<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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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): July 20, 1998
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TransCor Waste Services, Inc.
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(Exact name of registrant as specified in its charter)
Florida 1-11822 65-0369288
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) (Identification No.)
1502 Second Avenue, East - Tampa, FL 33605
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(Address of principal executive offices)
Registrant s telephone number, including area code: (813) 248-3878
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(Former name or former address, if changed since last report.)<PAGE>
Item 2. Disposition of Assets
On July 20, 1998, TransCor Waste Services, Inc., executed an
agreement to sell the stock of its wholly-owned operating subsidiary,
Kimmins Recycling Corp., as described in a press release, a copy of which
is being filed as Exhibit 1 to this Form 8-K. The transaction closed on
September 2, 1998.
Item 7. Financial Statements and Exhibits
(a) Financial statements
Not applicable.
(b) Pro-Forma Financial Information
Pro-forma financial information will be filed
at a later date.
(c) Exhibits
Exhibit 1 - Press Release dated July 23, 1998
Exhibit 2 - Stock Purchase Agreement dated July 17, 1998
Exhibit 3 - Press Release dated September 14, 1998
Exhibit 4 - Supplemental Agreement to Stock
Purchase Agreement dated August 31, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
TRANSCOR WASTE SERVICES, INC.
Dated: September 17, 1998
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By: /s/ Joseph M. Williams
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Name: Joseph M. Williams
Title: President<PAGE>
Exhibit 1
FOR IMMEDIATE RELEASE: THURSDAY, JULY 23, 1998
KIMMINS CORP. AND TRANSCOR WASTE SERVICES, INC., ANNOUNCES SALE OF
KIMMINS RECYCLING CORP.
TAMPA, FLORIDA, THURSDAY, JULY 23, 1998...TransCor Waste Services, Inc.
and Kimmins Corp. (NYSE: KVN)
TransCor Waste Services, Inc. President, Mr. Joseph M. Williams announced
today that, "The common stock of our solid waste subsidiary, Kimmins
Recycling Corp., will be sold to Eastern Environmental Services of
Florida, Inc. This transaction, along with the prior sale of the Miami
and Jacksonville operations, results in a total sale price of $62.7
million to be paid in cash and stock." Mr. Williams added, "Both
companies have executed a definitive agreement and closing is expected by
August 31, 1998."
Mr. Williams added, "Earlier this year, we sold our Jacksonville and
Miami operations to Eastern Environmental. That transaction opened up
negotiations for the sale of the balance of our solid waste business and
led us to re-examine our long-range plans as a regional solid waste
company in Florida. The combined transaction exits TransCor from the
solid waste industry and provides additional cash for other future
opportunities."
The closing of this transaction is subject to customary closing
conditions and certain governmental approvals.
TransCor, a regional solid waste and recycling company, provides services
to commercial, industrial, and residential customers in the state of
Florida. TransCor's services include transfer, collection,
transportation, waste segregation, recycling, demolition, and disposal.
TransCor is headquarter in Tampa, Florida, and operates facilities in
Miami, Dade County; Clearwater, Pinellas County; Tampa, Hillsborough
County; and Ft. Myers, Lee County.
Kimmins Corp. (NYSE: KVN) owns 74 percent of TransCor Waste Services,
Inc.
Contact: Joseph M. Williams
TransCor Waste Services, Inc.
(813) 247-0182<PAGE>
EXHIBIT 2
STOCK PURCHASE AGREEMENT
BETWEEN
TRANSCOR WASTE SERVICES, INC.
AND
EASTERN ENVIRONMENTAL SERVICES, INC.<PAGE>
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II - TITLE INSURANCE . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . 4
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF EASTERN . . . . . . . 13
ARTICLE V - ADDITIONAL AGREEMENTS OF SELLERS . . . . . . . . . . . . 14
ARTICLE VI - ADDITIONAL AGREEMENTS OF EASTERN . . . . . . . . . . . . 16
ARTICLE VII - CONDITIONS OF EASTERN . . . . . . . . . . . . . . . . . 17
ARTICLE VIII - CONDITIONS OF SELLERS . . . . . . . . . . . . . . . . 18
ARTICLE IX - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 19
ARTICLE X - OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . 22<PAGE>
SECTION OF DISCLOSURE SCHEDULE
ATTACHED TO THIS AGREEMENT
1.7(b) Opinion of Eastern Counsel
1.7(c) Non-competition Agreement
1.8(e) Opinion of Kimmins' and TransCor's Counsel
1.8(f) Release
ATTACHED AS PART OF DISCLOSURE BINDER
2.1 Real Property
2.2 Permitted Exceptions to Real Property Title
3.1 Subsidiaries
3.2 Capital Structure
3.3 Contracts, Permits, Mortgages and
Material Documents
3.4(b) Rolling Stock
3.4(c) Containers
3.4(f) Personal Property Encumbrances
3.5 Customer Contracts
3.6 Real Property Interests
3.6(a) Exceptions to governmental compliance
3.6(b) Exceptions to lawful use of the Real Property
3.6(c) Exceptions to conduct in compliance
with Applicable laws
3.6(e) Litigation or administrative proceedings for
environmental violations
3.6(f) Definition of "Hazardous Materials" and
Environmental Conditions
3.6(h) Wetlands
3.6(i) Mechanic's liens
3.6(k) Exceptions to proceedings which would
affect use of the Real Property
3.7 Adverse Changes
3.8(a)(iii) Liabilities not in Ordinary Course of Business
3.9 Fiscal Condition of Companies
3.10 Tax Status of Companies
3.11 Insurance Policies, Performance Bonds
and Letters of Credit
3.12(a) Contracts with Employees
3.12(b) Employees
3.12(c) Benefit Plans
3.13(a) Violations of federal, state or local laws
or regulations
3.13(b) Environmental Violations
3.13(f) List and Synopsis of All Litigation
3.15 Required Consents
3.18 Related Party Transactions
3.20 Adjustment in Purchase Price for Certain
Contracts
5.7 Divested Assets
5.9 Allocation of Purchase Price among the Assets
of the Company
9.7 List of Business Regions<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), is made and entered
into on July 17, 1998, by and between Eastern Environmental Services,
Inc., a Delaware corporation ("Eastern") and TransCor Waste Services,
Inc., a Delaware Corporation ("TransCor" or "Seller"). Kimmins Corp, a
Delaware Corporation ("Kimmins") has entered into this Agreement for the
purposes of giving certain limited representations and warranties and a
limited indemnity, all as specifically set forth in this Agreement.
RECITALS
Eastern is a waste services company engaged in the collection,
transportation and disposal of residential, commercial and industrial
waste in several eastern, southern, and Midwestern states. Kimmins owns a
controlling interest in the outstanding stock of TransCor, and TransCor
is the owner of all of the outstanding stock of Kimmins Recycling Corp.
("Company"). The Company is in the business of operating a solid waste
transfer station and collecting, recycling, transporting, and disposing
of non-hazardous solid waste in various cities in Florida. For purposes
of this Agreement, TransCor is sometimes hereinafter referred to as the
Seller, and Eastern is sometimes hereinafter referred to as the
Purchaser. Kimmins joins in the execution of this Agreement solely for
the limited purposes expressly set forth herein. In accordance with the
provisions of this Agreement, Sellers desire to sell all of the
outstanding shares of stock of the Company (the "Company Shares") to
Eastern in exchange for cash and common stock of Eastern, all on the
terms contained herein.
Throughout this Agreement various Schedules are referenced as being
attached to this Agreement. Notwithstanding the fact that all Schedules
are referred to as being attached to this Agreement, some of the
Schedules are not attached but instead appear in a Disclosure Binder
prepared by the Sellers. The Disclosure Binder is organized under
subheadings which correspond to the various Schedules described in this
Agreement. The parties agree that the Disclosure Binder will be completed
and approved by the parties within twenty (20) days after the execution
of this Agreement. For purposes of identification, the Disclosure Binder
will be identified by the parties by a written statement executed by the
parties and appearing as the first page of the Disclosure Binder.
ARTICLE I
Consideration and Closing
Section 1.1 Incorporation of Recitals. The recitals set forth above
are incorporated herein by reference and are a part of this Agreement.<PAGE>
Section 1.2 Time and Place for Closing. Closing under this Agreement
shall take place within ten days of the conditions set forth in Article
VII and Article VIII being satisfied or waived, time being of the
essence, at the offices of Eastern, 1000 Crawford Place, Mount Laurel,
New Jersey, or such other place as the parties hereto may agree upon. The
date that Closing occurs is referred to hereinafter as the "Closing Date"
and the act of closing as "Closing." The exact Closing Date shall be
established by a written notice sent by Purchaser to Seller, and agreed
to by Seller.
Section 1.3 Agreement to Sell Stock of Company; Consideration.
(a) At the Closing, the Sellers agree to transfer and deliver to
Purchaser all of the Company Shares owned by Sellers, and Purchaser
agrees to purchase and pay for the Company Shares, the total
consideration, subject to adjustment as provided herein, of $51,100,000
as follows: (i) a number of shares of Eastern's common stock ("EESI
Stock") having a value of $10,000,000, each share being valued at the
average closing price of the common stock on the Nasdaq Stock Market for
the five trading days which end on the fifth trading day prior to the
Closing Date ("Per Share Value"), and (ii) cash by wire transfer of good
funds in the amount of $41,100,000 (the "Cash Portion"). The Purchase
Price shall be (i) increased or decreased, dollar for dollar, by the
amount by which the current assets of the Company at Closing, determined
in accordance with generally accepted accounting principles ("GAAP"),
exceed or are exceeded by, respectively, the current liabilities of the
Company at Closing, including any current portion of long-term debt, as
determined in accordance with GAAP and (ii) decreased, dollar for dollar,
by the amount of any long term liability of the Company existing at the
Closing Date, excluding only the current portion of any long term
liability. For purposes of this Agreement the adjustment to the Purchase
Price set forth in (i) and (ii) above is hereafter referred to as the
("Working Capital Adjustment"). The increase or decrease, if any,
resulting from the Working Capital Adjustment, shall be added to or
deducted from the Cash Portion. The Cash Portion as adjusted by the
Working Capital Adjustment shall be paid to Seller at Closing. The EESI
Stock shall be delivered to Seller at Closing; provided, however, that if
Seller does not deliver to Purchaser at Closing the audited financial
statements set forth in Section 5.6, then the EESI Stock shall be
escrowed with an escrow agent suitable to Seller and Purchaser, and
delivered to Seller at such time as the audited financial statements set
forth in Section 5.6 are provided to Purchaser.
(b) Within one hundred twenty (120) days after the Closing Date,
Purchaser shall prepare and deliver to Seller the balance sheet for the
Company as of the close of business of on the Closing Date (the "Closing
Date Balance Sheet"). Seller shall fully cooperate with Purchaser during
Purchaser's preparation of the Closing Date Balance Sheet. The Closing
Date Balance Sheet shall set forth the Net Working Capital (as defined
below) of the Company, and shall have been prepared in accordance with
generally accepted accounting principles. Seller shall have the right to
review all of Purchaser's work papers and all relevant records of
Purchaser and its accountants relating to the Closing Date Balance Sheet.
