally binding obligations of the Buyer and/or of Harbors, as specified
herein or therein, enforceable in accordance with their respective terms
and conditions. Except as made or obtained or to be made or obtained by
the Buyer in connection with the Approvals, the Buyer and Harbors need not
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency which is
required of the Buyer or Harbors in order to consummate the transactions
contemplated by this Agreement or the Related Agreements.
(iii) NONCONTRAVENTION. Provided the conditions to the Closing set
forth in [SECTION] 7 hereof are satisfied, neither the execution and the
delivery of this Agreement or the Related Agreements, nor the consummation
of the transactions contemplated hereby and thereby, will (A) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency, or
court to which the Buyer or Harbors is subject or any provision of its
charter or by-laws or (B) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel any material agreement,
contract, lease, license, instrument, or other arrangement to which the
Buyer or Harbors is a party or by which it is bound or to which any of its
assets is subject.
(iv) BROKERS' FEES. Neither the Buyer nor Harbors has any
Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement or the Related Agreements for which the Seller or CWM could
become liable or obligated.
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE CWM CHICAGO ASSETS.
The Seller and CWM represent and warrant to the Buyer and Harbors that the
statements contained in this [SECTION] 4 and in the disclosure schedule
delivered by the Seller and CWM to the Buyer and Harbors on the date hereof
and initialed by the Parties (the "Disclosure Schedule") are correct and
complete in all material respects (as defined in [SECTION] 10(g) below) as
of the date of this Agreement and will be correct and complete in all
material respects as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout
this [SECTION] 4).
(a) TITLE TO THE CWM CHICAGO ASSETS. The Seller has good and indefeasible
title to, or, in the case of the Lease, a valid leasehold interest in, the CWM
Chicago Assets free and clear of all Security Interests. The CWM Chicago
Assets include, without limitation, the Personal Property described in Exhibit
B hereto.
(b) THE FACILITY. Attached hereto as Exhibit C is a true and complete
copy of the Lease and any amendments thereto. The Seller is not, and to the
Knowledge of the Seller and CWM the Port District is not, in material breach or
default of the Lease, and no event has occurred which with notice or lapse of
time would constitute a material breach or default, or permit
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termination or modification, of the Lease. Except for the Lease and the
easements described in Section 4(b) of the Disclosure Schedule, there are no
leases, tenancy agreements, easements, covenants, restrictions or any other
instruments, agreements or arrangements which create in or confer on any party
other than the Seller the right to occupy or possess all or any portion of the
Facility or create in or confer on any such party any right, title or interest
in or to the Facility or any portion thereof or any interest therein; no party
other than the Seller occupies or possesses the Facility or any portion
thereof; there is legal and adequate ingress and egress between the Facility
and an adjacent public roadway; to the Knowledge of the Seller and CWM, the
Facility is properly zoned in order to allow its current use in the Seller's
businesses; and there are no claims or demands pending or, to the Knowledge of
the Seller and CWM, threatened by any party which, if valid, would create in,
or confer on, any party other than the Seller, any right, title or interest in
or to the Facility or any portion thereof.
(c) LICENSES AND PERMITS. Section 4(c) of the Disclosure Schedule
accurately describes the nature and current regulatory status (including,
without limitation, the current expiration dates) of all material governmental
licenses, ordinances, authorizations, permits and certificates now held by the
Seller with respect to the business or operations of the Facility, including,
without limitation, licenses granted and administered pursuant to RCRA
(collectively, the "Existing Licenses"). The Seller and CWM have heretofore
delivered to the Buyer and Harbors true and complete copies of the Existing
Licenses. Section 4(c) of the Disclosure Schedule also identifies certain of
the Existing Licenses (collectively, the "Transferable Licenses") which the
Seller will transfer to the Buyer as part of the CWM Chicago Assets. The
appropriate expiration date of each of the Transferable Licenses listed on
[SECTION] 4(c) of the Disclosure Schedule will remain upon completion of the
Closing as set forth therein. Except as set forth on [SECTION] 4(c) of the
Disclosure Schedule: (i) the Transferable Licenses are in full force and
effect; (ii) the Seller has complied in all material respects with all of the
material terms and conditions of all of the Transferable Licenses; (iii) the
Seller has not taken or failed to take any action that would result in a
substantial risk of forfeiture of any Transferable License; and (iv) there is
not, as of the date hereof, pending or, to the Knowledge of the Seller and CWM,
threatened any action by or before any court or governmental agency to
revoke, cancel, rescind, modify or refuse to renew any of the Transferable
Licenses.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing:
(a) GENERAL. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in
order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in [SECTION] 7 below).
