EXHIBIT 10.70
DISPOSAL AGREEMENT
THIS DISPOSAL AGREEMENT ("Agreement") is made as of May 8, 1998,
by and between CITY MANAGEMENT CORPORATION, a Michigan corporation ("City"), and
USL CITY ENVIRONMENTAL, INC., a Michigan corporation ("Liquids").
W I T N E S S E T H:
WHEREAS, Liquids operates a hazardous and non-hazardous
commercial liquid waste transportation, treatment, processing and disposal
business in the Detroit, Michigan area (the "Business") and, in connection
therewith, disposes of certain non-hazardous sludge materials resulting from
such treatment and processing;
WHEREAS, on the date hereof, Liquids has acquired certain assets
of City to be used in connection with the Business (the "Acquisition");
WHEREAS, as part of the Acquisition, Liquids has agreed to
dispose of Acceptable Material (hereinafter defined) at one or more mutually
agreeable Detroit area landfills operated by City or its affiliates on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual benefits to be
derived from the Agreement and of the representations, warranties, covenants,
conditions and provisions hereinafter set forth, the parties hereto hereby agree
as follows:
1. DISPOSAL. Pursuant to the terms and conditions of this
Agreement, during the Term (hereinafter defined), Liquids shall dispose of all
of its Acceptable Material at one or more Detroit area landfills from time to
time designated by City and acceptable to Liquids in its reasonable business
judgment, and City agrees to accept for disposal all Acceptable Material
delivered to such landfill by Liquids; provided, however, that City shall have
the right to reject any material which City determines does not constitute
Acceptable Material. City and Liquids agree that Carleton Farms and Pinetree
Acres (together, the "Landfills") shall be the initial designated landfills and
that such landfills shall continue to be the designated landfill unless and
until another landfill is agreed to in writing by Liquids and City.
2. TERM. The term ("Term") of this Agreement shall commence on
the date hereof and continue for a term of twenty years, unless sooner
terminated as provided herein.
3. DISPOSAL PRICE. (a) The disposal price for each
cubic yard of Acceptable Material delivered by Liquids to the
Landfills shall be as follows:
YEAR CUBIC YARDS PER YEAR RATE
---- -------------------- ----
1 through 5 first 120,000 cu/yd. $45.50 per cu/yd.
1 through 5 120,001 cu/yd. and up $ 8.00 per cu/yd.
6 through 20 all cubic yards $ 8.00 per cu/yd.
(b) PRICE INCREASE FOR CPI INDEX. For purposes of this Agreement,
(a) $45.50 shall be the "Premium Rate", and (b) $8.00 shall be the "Base
Rate." The Base Rate and only that portion of the Premium Rate
equivalent to the Base Rate shall escalate annually on each January 1st
during the Term by an amount equal to the increase in the CPI Index
which results from comparing the CPI same for All Urban Consumers as of
May 1, 1998 with the same CPI Index for each succeeding May 1st.
(c) ADJUSTMENT TO PRICE. In the event that during the Term of
this Agreement there is levied upon the operations of the Landfills any
extraordinary tax, assessment or charge by any governmental authority or
there occurs any substantial change in regulatory requirements related
to the operation of the Landfills and having general applicability to
the waste disposal business which includes the Landfills (but not
related to any action, omission or condition of City), which tax
assessment or charge increases in a material manner City's annual cost
to operate the Landfills over City's cost of operations of the Landfills
for the immediately preceding calendar year (in each case, an
"Extraordinary Levy"), such amounts shall be added to the disposal price
to be paid by Liquids hereunder on a pro rata basis reflecting the
proportion of the volume of Acceptable Material delivered by Liquids
hereunder to the total volume of Acceptable Material received by the
Landfills during a like period, subject to subparagraph (d) below.
(d) NOTICE OF EXTRAORDINARY LEVIES. City shall notify Liquids of
any price increase for Extraordinary Levies at least 30 days in advance
of the effective date thereof (except in the case of Extraordinary
Levies where City has received less than 30 days notice in which case
the necessary advance notice period to Liquids shall be the same length
as that which was received by City).