For purposes of this Agreement, Net Working Capital shall mean the
current assets of the Company, less its current liabilities, including
the current portion of any long term liabilities, in each case as
determined in accordance with generally accepted accounting principles.<PAGE>
(c) The Closing Date Balance Sheet delivered by Purchaser to Seller
shall be deemed to be and shall be final, binding and conclusive on the
parties hereto, unless Seller disputes the Closing Date Balance Sheet in
accordance with this Section 1.3(c). Seller may dispute any amounts
reflected on the Closing Date Balance Sheet (any such disputed amounts,
the "Disputed Matters"); provided, however, that Seller shall be entitled
to dispute any such matter only if (1) Seller shall notify Purchaser in
writing of each Disputed Matter within thirty (30) days of Seller's
receipt of the Closing Date Balance Sheet and (2) all such asserted
disputes, if resolved in Seller's favor, would result in an adjustment to
the Closing Payment in excess of $25,000 (in which event the full amount
of the adjustment, as finally determined, shall be made as provided
below). Any Disputed Matters shall be subject to good faith negotiations
between the parties for up to fifteen (15) days prior to being referred
to the Independent Accounting Firm (as defined below). Any Disputed
Matters not resolved by such good faith negotiations shall be decided by
an independent accounting firm acceptable to both Seller and Purchaser
(the "Independent Accounting Firm"). The cost and fees of the Independent
Accounting Firm shall be shared equally by Seller and Purchaser. The
Independent Accounting Firm so chosen shall consider only the Disputed
Matters and Purchaser and Seller shall use reasonable efforts to cause
the Independent Accounting Firm to render a final decision on the
Disputed Matters by delivering a written report to Purchaser and Seller
no later than thirty (30) days after having received the assignment with
respect thereto. The decision of the Independent Accounting Firm with
respect to all Disputed Matters shall be based solely on whether the
Closing Date Balance Sheet was prepared in accordance with the
requirements of this Agreement, shall be final and binding upon the
parties hereto and shall not be subject to challenge in any court.
(d) If the Net Working Capital as of the Closing Date as
conclusively determined as provided in Section 1.3 (such conclusive
determination is referred to herein as "Certified Net Working Capital"),
is less than $25,000, then Seller shall pay, or cause to be paid, to
Purchaser the amount of such deficiency. If the Certified Net Working
Capital is greater than $25,000, then Purchaser shall pay, or cause to be
paid, to Seller the amount of such excess. Any payment pursuant to this
Section 1.3(b) shall be made within five (5) business days following the
conclusive determination of Net Working Capital (such fifth business day,
the "Due Date"). Any payment not made by the Due Date therefor shall bear
interest from the Due Date at the rate of ten percent (10%) per annum.
(e) Payments made pursuant to this Section 1.3 shall be made by wire
transfer of immediately available funds or by good check to an account
designated by the party receiving such payment.
Section 1.4 Closing. Following execution of this Agreement, the
Purchaser and Sellers shall be obligated to conclude the transaction
strictly in accordance with its terms within ten business days after the
conditions of Closing set forth in Article VII and Article VIII have been
satisfied or waived. If the failure to conclude this transaction is due
to the refusal and failure of Sellers to perform their obligations to
close under this Agreement, Purchaser may seek to enforce this Agreement
with an action of specific performance, or, in the alternative, shall be
entitled to liquidated damages in the amount of $1,200,000 of the Cash
Portion. If the failure to conclude this transaction is due to the<PAGE>
refusal and failure of Purchaser to perform its obligations to close
under this Agreement, the Sellers may seek to enforce this Agreement with
an action of specific performance, or, in the alternative, shall be
entitled to liquidated damages in the amount of $1,200,000 of the Cash
Portion.
Section 1.5 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 Eastern and Sellers;
(b) by Purchaser within 35 days after the date of this Agreement,
Purchaser is not satisfied, in its sole discretion, with the due
diligence it conducts on the Company subsequent to the date of this
Agreement, including, without limitation the matters disclosed in the
Schedules delivered by the Seller in the Disclosure Binder.
(c) by the Seller or by Purchaser, in the event Purchaser or the
Seller, as applicable, makes a material misrepresentation under this
Agreement or breaches a material covenant or agreement under this
Agreement, and fails to cure such misrepresentation or breach within ten
(10) business days from the date of written notice of the existence of
such misrepresentation or breach; or
(d) by the Seller or Purchaser, if the Closing shall not have
occurred by September 15, 1998, or such other date as may be agreed to by
the parties hereto in writing, due to the non-fulfillment by the non-
terminating party of a condition precedent to the terminating party's
obligation to close as set forth at Article VII or VIII hereof, as
applicable (through no fault or breach by the terminating party).
However, if the only condition to Closing which has not been satisfied is
the condition set forth in Section 7.7, the date of September 15, 1998,
shall be extended to October 15, 1998, at the option of Purchaser or
Seller, to be exercised through written notice to Seller or Purchaser, as
applicable.
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 this Section 1.4, Section 1.5, Article IX, Section 10.1,
Section 10.2 and Section 10.15 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. If this
agreement is terminated, all due diligence and other documentation
delivered to Eastern by the Company and Seller shall be returned to the
Seller.
Section 1.6 Deliveries by Eastern. At the Closing, Eastern shall
deliver or cause to be delivered, all duly and properly executed,
authorized and issued (where applicable):
(a) The Cash Portion, as adjusted by the Working Capital Adjustment,
and the EESI Stock;<PAGE>
(b) A favorable opinion from counsel for Eastern, dated the Closing
Date, in the form attached as Schedule 1.6(b);
(c) A Non-competition Agreement between Purchaser and each of the
Seller, Kimmins, and Francis Williams and Joseph Williams, in the form
and content agreed to between the parties and attached as Schedule 1.6(c)
to the Disclosure Binder (the Non-competition Agreement");
(d) A copy of resolutions of the directors of Eastern authorizing
the execution and delivery of this Agreement and each other agreement to
be executed in connection herewith (collectively, the "Collateral
Documents") and the consummation of the transactions contemplated herein
and therein; and,
(e) Such other documents as required to consummate the Closing.
Section 1.7 Deliveries by Seller. At the Closing, Seller shall
deliver to Eastern or cause to be delivered, all duly and properly
executed, authorized and issued (where applicable) the following:
(a) Duly executed certificates in valid form evidencing all of the
Company Shares owned by Seller, duly endorsed in blank or accompanied by
duly executed stock powers attached or otherwise executed in the presence
of authorized representatives of Purchaser;
(b) Except as may be otherwise required by Eastern, the written
resignations of all officers and directors of the Company as of the time
of Closing;
(c) The Non-competition Agreement;
(d) A certified copy of all charter documents and bylaws of the
Company and a current certificate of good standing for the Company from
each applicable jurisdiction of incorporation and admission;
(e) A favorable opinion from counsel for Seller and TransCor, dated
the Closing Date, in form attached as Schedule 1.7(e);
(f) A release from Seller and each executive officer of the Company,
in a form and content attached as Schedule 1.7(f);
(g) The Certificate described at Section 7.1 executed by the
President of Seller;
(h) The books and records of the Company, including, without
limitation, all original financial and operating records, the corporate
minute books and seals, the corporate stock ledgers, and all title
documents; and,
(i) Such other documents as required to consummate the Closing.<PAGE>
ARTICLE II
Title Insurance
Section 2.1 Real Property. A legal description of the metes and
bounds of all parcels of and rights to real property which will be owned
by the Company at Closing is attached as Schedule 2.1 ("Real Property").
For purposes of this Agreement, "Real Property" shall also include (i)
all of the Company's right, title and interest in and to all easements,
rights-of-way, privileges and appurtenances thereto, (ii) all of the
Company's right, title and interest, if any, in and to the beds of all
streets, roads, avenues or highways, open or proposed, abutting the Real
Property, (iii) all of the Company's right, title and interest, if any,
in and to any award in condemnation, or damages of any kind, to which the
Company may have become entitled or may hereafter be entitled, by reason
of any exercise of the power of eminent domain with respect to the Real
Property or any other right, title or interest to be sold hereunder or
any part thereof, and (iv) all of the Company's right, title and interest
in and to all surveys, architectural and engineering plans,
specifications, drawings, environmental and other reports, etc., if any,
presently existing or hereafter prepared, with respect to the Real
Property.
Section 2.2 Owners Title Policy. At Closing, the Company shall own,
with respect to the Real Property, an extended coverage owners policy of
title insurance from a title company acceptable to Purchaser (the "Title
Company"), dated as of the Closing Date, in the amount equal to the fair
market value of such real property ("Owners Policy"). The Owners Policy
shall have each of the Title, Company's standard printed exceptions
deleted and shall include, to the extent available, comprehensive,
access, non-imputation and contiguity endorsements. The Owners Policy
shall insure title to the Real Property to be in fee simple in Company,
subject only to the exceptions permitted by Section 2.3 hereof. Seller
shall order a preliminary title commitment in respect of the Real
Property and shall cause the same to be delivered to Purchaser and its
counsel, together with all documents noted as exceptions to title in the
preliminary title commitment. Seller shall deliver to Purchasers any
unrecorded leases, option agreements, contracts and any other items
affecting title which are in the possession of, or known to, Seller.
Purchaser, within 7 business days after the receipt of such title
commitment, and all such other documents required by this Section, shall
either: (i) notify Seller in writing of Purchaser's approval of the form
and substance of the preliminary title commitment and such other
documents; or (ii) notify Seller in writing that Seller must remove or
satisfy any exception or exceptions shown in the preliminary title
commitment or contained in any such other document which are not
acceptable to Purchaser. If the exceptions objected to are not removed or
satisfied within 15 days after the date of receipt by Seller of notice
from Purchaser in accordance with (ii) above, then Purchaser may, at
Purchaser's sole option, to be exercised by written notice to Seller,
either: (a) accept such title as Seller is able to furnish without
removal of the exceptions to which Purchaser objected; or (b) allow
Seller additional time in which to cure or remove any objected to
exceptions; or (c) terminate this Agreement. Seller agrees to use its
reasonable efforts to remove any exception which is not accepted by the
Purchaser in accordance with this Section 2.2. At least three business
days prior to the Closing Date, Seller shall cause Title Company to<PAGE>
deliver to Purchaser and its counsel a pro forma Owners Policy or marked
title commitments listing as exceptions only those matters accepted by
the Purchasers and or not objected to by the Purchasers under this
Section 2.2 ("Permitted Exceptions"), containing all endorsements and
otherwise in the form required by this Section 2.2. Seller and Purchaser
shall share the cost of the Owners Policy.
Section 2.3 Permitted Exceptions. The Owners Policy shall insure
Company's interest in the Real Property to be free and clear of all
encumbrances and exceptions whatsoever except for the Permitted
Exceptions.
Section 2.4 Survey. The Seller shall furnish Purchaser with a survey
relating to all of the Real Property that is sufficiently current that
the Title Company shall not have included a survey exception in the
Owner's Policy. If a new survey is required, Seller and Purchaser shall
share the cost of such survey.
ARTICLE III
Representations and Warranties of Seller
Whenever the phrase "to Seller's knowledge," or a similar phrase is
used in this Agreement, the phrase means the actual knowledge of any
general manager, officer or director of the Seller or the Company and the
knowledge such officers, directors or general managers would or should
have had, if such officer, director or general manager had exercised
reasonable diligence in the ordinary conduct of the Company's affairs.
