EQUITY INTEREST AND ASSET PURCHASE AGREEMENT among WCA WASTE CORPORATION, WCA OF MASSACHUSETTS, LLC, WCA OF OHIO, LLC, LIVE EARTH LLC, CHAMPION CITY RECOVERY, LLC, BOXER REALTY REDEVELOPMENT, LLC, SUNNY FARMS LANDFILL, LLC, and NEW AMSTERDAM & SENECA...
Exhibit 10.1
EQUITY
INTEREST AND ASSET PURCHASE AGREEMENT
among
WCA WASTE CORPORATION,
WCA OF MASSACHUSETTS, LLC,
WCA OF OHIO, LLC,
LIVE EARTH LLC,
CHAMPION CITY RECOVERY, LLC,
BOXER REALTY REDEVELOPMENT, LLC,
SUNNY FARMS LANDFILL, LLC,
and
NEW AMSTERDAM & SENECA RAILROAD COMPANY, LLC.
December 9, 2009
among
WCA WASTE CORPORATION,
WCA OF MASSACHUSETTS, LLC,
WCA OF OHIO, LLC,
LIVE EARTH LLC,
CHAMPION CITY RECOVERY, LLC,
BOXER REALTY REDEVELOPMENT, LLC,
SUNNY FARMS LANDFILL, LLC,
and
NEW AMSTERDAM & SENECA RAILROAD COMPANY, LLC.
December 9, 2009
TABLE OF
CONTENTS
Page | ||||||||
1. Transfer of Equity Interests and Transferred Assets;
Delivery of Other Assets and Consideration
|
1 | |||||||
1.1 | Specified Interests and Assets | 1 | ||||||
1.2 | Assumption of Certain Liabilities | 2 | ||||||
1.3 | Interests and Assets Free and Clear of Liens | 2 | ||||||
1.4 | Closing | 2 | ||||||
1.5 | Working Capital Adjustment | 3 | ||||||
2. Purchase Price
|
4 | |||||||
2.1 | Payment of Purchase Price | 4 | ||||||
2.2 | Earn-Out Shares | 4 | ||||||
2.3 | Closing Shares | 6 | ||||||
2.4 | Adjustments to Escrow Shares | 6 | ||||||
3. Representations and Warranties of the Live Earth Parties
|
6 | |||||||
3.1 | Due Organization | 7 | ||||||
3.2 | Authorization, Validity and Effect of Agreements; Non-Contravention | 7 | ||||||
3.3 | Equity Interests of the Live Earth Companies | 7 | ||||||
3.4 | Obligations to Issue or Sell Equity Interests | 7 | ||||||
3.5 | Subsidiaries | 8 | ||||||
3.6 | Predecessor Status; etc | 8 | ||||||
3.7 | Financial Statements | 8 | ||||||
3.8 | Liabilities and Obligations | 8 | ||||||
3.9 | Approvals | 9 | ||||||
3.10 | Accounts and Notes Receivable | 9 | ||||||
3.11 | Permits and Intangibles | 9 | ||||||
3.12 | Personal Property and Leases | 9 | ||||||
3.13 | Customers; Contracts and Commitments | 9 | ||||||
3.14 | Real Property | 10 | ||||||
3.15 | Insurance | 11 | ||||||
3.16 | Employment Matters | 11 | ||||||
3.17 | Parachute Provisions | 11 | ||||||
3.18 | Benefit Plans; ERISA Compliance | 11 | ||||||
3.19 | Conformity with Law | 12 | ||||||
3.20 | Taxes | 12 | ||||||
3.21 | Completeness; No Defaults | 13 | ||||||
3.22 | Government Contracts | 13 | ||||||
3.23 | Absence of Changes | 13 | ||||||
3.24 | Deposit Accounts; Powers of Attorney | 14 | ||||||
3.25 | Proprietary Rights | 14 | ||||||
3.26 | Relations with Governments | 15 | ||||||
3.27 | Environmental Matters | 15 | ||||||
3.28 | No Broker’s or Finder’s Fees | 16 | ||||||
3.29 | Litigation | 16 | ||||||
3.30 | Proxy Statement; Disclosure | 17 |
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Page | ||||||||
4. Representations and Warranties of the WCA Parties
|
17 | |||||||
4.1 | Organization; Standing and Power | 17 | ||||||
4.2 | Capitalization | 17 | ||||||
4.3 | Authorization, Validity and Effect of Agreements; Non-contravention | 18 | ||||||
4.4 | SEC Reports; Financial Statements | 18 | ||||||
4.5 | Litigation | 19 | ||||||
4.6 | Insurance | 19 | ||||||
4.7 | Conformity with Law | 19 | ||||||
4.8 | Relations with Governments | 19 | ||||||
4.9 | Contracts and Commitments | 20 | ||||||
4.10 | Absence of Certain Changes or Events | 20 | ||||||
4.11 | Proxy Statement | 21 | ||||||
4.12 | Required Vote | 21 | ||||||
4.13 | Financial Capability | 21 | ||||||
4.14 | Valid Issuance of the Securities | 21 | ||||||
4.15 | Offering | 21 | ||||||
5. Covenants of Both Parties
|
21 | |||||||
5.1 | Live Earth Tax Covenants | 21 | ||||||
5.2 | Regulatory and Other Approvals | 22 | ||||||
5.3 | Interim Conduct of the Business | 22 | ||||||
5.4 | WCA Parent’s Approval of Certain Transactions | 22 | ||||||
5.5 | Stockholder Meeting | 23 | ||||||
5.6 | Proxy Statement | 23 | ||||||
5.7 | NASDAQ Listing | 24 | ||||||
5.8 | Pre-Closing Access | 24 | ||||||
5.9 | Employee Matters | 24 | ||||||
5.10 | Live Earth Business | 25 | ||||||
5.11 | Notice of Developments | 25 | ||||||
5.12 | Exclusivity | 25 | ||||||
5.13 | Confidentiality | 25 | ||||||
5.14 | Publicity | 25 | ||||||
5.15 | Legal Requirements | 25 | ||||||
5.16 | Further Assurances | 25 | ||||||
5.17 | Unwinding of Transaction | 26 | ||||||
5.18 | Bank Lenders Approval | 26 | ||||||
5.19 | Landfill Closure; Bonds | 27 | ||||||
5.20 | Intercreditor Agreement with Comerica | 27 | ||||||
5.21 | Financial Statements | 27 | ||||||
5.22 | Real Property Documents | 27 |
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Page | ||||||||
6. Survival of Covenants, Representations and Warranties;
Indemnification
|
27 | |||||||
6.1 | Survival of Covenants, Representations, and Warranties | 27 | ||||||
6.2 | Indemnification by Live Earth | 27 | ||||||
6.3 | Indemnification by the WCA Parties | 28 | ||||||
6.4 | Notice and Defense of Third Party Claims | 28 | ||||||
6.5 | Payment and Interest | 29 | ||||||
6.6 | Limits of Liability | 29 | ||||||
7. Conditions to Closing
|
30 | |||||||
7.1 | Conditions to the WCA Parties’ Obligations | 30 | ||||||
7.2 | Conditions to the Live Earth Parties’ Obligations | 32 | ||||||
8. Termination
|
33 | |||||||
8.1 | Termination | 33 | ||||||
8.2 | Effect of Termination | 34 | ||||||
9. Certain Definitions
|
34 | |||||||
10. General
|
38 | |||||||
10.1 | Costs | 38 | ||||||
10.2 | Entire Agreement | 38 | ||||||
10.3 | Counterparts | 38 | ||||||
10.4 | Notices | 38 | ||||||
10.5 | Modification or Waiver | 39 | ||||||
10.6 | Binding Effect and Assignment | 39 | ||||||
10.7 | Governing Law; Venue | 39 | ||||||
10.8 | Section Headings | 39 | ||||||
10.9 | Severability | 39 | ||||||
10.10 | Drafting | 39 | ||||||
10.11 | References | 39 | ||||||
10.12 | Calendar Days, Weeks, Months and Quarters | 39 | ||||||
10.13 | Gender; Plural and Singular | 39 | ||||||
10.14 | Cumulative Rights | 39 | ||||||
10.15 | No Implied Covenants | 40 | ||||||
10.16 | Indirect Action | 40 | ||||||
10.17 | Attorneys’ Fees | 40 | ||||||
10.18 | Time of the Essence | 40 | ||||||
10.19 | No Third-Party Beneficiaries | 40 |
Exhibits
|
||
Exhibit A
|
Earn-Out Escrow Agreement | |
Exhibit B
|
Closing Shares Escrow Agreement | |
Exhibit C
|
Xxxx of Sale and Assignment and Assumption Agreement | |
Exhibit D
|
Registration Rights Agreement | |
Exhibit E
|
Voting Agreement |
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THIS EQUITY INTEREST AND ASSET PURCHASE AGREEMENT (this
“Agreement”) is made effective the
9th day of December, 2009, among WCA Waste Corporation, a
Delaware corporation (“WCA Parent”), WCA
of Massachusetts, LLC, a Delaware limited liability company
(“WCA Massachusetts”), WCA of Ohio, LLC,
a Delaware limited liability company (“WCA
Ohio” and, together with WCA Massachusetts,
“WCA Subs”), Live Earth LLC, an Ohio
limited liability company (“Live
Earth”), Champion City Recovery, LLC, a
Massachusetts limited liability company
(“CC”), Boxer Realty Redevelopment, LLC
a Massachusetts limited liability company
(“BR”), Sunny Farms Landfill, LLC, an
Ohio limited liability company (“SF”)
and New Amsterdam & Seneca Railroad Company, LLC, an
Ohio limited liability company (“NA”),
(WCA Parent and WCA Subs are collectively referred to as the
“WCA Parties;” and Live Earth, CC, BR,
SF and NA are collectively referred to as the “Live
Earth Parties”).
R E C I T
A L S:
WHEREAS, Live Earth is the sole record and beneficial
owner of all of the issued and outstanding limited liability
company interests of each of (i) SF that owns and operates
a landfill located in Fostoria, Ohio; (ii) NA that owns the
right to operate a short line rail; (iii) CC that owns and
operates a waste transfer station and leases certain property in
Brockton, Massachusetts; and (iv) BR that owns real
property in Brockton, Massachusetts relating to the operations
of CC; (the foregoing entities referred to collectively as the
“Live Earth Companies”), and the limited
liability company interests of the Live Earth Companies owned by
Live Earth (the “Equity Interests”)
represent all of the authorized, issued and outstanding equity
interests of each of SF, NA, CC and BR; and
WHEREAS, Live Earth wishes to sell and WCA Massachusetts
wishes to buy all of the Equity Interests in each of the Live
Earth Companies other than SF; and
WHEREAS, Live Earth wishes to sell and WCA Ohio wishes to
buy all of the Equity Interests in SF; and
WHEREAS, Live Earth wishes to sell and assign and the WCA
Subs wish to buy and assume the Transferred Assets (as defined
below) and the Assumed Liabilities (as defined below).
A G R E E
M E N T:
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements set forth below, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows,
intending to be legally bound hereby:
1. Transfer of Equity Interests and Transferred
Assets; Delivery of Other Assets and Consideration
1.1 Specified Interests and
Assets. Subject to the terms and conditions
of this Agreement, effective as of the Closing Date (as
hereinafter defined) the parties will take the following
actions, and shall transfer ownership of the Equity Interests
and Transferred Assets described herein, and shall further
deliver the consideration specified below and take the further
actions required of them under this Agreement:
(a) Live Earth shall assign, convey, transfer and deliver
to WCA Massachusetts 100% of the Equity Interests in NA, CC and
BR.
(b) Live Earth shall assign, convey, transfer and deliver
to WCA Ohio 100% of the Equity Interests in SF.
(c) Live Earth shall assign, convey, transfer and deliver
to the WCA Subs the assets of Live Earth that are listed on
Schedule 1.1(c) hereto (the “Transferred
Assets”) and such Transferred Assets.
(d) Live Earth shall assign, convey, transfer and deliver
to the WCA Subs the Current Assets and such Current Assets shall
be allocated between the WCA Subs in the manner determined by
the WCA Subs.
1
(e) WCA Parent will deliver the Purchase Price (defined
below), on behalf of Live Earth, to the parties and in the
manner set forth in Section 2.1 below.
1.2 Assumption
of Certain Liabilities.
(a) Assumed Liabilities. As of the
Closing Date, WCA Massachusetts shall assume and thereafter pay,
discharge or perform, as appropriate, the liabilities and
obligations of Live Earth as follows:
(i) the liabilities and obligations arising after the
Closing Date under the contracts included in the Transferred
Assets provided that such liabilities do not relate to any
period or event occurring prior to the Closing Date;
(ii) the liabilities and obligations under the operating
leases and equipment leases set forth on
Schedule 1.2(a)(ii);
(iii) the liabilities and obligations under the Licenses
included in the Transferred Assets to be performed on or after
the Closing Date;
(iv) the liabilities and obligations in respect of the
Transferred Assets to the extent accruing on or after the
Closing Date including but not limited to those set forth on
Schedule 1.2(a)(iv); and
(v) the liabilities and obligations arising under the
Current Liabilities.
(All such liabilities and obligations to be so assumed by WCA
Massachusetts are referred to herein as the “Assumed
Liabilities”.)
(b) Retained Liabilities. With the
exception of the Assumed Liabilities, the WCA Parties shall not,
by the execution and performance of this Agreement, or
otherwise, assume or otherwise be responsible for any liability
or obligation of Live Earth of any nature, or claims of such
liability or obligation, matured or unmatured, liquidated or
unliquidated, fixed or contingent, or known or unknown, whether
arising out of occurrences prior to, at or after the date
hereof, including, without limitation, any liability or
obligation of Live Earth:
(i) for any Taxes with respect to any period;
(ii) for any leases other than any operating leases and
equipment leases included in the Assumed Liabilities;
(iii) relating to, resulting from or arising out of any
former operation of Live Earth that has been discontinued or
disposed of prior to the Closing Date;
(iv) for “severance pay” or any other payment to
any Live Earth Company Employee (as defined below) or former
employee resulting from anything done prior to the Closing;
(v) relating to any real estate taxes, utilities, water and
sewer charges; or
(vi) incurred in connection with the negotiation,
preparation and execution of this Agreement and the transactions
contemplated hereby and any fees and expenses of counsel,
accountants, brokers, financial advisors or other experts of
Live Earth.
(All such liabilities and obligations, or claims of such
liabilities or obligations are referred to herein collectively
as the “Retained Liabilities”.)
(c) Live Earth shall assume, pay or otherwise satisfy in
full, promptly when due, all Retained Liabilities.
1.3 Interests
and Assets Free and Clear of Liens. All of
the Equity Interests and Transferred Assets and all other
properties and assets of all types to be conveyed or transferred
hereunder shall be delivered hereunder free and clear of all
liens and encumbrances, except for Permitted Liens.
1.4 Closing. Subject
to the satisfaction or waiver of the conditions to the Closing
set forth in Article 7 below, the closing of the
transactions contemplated hereby shall take place (in person or
via facsimile) at the offices of Xxxxxxx Xxxxx LLP, 000 Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000, at 10:00 a.m.,
Xxxxxxx, Xxxxx
0
time, on the first business day following the day on which the
last to be fulfilled or waived of the conditions set forth in
Article 7, or at such other time or place, as shall be
agreed upon by the Parties (which time and place are designated
as the “Closing” and the date on which
the Closing occurs is designated as the “Closing
Date”).
1.5 Working
Capital Adjustment.
