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Exhibit 10.46
ASSET PURCHASE AGREEMENT
Dated as of September 25, 1998, by and among
Waste Connections, Inc.,
Xxxxx Transfer & Recycling, Inc.
Westlane Disposal
and
Xxxxx Xxxxxx
and
Xxxxxxx Xxxxxx
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TABLE OF CONTENTS
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1. PURCHASE AND SALE OF ASSETS......................................................... 1
1.1. Sale and Transfer of Assets................................................. 1
1.2. Assumption by Buyer of Assumed Contracts.................................... 2
1.3. Excluded Liabilities........................................................ 2
1.4. Purchase Price.............................................................. 3
1.5. Certain Taxes............................................................... 3
2. CLOSING TIME AND PLACE.............................................................. 4
3. REPRESENTATIONS AND WARRANTIES OF SELLERS........................................... 4
3.1. Standing and Authority for Business......................................... 4
3.2. All Assets Being Acquired................................................... 4
3.3. Authority for Agreement..................................................... 4
3.4. No Breach or Default........................................................ 4
3.5. Financial Statements........................................................ 5
3.6. Liabilities................................................................. 5
3.7. Conduct of the Business..................................................... 6
3.8. Permits and Licenses........................................................ 6
3.9. Affiliate................................................................... 8
3.10. Fixed Assets and Facility Property.......................................... 8
3.11. Acquisition/Disposal of Assets.............................................. 8
3.12. Contracts and Agreements; Adverse Restrictions.............................. 8
3.13. Personnel................................................................... 9
3.14. Benefit Plans and Union Contracts........................................... 9
3.15. Taxes....................................................................... 10
3.16. Copies Complete............................................................. 11
3.17. Customers, Xxxxxxxx, Current Receipts and Receivables....................... 11
3.18. [INTENTIONALLY OMITTED]..................................................... 12
3.19. Closing Date Debt........................................................... 12
3.20. Compliance With Laws........................................................ 12
3.21. Patents, Trademarks, Trade Names, etc....................................... 13
3.22. Assets, etc., Necessary to the Business..................................... 13
3.23. Suppliers and Customers..................................................... 13
3.24. Absence of Certain Business Practices....................................... 13
3.25. Disclosure Schedules........................................................ 14
3.26. No Misleading Statements.................................................... 14
3.27. Accurate and Complete Records............................................... 14
3.28. Knowledge................................................................... 14
3.29. Brokers; Finders............................................................ 14
4. REPRESENTATIONS AND WARRANTIES OF WCI AND CTR....................................... 14
4.1. Existence and Good Standing................................................. 15
4.2. Authorization of Agreement.................................................. 15
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TABLE OF CONTENTS
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4.3. No Misleading Statements.................................................... 15
5. CLOSING DELIVERIES.................................................................. 15
5.1. Buyer's Deliveries.......................................................... 15
5.2. Sellers' Deliveries......................................................... 15
6. ADDITIONAL COVENANTS OF WCI, CTR, AND SELLERS....................................... 16
6.1. Confidentiality............................................................. 16
6.2. Brokers and Finders Fees.................................................... 16
6.3. Payments Recorded by Sellers After Closing Date............................. 16
6.4. Consents.................................................................... 16
7. INDEMNIFICATION............................................................. 17
7.1. Indemnity by Sellers........................................................ 17
7.2. Limitations on Sellers' Indemnities......................................... 18
7.3. Notice of Indemnity Claim................................................... 18
7.4. Survival of Representations, Warranties and Agreements...................... 19
7.5. No Exhaustion of Remedies or Subrogation; Right of Set Off.................. 19
8. OTHER POST-CLOSING COVENANTS OF SELLERS AND BUYER................................... 20
8.1. Restrictive Covenants....................................................... 20
8.2. Rights and Remedies Upon Breach............................................. 22
9. GENERAL............................................................................. 23
9.1. Additional Conveyances...................................................... 23
9.2. Assignment.................................................................. 23
9.3. Public Announcements........................................................ 23
9.4. Counterparts................................................................ 23
9.5. Notices..................................................................... 23
9.6. Attorneys' Fees............................................................. 24
9.7. Applicable Law.............................................................. 24
9.8. Payment of Fees and Expenses................................................ 24
9.9. Incorporation by Reference.................................................. 24
9.10. Captions.................................................................... 24
9.11. Number and Gender of Words.................................................. 24
9.12. Entire Agreement............................................................ 24
9.13. Waiver...................................................................... 25
9.14. Construction................................................................ 25
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TABLE OF CONTENTS
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10. GLOSSARY............................................................................ 25
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of September 25, 1998, and entered
into by and among Waste Connections, Inc., a Delaware corporation ("WCI"), Xxxxx
Transfer & Recycling, Inc., an Oregon corporation ("CTR" and, collectively with
WCI, "BUYER"), and Xxxxx and Xxxxxxx Xxxxxx, as husband and wife, doing business
as Westlane Disposal ("SELLERS").
WHEREAS, Sellers are engaged in the collection and transport of solid
waste in Xxxxxxxx and Dune City, Oregon, and the counties of Lane, Lincoln and
Xxxxxxx in Oregon (the "BUSINESS");
WHEREAS, Sellers are the sole owners of the Business;
WHEREAS, Buyer wishes to purchase, and Sellers wish to sell certain
assets that are necessary to operate the Business;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto, each intending to be bound hereby, agree as
follows:
1. PURCHASE AND SALE OF ASSETS.
1.1. SALE AND TRANSFER OF ASSETS. Subject to and in accordance
with the terms and conditions of this Agreement, at the Closing on the Closing
Date (as defined below) Sellers shall convey, transfer, deliver and assign to
Buyer (and as among WCI and CTR, as they shall designate to Sellers), and Buyer
shall accept from Sellers all of the assets listed on Schedule 1.1
(collectively, the "ASSETS"), including without limitation:
(a) the trucks, containers, operating machinery and
equipment, processing equipment, shop tools, parts, supplies,
accessories, inventory, physical assets and other tangible personal
property used primarily in connection with the ownership, operation and
management of the Business;
(b) all contracts, leases, agreements, customer
accounts, commitments and arrangements specifically identified in
Schedule 3.12(a) as contracts contemplated to be assumed by Buyer
pursuant to this Agreement (the "ASSUMED CONTRACTS");
(c) all permits, licenses, titles (including motor
vehicle titles and current registrations), fuel permits, zoning and land
use approvals and authorizations, including, without limitation, any
conditional or special use approvals or zoning variances, occupancy
permits, and any other similar documents from any and all governmental
authorities constituting a material authorization or entitlement or
otherwise material to the
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operation or management of the Business owned by, issued to, or held by
or otherwise benefiting Sellers (the "GOVERNMENTAL PERMITS");
(d) all customer lists of Sellers relating to the
Business;
(e) the logos, trade names, fictitious business names
and service marks of Sellers;
(f) the good will of the Business;
(g) all guarantees, warranties, indemnities and similar
rights in favor of Sellers with respect to any of the Assets and all
books and records primarily in connection with the operation of the
Business;
(h) all operating and financial records existing as of
the Closing Date relating to the Business, including without limitation
all ledgers, books of account, deprecation schedules, inventory
information, records relating to payables and receivables, cancelled
checks, bank statements, equipment records, maintenance records,
disposal records and information concerning customers;
(i) after the Closing and during normal business hours,
Buyer will allow Sellers reasonable access to business records relating
to Westlane Disposal that were created prior to the Closing Date and, if
needed, a reasonable opportunity to make copies of such documents. Buyer
will not dispose of any Westlane Disposal business records that were
created prior to the Closing Date without providing twenty (20) days'
written notice to the Sellers and allowing Sellers to preserve part or
all of such records at Sellers' expense; and
(j) use of the Business property for up to thirty (30)
days following the Closing Date.
Notwithstanding the foregoing, Buyer shall not acquire any of the assets listed
on Schedule 3.2 (the "EXCLUDED ASSETS").
1.2. ASSUMPTION BY BUYER OF ASSUMED CONTRACTS. Buyer hereby
assumes and agrees to perform and discharge, effective the day after the Closing
Date all of the obligations and commitments of Sellers accruing after the
Closing Date under or with respect to each Assumed Contract, but not including
any obligation or liability for any breach thereof occurring on or prior to the
Closing Date.