With knowledge that Purchaser is relying upon the representations,
warranties and covenants herein contained, the Seller represents and
warrants to Purchaser and makes the following covenants for the
Purchaser's benefit:
Section 3.1 Organization and Standing. The Company is duly
organized, validly 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. Except as
listed in Schedule 3.1, the Company does not own any stock or interest in
any other corporation, partnership, joint venture or other business
organization. TransCor owns all of the outstanding securities issued by
the Company.
Section 3.2 Securities. The Company has the authorized and
outstanding securities set forth on Schedule 3.2. All outstanding shares
of stock are legally and validly authorized and issued, fully-paid and
non-assessable. There are no outstanding rights of any kind to acquire
additional shares of any class of stock of the Company, except as set
forth on Schedule 3.2.
Section 3.3 Contracts, Permits and Material Documents. The items
listed in Schedule 3.3 attached hereto are all of the following
("Material Documents") with respect to the Company which provide a
benefit or imposes a detriment of a value of $25,000 or more: (i) leases
for real and personal property, (ii) licenses, (iii) franchises, (iv)
promissory notes, guarantees, bonds, mortgages, liens, pledges, and
security agreements under which any of the Company are bound or under
which any of the Company are the beneficiary, (v) collective<PAGE>
bargaining agreements, (vi) patents, trademarks, trade names, copyrights,
trade secrets, proprietary rights, symbols, service marks, and logos,
(vii) all permits, licenses, consents and other approvals from
governments, governmental agencies (federal, state and local) and/or
third parties relating to, used in or required for the operation of any
of the business of the Company, (viii) all surety bonds, closure bonds or
any other obligation which the Company have liability for with respect to
their operations and (ix) other contracts, agreements and instruments not
listed on another Schedule attached to this Agreement (such as the
customer contracts listed on Schedule 3.5) which are binding on any of
the Company or any of their property and pursuant to which the Company
derive a benefit or incur a detriment having a value of $25,000 or more.
The Material Documents listed on Schedule 3.3 are organized under
separate headings for each of the different types of documents listed.
Except as set forth on Schedule 3.3, neither the Company nor any person
or party to any of the Material Documents or bound thereby is in material
or knowing default under any of the Material Documents, and, to the
knowledge of Seller, no act or event has occurred which with notice or
lapse of time, or both, would constitute such a default. The Company is
not a party to, and none of Company's properties are bound by, any
agreement or instrument which is material to the continued conduct of
business operations of the Company, as now being conducted, except as
listed in Schedule 3.3.
Section 3.4 Personal Property.
(a) All furniture, office equipment, computer equipment, and radio
equipment, owned by the Company is in reasonably good condition, normal
wear and tear excepted, and is sufficient in type, quantity and quality
to operate the business currently conducted by the Company in a
reasonably efficient manner.
(b) Listed on Schedule 3.4(b) is all of the rolling stock, including
motor vehicles, trucks, front and rear end loaders, and compactors and
accessories and attachments used in the business of the Company together
with information as to the make, description of body and chassis, model
number, serial number and year of each such vehicle ("Rolling Stock").
The Rolling Stock is owned or leased by the Company as listed on Schedule
3.4(b). The Rolling Stock is in reasonably good condition, normal wear
and tear excepted, except as noted on Schedule 3.4(b). The Company owns
and/or leases a sufficient number and type of Rolling Stock to service
its customers in a reasonably efficient manner.
(c) Schedule 3.4(c), attached hereto, lists the containers used in
the business of the Company which are ten yards or greater together with
information as to container size. All of the containers owned and used by
the Company are in reasonably good condition, normal wear and tear
excepted, except as noted on Schedule 3.4(c). The Company owns and/or
leases a sufficient number and type of containers to service its
customers in a reasonably efficient manner.
(d) The inventory of parts, tires and accessories and the shop tools
owned by the Company is in reasonably good condition, normal wear and
tear excepted, and is sufficient in type, quantity and quality to operate
the business currently conducted by the Company in a reasonably efficient
manner.<PAGE>
(e) All recycling equipment and other equipment not listed on one of
the above schedules owned by the Company is in reasonably good condition,
normal wear and tear excepted, and is sufficient in type, quantity and
quality to operate the business currently conducted by the Company in a
reasonably efficient manner.
(f) The Company has good and marketable title to, or a valid
leasehold interest in, all of its personal property, each free and clear
of any mortgages, pledges, liens, encumbrances, charge, claim, security
agreement or title retention or other security arrangement ("Liens"),
except the types of liens set forth in subparagraphs (i) through (iii),
and the items listed on Schedule 3.4(f) ("Personal Property
Encumbrances").
(i) Liens imposed by law and incurred in the ordinary course of
business for indebtedness not yet due to carriers, warehousemen, laborers
or materialmen and the like;
(ii) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation; and
(iii) Liens for property taxes, assessments, or governmental
charges not yet subject to penalties for nonpayment.
Section 3.5 Customers. A list of customers the Company serves
together with information as to the services rendered to each such
customer, frequency of service and rates charged and the contractual
rights of each customer, whether oral or in writing, is listed on
Schedule 3.5 attached hereto. Neither the Company nor, to Seller's
knowledge, any other person or party to any of the customer contracts is
in material or knowing default under any of the customer contracts, and
no act or event has occurred which with notice or lapse of time, or both,
would constitute such a default. The purchase of the Company by Eastern
will not create a default under any customer contract.
Section 3.6 Real Property. The Company has never owned, leased or
otherwise occupied, had an interest in or operated any real property
other than the Real Property, except as listed on Schedule 3.6 attached
hereto and incorporated herein by reference. The Company has good,
marketable and insurable title to the Real Property, except for the
Permitted Exceptions.
(a) To Seller's knowledge, in all material respects, except as set
forth in Schedule 3.6(a) attached hereto and incorporated herein, the
Real Property is, and at all times during operation of the Company's
business ("Business") thereon has been, licensed, permitted and
authorized for the operation of such Business under all applicable
federal, state and local statutes, laws, rules, regulations, orders,
permits (including, without limitation, zoning restrictions and land use
requirements) and licenses and all administrative and judicial judgments,
rulings, decisions and orders affecting, or otherwise applicable to the
protection of the environment, the Real Property and the conduct of such
Business thereon (collectively, the "Applicable Laws").
(b) To Seller's knowledge, except as set forth in Schedule 3.6(b)
attached hereto and incorporated herein by reference, the Real Property<PAGE>
is legally usable for its current uses, and the Real Property can be used
by the Purchaser after the Closing to operate such business as is
currently operated, without violating any Applicable Law or private
restriction, and such uses are legal, conforming uses.
(c) To Seller's knowledge, except as set forth in Schedule 3.6(c)
attached hereto and incorporated herein by reference, all activities and
operations conducted on the Real Property, whether by Seller or by third
parties, are now being conducted and have always been conducted in
compliance with all Applicable Laws.
(d) The Seller shall make available on Purchaser's reasonable
request all engineering, geologic and other similar reports,
documentation and maps relating to the Real Property in the possession or
control of the Seller or its consultants or employed professional firms.
(e) Except as set forth in Schedule 3.6(e) attached hereto and
incorporated herein by reference, the Real Property is not now and during
the Company's ownership has not been involved in any litigation or
administrative proceeding seeking to impose fines, penalties or other
liabilities or seeking injunctive relief for violation of any Applicable
Laws relating to the environment.
(f) To Seller's knowledge, there have been no spills, leaks,
deposits or other releases by the Company into the environment or onto or
under the Real Property of any Hazardous Materials as defined in Schedule
3.6(f) attached hereto or other material environmental conditions other
than as disclosed on Schedule 3.6(f).
(g) No party, other than the Company, has a present or future right
to possession of all or any part of the Real Property, except for any
right defined in, under or by any of the Permitted Exceptions.
(h) To Seller's knowledge, and without independent investigation, no
portion of the Real Property contains any areas that could be
characterized as disturbed, undisturbed or man-made wetlands or as
"waters of the United States" pursuant to any Applicable Laws or the
procedural manuals of the Environmental Protection Agency, U.S. Army
Corps of Engineers or the applicable state agency whether such
characterization reflects current conditions or historic conditions which
have been altered without the necessary permits or approvals, except as
listed on Schedule 3.6(h) attached hereto and incorporated herein by
reference.
(i) There are no mechanic's liens affecting, the Real Property and
no work has been performed on the Real Property within ninety days of the
date hereof for which a mechanic's lien could be filed, except as set
forth in Schedule 3.6(i) attached hereto and incorporated herein by
reference.
(j) To Seller's knowledge, there are no levied or pending special
assessments affecting all or any part of the Real Property owed to any
governmental entity and none is threatened.<PAGE>
(k) There are no proceedings or amendments pending and brought by or
threatened by any third party which would result in a change in the
allowable uses of the Real Property or which would modify the right of
the Purchaser to use the Real Property for its present uses after the
Closing Date, except as set forth in Schedule 3.6(k) attached hereto and
incorporated herein by reference.
Section 3.7 Financial Statements. Seller will deliver to Purchaser,
as part of the Disclosure Binder true and correct copies of the following
financial statements of the Company (the "Financial Statements"):
(a) Balance sheets of the Company as of December 31, 1996, and
December 31, 1997, and a statement of income, cash flow and retained
earnings for the periods ended December 31, 1996, and December 31, 1997,
all prepared on an accrual basis; and
(b) A balance sheet as of June 30, 1998 ("Most Recent Balance
Sheet"), and a statement of income, cash flow and retained earnings for
the period ended June 30, 1998 ("Most Recent Income Statement"), with
respect to the Company, both prepared on an accrual basis internally by
the Company. The Most Recent Balance Sheet and Most Recent Income
Statement are hereafter referred to as the "Most Recent Financial
Statements."
The Financial Statements have been prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent
basis in accordance with past custom and practice of the Company. The
balance sheets present fairly, in all material respects, the financial
condition of the Company as of the dates indicated thereon and the
statements of income present fairly, in all material respects, on an
accrual basis the results of the operations of the Company for the
periods indicated thereon. Since the date of the Most Recent Balance
Sheet, the Company has not (i) made any material change in its accounting
policies or (ii) effected any prior period adjustment to, or other
restatement of, its financial statements for any period. The Financial
Statements are consistent with the books and records of the Company
(which books and records are correct and complete in all material
respects). Since the date of the Most Recent Financial Statements, except
as set forth on Schedule 3.7, there has not been any material adverse
change in the income, expenses or assets of the Company.
Section 3.8 Liabilities, Accounts Receivable and Working Capital.
(a) The Company does not have any long-term liabilities, and no
other liabilities, fixed or contingent, other than:
(i) liabilities fully reflected in the Most Recent Balance
Sheet, except for liabilities not required to be disclosed therein in
accordance with GAAP; and
(ii) accounts payable arising since the date of the Most Recent
Balance Sheet arising during the normal course of business consistent
with past custom and practice.<PAGE>
(b) All accounts receivable of the Company are, and all accounts
receivable arising since the date of this Agreement, will be valid and
enforceable accounts receivable, and will be fully collectable in the
ordinary course of business, less an allowance for bad debt set forth on
Most Recent Balance Statement. All accounts receivable have been
generated in the ordinary course of business of the Company consistent
with past practice. To Seller's knowledge, there are no defenses or set-
offs to any of the accounts receivable.