(a) Not less than five (5) days prior to Closing, the
Live Earth Parties shall provide to the WCA Parties an estimate
of the working capital of the Live Earth Companies in accordance
with Schedule 1.5(a) and the basis for making the
computations of Current Assets and Current Liabilities reflected
in such schedule (the “Worksheet”),
which shall represent the estimated working capital as of the
Closing Date (the “Estimated Working
Capital”). For the purposes of this
Section 1.5, Current Liabilities does not include the
liabilities to be paid off at the Closing in accordance with
Sections 2.1(b), 2.1(c) and 2.1(d). At Closing, WCA Parent
shall pay Live Earth an amount in cash equal to ninety percent
(90%) of the Estimated Working Capital (the
“Estimated Working Capital Payment
Amount”), which shall be calculated in accordance
with this Section 1.5(a).
(b) Within 120 days after the Closing Date, the WCA
Parties shall deliver to the Live Earth Parties a statement (the
“Statement”) setting forth what it
believes are the actual Current Assets and Current Liabilities
as of the Closing Date (the “Actual Working
Capital”). The WCA Parties will prepare the
Statement using the Worksheet in accordance with the provisions
of this Agreement and consistent with the Worksheet. The
Statement shall contain a supporting schedule detailing the
proposed Actual Working Capital, and be accompanied with copies
of the work papers and back up materials used by the WCA Parties
in preparing the Statement. If the Actual Working Capital
exceeds the Estimated Working Capital Payment Amount, the WCA
Parties shall pay to Live Earth, within fifteen (15) days
from the date of delivery of the Statement, an amount in cash
equal to the difference between the Actual Working Capital and
the Estimated Working Capital Payment Amount. If the Actual
Working Capital is less than the Estimated Working Capital
Payment Amount, Live Earth shall promptly pay to the WCA
Parties, within fifteen (15) days from the date of delivery
of the Statement, an amount in cash equal to the difference
between the Estimated Working Capital Payment Amount and the
Actual Working Capital.
(c) Live Earth and its accounting representatives will be
entitled to examine the work papers related to the preparation
of the Statement and to discuss the preparation of the Statement
with the WCA Parties’ accounting personnel. If Live Earth
disagrees with the calculation of the Actual Working Capital, it
must deliver to the WCA Parties, within 30 days after the
date the WCA Parties delivered the Statement to Live Earth, a
written description of each such disagreement. The WCA Parties
and Live Earth will negotiate in good faith to resolve any such
disagreements. If, after a period of 30 days following the
date on which such written description is delivered, Live Earth
and the WCA Parties have not resolved each such disagreement,
then either Live Earth or the WCA Parties will be entitled to
submit such disagreements to Xxxxx Xxxxxxxx LLP (the
“Disputes Auditor”) so long as such
submitting party provides written notice of such submission to
the nonsubmitting party. Within seven days after receipt of such
written notice, Live Earth and the WCA Parties will each deliver
to the Disputes Auditor a written settlement offer setting forth
its calculation of the Actual Working Capital (each, a
“Settlement Offer”). The WCA Parties
will grant (and will cause each of the Live Earth Companies to
grant) to the Disputes Auditors reasonable access to the WCA
Parties and the Live Earth Companies’ books and records.
The WCA Parties will cause their accounting personnel to discuss
with the Disputes Auditor the preparation of the Statement and
the calculation of Actual Working Capital and to grant to the
Disputes Auditor reasonable access to the work papers of the WCA
Parties’ accountants and accounting personnel. The Disputes
Auditor will resolve the disagreements within 30 days after
the date on which they are engaged or as soon thereafter as
possible. The calculation of the Actual Working Capital by the
Disputes Auditor will be binding upon the Parties. The cost of
the services of the Disputes Auditor will be borne by the Party
whose Settlement Offer differs the most from the working capital
(i.e., the difference of Current Assets minus Current
Liabilities) as finally determined by the Disputes Auditor. If
both Settlement Offers differ equally, such cost will be borne
half by Live Earth and half by the WCA Parties. If any Party
fails to deliver a Settlement Offer in accordance with this
Section 1.5(c), such cost will be borne by such Party.
3
2. Purchase Price
2.1 Payment
of Purchase Price. Upon the terms and
conditions set forth in this Agreement, in consideration of the
transfer of the Equity Interests and the Transferred Assets and
the covenants and agreements set forth in Article 5, the
aggregate consideration to be paid by WCA Parent (collectively,
the “Purchase Price”) shall be:
(a) an amount in cash equal to $2,000,000 to be delivered
to Live Earth by wire transfer of immediately available funds to
an account designated by Live Earth, in accordance with
Schedule 2.1(a) (the “Cash Purchase
Price”);
(b) payment of an amount up to $15,800,000 in satisfaction
of both Live Earth’s indebtedness to Comerica Bank, a Texas
banking association (“Comerica”), set
forth on Schedule 2.1(b) by wire transfer of immediately
available funds to an account designated by Comerica (the
“Comerica Payment”) and its obligations
under the Consent Order and Final Judgment with the State of
Ohio filed with the Seneca County Court of Common Pleas;
(c) an amount in cash equal to $750,000, a portion of which
shall be paid in satisfaction of certain equipment notes set
forth on Schedule 2.1(c), which equipment note pay-offs
will be wired directly to the respective lenders by WCA Parent;
(d) payment of an amount up to $200,000 in satisfaction of
Live Earth’s other indebtedness designated by Live Earth,
by wire transfer of immediately available funds to an account
designated by Live Earth (the “Other Indebtedness
Payment”);
(e) Earn-Out Certificates representing the right to receive
up to 2,000,000 shares of WCA Parent’s common stock
(the “Earn-Out Shares”) shall be placed
into an escrow account (the “Earn-Out
Escrow”) in accordance with Section 2.2;
(f) 3,555,556 shares of WCA Parent’s common stock
to be issued into an escrow account (the “Closing
Shares Escrow” and, together with the Earn-Out
Escrow, the “Escrow Funds”) in
accordance with Section 2.3 for the benefit of the parties
set forth on Schedule 2.1(f) (the “Closing
Shares” and, together with the Earn-Out Shares, the
“Securities”); and
(g) the assumption by the WCA Subs of the Assumed
Liabilities.
Live Earth hereby acknowledges that a portion of the Purchase
Price shall be payable directly to the Persons as set forth in
Schedule 2.1(f) (the “Seller
Parties”) in lieu of direct payment to Live Earth
for distribution to such Seller Parties. In connection herewith,
Live Earth hereby waives any and all manner of action, claims,
causes of action, losses, debts and collections it may have with
respect to any Purchase Price paid to the Seller Parties as set
forth in this Agreement and the schedules hereto.
Notwithstanding the foregoing, the stock certificates
representing the Closing Shares shall be placed in escrow in
accordance with Section 2.3.
The Purchase Price shall be allocated to the Transferred Assets,
Equity Interests and Assumed Liabilities as agreed by the
Parties as soon as reasonably practicable following Closing, and
the Parties each agree to file all tax returns only in
accordance with such agreed allocation.
2.2 Earn-Out
Shares.
(a) Certificates (the “Earn-Out
Certificates”) representing the right to receive
the Earn-Out Shares will be deposited by WCA Parent at the
Closing with Bank of Texas, N. A. (the “Escrow
Agent”) in accordance with the terms and conditions
of an escrow agreement, in substantially the form attached
hereto as Exhibit A (the “Earn-Out Escrow
Agreement”), and will be distributed by the Escrow
Agent in accordance with Section 2.2(b). If on or before
December 31, 2012, (i) the business operated using the
Transferred Assets and by the Live Earth Companies (the
“Live Earth Business”) achieves $6.25
Million in EBITDA for any four consecutive fiscal quarters and
(ii) the WCA Parties shall have obtained the OH EPA
Approval described in Section 5.17, then the Escrow Agent
shall distribute an aggregate of 777,778 of the Earn-Out Shares
to HBK Master Fund L.P, a Delaware limited partnership
(“HBK Master”) Xxxxxxx Global Loan
Investors, Ltd.
4
(“Xxxxxxx Global”) and Xxxxxxx National
Loan Investors, Ltd. (“Xxxxxxx National”
and, together with HBK Master and Xxxxxxx Global,
“HBK/Xxxxxxx”), and 777,778 of the
Earn-Out Shares to Live Earth Funding, LLC, an Ohio limited
liability company (“Earn-Out 1”). If on
or before December 31, 2012, (i) the Live Earth
Business achieves $7.0 Million in EBITDA for any four
consecutive fiscal quarters and (ii) the WCA Parties shall
have obtained the OH EPA Approval described in
Section 5.17, then the Escrow Agent shall distribute
444,444 of the Earn-Out Shares to Xxxxx Xxxxxxx-Xxxxx
(“Earn-Out 2”). Notwithstanding anything
to the contrary contained herein, if the Live Earth Business
does not meet the respective EBITDA goals in connection with
Earn-Out 1 or Earn-Out 2 by December 31, 2012 or if the OH
EPA Approval is not obtained by WCA Parties and the parties are
required to Unwind the Transaction pursuant to
Section 5.17, then the Escrow Agent shall promptly
distribute the Earn-Out Shares to WCA Parent and the WCA Parent
shall not have any further obligation to issue any Earn-Out
Shares to Live Earth Funding LLC, an Ohio limited liability
company (“LEF”), HBK/Xxxxxxx or Xxxxx
Xxxxxxx-Xxxxx (“Xxxxxxx-Xxxxx”).
(b) For purposes of this Section 2.2, on or before the
45th day following the last day of each fiscal quarter other
than the last fiscal quarter of WCA Parent’s fiscal year
and on or before the 60th day following the last day of the last
fiscal quarter of WCA Parent’s fiscal year (the
“Determination Date”), WCA Parent shall
determine the EBITDA (i) in the first such calculation, for
the first full fiscal quarter following the Closing Date and
(ii) in each subsequent calculation, cumulatively for the
period of consecutive fiscal quarters including such first
quarter, until such period reached four consecutive fiscal
quarters, and thereafter on a rolling four quarters basis (the
“Periodic EBITDA Determination”). Not
later than ten (10) days after each Determination Date, WCA
Parent shall provide LEF with a written notice setting forth in
reasonable detail each such Periodic EBITDA Determination.
Within fifteen (15) days after delivery of the first
Periodic EBITDA Determination to include four consecutive fiscal
quarters, and within fifteen (15) days after delivery of
each Periodic EBITDA Determination thereafter, LEF shall review
such EBITDA calculations and provide WCA Parent with written
notice of any objection thereto, which objections shall be in
reasonable detail (the “Objection
Notice”). In the event that WCA Parent does not
receive the Objection Notice within such fifteen (15) day
period, then LEF, HBK/Xxxxxxx and Xxxxxxx-Xxxxx shall be deemed
to have irrevocably accepted such calculations and
determinations. In the event that WCA Parent receives the
Objection Notice during such fifteen (15) day period, LEF
and WCA Parent shall enter into good faith negotiations to
resolve any objections. In the event that LEF and WCA Parent
cannot reach agreement on the EBITDA calculations within thirty
(30) days after the Determination Date, LEF and WCA Parent
shall refer the matter to the Disputes Auditor for a decision,
which shall be final and binding on all Parties. WCA Parent and
LEF agree that they will request the Disputes Auditor to render
its decision within thirty (30) days after referral of the
dispute to the Disputes Auditor for decision pursuant hereto.
Before referring a matter to the Disputes Auditor, WCA Parent
and LEF shall agree on procedures to be followed by the Disputes
Auditor (including procedures for presentation of evidence). If
WCA Parent and LEF are unable to agree upon procedures before
the end of thirty (30) days after receipt of notice of any
objections pursuant to this Section 2.2 the Disputes
Auditor shall establish procedures giving due regard to the
intention of the parties to resolve disputes as quickly,
efficiently and inexpensively as possible. The Disputes
Auditor’s procedures may be, but need not be, those
proposed by WCA Parent or LEF. WCA Parent and LEF shall, as
promptly as practicable, submit evidence in accordance with the
procedures agreed upon or established by the Disputes Auditor,
and the Disputes Auditor shall decide the dispute in accordance
therewith as promptly as practicable. The fees and expenses of
the Disputes Auditor for, and relating to, the making of any
such decision shall be paid by LEF; provided, however, that in
the event the Disputes Auditor determines that WCA Parent
incorrectly calculated EBITDA and such miscalculation results in
the issuance of additional Earn-Out Shares than the number of
Earn-Out Shares that would have been issued based on the initial
calculations of WCA Parent, then WCA Parent shall pay such fees
and expenses of the Disputes Auditor. The determination of the
Disputes Auditor as to the resolution of any dispute shall be in
writing and shall be binding and conclusive upon all Parties.
(c) Not later than ten (10) days after delivery of a
Periodic EBITDA Determination for a four consecutive fiscal
quarter period in which the EBITDA goals for Earn-Out 1
and/or
Earn-Out 2 have been met, or, if applicable, within ten
(10) days after determination by agreement or by a Disputes
Auditor that such EBITDA goals have been met, WCA Parent shall
provide the Escrow Agent and LEF with a written notice setting
forth the number of Earn-Out Certificates representing the right
to receive Earn-Out Shares that will be distributed
5
by the Escrow Agent to WCA Parent’s transfer agent so that
the Escrow Shares will be issued to LEF, HBK/Xxxxxxx and
Xxxxxxx-Xxxxx, as applicable.
(d) At the Closing, WCA Parent shall provide an irrevocable
instruction letter to its transfer agent directing the transfer
agent to issue the Escrow Shares to LEF, HBK/Xxxxxxx
and/or
Xxxxxxx-Xxxxx, as applicable, promptly upon the receipt by the
transfer agent of the Earn-Out Certificates representing the
right to receive such Earn-Out Shares.
2.3 Closing
Shares.
(a) The Closing Shares will be deposited by WCA Parent at
the Closing with the Escrow Agent in accordance with the terms
and conditions of an escrow agreement, in substantially the form
attached hereto as Exhibit B (the
“Closing Shares Escrow Agreement”
and together with the Earn-Out Escrow Agreement, the
“Escrow Agreements”), and will be
distributed by the Escrow Agent in accordance with
Section 2.3(b) and (c).
(b) Promptly following the receipt of the OH EPA Approval
described in Section 5.17, WCA Parent shall give written
notice to the Escrow Agent authorizing the Escrow Agent to
release 2,444,445 of the Closing Shares (the “Permit
Shares”) from the Closing Shares Escrow to the
parties set forth on Schedule 2.1(f) in the amounts set
forth in the Closing Shares Escrow Agreement; provided,
however, if the OH EPA Approval is not obtained pursuant to
Section 5.17 of the Purchase Agreement and it is determined
that the Live Earth Parties and the WCA Parties must Unwind the
Closing pursuant to Section 5.17 of the Purchase Agreement,
then the Escrow Agent shall promptly return all Permit Shares to
WCA.
(c) The remaining 1,111,111 of the Closing Shares (the
“Indemnification Shares”) shall be held
in the Closing Shares Escrow to partially satisfy the
indemnification obligations of Live Earth and the parties set
forth on Schedule 2.1(f) pursuant to Article 6 and
shall be held in the Closing Shares Escrow pursuant to the
terms of the Closing Shares Escrow Agreement and
Section 6.5.
2.4 Adjustments
to Escrow Shares. If, at any time subsequent
to the issuance of the Securities or the Earn-Out Certificates
and prior to the date that no Closing Shares or Earn-Out
Certificates remain held in an Escrow Fund, the number of shares
of WCA Parent’s common stock are proportionately increased
or decreased, changed or converted into or exchanged for a
different number or kind of shares of stock or other securities
of WCA Parent or of another corporation or other property,
including cash (whether as a result of a stock split, stock
dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation,
merger, consolidation, recapitalization or otherwise), then any
Closing Shares held in an Escrow Fund or Earn-Out Shares
issuable in exchange for Earn-Out Certificates held in an Escrow
Fund shall be adjusted in a manner to appropriately and
equitably reflect any such increase or decrease, change,
conversion or exchange in the manner set forth in the Escrow
Agreement with respect to such Closing Shares or Earn-Out Shares
issuable in exchange for Earn-Out Certificates, as applicable.