1.3. EXCLUDED LIABILITIES. Notwithstanding the provisions of
Section 1.2 or any other provision hereof or any Schedule or Exhibit hereto and
regardless of any disclosure to Buyer, Buyer shall not assume or be bound by any
other duties, responsibilities, obligations or liabilities of Sellers or to
which Sellers or any of the Assets or the Business may be bound or affected, of
whatever kind or nature, whether known, unknown, contingent or otherwise,
arising
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before, on or after the Closing Date (including without limitation taxes arising
from the operation of the Business or the sale of the Assets) except, as to
obligations and liabilities arising after the Closing Date only, those
obligations and liabilities expressly assumed by Buyer pursuant to Section 1.2
(the "EXCLUDED LIABILITIES").
1.4. PURCHASE PRICE. The purchase price (the "PURCHASE
PRICE") for the Assets shall be payable as follows:
(a) Six Hundred Ninety-one Thousand Dollars
($691,000), minus the Closing Date Debt as described on Schedule 3.19. The
Purchase Price shall be paid in cash by wire transfer or check payable in
clearinghouse funds at Closing. The cash portion of the Purchase Price paid at
the Closing will be based on Schedule 3.19 as delivered at the Closing. Buyer
and Sellers acknowledge that there will be accounts receivable and accounts
payable that cannot be accurately reconciled until after the Closing Date.
Within ninety (90) days after the Closing, WCI and the Sellers shall determine
the accounts payable and receivable for the Business that relate to the period
prior to and including the Closing Date and that relate to the period after the
Closing Date. Sellers shall be entitled to accounts receivable for services
rendered prior to and including the Closing Date and Buyer shall be entitled to
accounts receivable for services rendered after the Closing Date. Sellers shall
be liable for accounts payable that relate to products or services delivered to
Sellers prior to or on the Closing Date, and Buyer shall be liable for accounts
payable that relate to products or services delivered to Buyer after the Closing
Date. Buyer and Sellers will make available to each other all records relating
to the post-closing calculation and allocation of accounts receivable and
accounts payable.
(b) WCI shall deliver to the Sellers a non-interest
bearing Installment Note (the "NOTE") in the aggregate principal amount of
Twelve Thousand Dollars ($12,000), which Note shall be paid in twelve (12) equal
monthly installments of One Thousand Dollars ($1,000) and shall be substantially
in the form of Exhibit 1.4(b) attached hereto. The monthly installments of the
Note shall be paid on the first day of each calendar month starting on October
1, 1998.
1.5. CERTAIN TAXES. The Sellers shall pay any and all sales, use,
excise, transfer and conveyance taxes payable or assessable in connection with
or as a result of the transfer of the Assets under the terms of this Agreement
and the transactions contemplated hereby. Buyer shall not be responsible for any
business, occupation, withholding, possessory interest or similar tax or
assessment or any other tax or fee of any kind relating to any period on or
prior to the Closing Date with respect to Sellers, the Assets or the ownership,
operation or management of the Business.
1.6. ALLOCATION OF PURCHASE PRICE. Five Thousand Dollars
($5,000) of the Purchase Price shall be allocated to the covenant not to compete
described in Section 7.1(a), Thirty Thousand Dollars ($ 30,000) of the Purchase
Price shall be allocated to the Assets and the remainder of the Purchase Price
shall be allocated to the goodwill purchased by Buyer.
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2. CLOSING TIME AND PLACE
Subject to the terms and conditions of this Agreement, the closing of
the transactions contemplated herein (the "CLOSING") shall take place at such
time on September ___, 1998, as the parties shall agree (the "CLOSING DATE").
The Closing shall take place at the Law Offices of Shartsis, Xxxxxx & Xxxxxxxx
LLP, Xxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000, or
through an exchange of consideration and signed documents using overnight
courier service. At the Closing, Buyer and Sellers shall deliver to each other
the documents, instruments and other items described in Section 5 of this
Agreement.The Closing will be deemed effective as of September 12, 1998, for tax
and financial reporting purposes.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers (i) represent and warrant that each of the following
representations and warranties is true and complete as of Closing Date, and (ii)
agree that such representations and warranties shall survive the Closing.
3.1. STANDING AND AUTHORITY FOR BUSINESS. Sellers have full power
and authority to own the Assets and to operate the Business as now conducted.
3.2. ALL ASSETS BEING ACQUIRED. The Assets being acquired by
Buyer hereunder constitute all of the assets of Sellers used and necessary to
conduct and operate the Business as it is presently conducted.
3.3. AUTHORITY FOR AGREEMENT. Sellers have full right, power and
authority to enter into this Agreement and to perform his and her obligations
hereunder. This Agreement has been duly and validly executed and delivered by
Sellers, and, subject to the due authorization, execution and delivery by WCI
and CTR, constitutes the legal, valid and binding obligation of Sellers,
enforceable against Sellers in accordance with its terms.
3.4. NO BREACH OR DEFAULT. Except as disclosed on Schedule 3.4,
the execution and delivery by Sellers of this Agreement, and the consummation by
Sellers of the transactions contemplated hereby, will not:
(a) result in the breach of any of the terms or
conditions of, or constitute a default under any obligation by which
Sellers, or any of the Assets, is or may be bound or affected; or
(b) violate any law or any order, writ, injunction or
decree of any court, administrative agency or governmental authority, or
require the approval, consent or permission of any governmental or
regulatory authority; or
(c) violate any agreements to which Sellers are a party
relating to the Assets and the Business.
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3.5. FINANCIAL STATEMENTS. Sellers have delivered to Buyer, as
Schedule 3.5, copies of the financial statements ("FINANCIAL STATEMENTS") of
Sellers relating to the Business for the three (3) years ended September 12,
1998 (September 12, 1998, shall be referred to as the "BALANCE SHEET DATE"). The
Financial Statements are true and correct and fairly present (i) the financial
position of the Business as of the respective dates of the balance sheets
included in the Financial Statements, and (ii) the results of operations of the
Business for the respective periods indicated. The Financial Statements have
been prepared in accordance with generally accepted accounting principles,
applied consistently with prior periods. Except as disclosed on Schedules 3.5,
3.6, 3.19, Sellers had as of the Closing Date, no liabilities of any nature,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities due or to become due.
3.6. LIABILITIES. Parts I, II, III and IV of Schedule 3.6, are
accurate lists and descriptions of all liabilities of Sellers relating to the
Business required to be described below in the format set forth below.
(a) Part I of Schedule 3.6 lists, as of the Closing
Date, other than with respect to trade payables and as of the end of the
month prior to the Closing Date with respect to trade payables, all
indebtedness for money borrowed and all other fixed and uncontested
liabilities of any kind, character and description, whether reflected or
not reflected on the Financial Statements and whether accrued or
absolute, and states as to each such liability the amount of such
liability and to whom payable. From the end of the month prior to the
Closing Date through the Closing Date, trade payables have been incurred
only in the ordinary course of business consistent with comparable prior
periods.
(b) Part II of Schedule 3.6 lists, as of the Closing
Date, all claims, suits and proceedings which are pending against
Sellers relating to the Business and, to the knowledge of Sellers, all
material contingent liabilities and all material claims, suits and
proceedings threatened or anticipated against Sellers relating to the
Business. For each such liability, Part II of Schedule 3.6 includes a
summary description of such liability, including, without limitation:
(i) the name of each court, agency, bureau, board or body before which
any such claim, suit or proceeding is pending, including, without
limitation, those arising under Environmental Laws (as defined in
Section 3.20), those relating to personal injury or property damage
(including all workers' compensation and occupational disease and injury
claims, suits and proceedings) and those citations arising under the
Federal Occupational Safety and Health Act or any comparable state law,
(ii) the date such claim, suit or proceeding was instituted, (iii) the
parties to such claim, suit or proceeding, (iv) a description of the
factual basis alleged to underlie such claim, suit or proceeding,
including the date or dates of all material occurrences, and (v) the
amount claimed and other relief sought.
(c) Part III of Schedule 3.6 lists, as of the Closing
Date and to the extent not otherwise included in Part I of Schedule 3.6,
all material liens, claims and encumbrances secured by any of the
Assets, including a description of the nature of such
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lien, claim or encumbrance, the amount secured if it secures a
liability, the nature of the obligation secured, and the party holding
such lien, claim or encumbrance.
(d) Part IV of Schedule 3.6 lists, as of the Closing
Date and to the extent not otherwise included in Part I or Part III of
Schedule 3.6, all real property and material personal property leasehold
interests to which Sellers are a party as lessor or lessee relating to
the Business or affecting or relating to any Facility Property (as
described in Section 3.8), including a description of the nature and
principal terms of such leasehold interest and the identity of the other
party thereto.