4. PAYMENT. City shall issue a ticket to each Liquids vehicle
delivering Acceptable Material to one of the Landfills, which ticket shall show
the date, vehicle number and quantity of Acceptable Material to establish
charges. On a monthly basis, City shall send Liquids a statement of charges.
Liquids agrees to pay all charges due and owing hereunder to City on or before
the 30th day following the date of receipt of a statement of charges.
5. TITLE.
(a) TITLE. Title to the Acceptable Material delivered by Liquids
shall pass to City at the time the Acceptable Material is removed from
the transporting vehicles and
-2-
accepted by City as Acceptable Material at the designated working face
of one of the Landfills, and all risk and responsibility for such
Acceptable Material, including liability for any release or threatened
release thereof, under any federal, state or local environmental law,
shall thereafter rest with City. Title to and all risks and
responsibilities for material which does not conform to the definition
of Acceptable Material hereunder shall remain with Liquids and shall not
be deemed to pass to City whether or not disposed of at the Landfills.
(b) SURVIVAL. The obligations set forth in this Section 5 shall
survive the performance and termination of this Agreement.
6. UNACCEPTABLE WASTE. Liquids agrees that it will not dispose of
at the Landfills any Hazardous Waste (hereinafter defined) or any other material
which is not Acceptable Material. If Liquids delivers to the Landfills any
material which does not conform to the definition of Acceptable Material under
this Agreement and to the requirements of any applicable governmental law,
regulation, rule or order, then (in addition to City's other remedies pursuant
hereto or available at law or in equity), if City notifies Liquids of the
delivery of such nonconforming materials, which notice shall be made promptly
upon City's determination of such nonconformity, Liquids shall promptly make
available at the Landfills a vehicle suitable for transporting such
nonconforming material, shall promptly load such nonconforming material onto the
vehicle and shall promptly remove such nonconforming material from the
Landfills, all at Liquids's expense. Liquids shall reimburse City for any
reasonable and necessary costs incurred by City in connection with the removal
of non-conforming material.
7. REPRESENTATIONS AND WARRANTIES OF CITY. City represents and
warrants that at the date hereof:
(a) ORGANIZATION. City is duly organized, validly existing and in
good standing under the laws of the State of Michigan, it has all right,
power and authority to operate the Landfills and to carry on its
business as contemplated by this Agreement in the State of Michigan, and
it has all requisite power and authority to execute and perform this
Agreement.
(b) OPERATION OF LANDFILLS. City or its affiliates are the lawful
owner of the Landfills, and have obtained or have lawful rights to use
all federal, state and local licenses, permits and approvals, all
agreements relating to such licenses, permits and approvals to operate
the Landfills as currently operated and as contemplated by this
Agreement and are currently operating in material compliance with all
applicable federal, state and local laws, ordinances, requirements,
orders, directives, rules and regulations applicable to the Landfills.
-3-
The parties agree that the foregoing representations and warranties shall
survive the termination of this Agreement for a period of two years.
8. REPRESENTATIONS AND WARRANTIES OF LIQUIDS. Liquids represents
and warrants that at the date hereof:
(a) ORGANIZATION. Liquids is duly organized, validly existing and
in good standing under the laws of the State of Michigan, it has all
right, power and authority to carry on its business as now conducted and
as contemplated by this Agreement in the State of Michigan, and it has
all requisite power and authority to execute and perform this Agreement.
(b) OPERATION. Liquids has obtained all required state licenses,
permits and approvals to deliver the Acceptable Material to the
Landfills as contemplated hereunder, and it is currently operating in
material compliance with all such licenses, permits and approvals.
The parties agree that the foregoing representations and warranties shall
survive the termination of this Agreement for a period of two years.
9. COVENANTS.
(a) COVENANTS OF CITY. City covenants that:
(i) At all times during the Term of this Agreement, City
shall cause the Landfills to be operated in material compliance
with all required federal, state and local licenses, permits and
approvals and all federal, state and local laws, ordinances,
requirements, orders, directives, rules and regulations.