3. Representations and Warranties of the Live
Earth Parties
Prior to or upon the execution of this Agreement, Live Earth has
delivered to the WCA Parties a schedule (the “Live
Earth Disclosure Schedule”) setting forth, among
other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure
requirement contained in any provision hereof or as an exception
to one or more representations or warranties contained in
Article 3 or one or more of its covenants contained in
Article 5. The inclusion of any information in the Live
Earth Disclosure Schedule shall not be deemed to be an admission
or acknowledgment, in and of itself, that such information is
required by the terms hereof to be disclosed, is material to the
Live Earth Parties, has resulted in or would result in a
Material Adverse Effect, or is outside the ordinary course of
business.
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The Live Earth Parties make the following representations and
warranties jointly and severally, and represent and warrant that
all of the following representations and warranties are true as
of the date of this Agreement and shall be true on the Closing
Date:
3.1 Due
Organization.
(a) Each of the Live Earth Companies is a limited liability
company, duly formed, validly existing and in good standing
under the laws of its state of organization, and has all
requisite limited liability company authority to carry on its
business in the places and in the manner as now conducted. The
records and minutes books of each of Live Earth Company, as
heretofore made available to WCA Parent, are correct and
complete with respect to matters occurring on and after
January 1, 2008, and will be delivered to WCA Parent at the
Closing.
(b) Live Earth is a limited liability company, duly
organized, validly existing and in good standing under the laws
of the State of Ohio, and has all requisite limited liability
company authority to carry on its business in the places and in
the manner as now conducted or as proposed to be conducted. The
records and minutes books of Live Earth, as heretofore made
available to WCA Parent, are correct and complete.
3.2 Authorization,
Validity and Effect of Agreements; Non-Contravention.
(a) The execution and delivery of this Agreement by each
Live Earth Party and the performance of the transactions
contemplated herein by each Live Earth Party have been duly and
validly authorized by each Live Earth Party. This Agreement
constitutes, and all agreements and documents contemplated
hereby when executed and delivered pursuant hereto
(collectively, the “Transaction
Documents”) for value received will constitute, the
valid and legally binding obligations of the Live Earth Parties
enforceable in accordance with their terms, subject to
(i) applicable bankruptcy, insolvency or other similar laws
relating to creditor’s rights generally and
(ii) general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
(b) The execution and delivery of this Agreement by the
Live Earth Parties and each of the other Transaction Document to
which such Live Earth Parties are parties does not, and the
consummation of the transactions contemplated hereby by the Live
Earth Parties will not, except as set forth on Section 3.2
or Section 3.9 of the Live Earth Disclosure Schedule,
(i) result in the breach of any term or provision of, or
constitute a default under, or result in the acceleration of or
entitle any party to accelerate, terminate or modify (whether
after the giving of notice or the lapse of time or both) any
obligation under, or result in the creation or imposition of any
Lien (defined below) upon any part of the property of the Live
Earth Parties or any of the Live Earth Companies pursuant to any
provision of any order, judgment, arbitration award, injunction,
decree, indenture, mortgage, lease, license, lien, or other
agreement or instrument to which any Live Earth Party is a party
or by which it is bound; or (ii) violate or conflict with
any provision of the respective Certificates of Limited
Partnership, Articles of Organization, Agreements of Limited
Partnership or Operating Agreement, each as amended to the date
hereof and as applicable, of the Live Earth Parties, except with
respect to (i) for any such event that is not reasonably
expected to have a Material Adverse Effect on the Live Earth
Parties.
3.3 Equity
Interests of the Live Earth Companies. All of
the limited liability company interests of the Live Earth
Companies are set forth on Section 3.3 of the Live Earth
Disclosure Schedule. All of the limited liability company
interests of the Live Earth Companies have been duly authorized
and validly issued, are fully paid and nonassessable, are owned
of record and beneficially by Live Earth in the percentages set
forth in Section 3.3 of the Live Earth Disclosure Schedule,
and, except as set forth on Section 3.3 of the Live Earth
Disclosure Schedule, are free and clear of all Liens,
encumbrances and claims of every kind.
3.4 Obligations
to Issue or Sell Equity Interests. Except as
set forth on Section 3.4 of the Live Earth Disclosure
Schedule, no right of first refusal, option, warrant, call,
conversion right or commitment of any kind exists which
obligates any Live Earth Company to issue any of its authorized
but unissued limited liability company interests or other
securities or equity interests. Except as set forth on
Section 3.4 of the Live Earth Disclosure Schedule, in
addition, there are no (a) outstanding securities or
obligations which are convertible into or exchangeable for any
limited liability company interests or other securities of any
Live
7
Earth Company, or (b) contracts, arrangements or
commitments, written or otherwise, under which any Live Earth
Company is or may become bound to sell or otherwise issue any of
its limited liability company interests or other securities or
equity interests. Without limiting the generality of the
foregoing, except as set forth on Section 3.4 of the Live
Earth Disclosure Schedule, there is no valid basis upon which
any Person (other than Live Earth) may claim to be in any way
the record or beneficial owner of, or to be entitled to acquire
(of record or beneficially), any limited liability company
interest or other security or equity interest of any Live Earth
Company, and no Person has made or, to the Knowledge of the Live
Earth Parties, threatened to make any such claim. In addition,
no Live Earth Company has any obligation (contingent or
otherwise) to purchase, redeem or otherwise acquire any of its
limited liability company interests or other securities or
equity interests therein or to pay any dividend or make any
distribution in respect thereof.
3.5 Subsidiaries. No
Live Earth Company (a) presently owns, of record or
beneficially, or controls, directly or indirectly, any capital
stock, securities convertible into capital stock, membership
interest, partnership interest, limited partnership interest or
any other equity interest in any corporation, limited liability
company, partnership, limited partnership, association or
business entity; or (b) is, directly or indirectly, a
participant in any joint venture, partnership or other
non-corporate entity, save and except any joint venture solely
with another Live Earth Company.
3.6 Predecessor
Status; etc. To the Knowledge of the Live
Earth Parties, set forth on Section 3.6 of the Live Earth
Disclosure Schedule is a list of all of the names of all
predecessors of each Live Earth Company, including the names of
any entities from whom each Live Earth Company previously
acquired significant assets or with whom each Live Earth Company
merged. To the Knowledge of the Live Earth Parties, except as
disclosed in Section 3.6 of the Live Earth Disclosure
Schedule, no Live Earth Company has ever been a subsidiary or
division of another company nor been a part of an acquisition
which was later rescinded.
3.7 Financial
Statements.
(a) the Live Earth Parties have furnished to the WCA
Parties the selected internal unaudited financial statements
(balance sheet and statement of operations) of the Live Earth
Companies as, at and for the fiscal years ended
December 31, 2004, December 31, 2005,
December 31, 2006 and December 31, 2007 (collectively,
the “Unaudited Financial Statements”)
and the audited financial statements (balance sheet, statement
of operations and statement of cash flows) of the Live Earth
Companies as, at and for the fiscal year ended December 31,
2008 (the “Live Earth Financial
Statements”).
(b) the Live Earth Parties have furnished to the WCA
Parties the internal monthly unaudited financial statements
(balance sheet, statement of operations and statement of cash
flows) of the Live Earth Companies as, at and for the ten month
period ended October 31, 2009 (the “Interim Live
Earth Financial Statements”).
(c) the Live Earth Financial Statements and the Interim
Live Earth Financial Statements, collectively, in all material
respects fairly set forth the financial condition and operating
results of the Live Earth Companies as of the dates indicated,
and the results of its operations as of the dates and for the
periods indicated, and are in accordance with GAAP, except as
may be otherwise specified in such financial statements or the
notes thereto or in Sections 3.7(a) and 3.7(b) of the Live
Earth Disclosure Schedule and except that unaudited financial
statements may not contain all footnotes required by GAAP. Since
January 1, 2008, the Live Earth Companies have maintained a
standard system of accounting established in accordance with
GAAP. Since January 1, 2008 and to the Knowledge of the
Live Earth Parties, there are no significant deficiencies or
material weaknesses in the internal controls over financial
reporting of the Live Earth Companies.
(d) To the Knowledge of the Live Earth Parties and except
as set forth on Section 3.7(d) of the Live Earth Disclosure
Schedule , the Unaudited Financial Statements in all material
respects fairly set forth the financial condition and operating
results of the Live Earth Companies as of the dates indicated,
and the results of its operations as of the days and for the
periods indicated.
3.8 Liabilities
and Obligations. Except as set forth in the
balance sheet of the Live Earth Parties as of October 31,
2009 (the “Latest Balance Sheet Date”)
or as set forth in Section 3.8 of the Live Earth Disclosure
Schedule, the Live Earth Parties do not have any liabilities of
any kind, character and description, whether
8
accrued, obsolete, secured or unsecured, contingent or
otherwise, except (i) to the extent clearly and accurately
reflected and accrued for or fully reserved against in the
Interim Live Earth Financial Statements, (ii) for
liabilities and obligations which have arisen after the Latest
Balance Sheet Date in the ordinary course of business consistent
with past custom and practice or (iii) liabilities that
would not reasonably be expected to have a Material Adverse
Effect on the Live Earth Parties.
3.9 Approvals. Except
as set forth on Section 3.9 of the Live Earth Disclosure
Schedule, no authorization, consent or approval of, or
registration or filing with, any Governmental or Regulatory
Authority or any other Person is or was required to be obtained
or made by the Live Earth Parties or any Live Earth Company in
connection with the execution, delivery or performance of this
Agreement or any of the Transaction Documents.
3.10 Accounts
and Notes Receivable. Set forth on
Section 3.10 of the Live Earth Disclosure Schedule is an
accurate list of the Live Earth Companies’ accounts and
notes receivable as of the date hereof, including receivables
from and advances to their respective employees and to any other
Live Earth Party or an Affiliate thereof, an aging of all such
accounts and notes receivable showing amounts due in
30-day aging
categories for each Live Earth Company and a list of all names,
account numbers and amounts for such accounts and receivables.
To the Knowledge of the Live Earth Parties, such accounts and
notes of the Live Earth Companies are collectible in the amounts
shown on Section 3.10 of the Live Earth Disclosure
Schedule, except as fully reserved for in the Interim Live Earth
Financial Statements. On the Closing Date, the Live Earth
Parties will deliver an update to Section 3.10 of the Live
Earth Disclosure Schedule which shall be an accurate list of the
Live Earth Companies’ accounts and notes receivable as of
the Closing Date.
3.11 Permits
and Intangibles.
(a) To the Knowledge of the Live Earth Parties, the Live
Earth Parties hold all certificates of need, permits, titles
(including motor vehicle titles and current registrations), fuel
permits, Licenses, orders, approvals, franchises and
certificates (“Permits”) (other than
those relating to environmental matters, which are exclusively
covered in Section 3.27) as are adequate for the operation
of the Live Earth Companies, as presently constituted other than
would not reasonably be expected to have a Material Adverse
Effect on the Live Earth Parties and no Live Earth Party has
received notice of violation of such Permits.
(b) The Live Earth Parties have delivered to the WCA
Parties a description and copies as of the date of this
Agreement, of all of the Live Earth Companies’ material
reports, notifications, pending permit applications and
engineering studies filed or submitted or required to be filed
or submitted to governmental agencies, any other governmental
approvals or applications for approval and of all material
notifications from such governmental agencies with respect to
the Permits, in each case with respect to such items that have
been received or obtained by the Live Earth Parties since
January 1, 2008 or which are otherwise in the possession of
the Live Earth Parties.
3.12 Personal
Property and Leases. Section 3.12 of the
Live Earth Disclosure Schedule sets forth an accurate list and a
complete description as of the date hereof of all of the
personal property and leases for equipment used by the Live
Earth Companies in excess of $5,000 per annum. All assets used
by the Live Earth Companies are either owned by a Live Earth
Company or leased as indicated on Section 3.12 of the Live
Earth Disclosure Schedule. Except as described on
Section 3.12 of the Live Earth Disclosure Schedule or for
Permitted Liens, there are no Liens or encumbrances on any
personal property or assets owned by any Live Earth Company. On
the Closing Date, the Live Earth Parties may deliver an update
to Section 3.12 of the Live Earth Disclosure Schedule which
shall be an accurate list and a complete description as of the
Closing Date of all of the personal property and leases for
equipment used by the Live Earth Companies in excess of $5,000
per annum.
3.13 Customers;
Contracts and Commitments.
(a) Section 3.13(a) of the Live Earth Disclosure sets
forth the names and addresses of all of the customers of the
Live Earth Companies as of the date hereof. To the Knowledge of
the Live Earth Parties, the consummation of the transactions
contemplated by this Agreement will not have an Material Adverse
Effect
9
on the business relationship of the Live Earth Companies with
any customer and the Live Earth Parties have received no notice
to such effect.
(b) Section 3.13(b) of the Live Earth Disclosure
Schedule sets forth a true and complete list of the following
Live Earth Companies’ contracts, agreements and other
instruments and arrangements (i) by which any Live Earth
Company is bound or (ii) to which any Live Earth Company is
a party (the “Contracts”):
(i) arrangements relating to providing solid waste
collection, transportation or disposal services to any Person or
entity in excess of $50,000;
(ii) Licenses, Permits and other material arrangements
concerning or relating to real estate;
(iii) employment, consulting, collective bargaining or
other similar arrangements relating to or for the benefit of
current agents and independent contractors or consultants;
(iv) agreements and instruments relating to the borrowing
of money or obtaining of or extension of credit;
(v) brokerage or finder’s agreements;
(vi) contracts involving a sharing of profits or expenses;
(vii) acquisition or divestiture agreements;
(viii) service or operating agreements, manufacturer’s
representative agreements or distributorship agreements in
excess of $12,000;
(ix) arrangements limiting or restraining any Live Earth
Company from engaging or competing in any lines of business or
with any Person;
(x) leases for personal property requiring aggregate annual
payments in excess of $12,000;
(xi) any arrangement with any labor union;
(xii) any settlement or similar agreement with continuing
financial or compliance obligations to any Live Earth
Company; and
(xiii) any other agreements or arrangements that are
material to the operation of the Live Earth Companies.
3.14 Real
Property. Except as set forth on
Section 3.14 of the Live Earth Disclosure Schedule:
(a) the Live Earth Companies own good and marketable title
to their respective real property described on Section 3.14
of the Live Earth Disclosure Schedule (respectively, each
“Live Earth Company’s Real
Property”), free and clear of any Lien, other than
the Permitted Liens, and no Person has an option to purchase all
or any portion of such real property; provided that promptly
following the delivery by the Title Insurer of the
commitment for title insurance referred to in Section 5.22,
the Live Earth Parties may update Section 3.14 of the Live
Earth Disclosure Schedule to reflect the information regarding
the Live Earth Company’s Real Property received from the
Title Insurer;
(b) No Live Earth Company’s Real Property is subject
to any pending to the Knowledge of the Live Earth Parties or
threatened, condemnation Proceedings against all or part thereof;
(c) To the Knowledge of the Live Earth Parties, no Live
Earth Company has ever granted any Person or entity a lease,
sublease, license, concession, or other right, written or oral,
to use or occupy such Live Earth Company’s Real Property,
nor has any Live Earth Company ever entered into an option,
right of first refusal, or other agreement that would permit any
Person to purchase all or part of such Live Earth Company’s
Real Property;
(d) No Live Earth Company has ever owned, occupied, or
conducted operations on any lands, other than that respective
Live Earth Company’s Real Property; and
10
(e) No Live Earth Company has ever entered into an option,
right of first refusal or other agreement that would permit or
obligate such Live Earth Company to purchase any real property.
