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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) April 6, 1999
U.S. PLASTIC LUMBER CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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Nevada 3080 87-0404343
(State of incorporation (Primary Standard Industrial (I.R.S. Employer
/organization) Classification Code Number) Identification No.)
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2300 W. Glades Road, Suite 440 W, Boca Raton, Florida 33431
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: 561-394-3511
Former Name or Former Address if Changed Since Last Report: Not
Applicable.
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not Applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On March 23, 1999, the Registrant acquired Brass Investment Co, a
Delaware corporation in a merger transaction. Brass Investment Co.
("Brass") owns two wholly owned subsidiaries, Soil Remediation of
Philadelphia, Inc. and Allied Waste Services, Inc. The merger
consideration under the Plan of Merger Agreement was $4,450,000 in cash,
1,000,000 shares of non-registered common stock, par value $.0001, of U.S.
Plastic Lumber Corporation, and a grant of warrants to Louis Paolino, Jr.
in the amount of 1,500,000 shares. The Company had previously entered into
a Management Contract effective January 7, 1999, at which time the Company
took over the day to day operations and financial control of Brass. The
Registrant purchased the real property, located in Philadelphia, as part
of the aforementioned merger consideration consisting of 8.3 acres,
several buildings and the soil remediation plant upon which the business
operates.
The amount of consideration was determined by a number of factors,
including but not limited to, an appraisal of the business value of Brass
utilizing traditional business valuation formulas, an appraisal value of
the real estate and other assets being acquired, the vertical integration
aspects the Registrant believes will be derived from this merger, the
skill and expertise of the management team being acquired, and the
goodwill of the customer base being acquired. All negotiations relative to
all transactions hereunder were accomplished in an arms length manner.
The shareholders of Brass were Louis J. Paolino, Jr., Matthew Paolino,
Joseph Paolino and Louis J. Paolino, Sr. None of the individuals had
any relationship with the Registrant prior to this merger, other than
as a competitor of the Registrant.
The funding used by the Registrant was derived from cash on hand of the
Registrant, cash available from the Registrant's credit line facility with
its Bank, Coast Business Credit, and cash from PNC Bank of Delaware as a
first purchase money mortgage on the real estate.
(b) The business of Brass is the recycling and processing of petroleum
hydrocarbon contaminated soil and sale of materials for beneficial re-use.
The Registrant intends to continue to devote the assets for the purposes
currently used by Brass.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not Applicable.
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not Applicable
ITEM 5. OTHER EVENTS
Not Applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
The financial statements of Brass are not included in this filing and
shall be submitted no later than 60 days from the date of filing this Form
8K.
ITEM 8. CHANGE IN FISCAL YEAR.
Not Applicable.
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
Not Applicable.
EXHIBITS
1. Plan of Merger Agreement with Brass Investment Co.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned hereunto duly authorized.
U.S. Plastic Lumber Corporation
(Registrant)
Date: April 6, 1999 By: /s/ Bruce C. Rosetto
--------------------------------
Bruce C. Rosetto, Vice President and
General Counsel/Secretary
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EXHIBIT 1
AGREEMENT AND PLAN OF REORGANIZATION
OF
BRASS INVESTMENT CO.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RECITALS.....................................................................1
ARTICLE I PLAN OF MERGER ....................................................1
ARTICLE II ACQUISITION; CLOSING..............................................3
ARTICLE III TITLE INSURANCE..................................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES
OF THE SELLER...............................................................6
ARTICLE V REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS...........................................................8
ARTICLE VI ADDITIONAL AGREEMENTS OF SELLER...................................9
ARTICLE VII ADDITIONAL AGREEMENTS OF PURCHASERS.............................10
ARTICLE VIII CONDITIONS OF PURCHASERS.......................................11
ARTICLE IX CONDITIONS OF SELLER.............................................12
ARTICLE X INDEMNIFICATION...................................................12
ARTICLE XI OTHER PROVISIONS.................................................16
</TABLE>
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SCHEDULES
R.1 Legal Description of Property
Exhibit A Eastern Agreement
Exhibit B Registration Rights Agreement
Exhibit C Eastern Promissory Note
Exhibit D USPL and CEI Note Assumption
Exhibit E Certificate of the President of Seller
Exhibit F Certificate of Secretary of CEI
Exhibit G Certificate of Secretary of Brass
Exhibit H Certificate of Secretary of USPL
Exhibit I Opinion of Counsel
Exhibit J Non-Compete Agreements
Exhibit K Stock Sale Restriction Agreements
Exhibit L Promissory Note - Short Term
Exhibit M Management Contract
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AGREEMENT AND PLAN OF REORGANIZATION OF
BRASS INVESTMENT CO.
This Agreement and Plan of Reorganization of Brass Investment Co.
("Agreement") is made as of January 12, 1999, by and between Lousi J. Paolino,
Jr., Matthew Paolino, Joseph Paolino, and Louis Paolino, Sr. ("Seller"), on the
one hand, and Clean Earth, Inc., a Delaware corporation ("CEI") and U. S.
Plastic Lumber Corporation ("USPL"), a Nevada corporation, on the other hand,
CEI and USPL may sometimes be referred to herein after as "Purchasers."
RECITALS
Seller is the owner of all of the outstanding shares of stock ("Company
Shares") of Brass Investment Co., a Delaware corporation ("Company"), which has
purchased from Eastern Environmental Services, Inc. ("Eastern"), all of the
outstanding shares of Soil Remediation of Philadelphia, Inc., a Delaware
corporation ("SRP"), and Allied Waste Services, Inc. ("AWS"). AWS is in the
business of brokering environmental recycling services, and SRP is in the
business of remediating contaminated soil and disposing of the soil after it is
remediated. SRP owns certain real estate and improvements located thereon having
the common street address of 3201 South 61st Street, Philadelphia, Pennsylvania,
as more fully described on Schedule R.1 attached ("Property"). The terms of the
agreement between Company and Eastern (the "Eastern Agreement") are as set forth
on Exhibit A hereto, excepting only the consideration term, which has been
redacted.