(ii) The current operating hours for the Landfills are from
____ a.m. to ____ p.m., Mondays through Fridays and from ____
a.m. to ____ p.m. on Saturdays, excluding holidays. If the
foregoing operating hours at the Landfills shall be expanded or
restricted, then City shall cause the Landfills to be open for
operation and acceptance of Acceptable Material from Liquids
during such expanded or reduced hours.
(b) COVENANTS OF LIQUIDS. Liquids covenants that:
(i) Liquids acknowledges the right of City to make, change
and enforce reasonable rules and regulations regarding the
disposal of Acceptable Material at the Landfills. Liquids
covenants to abide by such rules and regulations as established
from time to time upon receipt of notice of such rules and
regulations.
-4-
10. INDEMNIFICATION.
(a) INDEMNIFICATION BY CITY. City agrees to indemnify and hold
harmless Liquids and its subsidiaries and affiliates, and their
respective directors, officers, agents and employees (the "Liquids
Indemnified Parties") from and against any and all liabilities, losses,
damages, costs, expenses and disbursements, including reasonable legal
fees and expenses, arising out of any claim or loss of or damage to
property and injuries to or death of any persons, including any Liquids
Indemnified Parties, environmental response costs caused (i) by the
breach of any term, covenant, agreement or undertaking herein of City,
(ii) by the negligence or willful misconduct of City; or (iii) by the
release or threatened release of any Acceptable Materials delivered by
Liquids to City.
(b) INDEMNIFICATION BY LIQUIDS. Liquids agrees to indemnify and
hold harmless City and its subsidiaries and affiliates, and their
respective directors, officers, agents and employees (the "City
Indemnified Parties") from and against any and all liabilities, losses,
damages, costs, expenses and disbursements, including reasonable legal
fees and expenses, arising out of any claim or loss of or damage to
property and injuries to or death of any persons, including any City
Indemnified Parties, caused (i) by the breach of any term, covenant,
agreement or undertaking herein of Liquids, or (ii) by the negligence or
willful misconduct of Liquids.
11. TERMINATION.
(a) TERMINATION BY LIQUIDS. Liquids shall have the right to
terminate this Agreement in the event of the occurrence and continuance
of any of the following:
(i) The material breach by City of any of the terms,
conditions or provisions of this Agreement, which breach is not
cured within 30 days after notice from Liquids of same is given
to City; provided, however, that if the nature of the breach is
such that more than 30 days are required for its cure, then
Liquids shall not be entitled to terminate this Agreement with
respect to such breach if City commences said cure within such 30
day period and thereafter diligently prosecutes same to
completion;
(ii) The commencement of any voluntary or involuntary
bankruptcy or insolvency proceedings against City or if
reorganization proceedings are commenced against City or any such
other party under any state or federal debtor relief statutes;
provided that any such proceedings are not dismissed within 90
days after being instituted;
-5-
(iii) The existence and continuation of an event of Force
Majeure (hereinafter defined) for more than 90 days;
(iv) The enactment, adoption, promulgation, amendment or
modification, after the date hereof, of any federal, state or
local law, regulation, ordinance, code, rule or similar
legislation, existing as of the date hereof, which results in the
illegality or impossibility of the performance by Liquids of its
rights or obligations as provided herein; including, without
limitation, the implementation directly, or indirectly through
licensing or similar requirements or otherwise, of flow control
or other restrictions, conditions, charges or assessments on the
movement of Acceptable Material outside the geographical borders
of the governmental entity where generated; or
(v) The order, final action, injunction and/or judgment of
any federal, state or local court, administrative agency or
governmental body with appropriate jurisdiction which results in
the illegality or impossibility of the performance by Liquids of
its rights or obligations as provided herein; provided that such
order,judgment, final action or injunction shall not be the
result of the willful or negligent action or inaction of Liquids.
For purposes of this provision, neither the contesting in good
faith of any such order or judgment, nor the failure to so
contest shall constitute or be construed as a willful or
negligent action or inaction.