(b) NOTICES AND CONSENTS. The Seller and CWM will give any notices to
third parties and will use their reasonable best efforts to obtain any
third-party consents that the Buyer and Harbors may reasonably request in
connection with the matters referred to in [SECTION] 4 above. Each of the
Parties will give any notices to, make any filings with, and use its reasonable
best efforts
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to obtain all of the Approvals and any other authorizations, consents, and
approvals of governments and governmental agencies required in connection with
the matters referred to in [SECTION] 3(a)(ii), [SECTION] 3(b)(ii), and
[SECTION] 4 above.
(c) PRESERVATION OF THE FACILITY. The Seller and CWM will keep the
Facility substantially intact, including its present physical assets, working
conditions, and relationships with lessors, licensors, suppliers, and
employees.
(d) FULL ACCESS. The Seller and CWM will permit representatives of the
Buyer and Harbors to have full access to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to the Facility to the fullest extent permitted by applicable laws
and regulations.
(e) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the other Parties of any material adverse development causing a breach of
any of its own representations and warranties as set forth in this Agreement.
No disclosure by any Party pursuant to this [SECTION] 5(e), however, shall be
deemed to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant unless otherwise
specifically agreed to in writing by the other Parties.
(f) EXCLUSIVITY. Neither the Seller nor CWM shall (i) solicit,
initiate, or encourage, the submission of any proposal or offer from any Person
relating to the acquisition of any substantial portion of the CWM Chicago
Assets (including any acquisition structured as a merger, consolidation, or
share exchange) or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in,
or facilitate in any other manner any effort or attempt by any Person to do or
seek any of the foregoing.
(g) TITLE INSURANCE. The Buyer will obtain in preparation for the
Closing, with respect to the Facility, an ALTA Leasehold Owner's Policy of
Title Insurance - 1987 issued by Chicago Title Insurance Company or another
title insurer satisfactory to the Buyer and the Seller, insuring title to the
leasehold estate to be in the Buyer as of the Closing (subject to the title
exceptions described in [SECTION] 4(b) of the Disclosure Schedule). The title
insurance policy delivered under this [SECTION] 5(g) shall (A) insure title to
the Facility and all recorded easements benefitting such real property, (B)
contain an "extended coverage endorsement" insuring over the general exceptions
contained customarily in such policies, (C) contain an ALTA Zoning Endorsement
3.1 (or equivalent), (D) contain an endorsement insuring that the real property
described in the title insurance policy is the same real estate as shown on the
Survey delivered with respect to such property, (E) contain an endorsement
insuring that each street adjacent to the Facility is a public street and that
there is direct and unencumbered pedestrian and vehicular access to such street
from the Facility, (F) if the Facility consists of more than one record parcel,
contain a "contiguity" endorsement insuring that all of the record parcels are
contiguous to one another, and (G) contain a "non-imputation" endorsement to
the effect that the title defects known to the officers, directors, and
stockholders of the owner prior to the Closing shall not be deemed "facts known
to the insured" for the purposes of the policy.
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(h) SURVEY. The Buyer will procure in preparation for the Closing,
with respect to the Facility, a current survey certified to the Buyer, prepared
by a licensed surveyor and conforming to current ALTA Minimum Detail
Requirements for Land Title Surveys, disclosing the location of all
improvements, easements, party walls, sidewalks, roadways, utility lines, and
other matters shown customarily on such surveys, and showing access
affirmatively to public streets and roads (the "Survey"). Except as set forth
in [SECTION] 4(b) of the Disclosure Schedule, the Survey shall not disclose
any material survey defect or encroachment from or onto the Facility which has
not been cured or insured over prior to the Closing.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect
to the period following the Closing:
(a) GENERAL. Each of the Parties covenants to comply with its
respective agreements set forth elsewhere in this Agreement including, without
limitation, its respective agreements set forth in [SECTION] 2. In case at
any time after the Closing any further action is necessary or desirable to
carry out the purposes of this Agreement, each of the Parties covenants to take
such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, all at
the cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor under [SECTION] 10 below).