CEI is a wholly-owned subsidiary of USPL. CEI desires to purchase all
of the Company Shares and acquire the Company, and the Seller desires to sell
all of the Company Shares and sell the Company, all subject to the terms and
conditions contained herein. For federal income tax purposes, it is intended
that the merger provided for herein shall qualify as a tax free reorganization
within the meaning of Section 368(a)(1)(A)and (a)(2)(D) of the Internal Revenue
Code of 1986, as amended. CEI and the Company may hereinafter be referred to as
"Constituent Corporations".
ARTICLE I
PLAN OF MERGER
Section 1.1. THE MERGER
1.1.1 The Merger. At the Effective Time (as defined in Section 1.1.2)
and subject to the terms and conditions of this Agreement, the Company shall be
merged into CEI and the separate existence of the Company shall thereupon cease,
in accordance with the applicable provisions of Section 251 of the General
Corporations Laws of the State of Delaware (the "DGCL").
(a) CEI will be the surviving corporation in the Merger under the name
of Clean Earth, Inc." (sometimes referred to herein as the "Surviving
Corporation") and will continue to be governed by the laws of the State of
Delaware, and the separate corporate existence of and all of its rights,
privileges, immunities and franchises, public or private, and all its duties and
liabilities as a corporation organized under the DGCL, will continue unaffected
by the Merger.
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(b) The Merger will have the effects specified by the DGCL.
(c) The recitals set forth above are incorporated herein by reference
and are a part of this Agreement.
1.1.2 Effective Time. As soon as practicable following fulfillment or
waiver of the conditions specified in this Agreement and provided that this
Agreement has not been terminated or abandoned pursuant to Section 2.3 hereof,
the Constituent Corporations will cause a Certificate of Merger (the
"Certificate of Merger") to be filed with the office of the Treasurer of the
State of Delaware as provided in the DGCL. Subject to and in accordance with the
laws of the State of Delaware, the Merger will become effective at the date and
time the Certificate of Merger is filed with the office of the Treasurer of the
State of Delaware or such later time or date as may be specified in the
Certificate of Merger (the "Effective Time"). Each of the parties will use its
best efforts to cause the Merger to be consummated as soon as practicable
following the fulfillment or waiver of the conditions specified herein.
Section 1.2. THE SURVIVING CORPORATION
1.2.1 Certificate of Incorporation. The Certificate of Incorporation of
CEI as in effect immediately prior to the Effective Time, as amended by the
Certificate of Merger, shall be the Certificate of Incorporation of the
Surviving Corporation after the Effective Time.
1.2.2 By-Laws. The By-Laws of CEI as in effect immediately prior to the
Effective Time shall be the By-Laws of the Surviving Corporation after the
Effective Time.
1.2.3 Board of Directors. The Board of Directors of CEI shall, as at
the Effective Time, be the Board of Directors of the Surviving Corporation.
Section 1.3. CONVERSION OF SHARES
1.3.1 Conversion of the Company's Common Stock in the Merger. Pursuant
to this Agreement, at the Effective Time, by virtue of the Merger and without
any action on the part of any holder of any capital stock of the Company:
(a) all shares of Common Stock, no par value, of the Company ("Company
Common Stock") held as treasury shares by the Company shall be canceled and
shall cease to exist from and after the Effective Time; and,
(b) each remaining issued and outstanding shares of the Company Common
Stock shall be converted into the right to receive, and become exchangeable for
common shares of validly issued, fully paid and nonassessable, non-registered
common stock, $.0001 par value, of U.S. Plastic Lumber Corporation ("Common
Stock") in accordance with the provisions of Section 2.1 hereof. The
consideration referred to in this Section 1.3.1(b), together with all
consideration set forth in Section 2.1 is hereinafter referred to as the "Merger
Consideration."
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1.3.2 Status of CEI's Shares. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of any capital stock of
CEI, the common stock of CEI shall continue unchanged and remain outstanding as
a share of common stock of the Surviving Corporation.
1.3.3 Exchange of the Company's Common Stock Certificates. (a) On or
prior to the Closing Date, USPL shall deliver to the Company the certificates
representing shares of Common Stock required to effect the exchange referred to
in Section 1.3.1(b). USPL shall also deliver to the Company the cash required to
make the cash payments set forth in Section 2.1. Shares of Common Stock, into
which shares of the Company Common Stock shall be converted in the Merger, shall
be deemed to have been issued at the Effective Time.
(b) From and after the Effective Time, each holder of a certificate,
which immediately prior to the Effective Time represented outstanding shares of
Company Common Stock are granted by reason of the Merger under the DGCL, shall
be entitled to receive in exchange therefor, upon surrender thereof to the CEI,
a certificate or certificates representing the number of whole shares of Common
Stock into which such holder's shares of the Company's Common Stock were
converted pursuant to Sections 1.3.1(b) and 2.1.
1.3.4 Closing of Transfer Books. From and after the Effective Time, the
stock transfer books of the Company shall be closed, and no transfer of shares
of the Company Common Stock shall thereafter be made. If, after the Effective
Time, the Company's Certificates are presented to USPL, they shall be canceled
and exchanged for the Merger Consideration in accordance with the procedures set
forth in Sections 1.3 and 2.1
ARTICLE II
MERGER CONSIDERATION; CLOSING
Section 2.1 Merger Consideration. The consideration for the Company Shares
which the CEI agrees to pay and the Seller agrees to accept is set forth in
subsection (a) and (b) below.
(a) CEI shall pay to Seller Cash in the amount of Four Million Four
Hundred and Fifty Thousand Dollars ($4,450,000) at Closing ("Cash Purchase
Price").
(b) CEI shall also deliver to Seller at Closing, One Million shares of
the common stock of USPL (the "USPL Stock"), each share being valued at the
lowest trading price of the common stock of USPL on the Nasdaq Stock Market,
Inc., on the day before the execution of this Agreement (being $4.5625 per
share) less a 20% discount since the common stock is subject to a one year Stock
Sale Restriction Agreement ("Per Share Value"). The USPL Stock shall not be
registered under the Securities Act of 1933 pursuant to Section 7.3 hereof,
however, USPL shall provide registration rights on all USPL stock transferred
hereunder pursuant to a Registration Rights Agreement attached hereto as Exhibit
B.