(c) At Closing, the Company shall have working capital consisting of
current assets in excess of current liabilities (each determined in
accordance with generally accepted accounting principles) in an amount no
less than they have had on an historic basis as reflected on the
Financial Statements. It is acknowledged that current assets shall
include cash, cash equivalents, pre-paid expenses and accounts receivable
(less a bad debt allowance), and current liabilities shall include
accounts payable, accrued expenses, accrued vacation pay, and the current
portion of any long-term liabilities not satisfied at Closing.
Section 3.9 Fiscal Condition of the Company. Since the date of the
Most Recent Balance Sheet, except as set forth in Schedule 3.9, there has
not (except as otherwise specifically permitted by this Agreement or as
set forth in the Schedules to this Agreement) been:
(a) Any material adverse change in the financial condition, business
organization or personnel of the Company or in the relationships of the
Company with suppliers, customers or others;
(b) Any disposition by any of the Company of any of its capital
stock or any grant of any option or right to acquire any of its capital
stock, or any acquisition or retirement by any of the Company of any of
its capital stock or any declaration or payment of any dividend or other
distribution of its capital stock;
(c) Any sale or other disposition of any asset owned by any of the
Company at the close of business on the date of the Most Recent Balance
Sheet, or acquired by it since that date, other than in the ordinary
course of business consistent with past practice;
(d) Any expenditure or commitment by the Company for the acquisition
of any single asset or any single business, except in the ordinary course
of business consistent with past practices and having an acquisition
price of $25,000 or less;
(e) Any damage, destruction or loss (whether or not insured)
adversely affecting the property, business or prospects of the Company
taken as a whole, except damage, destruction or loss which does not
exceed $25,000 in the aggregate;
(f) Any material bonuses or increases in the compensation payable or
to become payable by the Company to any officer or key employee, except
in the ordinary course of business or as required by law or pursuant to a
contract which is listed on a Schedule to this Agreement;
(g) Any loans or advances to or by any of the Company other than
renewals or extensions of existing indebtedness and other than in the
ordinary course of business consistent with past practice; or<PAGE>
(h) Any change in accounting method or practice.
Section 3.10 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 reserves for all taxes reflected in
the Most Recent Balance Sheet, if any, are adequate to cover all taxes,
interest and penalties in connection therewith that may be assessed with
respect to the property and business operations for the period(s) ending
on the Closing Date and for all prior periods. 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 or will in a timely
manner file all such returns due for all periods ended on or before the
Closing Date.
Section 3.11 Policies of Insurance. All insurance policies,
performance bonds, and letters of credit insuring the Company or which
the Company has had issued and which have not expired are listed on
Schedule 3.11 attached hereto. Schedule 3.11 includes the names and
addresses of the insurers and sureties, policy and bond numbers, types of
coverage or bond, time periods or projects covered and the names and
addresses of all known banks, beneficiaries, agents or agencies with
respect to each listed insurance policy, performance bond and letter of
credit. All current insurance policies, performance bonds and letters of
credits of the Company are in force and effect and the premiums thereon
are not delinquent. Except as set forth in Schedule 3.11, the Company has
not received any notification from any insurance carrier denying or
disputing any claim made by the Company or denying or disputing any
coverage for any such claim or denying or disputing the amount of any
claim. The Company has no claim against any of its insurance carriers
under any of policies insuring it pending or anticipated and there has
been no occurrence of any kind which would give rise to any such claim.
Section 3.12 Employees, Pensions, and ERISA.
(a) The Company does not have any contract of employment with an
officer or other employee, except as listed on Schedule 3.12(a).
(b) Except as set forth on Schedule 3.12(b), no employee of the
Company is represented by any union. A list of the name, address and
social security number and current rate of compensation of each of the
Company's employees and capacity in which each person is employed is set
forth on Schedule 3.12(b). There is no pending or threatened dispute
between the Company and any of its employees which might materially and
adversely affect the continuance of the business operations of the
Company.
(c) Attached hereto made a part hereof and marked Schedule 3.12(c)
lists all employee benefit plans, funds or programs (within the meaning
of the Code or the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) which are currently maintained and/or were established
or sponsored by the Company (whether or not they are now terminated) or
to which the Company currently contributes, or has an obligation to
contribute in the future, including, without limitation, employment
agreements and any other agreements containing "golden parachute"<PAGE>
provisions ("Plans"), whether or not the Plans are or are intended to be
(i) covered or qualified under the Code, ERISA or any other applicable
law, (ii) written or oral, (iii) funded or unfunded, or (iv) generally
available to all employees of the Company.
(d) The Seller's have delivered to Eastern (i) true and complete
copies of all Plan documents and other instruments relating thereto, (ii)
true and complete copies of the most recent financial statements with
respect to the Plans, (iii) true and complete copies of all annual
reports for any Plan prepared within the past 5 years, and (iv) all
material filings submitted to and any correspondence received from any
government agency relating to any Plan within the past 5 years.
(e) Each Plan which is intended to be qualified under Section 401(a)
and exempt from tax under Section 501(a) of the Code has been determined
by the IRS to be so qualified and such determination remains in effect
and has not been revoked. Except as set forth in the Disclosure Schedule,
nothing has occurred since the date of any such determination which may
adversely affect such qualification or exemption, or result in the
imposition of excise taxes or tax on unrelated business income under the
Code or ERISA. No Plan is funded through a trust intended to be exempt
from tax under Section 501(c) of the Code.
(f) No reportable event (as defined in Section 4043 of ERISA or the
regulations thereunder) for which the reporting requirements have not
been fully waived, or accumulated funding deficiency whether or not
waived (as defined in Section 302 of ERISA), or liability to the Pension
Benefit Guaranty Corporation ("PBGC") under Section 4062 of ERISA, nor
any prohibited transaction (as defined in Section 406 of ERISA or Section
4975 of the Code), has occurred or exists with respect to any Plan. All
Plans are in substantial compliance with all material applicable
provisions of ERISA and the regulations issued thereunder, as well as
with all other material law applicable to such Plans, and, in all
material respects, have been administered, operated and managed in
substantial accordance with the governing documents of the Plan and the
requirements of ERISA.
(g) There is no matter, action, audit, suit or claim pending or, to
the best knowledge of Sellers, threatened relating to any Plan, fiduciary
of any Plan or assets of any Plan, before any court, tribunal or
government agency.
(h) Each most recent Plan audit report, actuarial report and annual
report, certified by the Plan's actuaries and auditors, as the case may
be, fairly presents the actuarial status and the financial condition of
the Plan as at the date thereof and the results of operations of the Plan
for the plan year reflected therein and, subject to changes in amounts
attributable to investment performance and normal employee turnover,
there has been no adverse change in the condition of the Plan since the
date of the most recent Form 5500, audited annual financial statement or
actuarial valuation report.
(i) The transaction contemplated herein will not accelerate any
liability under the Plans because of an acceleration of any rights or
benefits to which any employee may be entitled thereunder.<PAGE>
Section 3.13 Legality of Operation.
(a) To Seller's knowledge, except as disclosed in Schedule 3.13(a)
to this Agreement, and except as to Environmental Laws, as hereinafter
defined, the Company is in compliance with all Federal, state and local
laws, rules and regulations including, without limitation, the following
laws: land use laws; payroll, employment, labor, or safety laws; or
federal, state or local "anti-trust" or "unfair competition" or
"racketeering" laws such as but not limited to the Sherman Act, Clayton
Act, Robinson Pitman Act, Federal Trade Commission Act, or Racketeer
Influenced and Corrupt Organization Act ("Law"). Except as disclosed in
Schedule 3.13(a), to Seller's knowledge the Company is in compliance with
all permits, franchises, licenses, and orders that have been issued with
respect to the Laws and are or may be applicable to the Company,
including, without limitation, any order, decree or directive of any
court or federal, state, municipal, or other governmental department,
commission, board, bureau, agency or instrumentality wherever located,
federal, state and local permits, orders, franchises and consents. Except
as set forth on Schedule 3.13(a), with respect to any Law there are no
claims, actions, suits or proceedings pending, or, to Seller's knowledge
threatened against or affecting the Company or the Real Property, at law
or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, wherever located, which would result in an material
change in how Company may conduct its operations or which would
invalidate this Agreement or any action taken in connection with this
Agreement. Except as disclosed in Schedule 3.13(a), the Company and the
Seller have received no notification of any past or present failure by
the Company to comply with any Law applicable to the Company or the Real
Property or affecting the Company's use of the Real Property.
(b) To Seller's knowledge, and except as disclosed in Schedule
3.13(b) to this Agreement, the Company is in compliance with all Federal,
state and local laws, rules and regulations relating to environmental
issues of any kind and/or the receipt, transport or disposal of any
hazardous or non-hazardous waste materials from any source
("Environmental Law"). Except as disclosed in Schedule 3.13(b), with
respect to any Environmental Law, the Company is in compliance with all
permits, licenses, and orders related thereto or issued thereunder with
respect to Environmental Laws, including, without limitation, any order,
decree or directive of any court or federal, state, municipal, or other
governmental department, commission, board, bureau, agency or
instrumentality wherever located. Except as set forth on Schedule
3.13(b), there are no Environmental Law related claims, actions, suits or
proceedings pending, or, to Seller's knowledge threatened against or
affecting the Company, at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, wherever located, which would result
in an adverse change in the financial condition of the Company of $5,000
or more or which would invalidate this Agreement or any action taken in
connection with this Agreement. To Seller's knowledge, except as set
forth on Schedule 3.13(b), the Company has not transported, stored,
treated or disposed, nor has the Company allowed any third persons, on
its behalf, to transport, store, treat or dispose waste generated or
processed by the Company to or at (i) any location other than a site
lawfully permitted to receive such waste for such purpose or, (ii) any<PAGE>
location currently designated for remedial action pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") or any similar federal or state statute; nor has the Company
performed, arranged for or allowed by any method or procedure such
transportation or disposal in contravention of state or federal laws and
regulations or in any other manner which may result in liability for
contamination of the environment; and the Company has not disposed, nor
has Company knowingly allowed third parties to dispose of waste upon the
Real Property other than as permitted by, and in conformity with,
applicable Environmental Law. Except as disclosed in Schedule 3.13(b),
the Company and the Seller has not received notification of any past or
present failure by the Company to comply with any Environmental Law
applicable to the Company. Without limiting the generality of the
foregoing, the Company and the Seller have not received any notification
(including requests for information directed to the Seller or Company)
from any governmental agency asserting that, in connection with the
operation of the business of the Company or the ownership of the Real
Property, the Company is or may be a "potentially responsible person" for
a remedial action at a waste storage, treatment or disposal facility,
pursuant to the provisions of CERCLA, or any similar federal or state
statute assigning responsibility for the costs of investigating or
remediating releases of contaminants into the environment. The Company
and the Seller have not received at the Real Property hazardous waste as
defined in the Resource Conservation and Recovery Act, 42 USCA Section
6901 et seq., or in any similar federal or state statute, except for de-
minimis amounts which do not require remediation.