3.15 Insurance. Set
forth on Section 3.15 of the Live Earth Disclosure Schedule
is a list of all policies covering general liability, excess
liability, product liability, auto liability, foreign liability,
all-risk property or environmental liability of the Live Earth
Companies, as well as an accurate list of: (a) all of their
respective insurance loss runs and worker’s compensation
claims received since January 1, 2008; (b) all open
claims; and (c) to the Knowledge of the Live Earth Parties,
all circumstances reasonably likely to result in a claim. All
such policies are currently in full force and effect and shall
remain in full force and effect through the Closing Date. Except
as set forth on Section 3.15 of the Live Earth Disclosure
Schedule, no insurance policy of any Live Earth Company has ever
been canceled, and no Live Earth Company has ever been denied
insurance coverage.
3.16 Employment
Matters. Section 3.16 of the Live Earth
Disclosure Schedule contains a list of all employees engaged to
perform services for the Live Earth Companies (the
“Live Earth Company Employees”). Prior
to the Closing Date, the Live Earth Parties have delivered to
the WCA Parties a schedule setting forth the annual
compensation, hourly wages, daily rate of pay, sick pay and
other benefits for all Live Earth Company Employees. The Live
Earth Companies have paid in full to all of their respective
employees all wages, salaries, commissions on jobs finished,
bonuses and other direct compensation due and payable as of the
date hereof for all services performed (including accrued
vacation) as of the date hereof and all amounts required to be
reimbursed to the Live Earth Company Employees. The Live Earth
Companies are in material compliance with all federal, state,
local and foreign laws and regulations respecting employment and
employment practices, terms and conditions of employment and
wages and hours.
3.17 Parachute
Provisions. Set forth on Section 3.17 of
the Live Earth Disclosure Schedule is a list of any and all of
the Live Earth Companies’ employment agreements and any
other agreements containing “parachute” provisions,
and deferred compensation agreements (which shall be considered
to be Retained Liabilities), together with copies of such plans,
agreements and any trusts related thereto, and classifications
of employees covered thereby as of the date hereof.
3.18 Benefit
Plans; ERISA Compliance.
(a) Section 3.18(a) of the Live Earth Disclosure
Schedule contains a list of each “employee pension
benefit plan” (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)) (sometimes referred to in
this Agreement as “Pension Plans”),
“employee welfare benefit plans” (as defined in
Section 3(1) of ERISA) (sometimes referred to in this
Section 3.18 as “Welfare Plans”) or
any other Benefit Plans, as defined below maintained by any Live
Earth Company with respect to the Live Earth Company Employees.
(b) No Live Earth Company maintains any Pension Plan or
Benefit Plan intended to be a tax qualified plan described
Section 401(a) of the Code, and no such plan is or has been
subject to the minimum funding rules of Code Section 412 or
ERISA Section 302, or the plan termination insurance
provisions of Title IV of ERISA.
(c) There are no voluntary employee benefit associations
maintained by any Live Earth Company and intended to be exempt
from federal income tax under Section 501(c)(9) of the Code.
(d) Neither the execution of this Agreement nor the
consummation of the transactions contemplated by this Agreement
will give rise to, or trigger, any change of control, severance
or other similar provisions in any Pension Plan, Welfare Plan or
Benefit Plan that will obligate the Live Earth Companies to make
such payment. The consummation of any transaction contemplated
by this Agreement will not result in any: (i) payment
(whether of severance pay or otherwise) becoming due from the
Live Earth Companies to any of their respective officers,
employees, former employees or directors or to the trustee under
any “rabbi trust” or similar
arrangement; (ii) benefit under any Benefit Plan applicable
to the Live Earth Companies being established or becoming
accelerated, vested or payable; or (iii) payment or series
of payments by any Live Earth Company, directly or indirectly,
to any Person that would constitute a “parachute
payment” within the
11
meaning of Section 280G of the Code (other than as set
forth under Section 3.17 of the Live Earth Disclosure
Schedule).
(e) No Live Earth Company provides any material
post-retirement medical, health, disability or death protection
coverage or contribute to or maintain any employee welfare
benefit plan which provides for medical, health, disability or
death benefit coverage following termination of employment by
any officer, director or employee except as is required by
Section 4980B(f) of the Code or other applicable statute,
nor has any Live Earth Company made any representations,
agreements, covenants or commitments to provide that coverage.
(f) With respect to any Welfare Plan applicable to the Live
Earth Companies, (i) each such Welfare Plan that is a group
health plan, as such term is defined in Section 5000(b)(1)
of the Code, complies in all material respects with any
applicable requirements of Part 6 of Title I of ERISA
and Section 4980B(f) of the Code and (ii) each such
Welfare Plan (including any such plan covering retirees or other
former employees) may be amended or terminated with respect to
health benefits without material liability to any Live Earth
Company on or at any time after the Closing Date.
(g) All contributions by any Live Earth Company required by
law or by a collective bargaining or other agreement to be made
under any Pension Plan, Welfare Plan or Benefit Plan with
respect to all periods through the Closing Date, including a pro
rata share of contributions due for the current plan year, will
have been made by such date.
(h) No Live Earth Company has, nor will any Live Earth
Company have, any liability or obligation for taxes, penalties,
contributions, losses, claims, damages, judgments, settlement
costs, expenses, costs, or any other liability or liabilities of
any nature whatsoever arising out of or in any manner relating
to any Pension Plan, Welfare Plan or Benefit Plan (including but
not limited to employee benefit plans such as foreign plans
which are not subject to ERISA), that has been, or is,
contributed to by any entity, whether or not incorporated, which
is deemed to be under common control (as defined in
Section 414 of the Code), with any such Live Earth Company.
3.19 Conformity
with Law. Except as set forth on
Section 3.19 of the Live Earth Disclosure Schedule:
(a) Each Live Earth Company has complied in all material
respects with, and no Live Earth Company is in material default
under, any ruling, directive, order, award, judgment or decree
of any Governmental or Regulatory Authority except where such
failure would not be reasonably expected to have a Material
Adverse Effect on the Live Earth Parties.
(b) There are no Proceedings pending or, to the Knowledge
of the Live Earth Parties, threatened, against or affecting any
Live Earth Company, at law or in equity, or before or by any
Governmental or Regulatory Authority and no notice of any
Proceeding, pending or, to the Knowledge of the Live Earth
Parties, threatened, has been received by any Live Earth Company
that would reasonably be expected to have a Material Adverse
Effect on such Live Earth Company.
(c) Since January 1, 2008, the Live Earth Companies
have conducted and are conducting their respective operations in
material compliance with the Law, and no Live Earth Company has
received any notification of any asserted present or past
unremedied failure by it to comply with any Law, in either case
that would reasonably be expected to have a Material Adverse
Effect on such Live Earth Company.
3.20 Taxes.
(a) Each Live Earth Company has timely filed all federal
and other material Tax Returns that it was required to file for
all taxable periods in all jurisdictions in which each Live
Earth Company has established a taxable presence beginning after
December 31, 2007, and ending on or before the Closing
Date, and has paid all material Taxes. Except as set forth on
Section 3.20 of the Disclosure Schedule, none of the Live
Earth Companies has waived any statute of limitations in respect
of Taxes or agreed to an extension of time with respect to a Tax
assessment or deficiency for any taxable period beginning after
December 31, 2007. None of the Tax Returns for any Live
Earth Company for any taxable period beginning after
December 31, 2007 is currently the subject of audit by a
Taxing authority.
12
(b) None of the Live Earth Companies is a party to any Tax
allocation or sharing agreement. None of the Live Earth
Companies has been a member of an affiliated group filing a
consolidated federal Tax Return for any Taxable period beginning
after December 31, 2007 and, except as set forth on
Section 3.20 of the Live Earth Disclosure Schedule, no Live
Earth Company has received written notice of any claim, whether
pending or threatened, for Taxes for any taxable period
beginning after December 31, 2007; there are no requests
for rulings in respect of any Taxable period beginning after
December 31, 2007 pending by any Live Earth Company with
any Tax Authority; except as set forth on Section 3.20 of
the Live Earth Disclosure Schedule, no material penalty or
deficiency in respect of any Taxes which has been assessed
against any Live Earth Company for any taxable period beginning
after December 31, 2007 remains unpaid.
(c) (i) No Live Earth Company is a subchapter
S corporation within the meaning of Sections 1361 and
1362 of the Internal Revenue Code of 1986, as amended
(“Code”), (ii) Live Earth Company
is, or owns any equity interests in, any “qualified
subchapter S subsidiary” within the meaning of
Sections 1361(b)(3)(B) and 1362 of the Code, (iii) to
the Knowledge of the Live Earth Parties, since January 1,
2008, each of SF, Live Earth Funding, LLC and NA are and always
have been disregarded entities for U.S. federal income tax
purposes, and (iv) to the Knowledge of the Live Earth
Parties, since January 1, 2008, both CC and BR are and
always have been partnerships for U.S. federal income tax
purposes.
(d) To the Knowledge of the Live Earth Parties, there are
no Liens on any of the assets of any Live Earth Company that
arose in connection with any failure (or alleged failure) to pay
any Tax. Further, to the Knowledge of the Live Earth Parties,
all of the assets of the Live Earth Companies and the
Transferred Assets have been properly listed and described on
the property tax rolls for all periods prior to and including
the Closing Date, and no portion of the assets of the Live Earth
Companies or the Transferred Assets constitute omitted property
for property tax purposes.
3.21 Completeness;
No Defaults. Except as set forth on
Section 3.21 of the Live Earth Disclosure Schedule, Live
Earth has made available to the WCA Parties true, correct and
complete copies of: (a) the operating agreements, as
amended, and record and minute books of each Live Earth Company
with respect to matters occurring on or after January 1,
2008 and (b) each lease, instrument, agreement, license,
permit, certificate or other document that are included on
Section 3.12, Section 3.13 and Section 3.14 of
the Live Earth Disclosure Schedule (collectively, the
“Delivered Documents”). No Live Earth
Party hereto is in material default under any of the Delivered
Documents.
3.22 Government
Contracts. Except as set forth on
Section 3.22 of the Live Earth Disclosure Schedule, no Live
Earth Company is now, and since January 1, 2008, has not
been, a party to any governmental contract subject to price
redetermination or renegotiation.
3.23 Absence
of Changes. Except as set forth in
Section 3.23 of the Live Earth Disclosure Schedule, since
September 30, 2009 there has not been:
(a) any event having a Material Adverse Effect on the
financial condition, assets, liabilities (contingent or
otherwise), income or business of any Live Earth Company;
(b) any damage, destruction or loss (whether or not covered
by insurance), change in zoning, or change in any law, rule,
regulation, ordinance, or permit condition, materially adversely
affecting the properties or business of any Live Earth Company
or any Transferred Asset with a value in excess of $20,000;
(c) any change in the authorized or outstanding limited
liability company interests of any Live Earth Company or any
grant of any options, warrants, calls, conversion rights or
commitments;
(d) any declaration or payment of any dividend or
distribution in respect of the limited liability company
interests or any direct or indirect redemption, purchase or
other acquisition of any of the limited liability company
interests of any Live Earth Company;
(e) any bonus or any increase in the compensation, sales
commissions, fringe benefits or fee arrangement payable or to
become payable by any Live Earth Company to any of its officers,
directors, employees, consultants or agents or any change in the
method by which sales commissions are calculated and paid;
13
(f) any work interruptions, labor grievances or claims
filed or, to the Knowledge of the Live Earth Parties, any
proposed law or regulation or any event or condition of any
character, that could reasonably be expected to have a Material
Adverse Effect on the business or future prospects of the Live
Earth Companies;
(g) any sale or transfer, or any agreement to sell or
transfer, other than in the ordinary course, any assets,
property or rights of any Live Earth Company to any Person;
(h) any cancellation, or agreement to cancel, any
indebtedness or other obligation owing to any Live Earth Company;
(i) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in the
assets, property or rights of any Live Earth Company or
requiring consent of any party to the transfer and assignment of
any such assets, property or rights;
(j) any purchase or acquisition, or agreement, plan or
arrangement to purchase or acquire, any property, rights or
assets of any Live Earth Company;
(k) any waiver of any material rights or claims of any Live
Earth Company;
(l) any breach, amendment, termination, notice of
non-renewal or material changes in the terms and conditions of
any material contract, agreement, license, permit or other right
to which any Live Earth Company is a party that would reasonably
be expected to have a Material Adverse Effect on any Live Earth
Company; or
(m) any transaction by any Live Earth Company outside the
ordinary course of its business.
3.24 Deposit
Accounts; Powers of Attorney.
(a) Set forth on Section 3.24(a) of the Live Earth
Disclosure Schedule is a list, as of the date of this Agreement,
of: (i) the name of each financial institution in which
each such Live Earth Company has accounts or safe deposit boxes;
(ii) the names in which such accounts or boxes are held;
and (iii) the type of accounts.
(b) No Person holds a general or special power of attorney
from any Live Earth Company or any of its subsidiaries.
(c) Set forth on Section 3.24(c) of the Live Earth
Disclosure Schedule is a list of all financial assurance
instruments issued by or on behalf of each Live Earth Company,
including the names of the surety, the obligee and the obligor
for each such instrument, the penal sum for each such
instrument, the purpose of such instrument, and the termination
or renewal date of each such instrument.
3.25 Proprietary
Rights. Except as set forth on
Section 3.25 of the Live Earth Disclosure Schedule, no Live
Earth Company owns or has any right or interest in any
registered trademarks, trade names, patents, patent applications
or registered copyrights (“Intellectual
Property”) or any license or assignment with
respect thereto. No Live Earth Company has granted to any third
party a License or other authorization to use any Intellectual
Property of such Live Earth Company (except to any other one or
more of the Live Earth Companies), except as set forth on
Section 3.25 of the Live Earth Disclosure Schedule and no
third party owns any ownership interest in or holds any claim,
Lien or other encumbrance, on any Live Earth Company’s
Intellectual Property. No Live Earth Party has received any
notification that any Live Earth Company has infringed upon or
is infringing upon, or has engaged in or is engaging in any
unauthorized use or misappropriation of, any Intellectual
Property owned by or belonging to any other Person that would
reasonably be expected to have a Material Adverse Effect on such
Live Earth Company; and there is no pending or, to the Knowledge
of the Live Earth Parties, threatened claim, and no basis for
the assertion of any valid claim, against any Live Earth Company
with respect to any such infringement, unauthorized use or
misappropriation. Except for software used in connection with
the operation of the Live Earth Companies, no Live Earth Company
has entered into any licensing agreements to use the
Intellectual Property of third parties, and no Live Earth
Company owes to any third parties royalties for the use of
Intellectual Property.
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3.26 Relations
with Governments. Since January 1, 2008,
no Live Earth Company nor to the Knowledge of the Live Earth
Parties, any shareholder, member, manager, director, officer,
agent, employee or other person acting on behalf of any Live
Earth Company, has used any funds of any Live Earth Company for
improper or unlawful contributions, payments, gifts or
entertainment, or made any improper or unlawful expenditures
relating to political activity to domestic or foreign government
officials or others. Each Live Earth Company has adequate
financial controls to prevent such improper or unlawful
contributions, payments, gifts, entertainment or expenditures.
To the Knowledge of the Live Earth Parties, no Live Earth
Company or any partner, shareholder, member, manager, director,
officer, agent, employee or other person acting on behalf of any
Live Earth Company, has accepted or received any improper or
unlawful contributions, payments, gifts or expenditures. To the
Knowledge of the Live Earth Parties, the Live Earth Companies
have at all times complied, and are in compliance, in all
material respects, with the Foreign Corrupt Practices Act and in
all material respects with all foreign laws and regulations
relating to prevention of corrupt practices.