(c) CEI shall assume a Promissory Note of Seller at Closing payable to
Waste Management, Inc. equal to Eight Hundred Thousand Dollars ($800,000) in the
form of Exhibit D hereto. The Note is attached hereto as Exhibit C.
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(d) USPL shall grant Louis Paolino, Jr. an warrant to purchase
1,500,000 shares of USPL in accordance with the following terms: (i) the
warrants shall vest immediately; (ii) the warrants shall have an exercise price
of $2.00 per share; (iii) the warrants shall have a term of five years; (iv) all
other terms of the warrants shall be on terms similar to standard warrants
issued by USPL.
Section 2.2 Time and Place for Closing. The consummation of the
transactions provided for in this Agreement ("Closing") shall take place at the
offices of Seller, 1000 Crawford Place, Mount Laurel, New Jersey, or at such
other location as the parties may mutually agree upon, within fifteen days from
the execution of this Agreement ("Closing Date") or such other place, time or
date as the parties may agree. Notwithstanding anything to the contrary, the
parties agree that the designated acquisition effective date is January 7, 1999.
Section 2.3 Termination. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing Date:
(a) by mutual written agreement of Seller and Purchasers;
(b) by Seller or Purchasers, in the event the other makes a material
misrepresentation under this Agreement or breaches a material covenant or
agreement under this Agreement; or
(c) by Seller or Purchasers, if the Closing shall not have occurred by
March 31, 1999, or such other date as may be agreed to by the parties hereto in
writing.
In the event this Agreement is terminated as provided herein, this
Agreement shall become void and be of no further force and effect and no party
hereto shall have any further liability to any other party hereto, except that
Section 2.3, Article IX, Section 10.1, Section 10.2 and Section 10.16 shall
survive and continue in full force and effect, notwithstanding termination. The
termination of this Agreement shall not limit, waive or prejudice the remedies
available to the parties, at law or in equity, for a breach of this Agreement.
Section 2.4 Deliveries by Purchasers. At the Closing, Purchasers shall
deliver, all duly and properly executed (where applicable):
(a) The USPL Stock, and cash by wire transfer of good funds in the
amount of the Cash Purchase Price;
(b) A certified copy of the resolutions of the Boards of Directors of
Purchasers authorizing the execution and delivery of this Agreement and the
consummation of the transactions contemplated herein; and
(c) A favorable opinion from counsel for Purchasers, dated the Closing
Date, to the effect that: (i) the USPL Stock has been validly issued and is
fully paid and non-assessable; and (ii) this Agreement has been duly and legally
authorized by all necessary corporate action on the part of
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Purchasers, has been duly and legally executed and delivered by Purchasers, and
is the valid, enforceable and binding Agreement and obligation of Purchasers,
except to the extent enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws affecting the enforcement of creditor's
rights generally.
Section 2.5 Deliveries by Seller. At the Closing, the Seller shall
deliver, all duly executed, the following:
(a) The Seller shall deliver to CEI duly executed certificates in valid
form evidencing all of the Company Shares, duly endorsed to CEI or accompanied
by duly executed stock powers attached or otherwise executed in the presence of
authorized representatives of Purchasers or, if not executed in the presence of
authorized representatives of Purchasers, then same shall be notarized (the
certificates and stock powers referred to in this Section 2.5(a) are
collectively referred to as the "Endorsed Certificates or Stock Powers");
(b) Except as may be otherwise required by Purchasers, the written
resignations of all officers and directors of the Company at the time of
Closing;
(c) A release from Seller, in a form and content satisfactory to
Purchasers, which provides that the Seller is releasing the Company and the
Purchasers from any and all claims, causes of action, debts and obligations
whatsoever except any and all obligations of Purchasers arising under this
Agreement;
(d) A current certificate of good standing for the Company from the
Delaware Secretary of State;
(e) A favorable opinion from counsel for the Seller, dated the date of
the Closing, in form and substance satisfactory to counsel for Purchasers, to
the effect that (i) this Agreement has been duly and legally authorized,
executed and delivered by the Seller and is the valid, enforceable and binding
Agreement on the Seller, except to the extent enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws affecting the
enforcement of creditor's rights generally, and (ii) the Company is a business
corporation duly organized, validly existing and in a condition of good standing
under the laws of its state of incorporation;
(f) The books and records of the Company, including, without
limitation, all original financial and operating records, the corporate minute
book, the corporate stock ledger and title documents;
(g) Actual and physical possession of the Property, free and clear of
any and all leases, tenancies and occupancies or claims therefor of any nature
whatsoever, excepting only the "Permitted Exceptions" (hereinafter defined) and
the rights of the Company.
(h) All of the documents, instruments and certificates required to be
delivered pursuant to this Agreement
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ARTICLE III
TITLE INSURANCE
Section 3.1 Owners Title Policy. Seller has delivered to Purchaser
with respect to the Property: (i) a copy of the title policy or commitment
issued to SRP ("Title Policy"); and (ii) a copy of any survey of the Property in
SRP's possession.
Section 3.2 Permitted Exceptions. The Property is free and clear of all
encumbrances and exceptions whatsoever except those listed as exceptions to
title on the Title Policy (the "Permitted Exceptions").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
With knowledge that Purchasers are relying upon the representations,
warranties and covenants herein contained, the Seller represents and warrants to
Purchasers and makes the following covenants for Purchasers' benefit. The Seller
represents and warrants that the representations and warranties contained in
this Article III are true on the date hereof and shall be true on the Closing
Date.
Certain of the following representations and warranties are made "to
Seller's knowledge." When so used, this phrase shall mean Seller's actual
knowledge.
Section 4.1 Organization and Standing. The Company is a corporation
duly organized, legally existing and in good standing under the laws of the
state of its incorporation, with full power and authority to own its properties
and conduct its business as now being conducted. Company owns no stock or
interest in any other corporation, partnership, or other business organization,
other than the ownership of SRP and AWS.