(c) To Seller's knowledge, Schedule 3.13(c) is a complete list of
all landfill and other disposal sites to which the Company has brought
waste within the past ten years. Except as set forth on Schedule 3.13(c),
the Company has never owned, operated, had an interest in, engaged in
and/or leased a waste transfer, recycling, treatment, storage, landfill
or other disposal facility. To the knowledge of Seller, the Company has
obtained and maintained, when required to do so under applicable
Environmental Laws, trip tickets, signed by the applicable waste
generators demonstrating the nature of all waste deposited and or
transported by the Company. To the Seller's knowledge, no employee,
contractor or agent of the Company has, in the course and scope of
employment with the Company, been harmed by exposure to hazardous
materials, as defined under the Laws. No liens with respect to
environmental liability have been imposed against the Company or the Real
Property under CERCLA, any comparable Florida state statute or other
applicable Environmental Law, and to Seller's knowledge no facts or
circumstances exist which would give rise to the same.
(d) Schedules 3.13(a) and 3.13(b) list all remedied violations of
Laws and Environmental Laws which existed within the past five years and
all outstanding unremedied notice of violations issued to the Company by
any federal, state or local regulatory agency.
(e) To Seller's knowledge, no employee, officer, director, or
shareholder of the Company is under investigation by the Attorney General
of any state, by the District Attorney of any county of any state, or by
any United States Attorney or any other governmental investigative agency
for the violation of any Laws, including, without limitation, the
violation of any anti-trust, racketeering, or unfair competition Laws.<PAGE>
(f) All pending or threatened litigation and administrative or
judicial proceedings involving the Company, or its assets or liabilities,
are set forth on Schedule 3.13(f) attached, together with a description
of each such proceeding.
Section 3.14 Corrupt Practices. The Company has not made, offered or
agreed to offer anything of value to any employees of any customers of
the Company (except in conformity with Law) for the purpose of attracting
business to the Company or any foreign or domestic governmental official,
political party or candidate for government office or any of their
respective employees or representatives, nor has the Company otherwise
taken any action which would cause it to be in violation of the Foreign
Corrupt Practices Act of 1977, as amended.
Section 3.15 Legal Compliance.
(a) Seller has the right, power, legal capacity and authority to
enter into, and perform their obligations under this Agreement, and,
except as set forth in Schedule 3.15, no approvals or consents of any
other persons, business or governmental units are necessary to be
obtained by Seller or the Company in connection with the transactions,
filings with or notices to, contemplated by this Agreement. Except as
disclosed in Schedule 3.15 to this Agreement, the execution and
performance of this Agreement will not result in a material breach of or
constitute a material default or result in the loss of any material right
or benefit under:
(i) Any charter, bylaw, agreement or other document to which
the Company or Seller are a party or by which the Company or the Seller
or any of their properties are bound, including without limitation, any
agreement by or between any shareholder of Company; or
(ii) Any decree, order or rule of any court or governmental
authority which is binding on any Seller or the Company or on any
property of the Company; or
(iii) Any permit, certificate or license issued by any
governmental authority under which the Company operates or pursuant to
which any of the property of the Company is bound; or
(iv) Any agreement to which the Company is bound, including,
without limitation, bank loan documents, agreements with customers or
suppliers and leases for equipment.
(b) Kimmins has the right, power, legal capacity and authority to
enter into, and perform their obligations under this Agreement, and,
except as set forth in Schedule 3.15, no approvals or consents of any
other persons, business or governmental units are necessary to be
obtained by Kimmins in connection with the transactions, filings with or
notices to, contemplated by this Agreement.
Section 3.16 Transaction Intermediaries. Except as disclosed in
Schedule 3.16, no agent, broker, financial advisor or other person acting
pursuant to the express 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.<PAGE>
Section 3.17 Intellectual Property. To Seller's knowledge, the
Company has not infringed, and is not now infringing, on any trade name,
trademark, service mark or copyright belonging to any person, firm or
corporation ("Intellectual Property") and no one has or is infringing any
Intellectual Property right of the Company. The Company owns or has
legally licensed all computer software used in connection with its
business and has not infringed, and is not now infringing, on the rights
of any third parties by its use of computer software.
Section 3.18 Competition. Except as set forth on Schedule 3.18, no
salaried officer, nor any spouse or child of any of them, has any direct
or indirect interest in any competitor of the Company within the
geographical area in which the Company currently conducts business, or an
interest in any supplier or customer of the Company or in any person from
whom or to whom the Company leases any real or personal property, or in
any other person with whom the Company does business.
Section 3.19 Disclosure. The representations and warranties of
Seller contained in this Agreement, or in any Schedule or other document
delivered by Seller pursuant hereto, do not contain any untrue statement
of a material fact, or omit any statement of a material fact necessary to
make the statements contained not misleading. If, prior to Closing,
Seller becomes aware of any inaccuracy or misrepresentation or omission
in any of the Schedules, they shall immediately advise Eastern in writing
of the inaccuracy, misrepresentation or omission.
Section 3.20 Certain Contracts. The Company is a party to a Palm
Beach Area 8 Contract, dated May 13, 1998, between the Company and Solid
Waste Authority of Palm Beach and a City of Cape Coral Contract, dated
May 11, 1998, between the Company and City of Cape Coral (the "Disposal
Contracts"). The Disposal Contracts are valid and enforceable. The
Disposal Contracts are scheduled to commence on October 1, 1998. In the
event that either of the Disposal Contracts fail to commence due to their
being canceled subsequent to Closing, through no fault of Purchaser (the
parties acknowledge it is not the fault of Purchaser, if either Disposal
Contract is canceled by the other party to it as a result of the Company
Shares being bought by Purchaser), then the stock portion of the Purchase
Price shall be adjusted by the value assigned to such contract(s), as set
forth on Schedule 3.20. In the event that either Disposal Contract shall
be terminated prior to Closing, then Seller, in its sole discretion,
reserves the right, upon notice to Purchaser, to terminate this
Agreement, upon which event neither party shall have any further
obligation to each other.
ARTICLE IV
Representations and Warranties of Eastern
With knowledge that Seller is relying upon the representations,
warranties and covenants contained herein, Eastern represents and
warrants to Seller and makes the following covenants for Seller's
benefit.<PAGE>
Section 4.1 Organization and Existence. Eastern is a corporation
duly organized, validly existing and in good standing under the laws of
its state of incorporation and has all requisite corporate power and
authority to carry on its business as now conducted. Eastern has all
requisite corporate power and authority to consummate the transactions
contemplated by this Agreement.
Section 4.2 Authority Relative to This Agreement. The execution,
delivery and performance of this Agreement by Eastern has been duly
authorized and approved by the Board of Directors of Eastern. No further
corporate action is necessary on the part of Eastern to consummate this
Agreement in accordance with its terms. Eastern has full authority to
enter into and perform its obligations under this Agreement, and neither
the execution, delivery nor performance by Eastern of this Agreement will
(i) result in a violation or breach of any term or provision nor
constitute a default under the certificate of incorporation or bylaws of
Eastern or under any contract or agreement to which Eastern is a party or
by which it is bound, or violate any order, writ, injunction or decree of
any court, administrative agency or governmental body, or (ii) result in
a violation or breach of any term or provision, or constitute a default
or accelerate the performance required, under any indenture, mortgage,
deed of trust or other contract or agreement to which Eastern is a party
or by which it or its properties is bound.
Section 4.3 Commission Filings. Eastern has delivered to Seller
current (for the quarter ending March 31, 1998) and all historical
filings made by Eastern 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,
Eastern'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. As of the date of this Agreement, except as
otherwise disclosed in the Public Reports, Eastern knows of no condition,
activity or event which would result in a material adverse change in its
business or its fiscal condition, taken as a whole.
Section 4.4 Issued Common Stock. The EESI Stock to be issued
pursuant to this Agreement has been duly authorized and, when issued,
will be validly issued, fully paid and non-assessable.
Section 4.5 Transaction Intermediaries. No agent or broker or other
person acting pursuant to the express authority of Purchasers is entitled
to any commission or finder's fee in connection with the transactions
contemplated by this Agreement.
ARTICLE V
Additional Agreements of the Parties and Seller
The parties hereto covenant and agree with the other, as applicable,
as follows:<PAGE>
Section 5.1 Access to Records. Seller will give to Eastern and its
representatives, from the date hereof until the Closing Date, full access
during normal business hours, upon reasonable notice, to all of the
properties, books, contracts, documents and records of the Company, and
will make available to Eastern and its representatives all additional
financial statements of and all information with respect to the business
and affairs of the Company that the other party may reasonably request.
Section 5.2 Continuation of Business. Seller will operate the
business of the Company until the Closing Date in the ordinary course of
business, consistent with past practice, so as to preserve its business
organizations intact, to assure, to the extent possible, the availability
to Eastern of the present key employees of the Company and to preserve
for Eastern the relationships of the Company with suppliers, customers,
and others.
Section 5.3 Continuation of Insurance. Seller will keep in existence
all policies of insurance insuring the Company against liability and
property damage, fire and other casualty through the Closing Date,
consistent with the policies currently in effect.
Section 5.4 Standstill Agreement. Until the Closing Date, unless
this Agreement is earlier terminated pursuant to the provisions hereof,
Seller will not, directly or indirectly, solicit offers for the shares or
the assets of the Company or for a merger or consolidation involving the
Company, or respond to inquiries from, share information with, negotiate
with or in any way facilitate inquiries or offers from, third parties who
express or who have heretofore expressed an interest in acquiring the
Company by merger, consolidation or other combination or acquiring the
Company's assets.
Section 5.5 Consents. Seller and Eastern shall cooperate with each
other and use their best efforts to obtain all approvals, authorizations
and consents required to be obtained to consummate the transaction set
forth in this Agreement, including, without limitation, (i) the approval
of the Federal Trade Commission pursuant to the provisions of the Hart-
Scott-Rodino Antitrust Improvement Acts of 1986, and (ii) the approval of
every regulatory agency of federal, state, or local government that may
be required in the opinion of either Eastern or Seller.
Section 5.6 Audited Financial Statements. Seller agrees to have
prepared audited balance sheets for the Company as of December 31, 1995,
December 31, 1996, and December 31, 1997, and statements of income, cash
flow and retained earnings for the Companies for the twelve-month periods
ended December 31, 1995, December 31, 1996, and December 31, 1997
("Historical Financial Statements"), as rapidly as possible. Seller shall
prepare a compiled stub balance sheets and statements of income, cash
flow and retained earnings for the period commencing January 1, 1998, and
ending on the last day of the last calendar quarter ending prior to
Closing ("Interim Financial Statements"). The Interim Financial
Statements are to be delivered as soon as possible, and shall be reviewed
by Ernest & Young, LLP The Historical Financial Statements shall be
prepared by Ernest & Young, LLP and the Interim Financial Statements
shall be reviewed by Ernest & Young, LLP at Seller's cost and expense.<PAGE>
Section 5.7 Asset Divestiture. Seller and Purchaser agree that
between the date of this Agreement and the Closing Date, the Company
shall distribute to its shareholder those assets listed on Schedule 5.7
("Divested Assets").
Section 5.8 Payment of Expenses. Eastern will pay all expenses
incurred by Eastern in connection with the negotiation, execution and
performance of this Agreement and the Collateral Documents. Seller will
pay all legal and accounting expenses incurred by Seller and the Company
in connection with the negotiation, execution and performance of this
Agreement and the Collateral Documents.