3.27 Environmental
Matters. The Live Earth Companies and the
Live Earth Parties have delivered to the WCA Parties all of the
material correspondence, agreements, notices or other documents
related to the items set forth on Section 3.27 of the Live
Earth Disclosure Schedule.
Except as set forth in Section 3.27 of the Live Earth
Disclosure Schedule:
(a) the Live Earth Companies and all property (whether real
or personal) which is or was formerly leased, used, operated,
owned or managed in whole or in part in any manner by any Live
Earth Company or any of its organizational predecessors
(individually, any “Business Facility”,
and collectively, the “Business
Facilities”) and all operations of the Live Earth
Companies and their respective Business Facilities, to the
Knowledge of the Live Earth Parties, are in material compliance
and have, to the Knowledge of the Live Earth Parties, been in
material compliance with all applicable Environmental Laws;
(b) each Live Earth Company and its Business Facilities has
obtained and is in material compliance with all material
permits, Licenses, registrations, approvals and other
authorizations (including all applications for all of the
foregoing) required under any Environmental Law for the business
of such Live Earth Company as currently conducted (collectively,
“Environmental Permits”), and
Section 3.27(b) of the Live Earth Disclosure Schedule
contains an accurate and complete listing of all of the Business
Facilities and all of the material Environmental Permits of each
Live Earth Company;
(c) there is no present, or to the Knowledge of the Live
Earth Parties, past event, condition or circumstance that may
reasonably be expected to interfere with the conduct of any Live
Earth Company’s business in the manner now conducted
relating to such Live Earth Company’s compliance with
Environmental Laws or which constitutes a material violation
thereof, or which could reasonably be expected to have a
Material Adverse Effect upon the Live Earth Parties;
(d) during the term of each Live Earth Company’s
ownership of or control of its Business Facilities (the
“Ownership Term”), each Live Earth
Company and its respective Business Facilities, and any
operations thereon, have not been and are not currently subject
to an Environmental Claim;
(e) there are no Environmental Claims or investigations
pending or, to the Knowledge of the Live Earth Parties,
threatened, involving the release or threat of release of any
Polluting Substances from or on (i) any Business Facility
of any Live Earth Company, or (ii) any other property where
Polluting Substances generated by any Live Earth Company or
originating from any Business Facility of any Live Earth Company
have been recycled, stored, treated, released or disposed, or
(iii) any property to which Polluting Substances were
transported by any Live Earth Company or (iv) any property
on which any Live Earth Company performs or performed
Remediation;
(f) to the Knowledge of the Live Earth Parties, there are
no Polluting Substances on any Business Facility of any Live
Earth Company in an amount or concentration which would require
reporting to any governmental authority or Remediation to comply
with the requirements of Environmental Laws and which have not
been so reported;
15
(g) to the Knowledge of the Live Earth Parties, no Live
Earth Company has undertaken Remediation or other
decontamination or cleanup of any facility or site or entered
into any agreement or extended any offer for the payment of
costs associated with such activity;
(h) to the Knowledge of the Live Earth Parties, each Live
Earth Company has filed all material notices, notifications,
financial assurance, applications and all similar documents
which are required to be obtained or filed for the operation of
its business or the use or operation of any of its Business
Facilities and has not received any notification that such
filings are incomplete or insufficient;
(i) to the Knowledge of the Live Earth Parties, there are
no Environmental Claims for which any Live Earth Company has
failed to notify its insurers within contractually required
notice periods or for which insurers have denied coverage or
reserved their rights to deny coverage;
(j) to the Knowledge of the Live Earth Parties, there are
no false or misleading statements in any current or prior
Environmental Permit relating to any Live Earth Company or any
of its Business Facilities;
(k) except as set forth on Section 3.27(k) of the Live
Earth Disclosure Schedule, the transactions contemplated by this
Agreement will not require the amendment or transfer of any of
the Environmental Permits;
(l) no Live Earth Company is now, and to the Knowledge of
the Live Earth Parties, no Live Earth Company is reasonably
expected to be in the future (based solely upon the
Environmental Laws as they exist on the Closing Date), as a
result of the operation or condition of any Business Facility of
any Live Earth Company or the businesses thereon as conducted
since January 1, 2008 or at Closing, subject to any:
(i) contingent liability in connection with any release or
threatened release of Polluting Substances into the environment
other than the normal or routine disposal of solid waste,
whether on or off the Properties or any Business Facility of any
Live Earth Company; (ii) reclamation, decontamination or
Remediation requirements under Environmental Laws, or any
reporting requirements related thereto, except for ordinary
closure requirements under Environmental Laws; or
(iii) consent order, compliance order or administrative
order relating to or issued under any Environmental Law;
(m) except as set forth on Section 3.27(m) of the Live
Earth Disclosure Schedule, there are no obligations,
undertakings or liabilities arising out of or relating to
Environmental Laws which any Live Earth Company has agreed to,
assumed or retained, by contract or otherwise, except as
required by Environmental Law or referenced in the Environmental
Permits; and
(n) to the Knowledge of the Live Earth Parties, there are
no, nor have there ever been any, storage tanks on or under any
Business Facility of any Live Earth Company, and all Business
Facilities of the Live Earth Companies containing such tanks
during the Ownership Term has been remediated in compliance with
all Environmental Laws.
3.28 No
Broker’s or Finder’s Fees. No
agent, broker, investment banker, person or firm has acted
directly or indirectly on behalf of the Live Earth Parties or
any Live Earth Company in connection with this Agreement or the
transactions contemplated herein who will be entitled to any
broker’s or finder’s fee or any other commission or
similar fee or expense, directly or indirectly, in connection
with this Agreement or the transactions contemplated herein.
3.29 Litigation. Except
as set forth in Section 3.29 of the Live Earth Disclosure
Schedule, there are no Proceedings pending or, to the Knowledge
of the Live Earth Parties, threatened against any Live Earth
Company, or challenging the validity or propriety of the
transactions contemplated by this Agreement or any Environmental
Permit or other permit or governmental authorization; to the
Knowledge of the Live Earth Parties, there is no basis or ground
for any such Proceedings; and there is no outstanding order,
writ, injunction or decree of any court, administrative agency,
governmental body or arbitration tribunal against any Live Earth
Company or the Live Earth Parties or their respective assets,
which relates to or could have a Material Adverse Effect on any
Live Earth Company. Set forth on Section 3.29 of the Live
Earth Disclosure Schedule are all Proceedings known to the Live
Earth Parties or that have commenced since January 1, 2008
16
to which any Live Earth Company was a party, or which, to the
Knowledge of the Live Earth Parties, were threatened against any
Live Earth Company, or which relate in any manner to the assets
of any Live Earth Company.
3.30 Proxy
Statement; Disclosure. To the Knowledge of
the Live Earth Parties, the representations and warranties
contained in this Agreement and the Live Earth Disclosure
Schedule do not include any untrue statement of a material fact
or omit to state a material fact necessary to make the
statements herein and therein not misleading. Except as set
forth on Section 3.30 of the Live Earth Disclosure
Schedule, the information with respect to the Live Earth Parties
that the Live Earth Parties furnish in writing to WCA Parent for
use in the Proxy Statement (defined below), and any amendments
or supplements thereto, when filed by WCA Parent with the
Securities and Exchange Commission
(“SEC”), or when distributed or
otherwise disseminated to WCA Parent’s stockholders, will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.
4. Representations and Warranties of the WCA
Parties. Prior to or upon the execution of this
Agreement, the WCA Parties have delivered to Live Earth a
schedule (the “WCA Parties’ Disclosure
Schedule”) setting forth, among other things, items
the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in any
provision hereof or as an exception to one or more
representations or warranties contained in Article 4. The
inclusion of any information in the WCA Disclosure Schedule
shall not be deemed to be an admission or acknowledgment, in and
of itself, that such information is required by the terms hereof
to be disclosed, is material to the WCA Parties, has resulted in
or would result in a Material Adverse Effect, or is outside the
ordinary course of business.
The WCA Parties make the following representations and
warranties jointly and severally, and represent and warrant that
all of the following representations and warranties are true as
of the date of this Agreement and shall be true on the Closing
Date:
4.1 Organization;
Standing and Power. The WCA Parties are
corporations duly organized, validly existing and in good
standing under the laws of the State of Delaware and have all
requisite power and authority to own, operate and lease its
properties and to carry on its business in the places and in the
manner as now being conducted. The WCA Subs are limited
liability companies duly organized, validly existing and in good
standing under the laws of its state of organization and have
all requisite power and authority to own, operate and lease its
properties and to carry on its business in the places and in the
manner as now being conducted.
4.2 Capitalization.
(a) As of the date of this Agreement, the authorized
capital stock of the WCA Parent consists of
50,000,000 shares common stock and 8,000,000 shares of
preferred stock. No other capital stock is authorized. As of
December 8, 2009, there were 16,497,686 shares of WCA
Parent common stock and 869,770 shares of WCA Parent
preferred stock outstanding, and 1,073,957 shares of WCA
common stock and no shares of WCA Parent preferred stock held in
WCA Parent’s treasury. As of the date of this Agreement, no
shares of WCA Parent common stock were reserved for issuance,
except that 10,000,661 shares of WCA Parent common stock
were reserved for issuance upon the conversion of WCA Parent
preferred stock and the exercise of long-term stock awards,
stock options and other equity-type rewards pursuant to the
Third Amended and Restated 2004 WCA Waste Corporation Incentive
Plan, effective as of June 1, 2005 (the “WCA
Parent Stock Plan”). All of the issued and
outstanding shares of WCA Parent common stock and preferred
stock have been duly authorized and validly issued and are fully
paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. Except
for the equity awards and WCA Parent preferred stock set forth
above, the WCA Parent does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments
or agreements of any character calling for the purchase or
issuance of any shares of WCA Parent common stock or any other
equity securities of WCA Parent or any securities representing
the right to purchase or otherwise receive any shares of WCA
Parent common stock or preferred stock.
17
(b) Section 4.2(b) of the WCA Parties’ Disclosure
Schedule attached hereto sets forth a true and correct list of
all of WCA Parent’s Subsidiaries as of the date of this
Agreement. WCA parent owns, directly or indirectly, all of the
issued and outstanding shares of capital stock of each of the
subsidiaries of the WCA Parent, free and clear of all Liens
other than Permitted Liens, and all of such shares are duly
authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights. No Subsidiary of the WCA Parent
has or is bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character
calling for the purchase or issuance of any shares of capital
stock or any other equity security of such subsidiary or any
securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security
of such subsidiary.
4.3 Authorization,
Validity and Effect of Agreements; Non-contravention.
(a) This Agreement constitutes, and all agreements and
documents contemplated hereby when executed and delivered
pursuant hereto for value received will constitute, the valid
and legally binding obligations of the WCA Parties enforceable
in accordance with their terms, subject to (i) applicable
bankruptcy, insolvency or other similar laws relating to
creditor’s rights generally and (ii) general
principles of equity, regardless of whether considered in a
proceeding in equity or at law.
(b) The execution and delivery of this Agreement by the WCA
Parties does not, and the consummation of the transactions
contemplated hereby by the WCA Parties will not except as set
forth on Section 4.3(b) of the WCA Parties’ Disclosure
Schedule, (i) require the consent, approval or
authorization of, or declaration, filing or registration with,
any governmental or regulatory authority or any third party;
(ii) result in the breach of any term or provision of, or
constitute a default under, or result in the acceleration of or
entitle any party to accelerate (whether after the giving of
notice or the lapse of time or both) any obligation under, or
result in the creation or imposition of any Lien upon any part
of the property of the WCA Parties pursuant to any provision of
any order, judgment, arbitration award, injunction, decree,
indenture, mortgage, lease, license, lien, or other agreement or
instrument to which any the WCA Parties is a party or by which
it is bound; or (iii) violate or conflict with any
provision of the respective Certificates of Incorporation or
Bylaws, each as amended to the date hereof and as applicable, of
the WCA Parties.
4.4 SEC
Reports; Financial Statements.
(a) Since January 1, 2007, WCA Parent has filed all
reports, schedules, forms, statements and other documents
required to be filed by WCA Parent under the Securities Act of
1933, as amended (the “Securities Act”),
and the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), (the foregoing
materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred
to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the
expiration of any such extension. Except to the extent corrected
by subsequent SEC Reports or amendments to a prior SEC Report,
as of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of WCA Parent
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in
accordance with GAAP, except as may be otherwise specified in
such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects
the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(b) WCA Parent maintains disclosure controls and procedures
required by
Rule 13a-15
or 15d-15
under the Exchange Act. Such disclosure controls and procedures
are reasonably designed to ensure that information required to
be disclosed by WCA Parent is recorded and reported on a timely
basis to the individuals responsible for the preparation of WCA
Parent’s filings with the SEC and other public disclosure
documents.
18
The WCA Parties maintain internal control over financial
reporting (as defined in
Rule 13a-15
or 15d-15,
as applicable, under the Exchange Act). WCA Parent has completed
an evaluation of the effectiveness of its internal control over
financial reporting in compliance with Section 404 of the
Sarbanes Oxley Act for the year ended December 31, 2008,
and such evaluation concluded that such controls were effective.
WCA Parent has disclosed and identified, based on the most
recent evaluation of its chief executive officer and its chief
financial officer prior to the date hereof, for WCA
Parent’s auditors and the audit committee of WCA
Parent’s board of directors (i) any significant
deficiencies in the design or operation of its internal controls
over financial reporting that are reasonably likely to adversely
affect WCA Parent’s ability to record, process, summarize
and report financial information, (ii) any material
weaknesses in internal control over financial reporting and
(iii) any fraud, whether or not material, that involves
management or other employees who have a significant role in WCA
Parent’s or its subsidiaries’ internal control over
financial reporting.
(c) Since the date of the latest unaudited financial
statements included within the SEC Reports, there has been no
event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect
with respect to WCA Parent. Since September 30, 2009, the
WCA Parties each (i) has been operated in all material
respects in the ordinary course of business and (ii) has
not made any material changes in its respective capital or
corporate structures.
4.5 Litigation. Except
as set forth in the SEC Reports, there are no Proceedings
pending or, to the Knowledge of the WCA Parties, threatened
against any WCA Party, or challenging the validity or propriety
of the transactions contemplated by this Agreement; to the
Knowledge of the WCA Parties and the Live Earth Parties, there
is no basis or ground for any such Proceedings; and there is no
outstanding order, writ, injunction or decree of any court,
administrative agency, governmental body or arbitration tribunal
against any WCA Party or their respective agents, which relates
to or would reasonably be expected to have a Material Adverse
Effect on any WCA Party.
4.6 Insurance. The
WCA Parties are presently insured, and since January 1,
2007, have been insured, for reasonable amounts with financially
sound and reputable insurance companies, against such risks as
companies engaged in a similar business would, in accordance
with good business practice, customarily be insured. Except as
would not reasonably be expected to have a Material Adverse
Effect on the WCA Parties, all of the insurance policies and
bonds maintained by the WCA Parties outside the ordinary course
of its business are in full force and effect, the WCA Parties
are not in default thereunder and all material claims thereunder
have been filed in due and timely fashion.
4.7 Conformity
with Law.
(a) Except as set forth in the SEC Reports, there are no
Proceedings pending or, to the Knowledge of the WCA Parties,
threatened against or affecting any WCA Party, at law or in
equity, or before or by any Governmental or Regulatory Authority
and no notice of any Proceeding, pending or, to the Knowledge of
the WCA Parties, threatened, has been received by any WCA Party
that would reasonably be expected to have a Material Adverse
Effect on such WCA Party.