Section 4.2 Company Stock. All of the authorized, issued, and
outstanding shares of capital stock and other securities of the Company are
owned by the Seller, including without limitation equity securities, debt
securities and options. The Company Shares Seller owns are legally and validly
authorized and issued, fully paid and nonassessable and free and clear of all
liens, claims and encumbrances of every kind and nature and are not subject to
any agreement or instrument relating to the transfer, disposition or voting of
such securities. There are no outstanding rights of any kind to acquire
additional shares of any class from the Company nor has any person claimed any
such rights. All of the outstanding shares of the Company's capital stock have
been duly authorized, issued, and are fully and validly paid and non-assessable.
The Company's Shares being sold and purchased pursuant to this Agreement
constitute all of the outstanding capital stock of the Company. The authorized
capital stock consists solely of 1,000 shares of Common Stock with a par value
of $.01 per share, which as of Closing 100 shares will be issued and
outstanding.
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Section 4.4 Assets and Operations. The Company has conducted no
business operations, other than to enter into and consummate the Eastern
Agreement, and has no assets except for the Eastern Agreement and the stock of
SRP and AWS.
Section 4.5 Liabilities and Receivables. The Company does not have any
liabilities, fixed or contingent, other than its obligations under the Eastern
Agreement, which obligations include the payment of a promissory note in the
original amount of $800,000. CEI shall assume payment of this promissory note in
the amount of $800,000 at Closing. The Seller shall cause all processed soil to
be removed from the property of SRP on or before the Closing Date. In the event
any soil remains in inventory on date of Closing, Purchasers shall receive a
credit at Closing equal to $5 per ton against the Purchase Price to be applied
against the principal balance due under the Promissory Note.
Section 4.6 Tax Returns. The Company has filed all Federal and other
tax returns for all periods on or before the due date of such return (as may
have been extended by any valid extension of time) and has paid all taxes due
for the periods covered by the said returns. The Company is a Subchapter C
corporation under the Internal Revenue Code of 1986, as amended (the "Code").
The Company has filed, and will file (if due), in a timely manner all requisite
federal, state, local and other tax returns due for all fiscal periods ended on
or before the date hereof, and as of the Closing shall have filed in a timely
manner all such returns due for all periods ended on or before the Closing Date.
Section 4.7 Employees, Pensions and, ERISA.
(a) The Company does not have any employees.
(b) The Company does not have and is not a participant in any employee
benefit plans, funds or programs (within the meaning of the Internal Revenue
Code of the United States ("Code") or the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
Section 4.8 Legal Compliance. The Seller has the right, power, legal
capacity and authority to enter into, and perform its respective obligations
under this Agreement, and no approvals or consents of any other persons are
necessary in connection with the transactions contemplated by this Agreement,
except for any approval that may be required from the Pennsylvania Department of
Environmental Protection due to a change of control of the Company. The
execution, delivery and performance of this Agreement will not result in a
breach of or constitute a default or result in the loss of any material right or
benefit under:
(a) Any charter, by-law, agreement or other document to which the
Company is a party or by which the Company or any of its property is bound; or
(b) Any decree, order or rule of any court of governmental authority
which is binding on the Company or on the property of the Company.
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Section 4.9 Transaction Intermediaries. No agent or broker or other
person acting pursuant to the authority of the Company or the Seller is entitled
to any commission or finder's fee in connection with the transactions
contemplated by this Agreement.
Section 4.10 To the knowledge of Seller, the representations and
warranties provided to Seller by Eastern Environmental Services, Inc. in a Stock
Purchase Agreement dated December 30, 1998, attached hereto as Exhibit A and
incorporated herein by reference, are materially true and accurate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Purchasers, jointly and severally, represent and warrant to the Seller
that the representations and warranties contained in this Article V are true on
the date hereof and shall be true on the Closing Date.
Section 5.1 Structure. The Purchasers are corporations duly organized
and legally existing in good standing under the laws of their respective states
of incorporation.
Section 5.2 Authorization to Proceed with this Agreement. Purchasers
have by proper corporate proceedings duly authorized the execution, delivery and
performance of this Agreement and each other agreement contemplated to be
entered into (collectively, the "Collateral Documents") and no other corporate
action is required by law or the Certificates of Incorporation or by-laws of
Purchasers.
Section 5.3 Absence of Intermediaries. No agent, broker, or other
person acting pursuant to Purchasers' authority will be entitled to make any
claim against the Seller for any commission or finder's fee in connection with
the transactions contemplated by this Agreement.
Section 5.4 Authorization. The Purchasers have the power and authority
to enter into this Agreement and each of the Collateral Documents and to carry
out the transactions contemplated hereby and thereby and this Agreement and each
of the Collateral Documents to which the Purchasers are a party, constitutes the
legal, valid and binding obligation of the Purchasers, enforceable in accordance
with its terms. The Purchasers have the power and authority to own and lease
their properties and to carry on their respective businesses as now conducted.
Section 5.5 Contravention; Consents and Approvals. No filing, action,
consent or approval of any person, entity or governmental body is required by
the Purchasers for the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, except for any approval
that may be required from the Pennsylvania Department of Environmental
Protection due to a change of control of the Company. The execution and delivery
of this Agreement by the Purchasers and the consummation of the transactions
contemplated hereby by the Purchasers will not result in a breach of the terms
or conditions of, or constitute a default under, or violate, (a) any provision
of any law, regulation or ordinance, (b) any agreement, lease, mortgage or other
instrument
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or undertaking, oral or written, to which the Purchasers is a party or by which
any of their properties or assets is or may be bound or affected, or (c) any
judgment, order, writ, injunction or decree of any court, administrative agency
or governmental body.
Section 5.6 Commission Filings. Purchasers have delivered to Seller
current (for the quarter ending September 30, 1998) and all historical filings
made by USPL on Forms 8-K, 10-K, 10-Q and Proxy Statements timely filed with the
Securities and Exchange Commission ("SEC") for fiscal year ending December 31,
1997 (the "Public Reports"). The Public Reports accurately and completely
describe, in all material respects, USPL's financial status, business operations
and prospects as of the date of such filings and as of the date hereof, and do
not omit any material fact(s) necessary to make the information contained in the
filings not misleading.