3.7. CONDUCT OF THE BUSINESS. Except as set forth on Schedule
3.7, since the Balance Sheet Date:
(a) The Business has been conducted only in the
ordinary course; and
(b) There has been no change in Sellers' financial
condition, the Assets, liabilities (contingent or otherwise), income or
operations of Sellers relating to the Business other than changes in the
ordinary course of business, none of which either singly or in the
aggregate has been materially adverse, or which could have a material
adverse effect on the financial condition, Assets, liabilities
(contingent or otherwise), income or operations of the Business.
3.8. PERMITS AND LICENSES.
(a) Schedule 3.8(a) is a full and complete list, and
includes copies, of all material permits, licenses, franchises, titles
(including motor vehicle titles and current registrations), fuel
permits, zoning and land use approvals and authorizations, including,
without limitation, any conditional or special use approvals or zoning
variances, occupancy permits, and any other similar documents
constituting a material authorization or entitlement or otherwise
material to the operation of the Business by Sellers (collectively the
"GOVERNMENTAL PERMITS") owned by, issued to, held by or otherwise
benefiting Sellers as of the Closing Date. The status of the
Governmental Permits related to the disposal areas owned or used by
Sellers, including, without limitation, any conditions thereto and, if
applicable, the expiration dates thereof, are also described in Schedule
3.8(a). Schedule 3.8(a) also sets forth the name of any governmental
agency from whom Sellers or Buyer must obtain consent (the "REQUIRED
GOVERNMENTAL CONSENTS") in order to effect a direct or indirect transfer
of the Governmental Permits required as a result of the consummation of
the transactions contemplated by this Agreement. Except as set forth on
Schedule 3.8(a), all of the Governmental Permits enumerated and listed
on Schedule 3.8(a) are and will be adequate for the operation of the
Business of Sellers and of each Facility Property as presently operated
and are valid and in full force and effect. All of said Governmental
Permits and agreements have been duly obtained and are in full force and
effect, and there are no proceedings pending or, to the knowledge of
Sellers, threatened which may result in the revocation, cancellation,
suspension or adverse modification of any of the same. Sellers
have no knowledge of any reason why all such Governmental Permits and
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agreements will not remain in effect after consummation of the
transactions contemplated hereby.
(b) As part of Schedule 3.8(a), Sellers have delivered
to Buyer: (i) all records, notifications, reports, permit and license
applications, engineering and geologic studies, and environmental impact
reports, tests or assessments (collectively, "RECORDS, NOTIFICATIONS AND
REPORTS") that (A) are material to the operation of the Business, or (B)
relate to the discharge or release of materials into the environment
and/or the handling or transportation of waste materials or hazardous or
toxic substances or otherwise relate to the protection of the public
health or the environment, or (C) were filed with or submitted to
appropriate governmental agencies during the past five (5) years by
Sellers or their agents, and (ii) all material notifications from such
governmental agencies to Sellers or their agents in response to or
relating to any of such Records, Notifications and Reports.
(c) Schedule 3.8(c) lists, as of the Closing Date, each
facility owned, leased, operated or otherwise used by Sellers for the
Business, the ownership, lease, operation or use of which is being
transferred to, assumed by or otherwise acquired directly or indirectly
by Buyer pursuant to this Agreement (each, a "FACILITY" and
collectively, the "FACILITIES"). Except as otherwise disclosed on
Schedule 3.8(c):
(i) Each Facility is fully licensed, permitted
and authorized to carry on its current business under all
applicable federal, state and local statutes, orders, approvals,
zoning or land use requirements, rules and regulations and no
Facility is a non-conforming use or otherwise subject to any
restrictions regarding reconstruction.
(ii) All activities and operations at each
Facility are being and have been conducted in compliance in all
material respects with the requirements, criteria, standards and
conditions set forth in all applicable federal, state and local
statutes, orders, approvals, permits, zoning or land use
requirements and restrictions, variances, licenses, rules and
regulations.
(iii) Each Facility is located on real property
owned or leased by Sellers (each a "FACILITY PROPERTY").
(iv) There are no circumstances, conditions or
reasons which are likely to be the basis for revocation or
suspension of any Facility's site assessments, permits, licenses,
consents, authorizations, zoning or land use permits, variances
or approvals relating to any Facility owned by Sellers, or any
Affiliate (as hereinafter defined) of Sellers and leased to
Sellers to be used in the Business after the Closing, and to the
knowledge of Sellers there are no circumstances, conditions or
reasons which are likely to be the basis for revocation or
suspension of any site assessments, permits, licenses, consents,
authorizations, zoning or land use permits, variances or
approvals relating to any such Facility.
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3.9. AFFILIATE. For purposes of this Agreement, the term
"AFFILIATE" means, with respect to any person, any person that directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with such person, and in the case of Sellers includes
each Seller's father, mother, grandfather, grandmother, brothers, sisters,
children and grandchildren, and in the case of a trust includes the grantors,
trustees and beneficiaries of the trust.
3.10. FIXED ASSETS AND FACILITY PROPERTY.
(a) Schedule 3.10(a) lists, as of the Closing Date,
substantially all the fixed assets (other than real estate) of Sellers
used in the Business, including, without limitation, identification of
each vehicle by description and serial number, identification of
machinery, equipment and general descriptions of parts, supplies and
inventory. Except as described on Schedule 3.10(a), all of Sellers'
containers, vehicles, machinery and equipment necessary for the
operation of the Business are in good working order and condition,
normal wear and tear excepted, and all of the motor vehicles and other
rolling stock of Sellers is in material compliance with all applicable
laws, rules and regulations. All such vehicles, machinery and equipment
are substantially fit for the purposes for which they are utilized. All
leases of fixed assets are in full force and effect and binding upon the
parties thereto; neither Sellers nor any other party to such leases is
in breach of any of the material provisions thereof.
(b) Sellers have good, valid and marketable title to
all personal properties and assets, tangible and intangible, actually
used or necessary for the conduct of the Business, free of any
encumbrance or charge of any kind except: (i) liens for current taxes
not yet due; and (ii) minor imperfections of title and encumbrances, if
any, that are not substantial in amount, do not materially detract from
the value of the property subject thereto, do not materially impair the
value of the Business or the Assets, and have arisen only in the
ordinary course of business and consistent with past practice. There are
and as of the Closing Date will be no leases, occupancy agreements,
options, rights of first refusal or any other agreements or
arrangements, either oral or written, that create or confer in any
person or entity the right to acquire, occupy or possess, now or in the
future, any Assets, or any portion thereof, or create in or confer on
any person or entity any right, title or interest therein or in any
portion thereof.
3.11. ACQUISITION/DISPOSAL OF ASSETS. Except as indicated on
Schedule 3.11, since the Balance Sheet Date, Sellers have not acquired or sold
or otherwise disposed of any properties or assets which, singly or in the
aggregate, have a value in excess of $5,000, or which are material to the
operation of the Business as presently conducted.
3.12. CONTRACTS AND AGREEMENTS; ADVERSE RESTRICTIONS.
(a) Schedule 3.12(a) lists, as of the Closing Date, and
includes copies of, all insurance policies, material contracts and
agreements relating to the Business to which either of the Sellers is a
party or by which any of the Assets is bound (including,
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but not limited to, joint venture or partnership agreements, contracts
with any labor organizations, promissory notes, loan agreements, bonds,
mortgages, deeds of trust, liens, pledges, conditional sales contracts
or other security agreements) (the "ASSUMED CONTRACTS"). Except as
disclosed on Schedule 3.12(a), all such contracts and agreements
included in Schedule 3.12(a) are and on the Closing Date shall be in
full force and effect and binding upon the parties thereto. Except as
described or cross referenced on Schedule 3.12(a), neither Sellers nor,
to Sellers' knowledge, any other parties to such contracts and
agreements is in breach thereof, and none of the parties has threatened
to breach any of the material provisions thereof or notified Sellers of
a default thereunder, or exercised any options thereunder.
(b) Except as set forth on Schedule 3.12(b), there is
no outstanding judgment, order, writ, injunction or decree against
Sellers, the result of which could materially adversely affect Sellers,
the Business or any of the Assets, nor have Sellers been notified that
any such judgment, order, writ, injunction or decree has been requested.