(b) LITIGATION AND OTHER SUPPORT. In the event and for so long as any
Party actively is either (i) contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand with a
third party in connection with any transaction contemplated under this
Agreement or any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the CWM Chicago Assets,
or (ii) engaged in complying with any administrative or judicial order, decree
or permit which is required in connection with the future operation of the
Facility, each of the other Parties will cooperate with it and its counsel in
the contest, defense or compliance, make available their personnel, and provide
such testimony and access to their books and records as shall be necessary in
connection with the contest, defense or compliance, all at the cost and expense
of the requesting Party (unless the requesting Party is entitled to
indemnification therefor under [SECTION] 10 below).
(c) CONFIDENTIALITY. From and after the Closing, each Party will treat
and hold as such all of the Confidential Information, and refrain from using
any of the Confidential Information except in connection with or as permitted
by this Agreement and as may be necessary to respond to any Tax audits or to
enforce the terms of this Agreement and any Related Agreements.
(d) CONTINUING FINANCIAL ASSURANCE OBLIGATIONS. The Parties will comply
in full with their respective financial assurance obligations relating to the
Facility as set forth in [SECTION] 2(h) of this Agreement.
7. CONDITIONS TO OBLIGATION TO CLOSE.
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(a) CONDITIONS TO OBLIGATION OF THE BUYER AND HARBORS. The obligation
of the Buyer and Harbors to consummate the transactions to be performed by them
in connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties of the Seller and CWM set forth
in [SECTION] 3(a) and [SECTION] 4 above shall be true and correct in all
material respects at and as of the Closing Date;
(ii) the Seller and CWM shall have performed and complied with all of
their covenants hereunder in all material respects through the Closing;
(iii) the Seller and CWM shall have delivered to the Buyer and Harbors
a certificate to the effect that each of the conditions specified above in
[SECTION] 7(a)(i)-(ii) is satisfied;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or
(C) affect adversely and materially the right of the Buyer to own the CWM
Chicago Assets or to operate the Facility (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(v) the Buyer and Harbors shall have received from counsel to the
Seller and CWM an opinion in form and substance reasonably satisfactory to
the Buyer and Harbors and their counsel addressed to the Buyer and
Harbors, and dated as of the Closing Date;
(vi) the Buyer shall have received all of the Approvals, including
without limitation the transfer of the Transferable Licenses and the
obtaining of the additional state and federal licenses, authorizations,
permits and certificates which are required for the future operation by
the Buyer of the Facility and which are described in Exhibit D to this
Agreement (the "New Licenses");
(vii) the Buyer shall have received the title insurance commitments,
policies, and riders specified in [SECTION] 5(h) above and the Survey
specified in [SECTION] 5(i) above;
(viii) the Buyer and Harbors shall have obtained from their lending
institutions, on terms and conditions reasonably satisfactory to them, all
of the waivers they need under their existing financing documents in order
to consummate the transactions contemplated hereby;
(ix) the Seller and the Port District shall have executed and delivered
the Assignment and Assumption Agreement in accordance with [SECTION]
2(j) hereof;
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(x) CWM shall have executed and delivered the Disposal Services
Agreement in accordance with [SECTION] 2(k) hereof and the Termination
Agreement (if required) in accordance with [SECTION] 2(m) hereof;
(xi) CWM shall have delivered to the Buyer and Harbors subsidiary
guaranties duly executed by each of CWM's Material Subsidiaries with
respect to the obligations of CWM under this Agreement in the form of
Exhibit F hereto (collectively, the "Subsidiary Guaranties"); and
(xii) all actions to be taken by the Seller and CWM in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form
and substance to the Buyer and Harbors.