Section 5.9 Tax Treatment.
(a) The parties intend for the purchase of the Company Shares to be
a "qualified stock purchase" for purposes of Section 338(d)(3) of the
Code, Seller, Purchaser and Kimmins shall join in making an election
under Section 338(h)(10) of the Code with respect to the purchase of the
Company Shares (the "338 Election"). Seller shall deliver to Purchaser at
the Closing (i) Internal Revenue Service Form 8023 and any applicable
similar forms required by state or local law fully completed with respect
to the purchase of the Company Shares and executed by a duly authorized
officer of the Seller, and (ii) all additional data and materials
required to be attached to such Form 8023 and any applicable similar
forms required by state or local law pursuant to Temp. Treas. Reg or
otherwise. Kimmins and Seller shall attach the Form 8023 to the
consolidated Federal Income Tax Return for the affiliated group of
corporations of which Kimmins is the common parent for its taxable period
which includes the Closing Date and otherwise shall cooperate fully with
Purchaser in making the 338 Election. The Form 8023 and all materials
required to be attached to such Form 8023 shall be as set forth in
Schedule 5.9, described in Section 5.9(b) below.
(b) The Purchase Price for the Company Shares shall be allocated
among the assets of the Company in accordance with Schedule 5.9. Schedule
5.9 shall be prepared by Seller and shall be given to Purchaser for
review prior to being finalized for the Disclosure Binder. Schedule 5.9
shall set forth (i) the modified aggregate deemed sales price ("MADSP")
at which the Company is deemed to have sold its assets for tax purposes
as a result of the Section 338(h)(10) election, (ii) the adjusted grossed
up basis ("AGUB") at which the Company is deemed to have purchased its
assets for tax purposes as a result of such election, and (iii) the
allocations of MADSP and AGUB among the assets of the Company. Schedule
5.9 shall be determined in accordance with Section 338 of the Code and
the applicable regulations thereunder. Purchaser, Seller and Kimmins
will, to the maximum extent permitted under applicable law file, or cause
to be filed, all tax returns filed by them in a manner consistent with
Schedule 5.9 and not to take any action inconsistent with Schedule 5.9.
(c) The parties hereto acknowledge that for Federal income tax
purposes (and for state tax purposes for those states that use a
taxpayer's Federal income tax liability or Federal taxable income as a
base for computing such taxpayer's state tax liability, or whose income
tax provisions are otherwise similar to the Federal income tax in this
respect) the purchase of the Company Shares and the 338(h)(10) election
will be treated in all respects as a sale of assets by the Company to a<PAGE>
newly-formed subsidiary of Purchaser followed by a complete liquidation
of the Company into the Seller, and the parties agree to report the
transaction in a manner consistent with this treatment. The parties also
agree that neither Purchaser nor the Company shall be liable for any
taxes, including income, transfer, franchise, sales or use taxes,
resulting from the purchase of the Company Shares and the 338(h)(10)
election.
Section 5.10 Replacement of Surety Guarantees. The Company has
certain surety bonds in place as listed in Schedule 3.11. Certain of the
surety bonds have been guaranteed by Kimmins, TransCor and Francis M.
Williams ("Guarantors"). Promptly after Closing, Purchaser will replace
all surety bonds which have been guaranteed by the Guarantors or obtain
the release of the Guarantors from their guarantees. The Guarantors will
cooperate with Purchaser in obtaining the release of the guarantees.
ARTICLE VI
Registration of EESI Stock
Section 6.1 Registration Rights.
(a) The EESI Stock delivered at Closing will be registered under the
Securities Act of 1933 ("Act") for sale to the public in brokered
transactions, pursuant to a "shelf registration" on Form S-4 or other
appropriate form, if Form S-4 is not available under Rule 415 of the Act.
At Eastern's request, the Seller shall provide Eastern with any
information required for the completion of the registration statement or
any supplements thereto. Eastern 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. Eastern shall also prepare and file with
the Securities and Exchange Commission 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, Eastern's
obligation to keep the shelf registration continuously effective shall be
suspended during any period that there exists material, non-public
information relating to Eastern.
(b) With respect to the EESI Stock, Eastern 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) Eastern shall indemnify Seller in accordance with the provisions
of Article IX 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<PAGE>
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 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
Eastern to which such Seller may become subject under the Act, or other
Federal or state laws or regulations, at common law or otherwise.
Notwithstanding the above, Eastern 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 Eastern by
Seller which is intended for such use; and provided further, that Eastern
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 6.2 shall be paid by Eastern, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for Eastern, underwriting expenses (other than
commissions or discounts which shall be shared by the parties registering
shares of Eastern's 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.
Section 6.2 Lock-Up Agreement. Seller agrees not to sell the EESI
Stock prior to September 20, 1998, without the Purchaser's consent and
the EESI Stock will be legened to state that it may not be sold prior to
September 20, 1998.
ARTICLE VII
Conditions of Eastern
The obligations of Eastern to effect the transaction contemplated by
this Agreement shall be subject to the fulfillment at or prior to the
Closing Date of each of the following items which are conditions to the
Closing:
Section 7.1 Compliance by Seller. Seller and the Company shall have
performed and complied with all material obligations and conditions
required by this Agreement to be performed or complied with by Seller and
the Company at or prior to the Closing Date. All representations and
warranties of Seller contained in this Agreement shall be true and
correct in all material respects 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, and Eastern
shall have received a Certificate duly executed by the President of
Seller representing and warranting the foregoing.<PAGE>
Section 7.2 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 Eastern to own, operate in
its entirety or control 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 Eastern or any affiliate thereof subsequent
to the Closing Date and which, in the judgement of the Board of Directors
of Eastern, made in good faith and based upon advice of its counsel,
makes it inadvisable to proceed with the transaction contemplated by this
Agreement.
Section 7.3 Fiscal Condition of Business. There shall have been no
material adverse change in the results of operations, financial condition
or business of the Company, and the Company shall have not suffered any
material loss or damage or any of its properties or assets, whether or
not covered by insurance, since the date of the Most Recent Balance
Sheet.
Section 7.4 Opinion of Counsel. Seller shall have delivered to the
Eastern the opinion of counsel, dated the Closing Date, in the form
annexed hereto as Schedule 1.8(e).
Section 7.5 Non-competition Agreement. The Seller shall have
executed and delivered to Eastern the Non-competition Agreement.
Section 7.6 Release. Seller shall have executed and delivered to
Eastern the Release described at Section 1.8(f).
Section 7.7 Consents. All approvals, authorizations and consents
required to be obtained shall have been obtained, including, without
limitation, (i) the consent of the Federal Trade Commission under the
Hart-Scott-Rodino Antitrust Act; and (ii) the approval of every
regulatory agency of federal, state, or local government that may be
required in the reasonable opinion of either Eastern or Seller. Eastern
shall have been furnished with appropriate evidence, reasonably
satisfactory to Eastern and its counsel, of the granting of such
approvals, authorizations and consents.
Section 7.8 Title Policy. Company shall own the Owner's Policy.
ARTICLE VIII
Conditions of Seller
The obligations of Seller to effect the transaction contemplated by
this Agreement shall be subject to the fulfillment at or prior to the
Closing Date of each of the following conditions:
Section 8.1 Compliance by Eastern. Eastern shall have performed and
complied with all material obligations and conditions required by this
Agreement to be performed or complied with by it at or prior to the
Closing Date. All representations and warranties of Eastern contained in
this Agreement shall be true and correct in all material respects 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.<PAGE>
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 Eastern to own, operate in
its entirety or control 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 Eastern or any affiliate thereof subsequent
to the Closing Date and which, in the judgment of Seller, made in good
faith and based upon advice of their counsel, makes it inadvisable to
proceed with the transaction contemplated by this Agreement.
Section 8.3 Material Adverse Change. There shall not have been, and
on the Closing Date shall not be in existence, any event, condition or
state of facts which could reasonably be expected to result in, any
material adverse change in the condition (financial or otherwise),
assets, real property, personal property, results of operations, business
or prospects of Eastern and its subsidiaries taken as a whole.
Section 8.4 Non-competition Agreement. Eastern shall have executed
and delivered the Non-competition Agreement.
Section 8.5 Opinion of Counsel. Eastern shall have delivered to
Seller the opinion of counsel to Eastern, dated the Closing Date, in the
form annexed hereto as Schedule 1.7(c).
Section 8.6 Payment. The Purchasers shall have delivered to the
Seller the Cash Portion in accordance with Section 1.3, and the EESI
Stock shall have been delivered to Seller or escrow agent, in accordance
with Section 1.3.
ARTICLE IX
Indemnification
Section 9.1 Indemnification by Seller and Kimmins. Seller and
Kimmins, jointly and severally, and subject to the terms of this Article
IX, hereby agree to indemnify, defend, protect and hold harmless Eastern
and its officers, shareholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, 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 such 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 the Collateral Documents; (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) violation of the
requirements of any governmental authority relating to the reporting and
payment (to the extent payment exceeds the amount reserved for in the
Most Recent Financial Statement) of federal, state, local or other
income, sales, use, franchise, excise or property tax liabilities of the<PAGE>
Company arising or accrued prior to the Closing Date; (d) any violation
by Company prior to the Closing Date of any federal, state or local
"anti-trust" or "racketeering" or "unfair competition law", including,
without limitation, the Sherman Act, Clayton Act, Robinson Patman Act,
Federal Trade Commission Act, or Racketeer Influenced and Corrupt
Organization Act; and (e) any claim by a third party that, if true, would
mean that a condition for indemnification set forth in subsections (a),
(b), (c) or (d) of this Section 9.1 of this Agreement has occurred.
Section 9.2 Indemnification by Eastern. Eastern agrees that it will
indemnify, defend, protect and hold harmless Seller and their officers,
shareholders, directors, divisions, subdivisions, affiliates,
subsidiaries, parents, agents, employees, 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) incurred by it, as a result of or incident to: (a) any
breach of, misrepresentation in, untruth in or inaccuracy in the
representations and warranties of Eastern set forth in this Agreement or
in the Schedules attached to this Agreement or in the Collateral
Documents; (b) nonfulfillment or nonperformance of any agreement,
covenant or condition on the part of Eastern made in this Agreement and
to be performed by Eastern 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), (b), or (c) of this Section
9.2 has occurred.
Section 9.3 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 IX, 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 ten
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 IX, 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<PAGE>
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.
(c) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 9.3(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 any condition set forth in Section 9.3(b) above is or becomes
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 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
IX.
Section 9.4 Procedure for Non-Third Party Claims. If Eastern or
Seller wishes to make a claim for indemnity under Section 9.1 or Section
9.2, as applicable, and the claim does not arise out of a third party
notification which makes the provisions of Section 9.3 applicable, the
party desiring indemnification ("Indemnified Party") shall deliver to the
party 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 9.1 or Section 9.2, as applicable;
(b) the nature of the event or occurrence which entitles the Indemnified
Party to receive payment under Section 9.1 or Section 9.2, 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 rounds for the objections
("Indemnification Objection"). If no Indemnification Objection is sent
within thirty (30) days after the Indemnification Demand is sent, the<PAGE>
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 Demand within forty-
five (45) 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 9.5 Survival of Claim. All of the respective
representations, warranties and obligations of the parties to this
Agreement shall survive consummation of the transactions contemplated by
this Agreement as follows: (i) all representations and warranties
pertaining to federal, state and local taxes, including, without
limitation, the representations and warranties set forth in Section 3.10
shall survive until the expiration of the applicable statute of
limitations on any claim which can be brought against the Company by tax
authorities or governmental agencies or governmental units and (ii) all
representations and warranties other than set forth in (i) above shall
survive until eighteen months from the Closing Date. Notwithstanding the
prior sentence which provides that the representations and warranties
expire after certain stated periods of time, if within the stated period
of time, a good faith notice of a actual or threatened claim for
indemnification or 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.