3.13. PERSONNEL. Schedule 3.13 is a complete list, as of the
Closing Date, of all employees (by type or classification) of Sellers relating
to the Business and their respective rates of compensation, including (i) the
portions thereof attributable to bonuses, (ii) any other salary, bonus, equity
participation, or other compensation arrangement made with or promised to any of
them, and (iii) copies of all employment agreements with employees. Schedule
3.13 also lists the driver's license number for each driver of motor vehicles
used in the Business.
3.14. BENEFIT PLANS AND UNION CONTRACTS.
(a) Schedule 3.14(a) is a complete list as of the
Closing Date, and includes complete copies, of all employee benefit
plans and agreements currently maintained or contributed to by Sellers
relating to the Business, including employment agreements and any other
agreements containing "golden parachute" provisions, retirement plans,
welfare benefit plans and deferred compensation agreements, together
with copies of such plans, agreements and any trusts related thereto,
and classifications of employees covered thereby as of the Closing Date.
Except for the employee benefit plans described on Schedule 3.14(a),
Sellers have no other pension, profit sharing, deferred compensation, or
other employee benefit plans or arrangements with any party. Except as
disclosed on Schedule 3.14(a), all employee benefit plans listed on
Schedule 3.14(a) are fully funded and in substantial compliance with all
applicable federal, state and local statutes, ordinances and
regulations. All such plans that are intended to qualify under Section
401(a) of the Internal Revenue Code have been determined by the Internal
Revenue Service to be so qualified, and copies of such determination
letters are included as part of Schedule 3.14(a). All reports and other
documents required to be filed with any governmental agency or
distributed to plan participants or beneficiaries (including, but not
limited to, actuarial reports, audits or tax returns) have been timely
filed or distributed, and copies thereof are included as part of
Schedule 3.14(a). All employee benefit plans listed on such Schedule
have been operated in accordance with the terms and provisions of the
plan documents and all related documents and policies. Sellers
have not incurred any liability
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for excise tax or penalty due to the Internal Revenue Service or U.S.
Department of Labor nor any liability to the Pension Benefit Guaranty
Corporation for any employee benefit plan, nor have Sellers, nor
party-in-interest or disqualified person, engaged in any transaction or
other activity which would give rise to such liability. Sellers have not
participated in or made contributions to any "multi-employer plan" as
defined in the Employee Retirement Income Security Act of 1974
("ERISA"), nor would Sellers be subject to any withdrawal liability with
respect to such a plan if any such employer withdrew from such a plan
immediately prior to the Closing Date. No employee pension benefit plan
is under funded on a termination basis as of the date of this Agreement.
(b) Schedule 3.14(b) is a complete list, as of the
Closing Date, and includes complete copies of all union contracts and
agreements between Sellers and any collective bargaining group relating
to the Business. In the operation of the Business, Sellers have complied
in all material respects with all applicable federal and state laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours, and nondiscrimination in employment, and
are not engaged in any unfair labor practice. There is no charge pending
nor, to Sellers' knowledge, is there any charge threatened against
Sellers relating to the Business before any court or agency and alleging
unlawful discrimination in employment practices. There is no charge of
or proceeding with regard to any unfair labor practice relating to the
Business that is pending before the National Labor Relations Board.
There is no labor strike, dispute, slow down or stoppage as of the
Closing Date, existing or threatened against Sellers relating to the
Business; no union organizational activity exists respecting employees
of Sellers relating to the Business not currently subject to a
collective bargaining agreement; except as set forth on Schedule
3.14(b), the Business has not experienced any work stoppage or material
labor difficulty; the union contracts or other agreements delivered as
part of Schedule 3.14(b) constitute all agreements with the unions or
other collective bargaining groups relating to the Business, and there
are no other arrangements or established practices relating to the
employees covered by any collective bargaining agreement; and Schedule
3.14(b) contains as of the Closing Date a list of all arbitration or
grievance proceedings relating to the Business that have occurred since
the Balance Sheet Date. No one has petitioned within the last five (5)
years, and no one is now petitioning, for union representation of any
employees of Sellers relating to the Business. Sellers have not
experienced any labor strike, slow-down, work stoppage, or other job
action during the last five (5) years relating to the Business.
3.15. TAXES.
(a) Sellers have timely filed all requisite federal,
state, local and other tax and information returns due for all fiscal
periods ended on or before the Closing Date. All such returns are
accurate and complete. Except as set forth on Schedule 3.15, there are
no open years, examinations in progress, extensions of any statute of
limitations or claims against Sellers relating to federal, state, local
or other taxes (including penalties and interest) for any period or
periods prior to and including the Closing Date and no notice of any
claim for taxes has been received. Copies of (i) any tax examinations,
(ii) extensions of statutory limitations and (iii) the federal income,
and state franchise, income
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and sales tax returns of Sellers for the last three (3) fiscal years are
attached as part of Schedule 3.15. Sellers have not been contacted by
any federal, state or local taxing authority regarding a prospective
examination.
(b) Except as set forth on Schedule 3.15 (which
schedule also includes the amount due) Sellers have duly paid all taxes
and other related charges required to be paid prior to the Closing Date.
The reserves for taxes contained in the Financial Statements are
adequate to cover the tax liability of Sellers as of the Closing Date.
(c) Sellers have withheld all required amounts from
their employees for all pay periods in full and complete compliance with
the withholding provisions of applicable federal, state and local laws.
All required federal, state and local and other returns with respect to
income tax withholding, social security, and unemployment taxes have
been duly filed by Sellers for all periods for which returns are due,
and the amounts shown on all such returns to be due and payable have
been paid in full.
3.16. COPIES COMPLETE. Except as disclosed on Schedule 3.16, the
copies of all leases, instruments, agreements, licenses, permits, certificates
or other documents that have been delivered to Buyer in connection with the
transactions contemplated hereby are complete and accurate as of the Closing
Date and are true and correct copies of the originals thereof. None of such
leases, instruments, agreements, licenses, permits, site assessments,
certificates or other documents requires notice to, or consent or approval of,
any governmental agency or other third party to any of the transactions
contemplated hereby, except such consents and approvals as are listed on
Schedule 3.16, all of which will have been obtained prior to the Closing Date.
3.17. CUSTOMERS, XXXXXXXX, CURRENT RECEIPTS AND RECEIVABLES.
Schedule 3.17 is current, accurate and complete list of, and includes:
(a) the customers of the Business that Sellers serve on
an ongoing basis, including name, location and current billing rate, as
of the Closing Date; and
(b) an accurate and complete aging of all accounts and
notes receivable from customers as of the last day of the month
preceding the Closing Date, showing amounts due in thirty-day (30-day)
aging categories. Except to the extent of the allowance for bad debts
reflected on the Financial Statements, Sellers' accounts and notes
receivable are collectible in the amounts shown on Schedule 3.17.
Since the Balance Sheet Date, Sellers have not lost any customers and no
customers have threatened or otherwise indicated to Sellers that they intend to
discontinue doing business with Sellers. Sellers have no knowledge of any
intention of any of such customers to terminate or reduce the scope of its
operations at the locations served by the Business, and none of such customers
has indicated to Sellers that it is considering terminating or reducing the
scope of any of its operations at any of such locations.
3.18. [INTENTIONALLY OMITTED]
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3.19. CLOSING DATE DEBT. At the Closing, Sellers shall prepare
and deliver to Buyer Schedule 3.19, which shall set forth the amount of (i) the
aggregate debt (excluding trade payables) of Sellers outstanding on the Closing
Date relating to the Business, which debt will be repaid at or immediately after
the Closing Date, including in each case all interest accrued through and
including the Closing Date and all prepayment penalties to be incurred in
connection with the repayment of any such debt required to be repaid, plus (ii)
the present value of all capitalized lease obligations (determined in accordance
with generally accepted accounting principles) included in the Assumed Contracts
or encumbering the Assets and (iii) the present value, discounted at the lease
rate factor, if known, inherent in the lease or, if the lease rate factor is not
known, at the rate charged to Sellers by a third party lender in connection with
its most recent borrowing to finance equipment, of all lease obligations that
are not capitalized lease obligations included in the Assumed Contracts or
encumbering the Assets (the "CLOSING DATE DEBT").
3.20. COMPLIANCE WITH LAWS. Except as disclosed on Schedule 3.20,
Sellers have complied with, and Sellers are presently in compliance with,
federal, state and local laws, ordinances, codes, rules, regulations,
Governmental Permits, orders, judgments, awards, decrees, consent judgments,
consent orders and requirements applicable to Sellers relating to the Business
(collectively "LAWS"), including, but not limited to, Laws relating to the
public health, safety or protection of the environment (collectively,
"ENVIRONMENTAL LAWS"). Except as disclosed on Schedule 3.20, there has been no
assertion by any party that Sellers are in material violation of any Laws.