The Buyer and Harbors may waive any condition specified in this [SECTION] 7(a)
if they execute a writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLER AND CWM. The obligation of
the Seller and CWM to consummate the transactions to be performed by them in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties of the Buyer and Harbors set
forth in [SECTION] 3(b) above shall be true and correct in all material
respects at and as of the Closing Date;
(ii) the Buyer and Harbors shall have performed and complied with all
of their covenants hereunder in all material respects through the Closing;
(iii) the Buyer and Harbors shall have delivered to the Seller and CWM
a certificate to the effect that each of the conditions specified above in
[SECTION] 7(b)(i)-(ii) is satisfied;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(v) the Buyer and Harbors shall have executed and delivered the
Disposal Services Agreement in accordance with [SECTION] 2(k) hereof and
the Termination Agreement (if required) in accordance with [SECTION] 2(m)
hereof;
(vi) the Buyer and the Port District shall have executed and delivered
the Assignment and Assumption Agreement in accordance with [SECTION]
2(j) hereof; and
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(vii) all actions to be taken by the Buyer and Harbors in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller and CWM.
The Seller and CWM may waive any condition specified in this [SECTION] 7(b) if
they execute a writing so stating at or prior to the Closing.
8. EMPLOYEE MATTERS.
Neither the Buyer nor Harbors shall have any Liability, whether contingent
or otherwise, relating to or arising out of the employment of employees or the
engagement of independent contractors by the Seller or CWM for periods prior to
and including the Closing Date.
9. TAX MATTERS.
(a) LIABILITY FOR TAXES. The Seller and CWM shall be liable for, and
shall indemnify the Buyer and Harbors against any Tax arising from or
attributable to the operations of the Facility through the Closing Date. The
Buyer and Harbors shall be liable for, and shall indemnify the Seller and CWM
against, any Tax arising from or attributable to the operations of the Facility
after the Closing Date. Each Party responsible under applicable law for the
payment of any sales, transfer or similar type tax arising from or attributable
to the transactions contemplated in this Agreement shall be liable for, and
shall indemnify the other Parties against, such tax.
(b) COOPERATION AND EXCHANGE OF INFORMATION. Following the Closing,
each Party will provide, or cause to be provided, to any other Party copies of
all correspondence received by such Party from any taxing authority in
connection with any potential liability of such other Party for Tax under
[SECTION] 9(a). The Parties will also provide each other with such other
cooperation and information as they may reasonably request of each other in
preparing or filing any return, amended return, or claim for refund, in
determining a liability or a right of refund, or in conducting any audit or
other proceeding, in respect of Tax imposed on the Parties or their respective
Affiliates as a result of the transactions provided for in this Agreement. Any
information obtained pursuant to this [SECTION] 9(b) shall be kept
confidential, except as may be otherwise necessary in connection with the
filing of returns or claims for refund or in conducting any audit or other
proceeding. Each Party shall be entitled to reimbursement for the actual costs
incurred by such Party in connection with providing the cooperation and
information required by this [SECTION] 9(b).
(c) SURVIVAL OF OBLIGATIONS AND CONFLICT. The obligations of the
Parties set forth in this [SECTION] 9 shall be unconditional and absolute and
shall remain in effect until the expiration of the relevant limitation period
under applicable law. In the event of a conflict between the provisions of
this [SECTION] 9 and any other provisions of this Agreement, the provisions
of this [SECTION] 9 shall control.
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10. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of the
representations, warranties and covenants of the Parties contained in this
Agreement shall survive the Closing hereunder (even if the damaged Party knew
or had reason to know of any misrepresentation or breach at the time of
Closing) unless such breach is formally waived in writing at or prior to
Closing, and shall continue in full force and effect thereafter.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER AND HARBORS.