Section 5.7 Issued Common Stock. The USPL Stock to be issued pursuant
to this Agreement has been duly authorized and, when issued, will be validly
issued, fully paid and nonassessable.
Section 5.8 Nasdaq Status. USPL is in conformance with all listing
requirements of the Nasdaq Stock Market, Inc. ("Nasdaq"), and has received no
notices of non-compliance from Nasdaq in the twenty-four months prior to the
date of this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS OF SELLER
The Seller covenants and agrees with Purchasers as follows:
Section 6.1 Payment of Expenses. Seller will pay all expenses
(including legal fees) incurred by it and the Company in connection with the
negotiation, execution and performance of this Agreement.
Section 6.2 Access to Records and the Property. The Seller will cause
the Company to give to Purchasers and their representatives, experts and
advisors, from and after the date of execution of this Agreement and up until
Closing, full access to all of the properties (including the Property), assets,
books, contracts, documents, records, contracts and customer lists of the
Company, and to make available to Purchasers and their representatives, experts
and advisors all additional financial statements of and all information with
respect to the business and affairs of the Company that Purchasers may
reasonably request. Purchasers and their representatives shall have the right to
copy any information or documentation the Purchasers are entitled to inspect
under this Section 6.2.
ARTICLE VII
ADDITIONAL AGREEMENTS OF PURCHASERS
Section 7.1 Payment of Expenses. Purchasers will pay all expenses
(including legal fees) incurred by them in connection with the negotiation,
execution and performance of this Agreement.
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Section 7.2 Books and Records. From the Closing Date to six years after
the Closing Date, the Purchasers shall allow the Seller and its professional
advisers access to all business records and files of the Company pertaining to
the operation of the Company prior to the Closing Date which were delivered to
the Purchasers in accordance with this Agreement ("Records") where the Seller
requires access to the Records for the purpose of preparing its tax returns,
responding to any audit or informational request regarding its tax returns or if
required by it for use in a judicial proceeding in which it is a party. Access
to the records shall be during normal working hours at the location where such
Records are stored. The Seller shall have the right, at its own expense, to make
copies of any Records provided, however, that any such access or copying shall
be had or done in such a manner so as not to interfere unreasonably with the
normal conduct of the Purchasers' business.
Section 7.3 Registration Rights.
(a) The USPL Stock delivered at Closing will not be registered under
the Act. Purchaser shall provide registration rights pursuant to the
Registration Rights Agreement attached hereto as Exhibit B. At Purchasers'
request, the Seller shall provide Purchasers with any information required for
the completion of the registration statement or any supplements thereto.
Purchasers shall keep such registration statement current and effective, until
such time as the shares may be sold by the Seller at any time without
restriction or pursuant to the provisions of Rule 144 or until such earlier date
as all of the shares registered pursuant to such registration statement shall
have been sold or otherwise transferred to a third party. Purchasers shall also
prepare and file with the Securities and Exchange Commission ("SEC") such
amendments and supplements to such registration statement (and the prospectus
used in connection therewith) as may be necessary to update and keep such
registration statement current and effective for such period and to comply with
the provisions of the Act with respect to the sale of all securities covered by
such registration statement. Notwithstanding the above, Purchasers' obligation
to keep the shelf registration continuously effective shall be suspended during
any period that there exists material, non-public information relating to USPL
or during any period in which a post effective amendment has been filed with the
SEC, but prior to a declaration of effectiveness.
(b) With respect to the USPL Stock, Purchasers will furnish to the
Seller such number of prospectuses, if required, under the Act, including copies
of preliminary prospectuses, prepared in conformity with the requirements of the
Act, and such other documents as the Seller may reasonably request in order to
facilitate the public sale or other disposition of the securities to be sold by
the Seller.
(c) Purchasers shall indemnify Seller in accordance with the provisions
of Article X from and against any and all losses, claims, damages and
liabilities (collectively a "Security Liability") to which Seller may become
subject under the Act, any state securities or "blue sky" law, any other statute
or at common law, insofar as such Security Liability (or action in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto or any
filing or other application under the Act or applicable federal or state
securities law or (ii) any omission or alleged
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omission to state therein a material fact required to be stated therein (i.e.,
in any registration statement, prospectus, application or filing, or necessary
in order to make the statements therein not misleading), or (iii) any violation
or alleged violation by Purchasers to which Seller may become subject under the
Act, or other Federal or state laws or regulations, at common law or otherwise.
Notwithstanding the above, Purchasers shall not be liable to Seller if and to
the extent that any Security Liability arises out of or is based upon any untrue
statement or omission made in such registration statement, preliminary or final
prospectus or amendment or supplement thereto, in reliance upon and in
conformity with information furnished to Purchasers by Seller which is intended
for such use; and provided further, that Purchasers shall not be required to
indemnify Seller against any Security Liability which arises out of the failure
of Seller to deliver a prospectus.
(d) All expenses incurred in effecting the registrations provided for
in this Section 7.2 shall be paid by Purchasers, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for Purchasers, underwriting expenses (other than commissions or
discounts which shall be shared by the parties registering shares of Purchasers'
common stock in proportion to the number of shares registered in each particular
offering), expenses of any audits incident to or required by any such
registration and expenses of complying with the securities or "blue sky" laws of
any jurisdictions.
ARTICLE VIII
CONDITIONS OF PURCHASERS
The obligations of Purchasers to effect the transaction contemplated by
this Agreement shall be subject to the fulfillment at or prior to the time of
Closing of each of the following items which are conditions to the Closing:
Section 8.1 Compliance by Seller. The Seller and the Company shall have
performed and complied with all of the obligations and conditions required by
this Agreement to be performed or complied with by the Seller and Company at or
prior to the Closing Date. All representations and warranties of Seller
contained in this Agreement shall be true and correct at and as of the Closing
Date, with the same force and effect as though made at and as of the Closing
Date, except for changes expressly permitted by this Agreement.
Section 8.2 Litigation Affecting This Transaction. There shall be no
actual or threatened action by or before any court which seeks to restrain,
prohibit or invalidate the transaction contemplated by this Agreement or which
might affect the right of Purchasers to own, operate in its entirety or control
any of the Property, the Company or the business the Company operates or which,
as a result of the transaction contemplated by this Agreement, might affect such
right as to Purchasers or any affiliate thereof subsequent to the Closing Date
and which, in the judgment of the Boards of Directors of Purchasers, made in
good faith and based upon advice of their counsel, makes it inadvisable to
proceed with the transaction contemplated by this Agreement.