Specifically and without limiting the generality of the foregoing, except as
disclosed on Schedule 3.20:
(a) Except as permitted under applicable laws and
regulations, including, without limitation, the federal Resource
Conservation Recovery Act, 42 USC Section 6901 et seq. ("RCRA"), the
Business has not accepted, processed, handled, transferred, generated,
treated, stored or disposed of any Hazardous Material (as defined in
Section 3.20(e) below) nor has it accepted, processed, handled,
transferred, generated, treated, stored or disposed of asbestos, medical
waste, radioactive waste or municipal waste, except in compliance with
Environmental Laws.
(b) During Sellers' ownership or leasing of the
Facility Property owned or leased by Sellers and prior to Sellers'
ownership or leasing of such Facility Property, no Hazardous Material,
other than that allowed under Environmental Laws, including, without
limitation, RCRA, has been disposed of, or otherwise released on any
Facility Property.
(c) During Sellers' ownership or leasing of the
Facility Property owned or leased by Sellers and prior to Sellers'
ownership or leasing of such Facility Property, no Facility Property has
ever been subject to or received any notice of any private,
administrative or judicial action, or notice of any intended private,
administrative or judicial action relating to the presence or alleged
presence of Hazardous Material in, under, upon or emanating from any
Facility Property or any real property now or previously owned by
Sellers. There are no pending and no threatened actions or proceedings
from any governmental agency or any other entity involving remediation
of
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any condition of any Facility Property, including, without limitation,
petroleum contamination, pursuant to Environmental Laws.
(d) Except as allowed under Environmental Laws, the
Business has not knowingly sent, transported or arranged for the
transportation or disposal of any Hazardous Material, to any site,
location or facility.
(e) As used in this Agreement, "HAZARDOUS MATERIAL"
shall mean the substances (i) defined as "HAZARDOUS WASTE" in 40 CFR
261, and substances defined in any comparable applicable state statute
or regulation; (ii) any substance the presence of which requires
remediation pursuant to any Environmental Laws; and (iii) any substance
disposed of in a manner not in compliance with Environmental Laws.
3.21. PATENTS, TRADEMARKS, TRADE NAMES, ETC. Schedule 3.21 lists
all patents, trade names, fictitious business names, trademarks, service marks,
and copyrights owned by Sellers or which Sellers are licensed to use in
connection with the Business (other than licenses to use software for personal
computer operating systems that were provided when the computer was purchased
and licenses to use software for personal computers that are granted to retail
purchasers of such software). No patents, trade secrets, know-how, intellectual
property, trademarks, trade names, assumed names, copyrights, or designations
used by Sellers in the Business infringe on any patents, trademarks, or
copyrights, or any other rights of any person. Sellers do not know or have any
reason to believe that there are any claims of third parties to the use of any
such names or any similar name, or know of or has any reason to believe that
there exists any basis for any such claim or claims.
3.22. ASSETS, ETC., NECESSARY TO THE BUSINESS. Sellers own or
lease all properties and assets, real, personal, and mixed, tangible and
intangible, and, except as disclosed on Schedules 3.4, 3.8(a), 3.12(a) and 3.16,
are a parties to all Governmental Permits and other agreements necessary to
permit Sellers to carry on the Business as presently conducted.
3.23. SUPPLIERS AND CUSTOMERS. The relations between Sellers and
the customers of the Business are good. Sellers have no knowledge of any fact
(other than general economic and industry conditions) which indicates that any
of the suppliers supplying products, components, materials or providing use of,
or access to, landfills or disposal sites to Sellers intends to cease providing
such items to Sellers, nor do Sellers have knowledge of any fact (other than
general economic and industry conditions) which indicates that any of the
customers of the Business intends to terminate, limit or reduce its business
relations with Sellers relating to the Business.
3.24. ABSENCE OF CERTAIN BUSINESS PRACTICES. Sellers have not
directly or indirectly within the past five (5) years given or agreed to give
any gift or similar benefit to any customer, supplier, governmental employee or
other person who is or may be in a position to help or hinder the Business in
connection with any actual or proposed transaction which (a) might subject
Sellers to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (b) if not given in the past, might have had an
adverse effect on the financial
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condition, business or results of operations of the Business, or (c) if not
continued in the future, might adversely affect the financial condition,
business or operations of the Business or which might subject Buyer to suit or
penalty in any private or governmental litigation or proceeding.
3.25. DISCLOSURE SCHEDULES. Any matter disclosed by Sellers on
any Schedule to this Agreement shall be deemed to have been disclosed on every
other Schedule that refers to such Schedule by cross reference so long as the
nature of the matter disclosed is obvious from a fair reading of the Schedule on
which the matter is disclosed.
3.26. NO MISLEADING STATEMENTS. The representations and
warranties of Sellers contained in this Agreement, the Exhibits and Schedules
hereto and all other documents and information furnished to Buyer and its
representatives pursuant hereto are complete and accurate in all material
respects and do not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made and to be made not
misleading.
3.27. ACCURATE AND COMPLETE RECORDS. The books, ledgers,
financial records and other records of Sellers relating to the Business:
(a) have been made available to Buyer and its agents at
Sellers' offices or at the offices of Buyer's attorneys or Sellers'
attorneys;
(b) have been, in all material respects, maintained in
accordance with all applicable laws, rules and regulations; and
(c) are accurate and complete, reflect all material
transactions.
3.28. KNOWLEDGE. Wherever reference is made in this Agreement to
the "KNOWLEDGE" of Sellers, such term means the actual knowledge of Sellers, or
any director, officer or management employee of Sellers whose duties relate to
the Business, or any knowledge which should have been obtained by Sellers, or
such employee upon reasonable inquiry by a reasonable business person.
3.29. BROKERS; FINDERS. No person has acted directly or
indirectly as a broker, finder or financial advisor for Sellers in connection
with the transactions contemplated by this Agreement and no person is entitled
to any broker's, finder's, financial advisory or similar fee or payment in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of Sellers.
4. REPRESENTATIONS AND WARRANTIES OF WCI AND CTR
WCI and CTR represent and warrant to Sellers that each of the following
representations and warranties is true as of the Closing Date and agree that
such representations and warranties will survive the Closing:
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4.1. EXISTENCE AND GOOD STANDING. WCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. CTR is a corporation duly organized, validly existing and in good
standing under the laws of the State of Oregon.
4.2. AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by WCI and CTR, and, subject to the due
authorization, execution and delivery by Sellers, constitutes a legal, valid and
binding obligation of WCI and CTR. Each of WCI and CTR has full corporate power,
legal right and corporate authority to enter into and perform its obligations
under this Agreement and to carry on the Business as presently conducted. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and the fulfillment of and compliance with the
terms and conditions hereof do not and will not, after the giving of notice, or
the lapse of time or otherwise: (a) violate any provisions of any judicial or
administrative order, award, judgment or decree applicable to CTR or WCI: (b)
conflict with any of the provisions of the Articles or Certificate of
Incorporation or Bylaws of CTR or WCI; or (c) conflict with, result in a breach
of or constitute a default under any material agreement or instrument to which
CTR or WCI is a party or by which either is bound.
4.3. NO MISLEADING STATEMENTS. The representations and warranties
of WCI and CTR contained in this Agreement, the Exhibits and Schedules hereto
and all other documents and information furnished to Sellers pursuant hereto are
materially complete and accurate, and do not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made and to be made not misleading as of the Closing Date.
5. CLOSING DELIVERIES
At the Closing, the respective parties shall make the deliveries
indicated:
5.1. BUYER'S DELIVERIES.
(a) Buyer shall deliver the cash portion of the
Purchase Price and the Note required to be delivered on the Closing Date
pursuant to Section 1.4.
5.2. SELLERS' DELIVERIES.
(a) Sellers shall deliver to Buyer (and/or its
designee) an executed xxxx of sale or bills of sale and other
instruments of transfer and conveyance for the full and complete
transfer, conveyance, assignment and delivery to Buyer on the Closing
Date of all of Sellers' right, title and interest in and to all of the
Assets, accompanied by all third party consents required with respect
thereto, including, without limitation, written evidence of the release
of the liens and encumbrances with respect to the Assets;
(b) Sellers shall deliver to Buyer an executed
assignment or transfer of the Assumed Contracts and Governmental Permits
accompanied by all third party consents required with respect thereto;
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(c) Sellers shall deliver to Buyer (and/or its
designee) all motor vehicle registrations and ownership documents for
the motor vehicles being acquired by Sellers;
(d) Sellers shall deliver to Buyer an opinion of
counsel for Sellers, dated as of the Closing Date, in substantially the
form attached hereto as Exhibit 5.2(d).