In the event the Seller or CWM breaches (or in the event any third party
alleges facts that, if true, would mean the Seller or CWM has breached) any of
their representations, warranties, and covenants contained herein, then the
Seller and CWM agree to indemnify the Buyer and Harbors from and against the
entirety of any Adverse Consequences the Buyer or Harbors may suffer through
and after the date of the claim for indemnification resulting from, arising out
of, relating to, in the nature of, or caused by the breach (or the alleged
breach). In addition, CWM agrees to indemnify the Buyer and Harbors from and
against the entirety of any Adverse Consequences the Buyer or Harbors may
suffer through and after the date of the claim for indemnification resulting
from, arising out of, relating to, in the nature of, or caused by, either (i)
the Seller's operation of the Facility prior to the Closing Date, (ii) any
claims relating to the transportation and disposal activities of the Seller or
CWM during the Seller's operation of the Facility (other than the D&D Costs and
the RFI Costs relating directly to the site of the CWM Chicago Assets which are
to be shared in accordance with [SECTION] 2(f) and [SECTION] 2(g) hereof, or
(iii) any past, present or future failure of or releases from the Surface
Impoundments or the Vaults, or any corrective action required by any regulatory
authority with respect thereto, or any requirements by the Port District or any
other Person that the Surface Impoundments or the Vaults be removed from the
Facility at any time in the future.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLER AND CWM. In
the event the Buyer or Harbors breaches (or in the event any third party
alleges facts that, if true, would mean the Buyer or Harbors has breached) any
of their representations, warranties, and covenants contained herein, then the
Buyer and Harbors agree to indemnify the Seller and CWM from and against the
entirety of any Adverse Consequences which the Seller or CWM may suffer through
and after the date of the claim for indemnification resulting from, arising out
of, relating to, in the nature of, or caused by the breach (or the alleged
breach). In addition, the Buyer and Harbors agree to indemnify the Seller and
CWM from and against the entirety of any Adverse Consequences (but excluding
any consequential or special damages) which the Seller or CWM may suffer
through and after the date of the claim for indemnification as a result of any
Third Party Claim (as defined in [SECTION] 10(d) below) resulting from,
arising out of, relating to, in the nature of, or caused by acts or omissions
of the Buyer in performing the New Construction Work.
(d) Matters Involving Third Parties.
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(i) If any third party shall notify any Party (the "Indemnified Party")
with respect to any matter (a "Third Party Claim") which may give rise to
a claim for indemnification against any other Party (the "Indemnifying
Party") under this [SECTION] 10, then the Indemnified Party shall
promptly notify each Indemnifying Party thereof in writing, provided,
however, that no delay on the part of the Indemnified Party in notifying
any Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing with 15 days
after the Indemnified Party has given notice of the Third Party Claim that
the Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief,
and (C) the Indemnifying Party conducts the defense of the Third Party
Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with [SECTION] 10(d)(ii) above, (A)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (not to be withheld
unreasonably), and (C) at any time after the commencement of the defense
of any Third Party Claim, the Indemnifying Party may request the
Indemnified Party to agree in writing to the abandonment of such contest
or to the payment or compromise by the Indemnified Party of the asserted
Third Party Claim, whereupon such action shall be taken unless the
Indemnified Party determines that the contest should be continued, and so
notifies the Indemnifying Party in writing within 15 days of such request
from the Indemnifying Party. If the Indemnifying Party determines that
the contest should be continued, the Indemnifying Party shall be liable
hereunder only to the extent of the amount that the other party to the
contested Third Party Claim had agreed to accept in payment or compromise
as of the time the Indemnifying Party made its request therefor to the
Indemnified Party.
(iv) In the event any of the conditions in [SECTION] 10(d)(ii) above
is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (C) the Indemnifying Party will remain responsible for any
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Adverse Consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the Third
Party Claim to the fullest extent provided in this [SECTION] 10.
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall take into
account the time cost of money (using the Applicable Rate as the discount rate)
in determining Adverse Consequences for purposes of this [SECTION] 10. All
indemnification payments under this [SECTION] 10 shall be deemed adjustments
to the Purchase Price.
(f) OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provision are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have for breach of
representation, warranty, or covenant.
(g) LIMITATION ON INDEMNIFICATION. The Seller and CWM shall not be
liable to the Buyer and Harbors, and the Buyer and Harbors shall not be liable
to the Seller and CWM, for Adverse Consequences under this [SECTION] 10 unless
the aggregate amount of Adverse Consequences for which such Parties would, but
for the provisions of this [SECTION] 10(g), be liable exceeds, on an aggregate
basis, $50,000 (which shall be the definition of "material" for purposes of the
first sentence of [SECTION] 3(a), [SECTION] 3(b), and [SECTION] 4 above), and
then only to the extent of any such excess.