(b) TERMINATION BY CITY. City shall have the right to terminate
this Agreement in the event of the occurrence and continuation of any of
the following:
(i) The failure of Liquids to comply with any payment
obligation under this Agreement within 30 days of the due date
for each such payment;
(ii) The material breach by Liquids of any of the terms,
conditions or provisions of this Agreement, which breach is not
cured within 30 days after notice from City of same is given to
Liquids; provided, however, that if the nature of said breach is
such that more than 30 days are required for its cure, then City
shall not be entitled to terminate this Agreement with respect to
such breach if Liquids commences said cure within such 30 day
period and thereafter diligently prosecutes same to completion
within 90 days after such notice;
(iii) The existence and continuation of an event of Force
Majeure for more than 90 days;
-6-
(iv) The commencement of any voluntary or involuntary
bankruptcy or insolvency proceedings against Liquids, or if
reorganization proceedings against Liquids are commenced under
any state or federal debtor relief statute; provided that any
such proceedings are not dismissed within 90 days after being
instituted; or
(v) The enactment, adoption, promulgation, amendment or
modification, after the date hereof, of any federal, state or
local law, regulation, ordinance, code, rule or similar
legislation, existing as of the date hereof, which results in the
illegality or impossibility of the performance by City of its
rights or obligations as provided herein; including, without
limitation, the implementation directly, or indirectly through
licensing or similar requirements or otherwise, or other
restrictions, conditions, changes or assessments on the movement
of Acceptable Material outside the geographical borders of the
governmental entity where generated; or
(vi) The order, final action, injunction and/or judgment
of any federal, state or local court, administrative agency or
governmental body with appropriate jurisdiction which results in
the illegality or impossibility of performance by City of its
rights or obligations as provided herein; provided that such
order, judgment, final action or injunction shall not be the
result of the unlawful or negligent action or inaction of City.
For purposes of this provision, neither the contesting in good
faith of any such order or judgment, nor the failure to so
contest shall constitute or be construed as an unlawful or
negligent action or inaction.
(c) EFFECT OF TERMINATION. Termination of this Agreement shall
not result in the termination of any obligation of any party hereunder
that has accrued at the time of termination, and in no event shall the
termination of this Agreement operate to excuse any obligation of any
party for breach of a representation or warranty under this Agreement or
failure to perform under the indemnity provisions of this Agreement, all
of which provisions shall survive any termination of the Agreement by
any party hereto.
12. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the meanings set forth
below:
(a) "Acceptable Material" means any non-hazardous waste generated
from a wastewater treatment plant or water supply treatment plant which
are parts of the Business; provided, however, Acceptable Material shall
not include:
(i) Hazardous Waste, as herein defined; or
-7-
(ii) any waste material which is required by any governmental
authority or by its general nature to be handled or disposed of
other than in accordance with the Landfills' normal disposal and
fill operating procedures as existing on the date hereof or as
amended from time to time; or
(iii) waste material which does not conform to the description
of waste materials which the Landfills are permitted to dispose
of under their permits, or operating license, and other
applicable requirements.
(b) "Hazardous Waste" means all waste defined as such in 42 USC
ss.6921, in MCLA 324.11103(3) or in the associated regulations as
amended from time to time.
13. MISCELLANEOUS.
(a) CONFIDENTIALITY. Each party hereto agrees that the terms of
this Agreement are confidential and each party agrees not to disclose
the terms hereof to any other person or entity whatsoever, nor to allow
any of its employees, directors, agents, contractors or other persons
within such party's control to so disclose, except if required to do so
by law. The violation of this provision shall be deemed to be a material
breach of this Agreement entitling the aggrieved party to terminate this
Agreement immediately without any grace period which may otherwise be
set forth herein for a breach of this Agreement.
(b) NOTICES. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand, by
overnight courier, by facsimile transmission or by certified or
registered United States mail, return receipt requested, with proper
postage prepaid as follows:
(i) To Liquids:
U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
ATTN: Xxxxx Xxxxxx
with a copy to:
U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
ATTN: W. Xxxxxxx Xxx
-8-
(ii) If to City:
USA Waste Services, Inc.
0000 Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: General Counsel
with a copy to:
USA Waste Services, Inc.