(e) Sellers shall execute and deliver such other
documents and instruments as are reasonably requested by Buyer in order
to consummate the transactions contemplated by this Agreement.
(f) Sellers shall deliver to Buyer evidence
satisfactory to Buyer showing that all written employment contracts and
all oral employment contracts other than those that are terminable "at
will" without payment of severance (other than normal severance benefits
approved by Buyer) or other benefits with non-union employees of Sellers
(including, without limitation, rights to obtain equity in the Business
or Assets) have been terminated, effective on or before the Closing
Date.
6. ADDITIONAL COVENANTS OF WCI, CTR, AND SELLERS
6.1. CONFIDENTIALITY. Sellers shall not disclose or make any
public announcements of the existence or terms of this Agreement or the
transactions contemplated by this Agreement without the prior written consent of
WCI, unless required to make such disclosure or announcement by law, in which
event the party making the disclosure or announcement shall notify WCI at least
24 hours before such disclosure or announcement is expected to be made.
6.2. BROKERS AND FINDERS FEES. Each party shall pay and be
responsible for any broker's, finder's or financial advisory fee incurred by
such party in connection with the transactions contemplated by this Agreement.
6.3. PAYMENTS RECORDED BY SELLERS AFTER CLOSING DATE. Sellers
shall receive in trust and pay over to Buyer any payments or other moneys
received by Sellers after the Closing Date that relate to the Business, the
Assets or services provided by Sellers to customers identified on Schedule 3.17.
6.4. CONSENTS. Sellers will use reasonable commercial efforts to
obtain the consent of any party whose consent is required to complete the
transaction contemplated by this Agreement, including without limitation (if
applicable) each party to any contract relating to the Assets or the Business,
each municipality or other jurisdiction that has granted a franchise to the
Sellers and each jurisdiction issuing or granting any other Governmental Permit,
shall have consented to such transactions, and every other Required Governmental
Consent shall have been obtained prior to the Closing Date. Buyer shall be under
no obligation to agree to any condition imposed by any party granting any such
consent.
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6.5. ACCESS TO FINANCIAL STATEMENTS AND RECORDS. For three (3)
years from the Closing Date, if necessary for Buyers to obtain financing, Seller
shall allow Buyer or Buyer's designee to read and audit Seller's financial,
accounting and tax records for the period of January 1, 1995, through the
Closing Date. Buyers shall assume any costs of such audit.
7. INDEMNIFICATION
7.1. INDEMNITY BY SELLERS. Subject to Section 7.2, Sellers
covenant and agree that they will, jointly and severally, indemnify and hold
harmless WCI and CTR and their respective directors, officers and agents and
their respective successors and assigns (collectively the "INDEMNITEES"), from
and after the date of this Agreement, against any and all losses, damages,
assessments, fines, penalties, adjustments, liabilities, claims, deficiencies,
costs, expenses (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation), expenditures, including, without
limitation, any "ENVIRONMENTAL SITE LOSSES" (as such term is hereinafter
defined) identified by an Indemnitee with respect to each of the following
contingencies until the expiration of the applicable statute of limitations
(all, the "INDEMNITY EVENTS"):
(a) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of Sellers
pursuant to the terms of this Agreement or any misrepresentation in or
omission from any Exhibit, Schedule, list, certificate, or other
instrument furnished or to be furnished to WCI or CTR pursuant to the
terms of this Agreement, regardless of whether, in the case of a breach
of a representation or a warranty, WCI or CTR relied on the truth of
such representation or warranty or had any knowledge of any breach
thereof.
(b) The design, development, construction or operation
of any "ENVIRONMENTAL SITE" as hereinafter defined, or the installation
or operation of an Underground Storage Tank ("UST") during any period on
or prior to the Closing Date. As used in this Agreement, "ENVIRONMENTAL
SITE" shall mean any facility, any UST and any other waste storage,
processing, treatment or disposal facility, and any other business site
or any other real property owned, leased, controlled or operated by
Sellers or by any predecessor thereof on or prior to the Closing Date
and used in the Business, provided however, as to activities of such
predecessors, only to the extent that Sellers had knowledge of such
activities. As used in this Agreement, "ENVIRONMENTAL SITE LOSSES" shall
mean any and all losses, damages (including exemplary damages and
penalties), liabilities, claims, deficiencies, costs, expenses, and
expenditures (including, without limitation, expenses in connection with
site evaluations, risk assessments and feasibility studies) arising out
of or required by an interim or final judicial or administrative decree,
judgment, injunction, mandate, interim or final permit condition or
restriction, cease and desist order, abatement order, compliance order,
consent order, clean-up order, exhumation order, reclamation order or
any other remedial action that is required to be undertaken under
federal, state or local law in respect of operating activities on or
affecting any facility, any UST or any other Environmental Site,
including, but not limited to (x) any actual or alleged violation of any
law or regulation respecting the protection of the
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environment, including, but not limited to, RCRA and CERCLA or any other
law or regulation respecting the protection of the air, water and land
and (y) any remedies or violations, whether by a private or public
action, alleged or sought to be assessed as a consequence, directly or
indirectly, of any "RELEASE" (as defined below) of pollutants (including
odors) or Hazardous Substances from any facility, any UST or any other
Environmental Site resulting from activities thereat, whether such
Release is into the air, water (including groundwater) or land and
whether such Release arose before, during or after the Closing Date. The
term "RELEASE" as used herein means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the ambient environment.
(c) All actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) incident to any of the foregoing.
7.2. LIMITATIONS ON SELLERS' INDEMNITIES. The maximum amount
which the Indemnitees can recover as a result of one or more Indemnity Events
pursuant to the provisions hereof for Claims shall not in the aggregate exceed
the Purchase Price.
7.3. NOTICE OF INDEMNITY CLAIM.
(a) In the event that any claim ("CLAIM") is hereafter
asserted against or arises with respect to any Indemnitee as to which
such Indemnitee may be entitled to indemnification hereunder, such
Indemnitee shall notify Sellers (collectively, the "INDEMNIFYING PARTY")
in writing thereof (the "CLAIMS NOTICE") within sixty (60) days after
(i) receipt of written notice of commencement of any third party
litigation against such Indemnitee, (ii) receipt by such Indemnitee of
written notice of any third party claim pursuant to an invoice, notice
of claim or assessment, against such Indemnitee, or (iii) such
Indemnitee becomes aware of the existence of any other event in respect
of which indemnification may be sought from the Indemnifying Party
(including, without limitation, any inaccuracy of any representation or
warranty or breach of any covenant). The Claims Notice shall describe
the Claim and the specific facts and circumstances in reasonable detail,
and shall indicate the amount, if known, or an estimate, if possible, of
the losses that have been or may be incurred or suffered by the
Indemnitee.
(b) The Indemnifying Party may elect to defend any
Claim for money damages where the cumulative total of all Claims
(including such Claims) do not exceed the limit set forth in Section 7.2
at the time the Claim is made, by the Indemnifying Party's own counsel;
provided, however, the Indemnifying Party may assume and undertake the
defense of such a third party Claim only upon written agreement by the
Indemnifying Party that the Indemnifying Party is obligated to fully
indemnify such Indemnitee with respect to such action. The Indemnitee
may participate, at the Indemnitee's own expense, in the defense of any
Claim assumed by the Indemnifying Party. Without the written approval of
the Indemnitee, which approval shall not be unreasonably withheld, the
Indemnifying Party shall not agree to any compromise of a Claim defended
by the Indemnifying Party.
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(c) If, within thirty (30) days of the Indemnifying
Party's receipt of a Claims Notice, the Indemnifying Party shall not
have provided the written agreement required by Section 7.3(b) and
elected to defend the Claims, the Indemnitee shall have the right to
assume control of the defense and/or compromise of such Claim, and the
costs and expenses of such defense, including reasonable attorneys'
fees, shall be added to the Claim. The Indemnifying Party shall
promptly, and in any event within thirty (30) days reimburse the
Indemnitee for the costs of defending the Claim, including attorneys'
fees and expenses.