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ARTICLE IX
CONDITIONS OF SELLER
The obligations of the Seller to transfer the Company Shares in
accordance with this Agreement shall be subject to the fulfillment at or prior
to the time of Closing of each of the following conditions:
Section 9.1 Compliance by Purchasers. The Purchasers shall have
performed and complied with all of the obligations and conditions required by
this Agreement to be performed or complied with by them at or prior to or at the
Closing Date. All representations and warranties of Purchasers contained in this
Agreement shall be true and correct at and as of the Closing Date, with the same
force and effect as though made at and as of the Closing Date, except for
changes expressly permitted by this Agreement.
Section 9.2 Litigation Affecting This Transaction. There shall be no
actual or threatened action by or before any court which seeks to restrain,
prohibit or invalidate the transaction contemplated by this Agreement or which
might affect the right of Purchasers to own, operate in its entirety or control
any of the Company or the business the Company operates which, as a result of
the transaction contemplated by this Agreement, might affect such right as to
Purchasers or any affiliate thereof subsequent to the Closing Date and which, in
the judgment of the Seller, made in good faith and based upon advice of its
counsel, makes it inadvisable to proceed with the transaction contemplated by
this Agreement.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnification by Seller. The Seller agrees that it will
indemnify, defend, protect and hold harmless the Purchasers and the Company and
their officers, shareholders, directors, divisions, subdivisions, affiliates,
subsidiaries, parent, agents, employees, legal representatives, successors and
assigns from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, penalties, costs and expenses whatsoever
(including specifically, but without limitation, reasonable attorneys' fees and
expenses of investigation) whether equitable or legal, matured or contingent,
known or unknown to the Seller, foreseen or unforeseen, ordinary or
extraordinary, patent or latent, whether arising out of occurrences prior to,
at, or after the date of this Agreement, from (a) any breach of,
misrepresentation in, untruth in or inaccuracy in the representations and
warranties by the Seller, set forth in this Agreement or in the Schedules
attached to this Agreement or in any writings delivered pursuant to this
Agreement; (b) nonfulfillment or nonperformance of any agreement, covenant or
condition on the part of Seller made in this Agreement and to be performed by
Seller before or after the Closing Date; (c) any claim by a third party that, if
true, would mean that a condition for indemnification set forth in subsections
(a) or (b) of this Section 10.1 of this Agreement has occurred. The
indemnification in this Section 10.1 is subject to the limitations set forth in
Sections 10.5, 10.6 and 10.7.
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Section 10.2 Indemnification by Purchasers. The Purchasers agree that
they will, jointly and severally, indemnify, defend, protect and hold harmless
Seller, and its heirs, legal representatives, successors and assigns, as
applicable, from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, penalties, costs and expenses whatsoever
(including specifically, but without limitation, reasonable attorneys' fees and
expenses of investigation) whether equitable or legal, matured or contingent,
known or unknown to the Purchasers, foreseen or unforeseen, ordinary or
extraordinary, patent or latent, whether arising out of occurrences prior to,
at, or after the date of this Agreement, incurred by it, or either of them, as a
result of or incident to: (a) any breach of, misrepresentation in, untruth in or
inaccuracy in the representations and warranties of Purchasers set forth in this
Agreement; (b) nonfulfillment of any agreement, covenant or condition on the
part of Purchasers made in this Agreement and to be performed by Purchasers
before or after the Closing Date; and (c) any claim by a third party that, if
true, would mean that a condition for indemnification set forth in subsections
(a) or (b) of this Section 10.2 has occurred. The indemnification in this
Section 10.2 is subject to the limitations set forth in Sections 10.5, 10.6 and
10.7.
Section 10.3 Procedure for Indemnification with Respect to Third Party
Claims
(a) If any third party shall notify a party to this Agreement (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") that may
give rise to a claim for indemnification against any other party to this
Agreement (the "Indemnifying Party") under this Article X, 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 is thereby prejudiced. Such notice shall state the amount of the claim and
the relevant details thereof.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
satisfactory to the Indemnified Party so long as (i) the Indemnifying Party
notifies the Indemnified Party in writing within fifteen days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party pursuant to the
provisions of Article X, as applicable, from and against the entirety of any
adverse consequences (which will include, without limitation, all losses,
claims, liens, and attorneys' fees and related expenses) the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(iii) the Third Party Claim involves only monetary damages and does not seek an
injunction or equitable relief, (iv) settlement of, or adverse judgment with
respect to the Third Party Claim is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedential custom or practice adverse
to the continuing business interests of the Indemnified Party, and (v) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.
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(c) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 10.3(b) above, (i) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in (but not control) the defense of the Third Party Claim, (ii) 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 (which will not be unreasonably withheld), and
(iii) the Indemnifying 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 Indemnified Party (which will not be unreasonably
withheld). In the case of (c)(ii) or (c)(iii) above, any such consent to
judgment or settlement shall include, as an unconditional term thereof, the
release of the Indemnifying Party from all liability in connection therewith.
(d) If the conditions set forth in Section 10.3(b) above are or become
unsatisfied, (i) 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 and any matter it may deem appropriate exercising reasonable
discretion and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith, (ii) the
Indemnifying Party will reimburse the Indemnified Party promptly and
periodically for the cost of defending against the Third Party Claim (including
attorneys' fees and expenses) and (iii) the Indemnifying Party will remain
responsible for 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 to the fullest extent provided in this Article X.
(e) Anything contained in this Section 10.3 to the contrary
notwithstanding, the Seller shall not be entitled to assume the defense for any
Indemnifiable Claim (and shall be liable for the reasonable fees and expenses
incurred by the Indemnified Party in defending such claim) if the Indemnifiable
Claim seeks an order, injunction or other equitable relief or relief for other
than money damages against Purchaser or the Company which Purchaser determines,
after conferring with its counsel, cannot be separated from any related claim
for money damages and which, if successfully, would adversely affect the
business, properties or prospects of the Company.