Park West Two
Suite 420
0000 Xxxxx Xxxx Xx.
Xxxxxxxxxx, XX 00000
ATTN: Regional Vice President
or to such other address as the parties listed immediately above shall
have last designated by notice to the other listed parties. Any notice
given by personal delivery or facsimile transmission shall be deemed to
have been delivered on the date of the receipt of such delivery or
transmission at the address set forth above (or such other address
designated pursuant hereto) and any notice given by United States mail
shall be deemed to have been delivered in the United States postal
system. Notice in writing may be given by a method other than as
described above and such notice shall be deemed delivered on the date
actually received.
(c) RELATIONSHIP OF PARTIES. This Agreement shall not in any
manner be construed so as to create the relationship of principal and
agent or of partnership or joint venture or of any associate between
Liquids and City. The parties hereto agree to act as independent
contractors, and, as such, except as otherwise specifically set forth in
this Agreement, each party shall be liable for its own business
operation, insurance, taxes, licenses, permits, expenses, and all other
liabilities.
(d) ASSIGNMENT. This Agreement may not be assigned by either
party without the prior written consent of the other party. This
Agreement shall be binding on and shall inure to the benefit of the
parties hereto and their permitted successors and assigns.
(e) SEVERABILITY; REMEDIES CUMULATIVE. If any term, covenant,
condition or provision of this Agreement or the application thereof to
any person or circumstance shall, at any time or to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances other
than those to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant, condition and provision of
this Agreement shall be valid and enforceable to the fullest extent
permitted by law. No right, remedy or
-9-
election give by any term of this Agreement shall be deemed exclusive
but each shall be cumulative with all rights, remedies and elections
available at law or in equity.
(f) FORCE MAJEURE. No party shall be liable, for its failure to
perform any of its obligations hereunder nor shall it be deemed a
default under this Agreement if a party fails to perform any of its
obligations hereunder, in any case in which such failure is caused
directly or indirectly by an event of Force Majeure; except that the
failure to pay money when due shall not be excused as a result of the
effect of this Section. For purposes of this Agreement, "Force Majeure"
shall mean any act of God; flood; fire; explosion; storm; strike;
lockout; war; insurrection; riot; the order or judgment or other act of
any federal or state court, administrative agency or governmental office
or body which adversely affects the obligations of either party
hereunder; the denial, loss, suspension, expiration, termination or
failure of renewal of any permit, license or other governmental approval
required to operate the Landfills; the adoption or change (including a
change in interpretation) of any law, rule or regulation adversely
affecting the obligations of either party hereunder; breakage or
accidents to machinery or equipment; or delays in obtaining, or
reductions or shortages, of supplies, materials, equipment, fuel, or
soil or other cover material, necessary to City's performance hereunder.
(g) NUMBER, GENDER AND HEADINGS. Wherever herein used, the
singular number shall include the plural and the masculine gender shall
include the feminine and neuter genders, and vice versa, as the context
shall require. The headings used herein are for reference and
convenience only and shall not enter into the interpretation hereof.
(h) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original but all of which
together shall constitute one and the same instrument.
(i) AMENDMENT AND WAIVER. This Agreement shall not be altered,
modified or otherwise amended except by a writing executed by the party
against who the modified or amended term or provision is sought to be
enforced. Any failure on the part of any party to this Agreement at any
time to require the performance by any other party to this Agreement at
any time to require the performance by any other party of any term or
provision hereof, even if known, shall in no way affect the right
thereafter to enforce the same (except that no party may enforce any
rights arising from a breach of this Agreement, which breach has been
cured), nor shall it be taken or held to be a waiver of any succeeding
breach.
-10-
(j) GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of
Michigan.
(k) TIME OF THE ESSENCE. Time is of the essence of this
Agreement.
(l) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes any prior agreement,
representation or understanding with respect thereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered under seal by the duly authorized
officers of each such party, all as of the day and year first above written.
CITY MANAGEMENT CORPORATION
By:__________________________
Its:_________________________
USL CITY ENVIRONMENTAL, INC.
By:__________________________
Its:_________________________
-11-