(d) The party assuming the defense of any Claim shall
keep the other party reasonably informed at all times of the progress
and development of its or their defense of and compromise efforts with
respect to such Claim and shall furnish the other party with copies of
all relevant pleadings, correspondence and other papers. In addition,
the parties to this Agreement shall cooperate with each other and make
available to each other and their representatives all available relevant
records or other materials required by them for their use in defending,
compromising or contesting any Claim.
(e) In the event both the Indemnitee and the
Indemnifying Party are named as defendants in an action or proceeding
initiated by a third party, they shall both be represented by the same
counsel (on whom they shall agree), unless such counsel, the Indemnitee,
or the Indemnifying Party shall determine that such counsel has a
conflict of interest in representing both the Indemnitee and the
Indemnifying Party in the same action or proceeding and the Indemnitee
and the Indemnifying Party do not waive such conflict to the
satisfaction of such counsel.
7.4. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations and warranties of the parties contained in this Agreement and in
any certificate, Exhibit or Schedule delivered pursuant hereto, or in any other
writing delivered pursuant to the provisions of this Agreement (the
"REPRESENTATIONS AND WARRANTIES") and the liability of the party making such
Representations and Warranties for breaches thereof shall survive the
consummation of the transactions contemplated hereby. The parties hereto in
executing and delivering and in carrying out the provisions of this Agreement
are relying solely on the representations, warranties, Schedules, Exhibits,
agreements and covenants contained in this Agreement, or in any writing or
document delivered pursuant to the provisions of this Agreement, and not upon
any representation, warranty, agreement, promise or information, written or
oral, made by any persons other than as specifically set forth herein or
therein.
7.5. NO EXHAUSTION OF REMEDIES OR SUBROGATION; RIGHT OF SET OFF.
Sellers waive any right to require any Indemnitee to (i) proceed against any
other person or (iii) pursue any other remedy whatsoever in the power of any
Indemnitee. Buyer may, but shall not be obligated to, set off against any and
all payments due Sellers under this Agreement or any other agreement between the
parties, any amount to which WCI, CTR or any other Indemnitee is
entitled to be indemnified hereunder with respect to any Indemnity Event. Such
right of set off shall be separate and apart from any and all other rights and
remedies that the Indemnities may have against Sellers or their successors. If
any Indemnitee has the option to proceed against any
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other person, besides the Sellers, and such Indemnitee chooses not to proceed
against that other person, such Indemnitee shall not proceed against the
Sellers.
8. OTHER POST-CLOSING COVENANTS OF SELLERS AND BUYER
8.1. RESTRICTIVE COVENANTS. Sellers and Sellers' Affiliates
acknowledge that (i) CTR, as the purchaser of the Assets (including the goodwill
of the Business), are and will be engaged in the same business as the Business;
(ii) Sellers, and their Affiliates are intimately familiar with the Business;
(iii) the Business is currently conducted in the State of Oregon and Buyer,
directly and indirectly through its Affiliates, currently conduct business in
Oregon and intends, by acquisition or otherwise, to expand the Business into
other geographic areas of Oregon where it is not presently conducted; (iv)
Sellers, and their Affiliates have had access to trade secrets of, and
confidential information concerning, the Business; (v) the agreements and
covenants contained in this Section 8.1 are essential to protect the Business
and the goodwill being acquired; and (vi) Sellers, and their Affiliates have the
means to support themselves and their dependents other than by engaging in a
business substantially similar to the Business and the provisions of this
Section 8 will not impair such ability. Sellers covenant and agree as set forth
in (a), (b) and (c) below with respect to the Business:
(a) NON-COMPETE. For a period commencing on the Closing
Date and terminating five (5) years thereafter (the "RESTRICTED
PERIOD"), Sellers, and their Affiliates shall not, anywhere in the
Cities of Dunes and Florence, Oregon or the Counties of Lincoln or Lane,
Oregon, or where the Buyer owns or operates a portable toilet or septic
services business, directly or indirectly, acting individually or as the
owners, shareholders, partners, or employees of any entity, (i) engage
in the operation of a portable toilet or septic services business or
engage in the operation of a solid waste collection, transporting,
disposal and/or composting business, transfer facility, recycling
facility, materials recovery facility or solid waste landfill; (ii)
enter the employ of, or render any personal services to or for the
benefit of, or assist in or facilitate the solicitation of customers
for, or receive remuneration in the form of salary, commissions or
otherwise from, any business engaged in such activities; or (iii)
receive or purchase a financial interest in, make a loan to, or make a
gift in support of, any such business in any capacity, including,
without limitation, as a sole proprietor, partner, shareholder, officer,
director, principal, agent, trustee or lender; provided, however, that
the Sellers may own, directly or indirectly, solely as an investment,
securities of any business traded on any national securities exchange or
NASDAQ, provided Sellers are not a controlling person of, or member of a
group which controls, such business and further provided that Sellers do
not, in the aggregate, directly or indirectly, own two percent (2%) or
more of any class of securities of such business. However, Sellers shall
have the right to participate in public matters involving the Buyer
other than rate setting and garbage franchise regulations if Sellers
have a financial interest in such public matters. For example, Sellers
may participate in land use applications involving land located near
property owned by them. In addition, Sellers may engage in business
dealings with customers of Westlane Disposal, the Buyer or Siuslaw
Disposal, as long as such business dealings do not violate the
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covenant not to compete contained in this section and do not involve any
aspect of solid waste collection, hauling and disposal or portable
toilets or septic services.
(b) CONFIDENTIAL INFORMATION. During the Restricted
Period, Sellers and their Affiliates shall keep secret and retain in
strictest confidence, and shall not use for the benefit of themselves or
others, all data and information relating to the Business ("CONFIDENTIAL
INFORMATION"), including without limitation, the existence of and terms
of this Agreement, know-how, trade secrets, customer lists, supplier
lists, details of contracts, pricing policies, operational methods,
marketing plans or strategies, bidding practices and policies, product
development techniques or plans, and technical processes; provided,
however, that the term "CONFIDENTIAL INFORMATION" shall not include
information that (i) is or becomes generally available to the public
other than as a result of disclosure by Sellers, or (ii) is general
knowledge in the portable toilet, septic services, solid waste
collection, hauling and disposal business and not specifically related
to the Business.
(c) PROPERTY OF THE BUSINESS. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof)
relating to the Business, including such items stored in computer
memories, on microfiche or by any other means, made or compiled by or on
behalf of Sellers or made available to Sellers relating to the Business
(other than those relating to the Excluded Assets and the Excluded
Liabilities), but excluding any materials maintained by any attorneys
for Sellers prior to the Closing, are and shall be the property of WCI
or CTR and have been delivered or will be delivered or made available to
WCI or CTR at the Closing.
(d) NON-SOLICITATION. Without the consent of WCI, which
may be granted or withheld by WCI in its discretion, Sellers and their
Affiliates shall not solicit any employees of WCI, CTR or their
Affiliates to leave the employ of WCI, CTR or their Affiliates and join
Sellers or Sellers' Affiliate in any business endeavor owned or pursued
by any of them.
(e) NO DISPARAGEMENT. During the Restricted Period,
Sellers shall not, in any way to any customer or employee of the
Business or Buyer, denigrate or derogate Buyer or any of its
subsidiaries, or any officer, director or employee, or any product or
service or procedure of any such company whether or not such denigrating
or derogatory statements shall be true and are based on acts or
omissions which are learned by Sellers from and after the date hereof or
on acts or omissions which occur from and after the date hereof, or
otherwise. A statement shall be deemed denigrating or derogatory to any
person if it adversely affects the regard or esteem in which such person
or entity is held by such person. Without limiting the generality of the
foregoing, Sellers shall not, directly or indirectly in any way in
respect of any such company or any such directors or officers,
communicate with, or take any action which is adverse to the position of
any such company with any customer or employee of the Business or Buyer.
This paragraph does not apply to the extent that testimony is required
by legal process, provided that WCI has received not less than five (5)
days' prior written notice of such proposed testimony, or such lesser
actual notice as Sellers shall have.
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8.2. RIGHTS AND REMEDIES UPON BREACH. If Sellers, or any
Affiliate breach, or threaten to commit a breach of, any of the provisions of
Section 8.1(a), (b) or (d) herein (the "RESTRICTIVE COVENANTS"), WCI and CTR
shall have the following rights and remedies, each of which rights and remedies
shall be independent of the others and severally enforceable, and each of which
is in addition to, and not in lieu of, any other rights and remedies available
to Buyer at law or in equity:
(a) SPECIFIC PERFORMANCE. The right and remedy to have
the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to
Buyer and that money damages would not provide an adequate remedy to
Buyer. Accordingly, in addition to any other rights or remedies, Buyer
shall be entitled to injunctive relief to enforce the terms of the
Restrictive Covenants and to restrain Sellers from any violation
thereof.