Section 10.4 Procedure for Non-Third Party Claims. If Purchasers or
Seller wish to make a claim for indemnity under Section 10.1 or Section 10.2, as
applicable, and the claim does not arise out of a third party notification which
makes the provisions of Section 10.3 applicable, the party desiring
indemnification ("Indemnified Party") shall deliver to the parties from which
indemnification is sought ("Indemnifying Party") a written demand for
indemnification ("Indemnification Demand"). The Indemnification Demand shall
state: (a) the amount of losses, damages or expenses to which the Indemnified
Party has incurred or has suffered or is expected to incur or suffer to which
the Indemnified Party is entitled to indemnification pursuant to Section 10.1 or
Section 10.2, as applicable; (b) the nature of the event or occurrence which
entitles the Indemnified Party to receive payment under Section 10.1 or Section
10.2, as applicable. If the Indemnifying Party wishes to object to an
Indemnification Demand, the Indemnifying Party must send written notice to the
Indemnified Party stating the objections and the grounds for the objections
("Indemnification Objection"). If no Indemnification Objection is sent within
forty-five (45) days after the Indemnification Demand is sent, the Indemnifying
Party shall be deemed to have acknowledged the correctness of the claim or
claims specified in the Indemnification Demand and shall pay the full amount
claimed in the Indemnification
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Demand within sixty (60) days of the day the Indemnification Demand is dated. If
for any reason the Indemnifying Party does not pay the amounts claimed in the
Indemnification Demand, within thirty days of the Indemnification Demand's date,
the Indemnified Party may institute legal proceedings to enforce payment of the
indemnification claim contained in the Indemnification Demand and any other
claim for indemnification that the Indemnified Party may have.
Section 10.5 Survival of Claims.
(a) All of the respective representations and warranties of the Seller
and Purchasers shall survive consummation of the transactions contemplated by
this Agreement for eighteen months after the Closing Date.
(b) The representations, warranties, covenants, and agreements relating
to taxes shall survive consummation of the transactions contemplated by this
Agreement until the expiration of the applicable statute of limitations.
(c) Notwithstanding the provisions of Section 10.5(a) and 10.5(b)
above, which provide that representations, warranties and obligations expire
after certain stated periods of time, if within the stated period of time, an
Indemnification Demand is given, or a suit or action based upon representation
or warranty is commenced, the Indemnified Party shall not be precluded from
pursuing such claim or action, or from recovering from the Indemnifying Party
(whether through the courts or otherwise) on the claim or action, by reason of
the expiration of the representation or warranty.
10.6 Indemnification Threshold. No Indemnification Demand shall be
made under this Article IX until such time that the party making an
Indemnification Demand believes, in good faith, that it has a claim or claims
for indemnity totaling Fifty Thousand Dollars ($50,000) or more, singly or in
the aggregate, and no Indemnifying Party shall have any liability to an
Indemnified Party until the damages to the Indemnified Party exceed a cumulative
aggregate total of Fifty Thousand Dollars ($50,000). Once cumulative aggregate
damages exceed Fifty Thousand Dollars ($50,000), the Indemnifying Party shall be
liable for all damages to the Indemnified Party, including the first Fifty
Thousand Dollars ($50,000) of damages.
10.7 Limitation of Liability. Notwithstanding anything else to the
contrary contained herein, the obligations of each of Seller and Purchasers
pursuant to the indemnifications contained in Section 10.1 and 10.2 hereof shall
be limited to Eight Million Dollars ($8,000,000).
ARTICLE XI
OTHER PROVISIONS
Section 11.1 Nondisclosure by Seller. Seller recognizes and
acknowledges that it has in the past, currently has, and in the future will have
certain confidential information of the Company such as lists of customers,
operational policies, and pricing and cost policies that are valuable, special
and unique assets of the Company. Seller agrees that for a period of ten (10)
years from the Closing Date it will not disclose such confidential information
to any person, firm, corporation, association or other
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entity for any purpose or reason whatsoever, except to authorized
representatives of Purchasers, unless (i) such information becomes known to the
public generally through no fault of Seller, (ii) Seller is compelled to
disclose such information by a governmental entity or pursuant to a court
proceeding, or (iii) the Closing does not take place. In the event of a breach
or threatened breach by Seller of the provisions of this Section, Purchasers
shall be entitled to an injunction restraining Seller from disclosing, in whole
or in part, such confidential information. Nothing herein shall be construed as
prohibiting Purchasers from pursuing any other available remedy for such breach
or threatened breach, including, without limitation, the recovery of damages.
Section 11.2 Nondisclosure by Purchasers. Purchasers recognize and
acknowledge that they have in the past, currently have, and prior to the Closing
Date, will have access to certain confidential information of the Company, such
as lists of customers, operational policies, and pricing and cost policies that
are valuable, special and unique assets of the Company. Purchasers agrees that
they will not utilize such information in the business or operation of
Purchasers or any of their affiliates or disclose such confidential information
to any person, firm, corporation, association, or other entity for any purpose
or reason whatsoever, unless (i) such information becomes known to the public
generally through no fault of Purchasers or any of their affiliates, (ii)
Purchasers are compelled to disclose such information by a governmental entity
or pursuant to a court proceeding, or (iii) Closing takes place. In the event of
a breach or threatened breach by Purchasers of the provisions of this Section,
Seller shall be entitled to an injunction restraining Purchasers from utilizing
or disclosing, in whole or in part, such confidential information. Nothing
contained herein shall be construed as prohibiting Seller from pursuing any
other available remedy for such breach or threatened breach, including, without
limitation, the recovery of damages.
Section 11.3 Assignment; Binding Effect; Amendment. This Agreement and
the rights of the parties hereunder may not be assigned (except by operation of
law) and shall be binding upon and shall inure to the benefit of the parties
hereto, and their respective successors, personal representatives and assigns.
This Agreement, upon execution and delivery, constitutes a valid and binding
agreement of the parties hereto enforceable in accordance with its terms and may
be modified or amended only by a written instrument executed by all parties
hereto.