Section 9.6 Prompt Payment. In the event that any party is required
to make any payment under this Article IX, such party shall promptly pay
the Indemnifying Party the amount so determined. If there should be a
dispute as to the amount or manner of determination of any indemnity
obligation owed under this Article IX, the Indemnifying Party shall,
nevertheless, pay when due such portion, if any, of the obligation as
shall not be subject to dispute. The portion in dispute shall be paid
upon a final and non-appealable resolution of such dispute. Upon the
payment in full of any claim, the Indemnifying Party shall be subrogated
to the rights of the Indemnified Party against any person with respect to
the subject matter of such claim.
Section 9.7 Limitation of Liability. Notwithstanding anything in
this Agreement to the contrary, the liability and obligations of Kimmins
under this Agreement for the indemnification set forth in Section 9.1,
shall be limited to, and in no event shall exceed, the total aggregate
amount of any proceeds from the sale of the Company to Eastern which are
actually distributed by TransCor to Kimmins, except that the foregoing
limitation of liability does not apply to Kimmins' failure to perform the
covenants set forth in Section 5.9 of the Agreement or the untruthfulness
of the representation and warranty set forth in Section 3.15(b) of the
Agreement.<PAGE>
The parties further agree that the total liability of Seller and
Kimmins under this Article IX shall be limited to and in no event shall
exceed an aggregate amount of seventy-five percent of the Purchase Price
(the "Indemnification Limit"). The Company has four business regions as
set forth in Schedule 9.7. As to Indemnification Claims relating to a
business region, the Indemnification Limit shall be divided among the
business regions, as set forth in Schedule 9.7.
Section 9.8 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 One Hundred Thousand Dollars ($100,000) 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 One Hundred
Thousand Dollars ($100,000). Once cumulative aggregate damages exceed One
Hundred Thousand Dollars ($100,000), the Indemnifying Party shall be
liable for all damages to the Indemnified Party, including, the first One
Hundred Thousand Dollars ($100,000) of damages. Notwithstanding the
previous two sentences, this Section 9.8 does not apply to claims for
indemnity made for money owed under Section 1.3 of this Agreement.
ARTICLE X
Other Provisions
Section 10.1 Non-disclosure by Seller. Seller recognize and
acknowledge that they have in the past, currently have, and in the future
will have certain confidential information of Eastern such as lists of
customers, operational policies, and pricing and cost policies that are
valuable, special and unique assets of Eastern. Seller agree that for a
period of ten (10) years from the Closing Date they will not disclose
such confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, except
to authorized representatives of Eastern, unless (i) such information
becomes known to the public generally through no fault of any Seller,
(ii) a 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 any Seller
of the provisions of this Section, Eastern shall be entitled to an
injunction restraining such Seller from disclosing, in whole or in part,
such confidential information. Nothing herein shall be construed as
prohibiting Eastern from pursuing any other available remedy for such
breach or threatened breach, including, without limitation, the recovery
of damages.
Section 10.2 Non-disclosure by Eastern. Eastern recognizes and
acknowledges that it has in the past, currently has, 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. Eastern agrees that it will not utilize such information in the
business or operation of Eastern or any of its 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 Eastern or any of its affiliates, (ii) Eastern is compelled to<PAGE>
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 Eastern of the provisions of this Section, Seller
shall be entitled to an injunction restraining Eastern 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 10.3 Assignment; Binding Effect; Amendment. This Agreement
and the and the rights of the parties hereunder may not be assigned
(except after Closing by operation of law by the merger of Eastern) and
shall be binding upon and shall inure to the benefit of the parties
hereto, and the successors of Eastern. 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 10.4 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 10.5 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.
Section 10.6 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 Eastern, addressed to it at:
President
1000 Crawford Place, Suite 101
Mount Laurel, New Jersey 08054
with a copy to:
Robert M. Kramer, Esq.
Robert M. Kramer & Associates, P.C.
1150 First Avenue, Suite 900
King of Prussia, Pennsylvania 19406<PAGE>
(b) If to Seller, addressed to them at:
1502 Second Avenue
Tampa, Florida 33605
Attention: Mr. Joseph Williams
with a copy to:
Russell S. Thomas, Esq.
Anderson & Orcutt, P.A.
401 East Jackson Street, Suite 2400
Tampa, Florida 33602
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 10.6.
Section 10.7 Governing Law. This agreement shall be governed by and
construed in accordance with the internal laws of the State of Florida,
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Florida or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
State of Florida.
Section 10.8 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.
Section 10.9 Time of the Essence. Time is of the essence of this
Agreement.
Section 10.10 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 thereof.
Section 10.11 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.<PAGE>
Section 10.12 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.
Section 10.13 Extension or Waiver of Performance. Either Seller or
Eastern 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 Seller and
Eastern.
Section 10.14 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 officers, shareholders,
directors, affiliates, subsidiaries, parents, agents, employees, legal
representatives, successors 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.
Section 10.15 Publicity. Prior to Closing, except as may be required
by law or otherwise to facilitate the consummation of this Agreement, no
party to this Agreement shall issue any press release or otherwise make
any statement with respect to the transactions contemplated by this
Agreement without the prior consent of the other party, which shall not
be unreasonably withheld.
Section 10.16 Arbitration.
(a) Each and every controversy or claim arising out of or relating
to this Agreement shall be settled by arbitration in Tampa, Florida, 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, 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.<PAGE>
(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 Seller and Purchaser 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 Purchaser, 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.<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
EASTERN ENVIRONMENTAL SERVICES, INC.
By: /s/ ROBERT M. KRAMER
--------------------------
Robert M. Kramer
Executive Vice President
KIMMINS CORP.
By: /s/ JOSEPH M. WILLIAMS
--------------------------
Name: Joseph M. Williams
Title: Secretary
TRANSCOR WASTE SERVICES, INC.
By: /s/ JOSEPH M. WILLIAMS
--------------------------
Name: Joseph M. Williams
Title: President<PAGE>
Exhibit 3
FOR IMMEDIATE RELEASE: MONDAY, SEPTEMBER 14, 1998
KIMMINS CORP. AND TRANSCOR WASTE SERVICES, INC., COMPLETES SALE OF
KIMMINS RECYCLING CORP. TO EASTERN ENVIRONMENTAL
TAMPA, FLORIDA, THURSDAY, SEPTEMBER 10, 1998...TransCor Waste Services,
Inc. (OTC: TRCW) and Kimmins Corp. (NYSE: KVN)
TransCor Waste Services, Inc., President, Mr. Joseph M. Williams
announced today that We have completed the sale of the common stock of
our solid waste subsidiary, Kimmins Recycling Corp. to Eastern
Environmental Services of Florida, Inc. The transaction closed on
September 2, 1998, and resulted in a gain from this sale of approximately
$21 million net of taxes, or about $5.25 per share.
Mr. Williams added, Our parent company, Kimmins Corp., will also
recognize a gain of approximately $17 million net of taxes, or about
$2.50 per share.
Mr. Williams, concluded, Earlier this year, we sold our Jacksonville and
Miami operations to Eastern Environmental. That transaction opened up
negotiations for the sale of the balance of our solid waste business, and
let us to re-examine our long-range plans as a regional solid waste
company in Florida. The combined transaction exits TransCor from the
solid waste industry in Florida and provides additional cash for other
future opportunities.
Kimmins Corp. (NYSE: KVN) owns 81 percent of TransCor Waste Services,
Inc.
Contact: Joseph M. Williams
TransCor Waste Services, Inc.
(813) 247-0182<PAGE>
Exhibit 4
SUPPLEMENTAL AGREEMENT TO STOCK PURCHASE AGREEMENT
THIS SUPPLEMENTAL AGREEMENT TO STOCK PURCHASE AGREEMENT
("Supplemental Agreement") is made and entered into as of August 31,
1998, by and between Eastern Environmental Services, Inc, a Delaware
corporation ("Eastern"), and TransCor Waste Services, Inc, a Florida
corporation ("TransCor" or "Seller"). Kimmins Corp., a Delaware
corporation ("Kimmins"), has entered into this Supplemental Agreement for
the purpose of giving limited representations and warranties and a
limited indemnity, all as specifically set forth herein.
RECITALS
Eastern, TransCor and Kimmins have heretofore entered into that
certain Stock Purchase Agreement dated July 17, 1998 ("Agreement") for
the purpose of the acquisition of the stock of Kimmins Recycling Corp.
(the "Company") by Eastern from TransCor and the joinder by Kimmins as
the owner of 74 percent of the outstanding capital stock of TransCor, for
the purposes of making certain representations and warranties and
providing a limited indemnity, as set forth in the Agreement.
In consideration of the parties' efforts to complete the transaction
set forth in the Agreement, additional terms, conditions, covenants and
agreements have been determined by the parties to be necessary and,
therefore, the parties have agreed to entered into this Supplemental
Agreement.
THEREFORE, in consideration of the promises and the mutual covenants
provided herein, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO AGREEMENT
Section 1.1 Incorporation of Recitals. The recitals set forth
above are incorporated herein by reference and are a part of this
Supplemental Agreement.
Section 1.2 Amendment to Agreement. The provisions of the
Supplemental Agreement shall be and are agreed by the parties hereto to
constitute amendments and additional terms to the Agreement. The terms
and conditions hereof shall be considered superior to the terms and
conditions set forth in the Agreement where, and to the extent such terms
shall differ. All other terms and conditions of the Agreement, as well as
the definitions and references therein shall be incorporated into this
Supplemental Agreement. Capitalized terms in this Supplemental Agreement
shall have the same meaning as such capitalized terms have in the
Agreement.
Section 1.3 Closing. Subject to the terms of Article X, the
closing of this transaction shall take place at Miami, Florida on the
date set forth below when this Supplemental Agreement is executed.
Determinations of amounts are made as of the 31st day of August, 1998
which shall be deemed to be the "Effective Date" of the transaction
contemplated in the Agreement.<PAGE>
Section 1.4 Purchase Price. The Purchase Price for this
transaction has been redetermined by the parties and increased by the
amount of $6,699,355.71 due to the purchase of certain additional assets
and equipment which shall exist at the Effective Date as part of the
Personal Property, as set forth in Section 3.4 of the Agreement, over the
amount of equipment previously contemplated, as specifically described in
part in Schedule 3.4(b)(ii) of the Agreement. The additional Purchase
Price consideration shall be paid in the Cash Portion of the Purchase
Price, subject to adjustments as provided hereafter.
The Stock Portion of the Purchase Price is hereby increased by
$7,000,000.00 to a total of $17,000,000.00 and the Cash Portion is hereby
reduced by $7,000,000.00 to $40,799,356, subject to adjustments and
credits as provided herein.