(b) Except as set forth in the SEC Reports, the WCA Parties
have conducted and are conducting their respective operations in
material compliance with the Law, and to the Knowledge of the
WCA Parties, no WCA Party has received any notification of any
asserted present or past unremedied failure by it to comply with
any Law that would reasonably be expected to have a Material
Adverse Effect on such WCA Party.
4.8 Relations
with Governments. No WCA Party nor to the
Knowledge of the WCA Parties, any shareholder, member, manager,
director, officer, agent, employee or other person acting on
behalf of any WCA Party, has used any funds of any WCA Party for
improper or unlawful contributions, payments, gifts or
entertainment, or made any improper or unlawful expenditures
relating to political activity to domestic or foreign government
officials or others. Each WCA Party has adequate financial
controls to prevent such improper or unlawful contributions,
payments, gifts, entertainment or expenditures. To the Knowledge
of the WCA Parties, no WCA Party, partner, shareholder, member,
manager, director, officer, agent, employee or other person
acting on behalf of any WCA Party, has accepted or received any
improper or unlawful contributions, payments, gifts or
expenditures. To the Knowledge of the WCA Parties, the WCA
Parties have
19
at all times complied, and are in compliance, in all material
respects, with the Foreign Corrupt Practices Act and in all
material respects with all foreign laws and regulations relating
to prevention of corrupt practices.
4.9 Contracts
and Commitments.
(a) Except for this Agreement, no WCA Party is a party to
or bound by any contract, arrangement, commitment or
understanding (whether written or oral) which (i) is a
material contract (as defined in Item 601(b)(10) of
Regulation S-K
of the SEC) to be performed after the date hereof that has not
been filed or incorporated by reference in the SEC Reports or
(ii) which materially restricts the conduct of any line of
business by the WCA Parties. Each contract, arrangement,
commitment or understanding of the type described in this
Section 4.9 is referred to herein as a “WCA
Contract.”
(b) Each WCA Contract is a valid and binding obligation of
the each such WCA Party which is a party thereto and, to the
Knowledge of the WCA Parties, of each other party thereto, is in
full force and effect, except where such failure to be in full
force and effect would not have or be reasonably likely to have
a Material Adverse Effect on the WCA Parties. The WCA Parties
have performed all obligations required to be performed by them
to date under each WCA Contract, except where such
nonperformance, individually or in the aggregate, would not have
or be reasonably likely to have a Material Adverse Effect. No
event or condition exists which constitutes or, after notice or
lapse of time or both, would constitute, a material default on
the part of the WCA Parties any such WCA Contract, except where
such default, individually or in the aggregate, would not have
or be reasonably likely to have a Material Adverse Effect. To
the Knowledge of the WCA Parties, no other party to any WCA
Contract is in default under the terms of any WCA Contract,
except where such default, individually or in the aggregate,
would not have or be reasonably likely to have a Material
Adverse Effect.
4.10 Absence
of Certain Changes or Events.
(a) Except as disclosed in the SEC Reports filed prior to
the date hereof, since September 30, 2009, no event has
occurred which has caused, or is reasonably likely to cause,
individually or in the aggregate, a Material Adverse Effect on
the WCA Parties.
(b) Since September 30, 2009:
(i) each WCA Party has been operated in all material
respects in the ordinary course of business;
(ii) no WCA Party has made any material changes in its
respective capital or corporate structures;
(iii) no Person (including the WCA Parties) has
accelerated, terminated, modified or cancelled any material
contract, agreement or other instrument or arrangements by which
any WCA Party is bound or affected or to which any WCA Party is
a party;
(iv) no WCA Party has permitted any material Lien or claim
against any WCA Party’s assets outside the ordinary course
of business and no event has occurred which would reasonably be
expected to result in a material impairment to any significant
asset of any WCA Party;
(v) no WCA Party has made any material investment in or
loan to any other Person or incurred any material indebtedness
to any other Person;
(vi) there are no Environmental Claims or investigations
pending, or to the Knowledge of the WCA Parties, threatened,
against any WCA Party that would reasonably be expected to be
disclosed in any report filed by WCA Parent pursuant to the
Exchange Act;
(vii) no WCA Party has received any written notice of any
claim, whether threatened or pending, for any material Taxes or
notice of any material penalty or deficiency in respect of any
Taxes that has been assessed against any WCA Party and no other
event has occurred that would be reasonably be expected to cause
a material increase in the WCA Parties’ Tax reserves or
effective Tax rate; and
(viii) each WCA employee benefit plan (as the term is
defined in Section 3(3) of ERISA, and other arrangements or
agreement providing benefits to any employee or former employee
of WCA Parent, its Subsidiaries or any ERISA Affiliate
(collectively, the “WCA Plans”) has been
operated and administered
20
in all material respects in accordance with its terms and
applicable law, no WCA Party has received notice of any material
claims, whether threatened or pending (other than routine claims
for benefits) by, on behalf of or against any WCA Plans or
trusts related thereto and no other event has occurred that
would reasonably be expected to cause any WCA Party to record a
material liability or impairment to the value of any assets held
with respect to the WCA Plans.
4.11 Proxy
Statement. The Proxy Statement or any other
document filed with any other regulatory agency in connection
herewith, and any amendments or supplements thereto, when filed
by WCA Parent with the SEC or any other Governmental or
Regulatory Authority, or when distributed or otherwise
disseminated to WCA Parent’s stockholders, as applicable,
will comply as to form in all material respects with the
applicable requirements of the Securities Act and the rules and
regulations thereunder and the Exchange Act and the rules and
regulations thereunder and other applicable Laws will not
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
4.12 Required
Vote. No vote of the stockholders of the WCA
Parent is required by law, WCA Parent’s certificate of
incorporation or bylaws or otherwise to approve this Agreement
and the transactions contemplated hereby other than the vote of
stockholders of WCA Parent to approve the issuance of the
Securities pursuant to the transactions contemplated by this
Agreement as required by the rules of NASDAQ.
4.13 Financial
Capability. As of the Closing, WCA Parent
will have sufficient funds to deliver the Cash Purchase Price as
and when due, and to consummate the transactions contemplated by
this Agreement.
4.14 Valid
Issuance of the Securities. The Securities,
when issued, sold and delivered in accordance with the terms of
this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable, and will be free of restrictions on
transfer and pre-emptive rights other than restrictions on
transfer under this Agreement and under applicable state and
federal securities laws. The Earn-Out Shares have been duly and
validly reserved for issuance.
4.15 Offering. The
offer, sale and issuance of the Securities as contemplated by
this Agreement are exempt from the registration or qualification
requirements of the Securities Act, and any applicable state
securities laws, and neither the WCA Parent nor any authorized
agent acting on its behalf will take any action hereafter that
would cause the loss of such exemption.
5. Covenants of Both Parties
5.1 Live
Earth Tax Covenants.
(a) For purposes of the taxable year in which the
transaction contemplated by this Agreement shall close, the Live
Earth Parties, at the Live Earth Parties’ sole cost and
expense, shall prepare or cause to be prepared and file or cause
to be filed all Tax Returns for the Live Earth Companies for all
periods ending on or prior to the Closing Date. The Live Earth
Parties shall pay all Taxes attributable to the Live Earth
Companies for the period prior to Closing in the normal course
of the Live Earth Parties’ businesses.
(b) Each Live Earth Company that is a partnership for Tax
purposes, including, but not limited to, CC and BR, shall make
elections pursuant to Internal Revenue Code Section 754 in
their final partnership Tax returns for the period ending on the
Closing Date.
(c) Cooperation on Tax Matters.
(i) The Parties shall cooperate fully, as and to the extent
reasonably requested by the other Party, in connection with the
filing of Tax Returns pursuant to this Agreement and any audit,
litigation or other proceeding with respect to Taxes. Such
cooperation shall include the retention and (upon the other
Party’s request) the provision of records and information
that are reasonably relevant to any such audit, litigation or
other proceeding and making employees available on a mutually
convenient basis to provide additional information and
explanation of any material provided hereunder. The Parties
agree (A) to retain all books and records with respect to
Tax matters pertinent to each of the Live Earth Companies
relating to any taxable period beginning before the Closing
until the expiration of the statute of limitations (unless,
prior to such
21
expiration, the WCA Parties deliver a written notice to Live
Earth requesting that such books and records be retained and
specifying the additional retention period) of the respective
taxable periods and to abide by all record retention agreements
entered into with any Taxing Authority, and (B) to give the
other Party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the
other Party so requests, the WCA Parties or the Live Earth
Parties, as the case may be, shall allow the other Party to take
possession of such books and records.
(ii) The WCA Parties and the Live Earth Parties further
agree, upon request, to use their best efforts to obtain any
certificate or other document from any Governmental or
Regulatory Authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions
contemplated hereby).
5.2 Regulatory
and Other Approvals. The WCA Parties will, as
promptly as practicable, (i) take all commercially
reasonable steps necessary or desirable to obtain all consents,
approvals or actions of, make all filings with and give all
notices to Governmental or Regulatory Authorities or any other
Person required of the WCA Parties to consummate the
transactions contemplated by this Agreement or the Transaction
Documents, (ii) provide such other information and
communications to such Governmental or Regulatory Authorities or
other Persons as the Live Earth Parties or such Governmental or
Regulatory Authorities or other Persons may reasonably request
in connection therewith and (iii) cooperate with the Live
Earth Parties in connection with the performance of its
obligations under this Section 5.2. To the extent that any
involvement from any Live Earth Party is needed, the Live Earth
Parties agree to cooperate with and assist the WCA Parties in
the performance of its obligations under this Section 5.2.
The WCA Parties will provide prompt notification to Live Earth
when any such consent, approval, action, filing or notice above
is obtained, taken, made or given, as applicable, and will
advise Live Earth of any communications (and, unless precluded
by Law, provide copies of any such communications that are in
writing) with any Governmental or Regulatory Authority or other
Person regarding any of the transactions contemplated by this
Agreement or any of the Transaction Documents.
5.3 Interim
Conduct of the Business. Until Closing, the
Live Earth Parties will conduct their businesses only in the
ordinary and usual course consistent with past practice. Without
limiting the generality of the foregoing, each Live Earth Party
will use commercially reasonable efforts to:
(a) preserve intact its relationships with suppliers,
customers, employees, creditors, and others having business
dealings with the Live Earth Companies;
(b) maintain in full force and effect its existing policies
of insurance which affect the Live Earth Companies;
(c) preserve, protect and maintain the Transferred Assets,
ordinary wear and tear excepted;
(d) continue performance in the ordinary course of its
obligations under the Contracts and other obligations; and
(e) take no action which would interfere with or prevent
performance and consummation of this Agreement, including
without limitation solicitation from any other Person, any
inquiries or proposals related to the disposition of all or any
portion of the Transferred Assets or the Live Earth Companies,
or pursuing or engaging in discussions with respect thereto.
5.4 WCA
Parent’s Approval of Certain
Transactions. Until Closing, with respect to
the Transferred Assets and the operation of the Acquired
Businesses, the Live Earth Parties shall not, without WCA
Parent’s prior written consent, directly or indirectly:
(a) incur, commit to incur or permit to be incurred any
debt or other obligation or liability, which increases the
Assumed Liabilities or results in the creation of a Lien other
than a Permitted Lien on any of the Transferred Assets or any
asset of a Live Earth Company;
(b) sell, assign, transfer, license or otherwise dispose of
any interest in any Transferred Asset or any asset of a Live
Earth Company other than in the ordinary course of business;
22
(c) enter into any lease of real or personal property or
any renewals thereof involving a rental obligation other than in
the ordinary course of business;
(d) permit any Lien other than a Permitted Lien or claims
against any Transferred Assets or any assets of a Live Earth
Company;
(e) enter into any transaction, contract or commitment
outside of the ordinary course of business, waive any right,
cancel any debt or claim, or voluntarily suffer any
extraordinary loss;
(f) make any capital expenditure or commitments for
additions to property, plant or equipment constituting capital
assets on behalf of the Live Earth Companies in an aggregate
amount exceeding $100,000; or
(g) enter into any agreement to do or engage in any of the
foregoing.
5.5 Stockholder
Meeting. WCA Parent shall establish a record
date for, duly call, give notice of, convene and hold a meeting
of its stockholders (the “WCA Stockholder
Meeting”) as promptly as practicable after the date
hereof for the purpose of voting on the matters requiring
Stockholder Approval (as defined below); provided, that
(i) if WCA Parent is unable to obtain a quorum of its
stockholders at such time, WCA Parent may adjourn or postpone
the date of the Stockholder Meeting by no more than five
business days and WCA Parent shall use commercially reasonable
efforts during such five-business-day period to obtain such a
quorum as soon as practicable, and (ii) WCA Parent may
delay, adjourn or postpone the WCA Stockholder Meeting to the
extent (and only to the extent) WCA Parent reasonably determines
that such delay, adjournment or postponement is required by
applicable Law to comply with any comments made by the SEC with
respect to the Proxy Statement or otherwise. The board of
directors of WCA Parent shall at all times prior to and during
such meeting recommend approval by its stockholders and shall
take all reasonable lawful action to solicit such approval by
its stockholders; provided that nothing in this Agreement shall
prevent the board of directors of WCA Parent from withholding,
withdrawing, amending or modifying its recommendation if the
board of directors of WCA Parent determines, after consultation
with its outside counsel, that such action is legally required
in order for the directors to comply with their fiduciary duties
to WCA Parent stockholders under applicable law
5.6 Proxy
Statement.
(a) WCA will use its best efforts to prepare and file a
preliminary proxy statement with the SEC with respect to the
Stockholder Approval (defined below) (the “Proxy
Statement”) no later than December 9, 2009.
(b) WCA Parent agrees to prepare and file the Proxy
Statement with the SEC in connection with the issuance of the
Securities under this Agreement. The Live Earth Parties shall
prepare and furnish such information relating to it and its
directors, officers and equity holders as may be reasonably
required in connection with the above referenced documents based
on its knowledge of and access to the information required for
said documents, and the Live Earth Parties, and its legal,
financial and accounting advisors, shall have the right to
review and approve (which approval shall not be unreasonably
withheld or delayed) the Proxy Statement prior to its filing.
The Live Earth Parties agree to cooperate with the WCA Parties
and the WCA Parties’ a counsel and accountants in
requesting and obtaining appropriate consents and letters from
its independent auditor in connection with the Proxy Statement.
WCA Parent, after consultation with Live Earth, will use all
reasonable efforts to promptly respond to any comments made by
the SEC with respect to the Proxy Statement. WCA Parent shall
(i) provide Live Earth and its counsel with copies of any
written comments, and advise Seller and its counsel of any oral
comments, with respect to the Proxy Statement received from the
SEC or its staff, (ii) provide Live Earth and its counsel a
reasonable opportunity to review the WCA Parent’s proposed
response to such comments, (iii) include in the WCA
Parent’s written response to such comments any reasonable
comments proposed by Live Earth and its counsel and
(iv) provide Live Earth and its counsel a reasonable
opportunity to participate in any discussions or meetings with
the SEC. No amendment to the Proxy Statement or supplemental
materials related thereto will be filed by WCA Parent without
the approval of Live Earth (which approval shall not be
unreasonably withheld, conditioned or delayed). The WCA Parties
also agree to use their reasonable best efforts to obtain all
necessary state securities Law or “Blue Sky” permits
and approvals required to carry out the transactions
contemplated by this
23
Agreement. After the SEC has confirmed that it will not review
or has no further comments on the Proxy Statement, WCA Parent
shall promptly mail the Proxy Statement to its stockholders.
(c) WCA Parent agrees that the Proxy Statement at the
date(s) of mailing to WCA Parent’s stockholders and at the
time of the WCA Stockholder Meeting, shall not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading. Each of Live Earth and
WCA Parent further agree that if such Party shall become aware
prior to the WCA Stockholder Meeting of any information
furnished by such Party that would cause any of the statements
in the Proxy Statement to be false or misleading with respect to
any material fact, or to omit to state any material fact
necessary to make the statements therein not false or
misleading, to promptly inform the other Parties thereof and to
take the necessary steps to correct the Proxy Statement.