Section 11.4 Entire Agreement. This Agreement, is the final, complete
and exclusive statement and expression of the agreement among the parties hereto
with relation to the subject matter of this Agreement, it being understood that
there are no oral representations, understandings or agreements covering the
same subject matter as the Agreement. The Agreement supersedes, and cannot be
varied, contradicted or supplemented by evidence of any prior to contemporaneous
discussions, correspondence, or oral or written agreements of any kind. The
parties to this Agreement have relied on their own advisors for all legal,
accounting, tax or other advice whatsoever with respect to the Agreement and the
transactions contemplated hereby.
Section 11.5 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute but one and the same
instrument.
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Section 11.6 Notices. All notices or other communications required or
permitted hereunder shall be in writing and may be given by depositing the same
in United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, by overnight courier
or by delivering the same in person to such party.
(a) If to Seller, addressed to it at:
Robert M. Kramer & Associates, P.C.
1150 First Avenue, Suite 900
King of Prussia, Pennsylvania 19406
(b) If to Purchasers, addressed to them at:
U. S. Plastic Lumber Corporation
2300 W. Glades Road, Suite 440 West
Boca Raton, Florida 33431
Atten: Bruce C. Rosetto, Esq., Vice President and
General Counsel
Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier and three business days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received, if earlier. Any
party may change the address for notice by notifying the other parties of such
change in accordance with this Section 11.6.
Section 11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Pennsylvania, without giving effect to any choice or conflict of law provision
or rule (whether of the Commonwealth of Pennsylvania or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
Commonwealth of Pennsylvania.
Section 11.8 No Waiver. No delay of or omission in the exercise of any
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in any
such breach or default, or of or in any similar breach or default occurring
later; nor shall any waiver of any single breach or default be deemed a waiver
of any other breach of default occurring before or after that waiver.
11.9 Time of the Essence. Time is of the essence of this Agreement as
well as all dates referred to herein and extensions thereof.
11.10 Captions. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
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11.11 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified
in such manner as to be valid, legal and enforceable but so as most nearly to
retain the intent of the parties. If such modification is not possible, such
provision shall be severed from this Agreement. In either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
11.12 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 shall be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"Including" means included, without limitation.
11.13 Extension or Waiver of Performance. Either the Seller or
Purchasers may extend the time for or waive the performance of any of the
obligations of the other, waive any inaccuracies in the representations or
warranties by the other, or waive compliance by the other with any of the
covenants or conditions contained in this Agreement, provided that any such
extension or waiver shall be in writing and signed by the Seller and the
Purchasers.
11.14 Liabilities of Third Parties. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors, legal representative and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement, nor shall any provisions give any
third person any rights of subrogation or action over or against any party to
this Agreement.
11.15 Disclosure on Schedules. The parties to this Agreement shall
have the obligation to supplement or amend the Schedules being delivered
concurrently with the execution of this Agreement and annexed hereto 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 the Schedules. The obligations of the parties to amend or
supplement the Schedules shall terminate on the Closing Date.
11.16 Arbitration.
(a) Each and every controversy or claim arising out of or relating to
this Agreement shall be settled by arbitration in Philadelphia, Pennsylvania, in
accordance with the commercial rules (the "Rules") of the American Arbitration
Association then obtaining, and judgment upon the award rendered in such
arbitration shall be final and binding upon the parties and may be confirmed in
any court having jurisdiction thereof. Notwithstanding the foregoing, this
Agreement to arbitrate shall not bar any party from seeking temporary or
provisional remedies in any Court having jurisdiction. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement,
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<PAGE> 22
which such demand shall set forth in the same degree of particularity as
required for complaints under the Federal Rules of Civil Procedure the claims to
be submitted to arbitration. Additionally, the demand for arbitration shall be
stated with reasonable particularity with respect to such demand with documents
attached as appropriate. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claim, dispute or other matter in question would be barred by the applicable
statutes of limitations.
(b) The arbitrators shall have the authority and jurisdiction to
determine their own jurisdiction and enter any preliminary awards that would aid
and assist the conduct of the arbitration or preserve the parties' rights with
respect to the arbitration as the arbitrators shall deem appropriate in their
discretion. The award of the arbitrators shall be in writing and it shall
specify in detail the issues submitted to arbitration and the award of the
arbitrators with respect to each of the issues so submitted.
(c) Within sixty (60) days after the commencement of any arbitration
proceeding under this Agreement, each party shall file with the arbitrators its
contemplated discovery plan outlining the desired documents to be produced, the
depositions to be take, if ordered by the arbitrators in accordance with the
Rules, and any other discovery action sought in the arbitration proceeding.
After a preliminary hearing, the arbitrators shall fix the scope and content of
each party's discovery plan as the arbitrators deem appropriate. The arbitrators
shall have the authority to modify, amend or change the discovery plans of the
parties upon application by either party, if good cause appears for doing so.
(d) The award pursuant to such arbitration will be final, binding and
conclusive.
(e) Counsel to Purchasers and Seller in connection with the negotiation
of and consummation of the transactions under this Agreement shall be entitled
to represent their respective party in any and all proceedings under this
Section or in any other proceeding (collectively, "Proceedings"). Seller and
Purchasers, respectively, waive the right and agree they shall not seek to
disqualify any such counsel in any such Proceedings for any reason, including
but not limited to the fact that such counsel or any member thereof may be a
witness in any such Proceedings or possess or have learned of information of a
confidential or financial nature of the party whose interests are adverse to the
party represented by such counsel in any such Proceedings.
11.17 Agreement Not Binding Until Fully Executed. This Agreement shall
not be binding on any party hereto until the Agreement has been fully executed.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
PURCHASERS
U. S. PLASTIC LUMBER CORPORATION
By:
----------------------------------------
Name: Bruce C. Rosetto
Title: Vice President and General Counsel
CLEAN EARTH, INC.
By:
----------------------------------------
Name: Bruce C. Rosetto
Title: Secretary
SELLER
-------------------------------------------
Matthew Paolino
-------------------------------------------
Louis J. Paolino, Jr.
-------------------------------------------
Joseph Paolino
-------------------------------------------
Louis Paolino, Sr.
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