TransCor has contributed $2,000,000.00 as a prepaid asset to the
Company at the time of the transaction and is an asset included in the
Stock Purchase Agreement.
Section 1.5 Absence of Long-Term Liabilities. As of the Effective
Date, the Company shall not have any Long-Term Liabilities whatsoever.
Any such obligations which might have existed prior to such date shall be
assumed or satisfied by TransCor as of the Effective Date.
Section 1.6 Absence of any Liens Claims or Mortgages. As of the
Effective Date, the assets of the Company, including all real property
and personal property, shall not be subject to any liens, claims,
mortgages or encumbrances whatsoever except as provided in the Working
Capital Adjustment, set forth in Section 2.1. Any such liens, claims,
mortgages or encumbrances which might have existed prior to the Effective
Date shall be extinguished or satisfied by TransCor as of the Effective
Date.
Section 1.7 Determination of Stock Portion. Notwithstanding the
terms of the Agreement, the parties have determined the Purchase Value of
the EESI Stock to be $30.6125 per share and thus have determined that the
number of shares to be issued in the transaction shall in all events,
notwithstanding the actual date of closing, to be 555,329 shares.
ARTICLE II
DETERMINATION OF WORKING CAPITAL COMPUTATION
Section 2.1 The Working Capital Computation is agreed by the
parties to be as follows for this transaction, as of the Effective Date,
is Six Million Six Hundred and Sixty-Eight Thousand, Six Hundred and
00/100 Dollars ($6,668,600.00).<PAGE>
ARTICLE III
TERMINATION OF SEPARATE AGREEMENT
Section 3.1 Termination. The following agreements or arrangements
are terminated as of the Effective Date:
(a) That certain Management Agreement between the Company and
Kimmins and all management fees or similar costs;
(b) That certain tax-sharing agreement between the Company,
TransCor and Kimmins.
ARTICLE IV
USE OF KIMMINS NAME
Section 4.1 The Company shall be entitled to retain the name of
Kimmins and to use the name without restriction in a normal businesslike
manner for the period of twelve (12) months from and after the Effective
Date, after which Eastern agrees to cause the Company to change its
corporate name to some other name dissimilar to "Kimmins." Eastern shall
ensure that the "Kimmins" name is at all times used in only a
professional and reputable manner. Upon notice from TransCor, Company and
Eastern shall immediately cease and desist from the use of the Kimmins'
name in any manner which TransCor, in its reasonable discretion, shall be
deemed to be a disreputable use.
ARTICLE V
SATISFACTION OF LONG-TERM DEBT AND RELEASE OF LIENS
Section 5.1 Satisfaction of Long-Term Debt. On the Closing Date
TransCor shall cause to be satisfied all Long-Term Liabilities of the
Company (and the appropriate short-term or current portions thereof)
which may have been previous obligations of the Company, whether to any
affiliate or to third parties, without cost, expense or liability to the
Company and shall diligently pursue the evidence of satisfaction thereof
and the delivery of same to, and to the satisfaction of, Eastern within
ten (10) days after the Closing Date. All such obligations shall be
assumed by TransCor to the extent not fully satisfied or extinguished
with respect to the Company.
Section 5.2 Satisfaction of Liens, Claims and Mortgages. On the
Closing Date, TransCor shall cause to be satisfied, removed or terminated
any and all liens, claims, mortgages or encumbrances against or
applicable to the Company or any of its subsidiaries, or any of their
assets, without cost, expense or liability to the Company and TransCor
shall diligently pursue and shall obtain and deliver to Eastern
appropriate releases of liens, UCC termination statements, mortgage and
lien satisfactions and title certificates (without liens) as soon as
possible and in no event longer than twenty (20) days after the Closing
Date. All such obligations reflected by any liens, claims, mortgages or
encumbrances of any kind shall be assumed by TransCor to the extent not
fully satisfied or extinguished with respect to the Company.<PAGE>
ARTICLE VI
INDEMNIFICATION
Section 6.1 The parties hereby reaffirm and restate their
indemnification obligations as set forth in Article IX of the Agreement.
In addition, TransCor and Kimmins jointly and severally, hereby agree to
indemnify, defend, protect and hold harmless Eastern, KRC and its
officers, directors, subsidiaries, agents, employees, successors and
assigns from and against all claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, penalties, costs and
expenses whatsoever (including specifically but without limitations
reasonable attorneys' fees and expenses of investigation) whether
equitable or legal, matured or contingent, known or unknown to Seller,
foreseen or unforeseen, ordinary or extraordinary, patent or latent,
whether arising out of occurrences prior to, at, or after the Effective
Date but, in every instance prior to the Closing Date resulting from or
with respect to the Company, any claim, debt, obligation or requirement
whatsoever relating to the ESOP, its trust, or any employees eligible
with respect thereto; any claim, debt, obligation or requirement
whatsoever relating to any 401(k) Plan or arrangement, or any other
qualified or unqualified employment or employee plan, agreement,
arrangement, trust or benefit arrangement whatsoever.
ARTICLE VII
PENDING PROCEDURES
Section 7.1 The parties acknowledge that certain proceeds from
the transaction shall be a escrowed with Becker & Poliakoff, P.A.
("Escrow Agent"), subsequent to the Closing, for the purposes set forth
herein (the "Escrow Amount"). The sum of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00) shall be escrowed in connection with the
pending litigation styled Reliable Group, Incorporated v. Kimmins
Recycling Corp., Case No. 98-5287(I) (the "Reliable Litigation"). The sum
of Fifteen Thousand and No/100 Dollars ($15,000.00) shall be escrowed in
connection with the Warning Notice filed by the Environmental Protection
Commission of Hillsborough County ("HCEPC"), Case No. 98-18191 (the "EPC
Matter"). Subsequent to Closing, TransCor shall diligently proceed to
defend and resolve the Reliable Litigation and the EPC Matter, at its
sole cost and expense, and on behalf of the Company. Eastern shall
cooperate with TransCor to resolve such matters, including, without
limitation, the execution of settlement agreements, documents and other
matters reasonably required to resolve the proceedings. TransCor shall
provide Eastern with evidence reasonably satisfactory to Eastern of the
resolution of such matters, together or independently, at which time the
portion of the Escrow Amount allocable to such matter shall be released
to TransCor. Eastern shall approve the release of the Escrow Amount, by
written notice to Escrow Agent, within ten (10) days after receipt of
notice that the pending proceedings have been satisfied. In the event
that either or both of the pending proceedings have not been satisfied
within two (2) years, then the remaining Escrow Amount shall be paid to
KRC and all responsibility for such proceedings shall be assumed by
TransCor.<PAGE>
ARTICLE VIII
GUARANTY BY TRANSCOR
Section 8.1 TransCor shall maintain and continue its guaranty
with respect to the performance by the Company of its obligations under
that certain Agreement with Hillsborough County for a period of two (2)
years. The Company and Eastern, its successors and assigns, jointly and
severally agree to indemnify, defend, protect, and hold harmless TransCor
from and against any and all liability to which it may be subject
pursuant to the guaranty, which indemnity shall be governed by and
construed pursuant to the terms of Article IX of the Agreement.
ARTICLE IX
COOPERATION
Section 9.1 The parties agree that subsequent to the closing they
shall mutually cooperate to execute such documents, provide such
materials, and otherwise take such action as reasonably required to
effectuate the transaction contemplated herein and in the Agreement. Each
party shall pay its own expense with respect to any post-closing matters,
ARTICLE X
DOCUMENTS IN ESCROW
Section 10.1 The parties agree that, upon the execution of this
Agreement, all documents necessary to effectuate the transaction have
been executed (the "Closing Documents") and all conditions precedent to
Purchaser's obligation to close have been waived or satisfied. The
Closing Documents have been delivered to Escrow Agent. The Closing
Documents shall be held in escrow by Escrow Agent pending delivery to
Escrow Agent by Purchaser of the Cash Portion of the Purchase Price, and
written confirmation from Seller that the Stock Portion of the Purchase
Price has been delivered to Seller (the "Payment Event"). In the event
that the Payment Event shall not have occurred on or before 5:00 p.m.
Eastern Standard Time on Thursday, September 3, 1998 (the "Payment Event
Deadline ), then Escrow Agent shall return the Closing Documents to
counsel for the respective parties, and the parties shall proceed to
Closing pursuant to the terms of the Agreement; provided, however, that
the parties, upon written notice to Escrow Agent, may extend the Payment
Event Deadline until Tuesday, September 8, 1998. For each day that the
Payment Event Deadline extends beyond September 4, 1998, the Purchaser
shall pay to Seller an additional sum of Twenty Thousand and 00/100
Dollars ($20,000.00), payable with the Cash Portion of the Purchase
Price.<PAGE>
Section 10.2 The parties hereby release and relieve Escrow Agent
from and against any and all liability for loss, cost, expense, or damage
resulting from its performance of the escrow obligations hereunder. In
the event of any dispute between the parties pertaining to the
distribution of the Closing Documents or the Purchase Price, Escrow Agent
shall retain the Escrow Documents and place the disputed portion of the
Purchase Price into the registry of the Circuit Court in and for the
Thirteenth Judicial Circuit, Hillsborough County, Florida, and shall
advise the parties accordingly. Purchaser acknowledges that Escrow Agent
is counsel for Seller, and shall not assert any conflict of interest
against Seller or Escrow Agent in connection with or resulting from
Escrow Agent's continued representation of Seller in connection with the
Agreement or this transaction.
ARTICLE XI
GENERAL
Section 11.1 Headings. The headings or subheadings of paragraphs
contained herein are used for convenience and ease of reference and shall
not limit the scope or intent of the paragraph.
Section 11.2 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Florida,
without regard to the principles of choice of law of the State of
Florida.
Section 11.3 Counterparts. This Agreement maybe executed in one or
more counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
Section 11.4 Severability. If any provisions of this Agreement
shall, for any reason, be held violative of any applicable law, and so
much of this Agreement is held to be unenforceable, then the invalidity
of such specific provision herein shall not be held to invalidate any
other provision herein which shall remain in full force and effect.
Section 11.5 Entire Agreement. Together with the Agreement, this
Supplemental Agreement shall constitute the entire agreement of the
parties respecting the subject matter hereof and shall supersede all
previous communications and understandings, either written or oral,
between the parties relative to the subject matter hereof.
Section 11.6 Binding of the Successors. This Agreement shall be
binding upon the heirs, executors, administrators, successors and assigns
of the parties.<PAGE>
IN WITNESS WHEREOF the parties hereto have executed this Agreement
on this 2nd day of September 1998.
EASTERN ENVIRONMENTAL SERVICES, INC.
A Delaware Corporation
By: /s/Neal W. Rodrigue
-----------------------
Name: Neal W. Rodrigue
-----------------------
Its: Vice President
-----------------------
KIMMINS CORP.
A Delaware Corporation
By: /s/Joseph M. Williams
-----------------------
Name: Joseph M. Williams
-----------------------
Its: Secretary
-----------------------
TRANSCOR WASTE SERVICES, INC.
A Florida Corporation
By: /s/Joseph M. Williams
-----------------------
Name: Joseph M. Williams
-----------------------
Its: President
-----------------------<PAGE>