11. TERMINATION
(a) TERMINATION OF AGREEMENT. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Parties may terminate this Agreement by mutual written consent
at any time prior to the Closing;
(ii) the Buyer or Harbors may terminate this Agreement by giving
written notice to the Seller and CWM at any time prior to the Closing (A)
in the event either the Seller or CWM has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect, the Buyer or Harbors has notified the Seller and CWM of
the breach, and the breach has continued without cure for a period of 30
days after the notice of breach, or (B) if the Closing shall not have
occurred on or before July 1, 1995, by reason of the failure of any
condition precedent under [SECTION] 7(a) hereof (unless the failure
results primarily from the Buyer or Harbors itself breaching any
representation, warranty, or covenant contained in this Agreement);
(iii) the Seller or CWM may terminate this Agreement by giving written
notice to the Buyer and Harbors at any time prior to the Closing (A) in
the event the Buyer or Harbors has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect,
the Seller and CWM has notified the Buyer and Harbors of the breach, and
the breach has continued without cure for a period of 30 days after the
notice of breach, or (B) if the Closing shall not have occurred on or
before July
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1, 1995, by reason of the failure of any condition precedent under
[SECTION] 7(b) hereof (unless the failure results primarily from the
Seller or CWM itself breaching any representation, warranty, or covenant
in this Agreement); and
(iv) in the event that by July 1, 1995, the Closing shall not have
occurred but this Agreement shall not have been terminated in accordance
with (i), (ii) or (iii) above, the Parties shall thereupon mutually
determine whether to extend or to terminate this Agreement.
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to [SECTION] 11(a) above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for any Liability of any Party or Parties then in breach).
12. MISCELLANEOUS
(a) NATURE OF CERTAIN OBLIGATIONS; GUARANTIES. The representations,
warranties, and covenants in this Agreement are joint and several obligations
of the respective Parties. Any and all obligations of the Buyer under this
Agreement and the Related Agreements shall be unconditionally and irrevocably
guaranteed by Harbors. Any and all obligations of CWM under this Agreement and
the Related Agreements shall be unconditionally and irrevocably guaranteed by
each of CWM's Material Subsidiaries in accordance with the Subsidiary
Guaranties.
(b) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Parties;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its reasonable best efforts to advise the other Parties prior to
making the disclosure).
(c) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(d) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes
the Letter of Intent and any other prior understandings, agreements, or
representations by or among the Parties, written or oral, to the extent they
related in any way to the subject matter hereof.
(e) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other Parties; provided, however, that the Buyer may
(i) assign any or all of its rights and interests hereunder to one or more of
its Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of
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which cases the Buyer and Harbors nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
(f) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by nationally recognized overnight carrier
or by registered or certified mail, return receipt requested, postage prepaid,
and addressed to the intended recipient as set forth below:
If to the Buyer: Copy to:
Clean Harbors of Chicago, Inc. C. Michael Malm, Esq.
1200 Crown Colony Drive Davis, Malm & D'Agostine, P.C.
P.O. Box 9137 One Boston Place
Quincy, Massachusetts 02269-9137 Boston, Massachusetts 02108
Attn: Stephen H. Moynihan
If to Harbors: Copy to:
Clean Harbors, Inc. C. Michael Malm, Esq.
1200 Crown Colony Drive Davis, Malm & D'Agostine, P.C.
P.O. Box 9137 One Boston Place
Quincy, Massachusetts 02269-9137 Boston, Massachusetts 02108
Attn: Jonathan R. Black,
General Counsel
If to the Seller: Copy to:
CWM Chemical Services, Inc. Brian Clarke, Esq.
3001 Butterfield Road Vice President and General Counsel
Oak Brook, Illinois 60521 Chemical Waste Management, Inc.
Attn: Jerome D. Girsch, 3001 Butterfield Road
Executive Vice President Oak Brook, Illinois 60521
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If to CWM: Copy to:
Chemical Waste Management, Inc. Brian Clarke, Esq.
3001 Butterfield Road Vice President and General Counsel
Oak Brook, Illinois 60521 Chemical Waste Management, Inc.
Attn: Jerome D. Girsch, 3001 Butterfield Road
Executive Vice President Oak Brook, Illinois 60521
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(i) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of Illinois without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois.
(j) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
(k) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) EXPENSES. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(m) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or
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law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including" shall
mean "including without limitation." The Parties intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in
breach of the first representation, warranty, or covenant.