(d) WCA Parent agrees to advise Live Earth, promptly after
WCA Parent receives notice thereof, of the time when the Proxy
Statement or any supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the
qualification of WCA Parent common shares for offering or sale
in any jurisdiction, of the initiation or, to the extent WCA
Parent is aware thereof, threat of any proceeding for any such
purpose, or of any request by the SEC for the amendment or
supplement of the Proxy Statement or for additional information.
5.7 NASDAQ
Listing. WCA Parent agrees to list, prior to
the Closing, on NASDAQ the Securities to be issued hereunder.
5.8 Pre-Closing
Access. The Live Earth Parties agree that
upon reasonable notice and subject to applicable Laws relating
to the exchange of information, between the date of this
Agreement and the Closing, the Live Earth Parties will permit
representatives of the WCA Parties to have access at all
reasonable times, and in a manner so as not to interfere
unreasonably with the normal business operations of the Live
Earth Companies, to the premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or
pertaining to the Transferred Assets and Live Earth Companies
and to the Live Earth Company Employees. The WCA Parties agree
that upon reasonable notice and subject to applicable Laws
relating to the exchange of information, between the date of
this Agreement and the Closing, the WCA Parties will permit
representatives of the Live Earth Parties to have access at all
reasonable times, and in a manner so as not to interfere
unreasonably with the normal business operations of the WCA
Parties to the properties, personnel, books, records (including
Tax records and work papers of independent auditors), contracts,
and documents relating to the WCA Parties that the Live Earth
Parties may reasonably request.
5.9 Employee
Matters. Except as may be required by Law,
the Live Earth Parties will refrain from directly or indirectly:
(a) making any material representation or promise, oral or
written, to any Live Earth Company Employee concerning any
Benefit Plan, except for statements as to the rights or accrued
benefits of any Live Earth Company Employee under the terms of
any Benefit Plan;
(b) making any increase in the salary, wages or other
compensation of any Live Earth Company Employee by an amount of
2% or greater over the salary, wages or other compensation of
such Live Earth Company Employee on the date hereof, except as
set forth in Section 5.9 of the Live Earth Disclosure
Schedule;
(c) adopting, entering into or becoming bound by any
Benefit Plan, employment-related Contract or collective
bargaining agreement with respect to the Acquired Businesses or
any of the Live Earth Company Employees, or amending, modifying
or terminating (partially or completely) any such Benefit Plan,
employment-related Contract or collective bargaining agreement,
except to the extent required by applicable Law; or
(d) establishing or modifying any (i) targets, goals,
pools or similar provisions in respect of any fiscal year under
any Benefit Plan or any employment-related Contract or other
compensation arrangement with or for Live Earth Company
Employees or (ii) salary ranges, increase guidelines or
similar
24
provisions in respect of any Benefit Plan or any
employment-related Contract or other compensation arrangement
with or for Live Earth Company Employees.
Live Earth will administer each Benefit Plan, or cause the same
to be so administered, in all material respects in accordance
with the applicable provisions of the Code, ERISA and all other
applicable Laws. Live Earth will promptly notify WCA Parent in
writing of each receipt by the Live Earth Parties (and furnish
WCA Parent with copies) of any notice of investigation or
administrative proceeding by the IRS, Department of Labor, the
Pension Benefit Guaranty Corporation or other Person involving
any Benefit Plan.
5.10 Live
Earth Business. The WCA Parties agree that,
prior to December 31, 2012, in the event of any transaction
that results in a change in control of the Live Earth Companies
they will cause any party who acquires the Live Earth Companies
to assume the WCA Parties obligations under Section 2.2 and
this Section 5.10. The WCA Parties agree that prior to
December 31, 2012 they will prepare separate financial
statements for the Live Earth Business sufficient for the
Parties to determine the EBITDA calculations in accordance with
Section 2.2. The WCA Parties agree that prior to
December 31, 2012 they will continue to operate the Live
Earth Companies in a commercially reasonable manner and will not
take actions intended to materially limit the ability of the
Live Earth Companies to meet the EBITDA goals for Earn-Out 1 and
Earn-Out 2.
5.11 Notice
of Developments. Each Party will give prompt
written notice to the other Party of any fact, event or
circumstances known to it that (i) is reasonably likely,
individually or taken together with all other facts, events and
circumstances known to it, to result in any Material Adverse
Effect or (ii) would cause or constitute a material breach
of any of its representations, warranties or covenants in this
Agreement. No disclosure by any Party pursuant to this Section,
however, shall be deemed to amend or supplement any schedule
hereto or to prevent or cure any misrepresentation or breach of
warranty.
5.12 Exclusivity. No
Live Earth Party nor any of its Affiliates will solicit,
initiate, or encourage the submission of any proposal or offer
from any Person other than the WCA Parties relating to the
acquisition of all or substantially all of the assets of any
Live Earth Company (including any acquisition structured as a
merger, consolidation, or share exchange).
5.13 Confidentiality. The
Live Earth Parties shall not disclose to any Person or make use
of any trade secrets or confidential information regarding the
Live Earth Companies or the Transferred Assets, other than to
disclose such secrets and information to the WCA Parties and its
counsel. Without limiting the right of the WCA Parties to pursue
all other legal and equitable rights available to it for
violation of this Agreement by the Live Earth Parties and their
agents, it is agreed that other remedies cannot fully compensate
the WCA Parties for such a violation and that the WCA Parties
shall be entitled to injunctive relief to prevent violation or
continuing violation thereof. It is the intent and understanding
of each party hereto that if, in any action before any court or
agency legally empowered to enforce this Agreement, any term,
restriction, covenant or promise shall be deemed modified to the
extent necessary to make it enforceable by such court or agency.
5.14 Publicity. The
Live Earth Parties and the WCA Parties shall consult with each
other before issuing any press release or other public
disclosure concerning this Agreement or the transactions
contemplated hereby. Live Earth shall not issue a press release
or other public disclosure without advance approval thereof by
WCA Parent except to the extent required by Law. Live Earth
shall have the right to review any press release or other public
disclosure issued by WCA Parent concerning this Agreement or the
transactions contemplated hereby.
5.15 Legal
Requirements. Each of Live Earth Parties and
the WCA Parties will take all reasonable actions necessary to
comply promptly with all legal requirements which may be imposed
on them with respect to the consummation of the transactions
contemplated by this Agreement or the Transaction Documents and
will promptly cooperate with and furnish information to any
party hereto necessary in connection with any such requirements
imposed upon such other party in connection with the
consummation of the transactions contemplated by this Agreement
or the Transaction Documents.
5.16 Further
Assurances. Subject to the terms and
conditions of this Agreement, the Live Earth Parties and the WCA
Parties each agree to use reasonable best efforts in good faith
and to cause to be taken, such
25
further actions and execute such other documents as may be
reasonably required to promptly fulfill the conditions to the
Closing, permit the consummation of the transactions
contemplated under this Agreement and to further secure to each
party the rights intended to be conferred hereby and the other
agreements ancillary to the transactions contemplated hereby.
5.17 Unwinding
of Transaction.
(a) The WCA Parties and the Live Earth Parties acknowledge:
(i) that in order for WCA Ohio to own and operate SF, WCA
Ohio must satisfy a state required background investigation in
connection with, and obtain approval of the Attorney General of
the State of Ohio (the “Ohio Attorney
General”) and the State of Ohio Environmental
Protection Agency (the “Ohio EPA”) of,
the acquisition by WCA Ohio of SF (such approval, the
“OH EPA Approval”); (ii) that WCA
Ohio might never obtain the OH EPA Approval; and (iii) that
because the OH EPA Approval may not be received prior to the
Closing Date, Ohio Revised Code Section 3734.42(F)
(“ORC 3734.42(F)”) requires that this
Agreement expressly state that the transactions contemplated
hereby are subject to the approval of the Director of the Ohio
EPA and contain specific provisions negating such sale in the
event that the OH EPA Approval is ultimately denied by the
Director of the Ohio EPA. Therefore, the WCA Parties and the
Live Earth Parties agree as follows: (x) in the event that
WCA Ohio receives correspondence or other documentation from the
Ohio Attorney General
and/or the
Ohio EPA stating that the OH EPA Approval is ultimately denied
(the “Denial”), the WCA Parties shall
provide written notice of, and a copy of, such Denial to Live
Earth by no later than the third business day after the
occurrence of one of the following events, whichever is
applicable: (A) WCA Ohio’s receipt of the Denial, if
WCA Ohio elects not to appeal the Denial, (B) WCA
Ohio’s receipt of a written decision from a court or
tribunal of competent jurisdiction indicating that an appeal was
ultimately not successful in reversing the Denial, if WCA Ohio
elects to appeal the Denial, or (C) the expiration of any
time period available for appeal of the Denial, if an appeal of
such Denial has not otherwise been filed; and (y) upon
receipt by Live Earth of the applicable notice pursuant to
subparagraph (x) above, the sale shall be immediately
negated as provided under ORC 3734.42(F) and the Live Earth
Parties and the WCA Parties shall “unwind” or
“reverse” the Closing (the
“Unwind” or
“Unwinding”) in the manner set forth in
Section 5.17(b).
(b) In the event the Live Earth Parties and WCA Parties
must Unwind the Closing pursuant to Section 5.17(a), the
parties shall take the actions set forth below. The Unwinding of
the Closing shall take place as promptly as practicable
following the determination of the parties to Unwind the Closing
pursuant to Section 5.17(a) and the date on which the
Unwind shall be effected shall be on such date and at such place
as Live Earth and WCA Parent shall mutually agree (the
“Unwind Closing Date”).
(i) On the Unwind Closing Date, Live Earth shall
(A) take all actions reasonably necessary to assign the
Closing Shares to WCA Parent, (B) pay, or cause to be paid
to, WCA Parent an amount in cash equal to the Cash Purchase
Price, the Comerica Payment and the Other Indebtedness Payments
less the Cash Flow resulting from the operation by the WCA
Parties of the Live Earth Businesses from the Closing Date to
the Unwind Closing Date, and (C) take all such other
actions necessary or desirable to “unwind” the actions
taken by the parties to effect the Closing and the transactions
contemplated thereby, including, but not limited to, taking all
commercially reasonable steps necessary or desirable to obtain
all consents, approvals or actions of, make all filings with and
give all notices to Governmental or Regulatory Authorities or
any other Person required to “unwind” the transactions
contemplated by this Agreement.
(ii) The WCA Parties shall (A) assign the Equity
Interests to Live Earth, (B) transfer the Transferred
Assets and Assumed Liabilities to Live Earth, and (C) take
all such other actions necessary or desirable to Unwind the
actions taken by the parties to effect the Closing, including,
but not limited to, cooperating with Live Earth in obtaining all
consents, approvals or actions of, make all filings with and
give all notices to Governmental or Regulatory Authorities or
any other Person required to Unwind the Closing of the
transactions contemplated by this Agreement.
5.18 Bank
Lenders Approval. The WCA Parent shall use
commercially reasonable efforts (which shall include, without
limitation, the payment of customary consent fees and the
reimbursement of customary lender expenses) to obtain the
requisite consent of the lenders to the consummation of the
transactions contemplated
26
under this Agreement and the Transaction Documents under the WCA
Parent’s Revolving Credit Agreement, dated as of
July 5, 2006, as amended.
5.19 Landfill
Closure; Bonds. The parties acknowledge that,
notwithstanding any limitation of this Agreement to the contrary
(other than as required by Section 5.17), at Closing the
WCA Parties shall succeed to all the closure and post-closure
obligations and liabilities as well as any new, continuing or
recurring compliance obligations associated with the landfill
located in Fostoria, Ohio owned and operated by SF and the
transfer station located in Brockton, Massachusetts owned and
operated by CC and BR. Any and all performance bonds, collection
bonds and other types of bonds related to the landfill located
in Fostoria, Ohio and the transfer station in Brockton,
Massachusetts in effect prior to the Closing Date shall be
terminated on or prior to the Closing Date and any associated
collateral shall be returned as directed by Live Earth. The WCA
Parties shall obtain all performance bonds, collection bonds and
other types of bonds related to the landfill located in
Fostoria, Ohio and the transfer station located in Brockton,
Massachusetts and provided financial assurance in connection
therewith required by and in accordance with applicable Laws and
such bonds shall be effective as of the Closing Date.
5.20 Intercreditor
Agreement with Comerica. WCA Parent and Live
Earth shall use their commercially reasonable efforts to enter
into an intercreditor agreement pursuant to which in the event
the parties Unwind the transactions to be consummated at the
Closing, the Comerica Payment will be repaid to WCA Parent in
connection with the Unwinding and the secured credit arrangement
currently in place between Live Earth and Comerica that is to be
terminated at Closing would be reestablished upon the Unwinding.
5.21 Financial
Statements. As promptly as reasonably
practicable and in any event on or before the twentieth day of
each month from the date hereof to the Closing Date, Live Earth
shall deliver to WCA Parent the internal monthly unaudited
financial statements (balance sheet, statement of operations and
statement of cash flows) of the Live Earth Companies for the
prior month.
5.22 Real
Property Documents. As promptly as
practicable following the execution hereof, (a) WCA
Massachusetts will obtain a commitment for title insurance from
Chicago Title Insurance Company (the
“Title Insurer”) covering the Live
Earth Companies’ Real Property located in Brockton,
Massachusetts, together with copies of all documents evidencing
title exceptions thereon, and an updated survey of such real
property, and (b) WCA Ohio will obtain a commitment for
title insurance from the Title Insurer covering the Live
Earth Companies’ Real Property located in Fostoria, Ohio,
together with copies of all documents evidencing title
exceptions thereon, and an updated survey of such real property.
Copies of such commitments for title insurance and updated
surveys shall be provided to Live Earth.
6. Survival of Covenants, Representations and
Warranties; Indemnification
6.1 Survival
of Covenants, Representations, and Warranties.
(a) The representations and warranties of the Parties
contained in this Agreement shall survive the Closing hereunder
and continue in full force and effect for the earlier of
(i) two (2) years following the Closing Date, or
(ii) the date upon which the liability to which any such
claim may relate is barred by all applicable statutes of
limitation, taking into account any extensions or waivers
thereof, and thereafter shall terminate (“Expiration
Date”).
(b) No Party shall be obligated to indemnify any other
Party pursuant to this Article 6 for any claim that is
first made after the Expiration Date. Claims first made prior to
the Expiration Date shall be subject to indemnity pursuant to
this Article 6 throughout the entirety of the Proceeding or
Proceedings arising out of such claim, notwithstanding the fact
that such Proceeding or Proceedings may extend beyond the
Expiration Date.