(b) ACCOUNTING. The right and remedy to require Sellers
to account for and pay over to Buyer all compensation, profits, monies,
accruals, increments or other benefits derived or received by Sellers as
the result of any transactions constituting a breach of the Restrictive
Covenants.
(c) SEVERABILITY OF COVENANTS. Sellers acknowledge and
agree that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. If any court
determines that any of the Restrictive Covenants, or any part thereof,
is invalid or unenforceable, the remainder of the Restrictive Covenants
shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.
(d) BLUE-PENCILING. If any court determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable because
of the duration or geographic scope of such provision, such court shall
reduce the duration or scope of such provision, as the case may be, to
the extent necessary to render it enforceable and, in its reduced form,
such provision shall then be enforced.
(e) ENFORCEABILITY IN JURISDICTION. Buyer and Sellers
intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographic
scope of the Restrictive Covenants. If the courts of any one or more of
such jurisdictions hold the Restrictive Covenants unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of
Buyer and Sellers that such determination not bar or in any way affect
Buyer's right to the relief provided above in the courts of any other
jurisdiction within the geographic scope of the Restrictive Covenants as
to breaches of such covenants in such other respective jurisdictions,
such covenants as they relate to each jurisdiction being, for this
purpose, severable into diverse and independent covenants.
9. GENERAL
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9.1. ADDITIONAL CONVEYANCES. Following the Closing, Sellers and
Buyer shall each deliver or cause to be delivered at such times and places as
shall be reasonably agreed upon such additional instruments as Buyer or Sellers
may reasonably request for the purpose of carrying out this Agreement. Sellers
will cooperate with Buyer on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in connection with any
actions, proceedings or disputes of any nature with respect to matters
pertaining to all periods prior to the Closing Date. Sellers will cooperate with
WCI and its auditors, and will make available to WCI and its auditors to the
extent not included in the Assets, all records of Sellers relating to the
Business to the extent necessary to enable the information included in such
records to be audited and included in WCI's consolidated financial statements or
stated separately in accordance with SEC rules.
9.2. ASSIGNMENT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, the successors or assigns of WCI,
CTR and Sellers and the heirs, legal representatives or assigns of Sellers;
provided, however, that any such assignment shall be subject to the terms of
this Agreement and shall not relieve the assignor of its or his responsibilities
under this Agreement. Buyer may assign some or all of its rights hereunder to
another affiliate of WCI.
9.3. PUBLIC ANNOUNCEMENTS. Except as required by law, Sellers
shall not make any public announcement or filing with respect to the
transactions provided for herein without the prior written consent of WCI.
9.4. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
9.5. NOTICES. All notices, requests, demands and other
communications hereunder shall be deemed to have been duly given if in writing
and either delivered personally, sent by facsimile transmission or by air
courier service, or mailed by postage prepaid registered or certified U.S. mail,
return receipt requested, to the addresses designated below or such other
addresses as may be designated in writing by notice given hereunder, and shall
be effective upon personal delivery or facsimile transmission thereof or upon
delivery by registered or certified U.S. mail or one business day following
deposit with an air courier service:
If to Sellers: Xxxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxx, Xxxxxx 00000
With a copy to: D. Xxxxxx Xxxxxx, Esq.
D. Xxxxxx Xxxxxx, P.C.
0000 Xxxx Xxxxxx
X. X. Xxx X
Xxxxxxxx, Xxxxxx 00000
If to Buyer: Waste Connections, Inc.
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0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx
With a copy to: Xxxxxx X. Xxxxx, Esq.
Shartsis, Xxxxxx & Xxxxxxxx LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
9.6. ATTORNEYS' FEES. In the event of any dispute or controversy
between WCI or CTR on the one hand and Sellers on the other hand relating to the
interpretation of this Agreement or to the transactions contemplated hereby, the
prevailing party (before litigation, during litigation, at trial and on appeal)
shall be entitled to recover from the other party reasonable attorneys' fees and
expenses incurred by the prevailing party. Such award shall include
post-judgment attorney's fees and costs.
9.7. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon without regard to
its conflict of laws provisions. Any litigation relating to this Agreement or
related documents will be filed in Lane County, Oregon.
9.8. PAYMENT OF FEES AND EXPENSES. Whether or not the
transactions herein contemplated shall be consummated, each party hereto will
pay its own fees, expenses and disbursements incurred in connection herewith and
all other costs and expenses incurred in the performance and compliance with all
conditions to be performed hereunder.
9.9. INCORPORATION BY REFERENCE. All Schedules and Exhibits
attached hereto are incorporated herein by reference as though fully set forth
at each point referred to in this Agreement.
9.10. CAPTIONS. The captions in this Agreement are for
convenience only and shall not be considered a part hereof or affect the
construction or interpretation of any provisions of this Agreement.
9.11. NUMBER AND GENDER OF WORDS. Whenever the singular number is
used herein, the same shall include the plural where appropriate, and shall
apply to all of such number, and to each of them, jointly and severally, and
words of any gender shall include each other gender where appropriate.
9.12. ENTIRE AGREEMENT. This Agreement (including the Schedules
and Exhibits hereto) and the other documents delivered pursuant hereto
constitute the entire Agreement and understanding between Sellers and Buyer and
supersedes any prior agreement and understanding relating to the subject matter
of this Agreement. This Agreement may be modified or amended only by a written
instrument executed by Sellers and Buyer acting through their officers,
thereunto duly authorized.
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9.13. WAIVER. No waiver by any party hereto at any time of any
breach of, or compliance with, any condition or provision of this Agreement to
be performed by any other party hereto may be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
9.14. CONSTRUCTION. The language in all parts of this Agreement
must be in all cases construed simply according to its fair meaning and not
strictly for or against any party. Unless expressly set forth otherwise, all
references herein to a "DAY" are deemed to be a reference to a calendar day. All
references to "BUSINESS DAY" mean any day of the year other than a Saturday,
Sunday or a public or bank holiday in California or Oregon. Unless expressly
stated otherwise, cross-references herein refer to provisions within this
Agreement and are not references to the overall transaction or to any other
document.
10. GLOSSARY. The definitions of the terms used below can be found at
the Section indicated:
Term Section
---- -------
Affiliate 3.9.
Assets 1.1.
Assumed Contracts 1.1.(b); 3.12(a)
Average Closing Price 1.4(b)
Balance Sheet Date 3.5.
Business Recitals
Buyer Parties
business day 9.14
Claim 7.3.(a)
Claims Notice 7.3.(a)
Closing 2.
Closing Date 2.
Closing Date Debt 3.19.
Confidential Information 8.1.(b)
CTR Parties
day 9.14.
Environmental Laws 3.20.
Environmental Site 7.1.(b)
Environmental Site Losses 7.1.
ERISA 3.14.(b)
Excluded Assets 1.1.
Excluded Liabilities 1.3.
Facility 3.8.(c)
Facilities 3.8.(c)
Facility Property 3.8.(c)(iii)
Financial Statements 3.5.
Governmental Permits 1.1.(c); 3.8(a)
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Hazardous Material 3.20.(e)
Hazardous Waste 3.20.(e)
Indemnifying Party 7.3.(a)
Indemnitees 7.1.
Indemnity Events 7.1.
knowledge 3.28.
Laws 3.20.
Note 1.4.(b)
Purchase Price 1.4.
RCRA 3.20.(a)
Records, Notifications and Reports 3.8.(b)
Release 7.1.(b)
Representations and Warranties 7.4.
Required Governmental Consents 3.8.(a)
Restrictive Covenants 8.2.
Restricted Period 8.1.(a)
Sellers Parties
UST 7.1.(b)
WCI Parties
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by persons thereunto duly authorized as of the date first above
written.
SELLERS:
___________________________________
Xxxxx Xxxxxx
___________________________________
Xxxxxxx Xxxxxx
WCI:Waste Connections, Inc.
By:________________________________
Xxxxxx X. Xxxxxxxxxxxx
President
CTR:Xxxxx Transfer & Recycling, Inc.
By:________________________________
Xxxxxx X. Xxxxxxxxxxxx
President
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