(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement or the Related Agreements are not performed in
accordance with their specific terms or otherwise are breached. Accordingly,
each of the Parties agrees that the other Parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement or the Related Agreements and to enforce specifically this Agreement
or the Related Agreements and the terms and provisions hereof and thereof in
any action instituted in any court of the United States or any state thereof
having jurisdiction over the Parties and the matter, in addition to any other
remedy to which they may be entitled, at law or in equity.
(o) ALTERNATIVE DISPUTE RESOLUTION. If any dispute shall arise among the
Parties with respect to any matters governed by [SECTION] 2(e) ("New
Construction Work"), [SECTION] 2(f) ("Decontamination and Dismantling"),
[SECTION] 2(g) ("Facility Investigation; Corrective Action; Closure"),
[SECTION] 2(i) ("Control of Work"), or Exhibit A ("Scope of Work"), and such
dispute shall not have been resolved or compromised within sixty (60) days
after any Party has given notice of such dispute in accordance with [SECTION]
12(h) hereof, the Parties shall refer such dispute for resolution to
arbitration or another form of alternative dispute resolution satisfactory to
the Parties. Such dispute shall then be resolved by arbitration or such other
form in Chicago, Illinois, in accordance with the rules of the American
Arbitration Association or other Person selected by the Parties to resolve such
dispute. The fees and expenses of such arbitrator or other Person shall be
borne by the Parties in such proportions as shall be determined by such
arbitrator or other Person , or if there is not such a determination, then such
fees and expenses shall be borne equally by the Buyer and the Seller. The
determination of such arbitrator or other Person as to the amount, if any, of
any claim arising from such dispute which is properly allowable shall be
conclusive and binding upon the Parties, and judgment may be entered thereon in
any court having jurisdiction thereof, including, without limitation, any
appropriate court in the State of Illinois. The provisions of this [SECTION]
12(o) shall, however, not affect the rights of any Party, without first
resorting to arbitration or other form of alternative dispute resolution,
either: (i) with respect to any matters governed by any of the provisions of
this Agreement which are specifically listed above in this [SECTION] 12(o),
to seek from a court of competent jurisdiction specific performance of this
Agreement or the Related Agreements or, where appropriate, injunctive relief in
accordance with [SECTION] 12(n) of this Agreement; or (ii) with respect to any
matters governed by any of the provisions of this Agreement or the Related
Agreements which are not specifically listed above in this [SECTION] 12(o),
to seek from a court of competent jurisdiction appropriate relief (including,
without limitation, damages, specific performance or, where appropriate,
injunctive relief in accordance with [SECTION]
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12(n) of this Agreement) to the extent then appropriate under this Agreement or
the Related Agreements and applicable laws and regulations.
IN WITNESS WHEREOF , the Parties hereto have executed this Agreement as
of the date first above written.
CLEAN HARBORS OF CHICAGO, INC.
By: /s/ JAMES A. PITTS
--------------------------------------
Title: EXECUTIVE VICE PRESIDENT & CFO
--------------------------------------
CLEAN HARBORS, INC.
By: /s/ ALLAN S. MCKIN
--------------------------------------
Title: PRESIDENT
--------------------------------------
CWM CHEMICAL SERVICES, INC.
By: /s/ JEROME D. GIRSH
--------------------------------------
Title: VICE PRESIDENT
--------------------------------------
CHEMICAL WASTE MANAGEMENT, INC.
By: /s/ JEROME D. GIRSH
--------------------------------------
Title: EXECUTIVE VICE PRESIDENT & CFO
--------------------------------------
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EXHIBITS AND SCHEDULES TO AGREEMENT
-----------------------------------
Document Section Reference
- -------- -----------------
Exhibit A: Scope of Work [SECTION][SECTION] 2(e),2(f),(2(g)
Exhibit B: Description of Personal Property [SECTION] 4(a)
Exhibit C: The Lease [SECTION] 4(b)
Exhibit D: Description of New Licenses [SECTION] 7(a)(vi)
Exhibit E: Buyer's Rate Schedule [SECTION] 1
Exhibit F: Form of Subsidiary Guaranties [SECTION] [SECTION] 7(a)(xi); 12(a)
Disclosure Schedule [SECTION] 4
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