6.2 Indemnification
by Live Earth. For claims for indemnification
made under this Section 6.2, Live Earth and the parties set
forth on Section 6.2 of the Live Earth Disclosure Schedule
(solely to the extent of each such parties pro rata interest in
Indemnification Shares held in the Closing Shares Escrow)
(collectively, the “Live Earth Indemnifying
Parties”) will, from and after Closing and during
the period prior to the Expiration Date, jointly and severally,
unconditionally, absolutely and irrevocably agree to and shall
defend,
27
indemnify and hold harmless the WCA Parties and each of their
respective subsidiaries, shareholders, affiliates, officers,
directors, employees, counsel, accountants, agents, successors,
assigns, heirs and legal and personal representatives (the WCA
Parties and all such Persons are collectively referred to as
“WCA Indemnified Persons”) from and
against, and shall reimburse the WCA Indemnified Persons for,
each and every Loss paid, imposed on or incurred by the WCA
Indemnified Persons relating to, resulting from or arising out
of: (a) any inaccuracy in any representation or warranty of
any Live Earth Party under this Agreement, (including the
schedules hereto), or any breach or nonfulfillment of any
covenant, agreement or other obligation of any Live Earth Party
under this Agreement or any Transaction Document delivered
pursuant hereto; (b) all Claims arising with respect to
facts, conditions, events, operations and circumstances existing
prior to the Closing Date other than facts, conditions, events,
operations and circumstances (i) disclosed in the Live
Earth Disclosure Schedule and (ii) constituting the Assumed
Liabilities; provided, however, in the event of any Claim that
arises with respect to facts, conditions, events, operations and
circumstances arising both before and after the Closing Date,
the Live Earth Indemnifying Parties’ indemnification
obligations shall be limited to such matters arising with
respect to facts, conditions, events, operations and
circumstances on or prior to the Closing Date; and (c) the
Retained Liabilities.
6.3 Indemnification
by the WCA Parties. For claims for
indemnification made under this Section 6.3, the WCA
Parties will, from and after Closing and during the period prior
to the Expiration Date, jointly and severally, unconditionally,
absolutely and irrevocably agree to and shall defend, indemnify
and hold harmless Live Earth and its subsidiaries, shareholders,
affiliates, officers, directors, employees, counsel,
accountants, agents, successors, assigns, heirs and legal and
personal representatives (Live Earth and all such Persons are
collectively referred to as “Live Earth Indemnified
Persons”) from and against, and shall reimburse the
Live Earth Indemnified Persons for, each and every Loss paid,
imposed on or incurred by Live Earth Party Indemnified Persons,
directly or indirectly, relating to, resulting from or arising
out of: (a) any inaccuracy in any representation or
warranty of any WCA Party under this Agreement, (including the
schedules hereto), or any breach or nonfulfillment of any
covenant, agreement or other obligation of any WCA Party under
this Agreement or any Transaction Document; and (b) the
Assumed Liabilities. Notwithstanding the foregoing, in the event
the parties are required to Unwind the Closing of the
transactions contemplated by this Agreement pursuant to
Section 5.17, the WCA Parties will, from and after the
Unwind Closing Date and during the period prior to the
Expiration Date, jointly and severally, unconditionally,
absolutely and irrevocably agree to and shall defend, indemnify
and hold harmless the Live Earth Indemnified Persons from and
against, and shall reimburse the Live Earth Indemnified Persons
for, each and every Loss paid, imposed on or incurred by Live
Earth Party Indemnified Persons, directly or indirectly,
relating to, resulting from or arising out of all Claims arising
with respect to facts, conditions, events, operations and
circumstances existing after the Closing Date but prior to the
Unwind Closing Date; provided, however, that in the event of any
Claim that arises with respect to facts, conditions, events,
operations and circumstances arising both before and after the
Unwind Closing Date, the WCA Parties’ indemnification
obligations shall be limited to such matters arising with
respect to facts, conditions, events, operations and
circumstances on or prior to the Unwind Closing Date.
6.4 Notice
and Defense of Third Party Claims. If any
Proceeding shall be brought or asserted under this
Article 6 against an indemnified party or parties or any
successor thereto (the “Indemnified
Person”) in respect of which indemnity may be
sought under this Article 6 from an indemnifying person or
persons or any successor or successors thereto (the
“Indemnifying Person(s)”), the
Indemnified Person shall give prompt written notice of such
Proceeding to the Indemnifying Person who shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Person and the payment of all
expenses; provided, that any delay or failure to so notify the
Indemnifying Person shall relieve the Indemnifying Person of its
obligations hereunder only to the extent, if at all, that it is
prejudiced by reason of such delay or failure. In no event shall
any Indemnified Person be required to make any expenditure or
bring any cause of action to enforce the Indemnifying
Person’s obligations and liability under and pursuant to
the indemnifications set forth in this Article 6. In
addition, the filing of a Proceeding shall not be required as a
condition or prerequisite to the Indemnifying Person’s
obligations under this Article 6, if the Indemnified Person
is required to expend sums for investigation or remedial
purposes as a result of a threatened Proceeding. The Indemnified
Person shall have the right to employ separate counsel in any of
the foregoing Proceedings and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at
the expense of the Indemnified Person
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unless the Indemnified Person shall in good faith determine that
there exist actual or potential conflicts of interest which make
representation by the same counsel inappropriate. The
Indemnified Person’s right to participate in the defense or
response to any Proceeding should not be deemed to limit or
otherwise modify its obligations under this Article 6. In
the event that the Indemnifying Person, within thirty
(30) days after notice of any such Proceeding, fails to
assume the defense thereof, the Indemnified Person shall have
the right to undertake the defense, compromise or settlement of
such Proceeding for the account of the Indemnifying Person,
subject to the right of the Indemnifying Person to assume the
defense of such Proceeding with counsel reasonably satisfactory
to the Indemnified Person at any time prior to the settlement,
compromise or final determination thereof. Anything in this
Article 6 to the contrary notwithstanding, the Indemnifying
Person shall not, without the Indemnified Person’s prior
written consent, settle or compromise any Proceeding or consent
to the entry of any judgment with respect to any Proceeding for
anything other than money damages paid by the Indemnifying
Person. The Indemnifying Person may, without the Indemnified
Person’s prior written consent, settle or compromise any
such Proceeding or consent to entry of any judgment with respect
to any such Proceeding that requires solely the payment of money
damages by the Indemnifying Person and that includes as an
unconditional term thereof the release by the claimant or the
plaintiff of the Indemnified Person from all liability in
respect of such Proceeding.
6.5 Payment
and Interest. The Indemnifying Person shall
make any payment required to be made under this Section 6.5
in immediately available funds and on demand; provided that the
Live Earth Indemnifying Parties may make payments required to be
made under this Article 6 through the delivery of all or a
portion of the Indemnification Shares pursuant to the terms of
the Closing Shares Escrow Agreement, which shall be made on
a pro rata basis with respect to each party on
Schedule 2.1(f)’s interest in such Indemnification
Shares, and until such time as the Indemnification Shares are
exhausted. Indemnification Shares shall be deemed to have a per
share value equal to the closing sales price of WCA
Parent’s common stock as reported on NASDAQ for the ten
(10) trading days ending one (1) trading day prior to
the date on which such indemnification claim is fully and
finally resolved pursuant to the procedures set forth in this
Article 6 (the “Share Value”). Any
amounts or payments required to be paid by an Indemnifying
Person under this Section 6.5 which are not paid within
sixty (60) days of receipt by the Indemnifying Person of
the Indemnified Person’s demand therefor shall thereafter
be deemed delinquent, and the Indemnifying Person shall pay to
the Indemnified Person immediately upon demand, interest at the
rate of eight percent (8%) per annum, from the date such payment
becomes delinquent to the date of payment of such delinquent
sums. The WCA Parties and the Live Earth Parties agree that the
Share Value has been agreed upon solely for the purpose of
satisfying indemnification claims hereunder and that such Share
Value may not be the fair market value of each Closing Price
Share.
6.6 Limits
of Liability.
(a) Except as set forth in (b) below and in the case
of fraud or intentional misconduct of the WCA Parties, the
liability of the WCA Parties to the Live Earth Parties under
this Agreement shall not exceed $5,000,000 (the “WCA
Cap”). Except in the case of fraud or intentional
misconduct of the Live Earth Parties, the liability of the Live
Earth Indemnifying Parties to the WCA Parties under this
Agreement shall not exceed $5,000,000 (the “Live
Earth Cap”) and the liability of the parties set
forth on Section 6.2 of the Live Earth Disclosure Schedule
shall not exceed the interest of such parties in the
Indemnification Shares and such parties shall have no further
liability pursuant to this Article 6 once all
Indemnification Shares have been released or otherwise
distributed from the Closing Shares Escrow. No such party
shall be obligated to provide indemnification under this
Agreement for any damage until the aggregate indemnifiable
Losses exceed $100,000 (the “Threshold”).
(b) Notwithstanding the limits set forth in (a) above,
no Party’s indemnity obligations hereunder shall be subject
to the Threshold, nor shall be limited to the respective
Party’s Cap with respect to (i) any obligations of the
respective Parties (including all subsidiaries thereof) to pay
Taxes for any period ending on or prior to the Closing Date.
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(c) Notwithstanding anything to the contrary contained in
this Agreement, the following limitations shall apply to claims
under this Article 6 or otherwise made with respect to this
Agreement or any Transaction Agreement:
(i) The amount of any Losses to which the WCA Parties are
entitled with respect to any claim shall be reduced by
(A) the amount of any payment receivable by the WCA Parties
with respect such Losses from any insurance provider or any
other third party, and (B) the amount of any Tax benefit
realized by the WCA Parties which is attributable to the Losses
to which such claim relates.
(ii) In no event shall any Indemnifying Person have any
obligation or liability for (A) any Losses that are
consequential, in the nature of lost profits (including, without
limitation, loss of profit or revenue, any multiple of reduced
cash flow or any adjustment based on price to earnings or
similar ratios), interference with operations, or loss of
customers, tenants, lenders, investors or buyers, diminution in
the value of property, special or punitive or otherwise not
actual
out-of-pocket
damages, or (B) any Losses arising from or relating to,
directly or indirectly, any act, omission or transaction carried
out by or at the express written request, or with the written
consent of, the WCA Parties thereof before, on or after the
Closing Date, including, without limitation, any change in the
accounting policies, practices or procedures of the Live Earth
Business after the Closing.
(d) From and after the Closing, except with respect to
claims for equitable relief, including, without limitation,
specific performance, or claims based on fraud or intentional
misrepresentation, made with respect to breaches of any covenant
or agreement contained in this Agreement or the Transaction
Documents, the rights provided to the Parties under this
Article 6 shall be the sole and exclusive remedies of the
Parties and their respective Affiliates with respect to claims
under this Agreement or otherwise relating to the transactions
contemplated hereby. Without limiting the generality of the
foregoing, in no event shall any Party, its successors or
permitted assigns be entitled to claim or seek rescission of the
transactions contemplated by this Agreement.
7. Conditions to Closing
7.1 Conditions
to the WCA Parties’ Obligations. The
obligations of the WCA Parties to consummate the Closing are
subject to the fulfillment or waiver by WCA Parent in writing on
or before the Closing of each of the following conditions by the
Live Earth Parties:
(a) Representations and
Warranties. The representations and
warranties of the Live Earth Parties contained in Article 3
shall be true and correct on and as of the Closing with the same
effect as though such representations and warranties had been
made on and as of the date of the Closing, except where the
failure of any such representation or warranty to be true and
correct would not reasonably be expected to have a Material
Adverse Effect.
(b) Performance. The Live Earth
Parties shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement or the
Transaction Documents that are required to be performed or
complied with by it on or before the Closing, except where the
failure to so perform would not reasonably be expected to have a
Material Adverse Effect.
(c) No Actions or Proceedings. No
Proceeding shall be pending or threatened before any
Governmental or Regulatory Authority which presents a
substantial risk of the restraint or prohibition of the
transactions contemplated by this Agreement or the Transaction
Documents.
(d) Government Approvals. Other
than the Ohio EPA Approval, all authorizations, permits,
consents, orders or approvals of, or declarations or filings
with, or expiration of waiting periods imposed by, any
Governmental or Regulatory Authority necessary for the
consummation of the transactions contemplated by this Agreement
shall have been filed, occurred or been obtained.
(e) Third-Party Consents. All
consents or waivers listed on Schedule 7.1(e) shall have
been obtained.
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(f) Approval of Bank Lenders. The
required consent of the lenders under WCA Parent’s
Revolving Credit Agreement, dated as of July 5, 2006, as
amended.
(g) Stockholder Approval. The
issuance of all of the shares of WCA Parent common stock
issuable pursuant to this Agreement, shall have been approved by
a vote (and not rescinded) by the stockholders of WCA Parent
(the “Stockholder Approval”).
(h) SAS No. 100 Review. WCA
Parent shall have received from the Live Earth Companies
independent audit firm a Statement on Accounting Standards (SAS)
No. 100 review of the financial statements of the Live
Earth Companies for the three and nine-month periods ended
September 30, 2009.
(i) Intercreditor Agreement with
Comerica. WCA Parent, Live Earth and Comerica
shall have entered into an intercreditor agreement upon terms
reasonably acceptable to WCA Parent pursuant to with the
Comerica Payment will be repaid to WCA Parent in connection with
the Unwinding and the secured credit arrangement between Live
Earth and Comerica would be reestablished upon the Unwinding.
(j) Title to Real Property. Based
on the review of the title commitments, title exception
documents and updated surveys obtained by WCA Massachusetts and
WCA Ohio pursuant to Section 5.22, the title to the Live
Earth Company’s Real Property located in Brockton,
Massachusetts and Fostoria, Ohio are reasonably satisfactory to
WCA Massachusetts and WCA Ohio, and the Title Insurer is
ready, willing and able to issue at Closing, subject to the
payment of the appropriate premium therefor, title insurance
policies in a form reasonably satisfactory to WCA Massachusetts
and WCA Ohio insuring the title to such properties subject to no
exceptions other than those that are reasonably acceptable to
WCA Massachusetts and WCA Ohio.
(k) Live Earth Parties’
Deliveries. The applicable Parties shall have
delivered, or caused to be delivered, to WCA Parent the
following (which shall be in form and substance satisfactory to
WCA Parent):
(i) Compliance Certificate. An
authorized officer of Live Earth shall have delivered to WCA
Parent at the Closing a certificate stating that the conditions
specified in Sections 7.1(a) and (b) have been
fulfilled.
(ii) Secretary’s
Certificate. The Secretary of Live Earth
shall have delivered to WCA Parent at the Closing a certificate
stating that all approvals necessary to consummate the
transactions contemplated by this Agreement have been obtained
and attaching thereto: (i) a copy of the organizational
documents of each Live Earth Party (as amended and in effect
through the date of the Closing), certified by the Secretary of
each such Live Earth Party as the true and correct copies
thereof as of the Closing; and (ii) copies of resolutions
of the manager and resolutions of the members of Live Earth,
evidencing the approval of this Agreement, the Transaction
Documents and other matters contemplated hereby.
(iii) Xxxx of Sale and Assignment and Assumption
Agreement. Live Earth shall have executed and
delivered a Xxxx of Sale and Assignment and Assumption Agreement
in substantially the form attached hereto as
Exhibit C.
(iv) Earn-Out Escrow
Agreement. Live Earth shall have executed and
delivered the Earn-Out Escrow Agreement in substantially the
form attached hereto as Exhibit A.
(v) Closing Shares Escrow
Agreement. Live Earth shall have executed and
delivered the Closing Shares Escrow Agreement in
substantially the form attached hereto as Exhibit B.
(vi) Pay-Off Letter. WCA shall
have received a pay-off letter from each of LEF, HBK/Xxxxxxx,
Comerica, and Xxxxxxx-Xxxxx, that confirms the satisfaction,
release and termination of Live Earth’s indebtedness to
such party upon consummation of the transactions contemplated
under this Agreement.
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(vii) Voting Agreement. Xxxxxx X.
XxXxxxx, Xxxxxx X. Xxxxx, Xxxxxxx X. Skoda and Xxxxxxxx X. Skoda
as Trustee of the Xxxxxxxx X. Skoda Revocable Trust shall have
executed and delivered a Voting Agreement in substantially the
form attached hereto as Exhibit E.
(viii) Consulting Services or Employment
Agreement. Xxxxx Valerian shall have executed
and delivered a Consulting Services or Employment Agreement in
form reasonably acceptable to the parties thereto.
(ix) Release of Encumbrances. Any
Liens listed on Schedule 7.1(k)(i) shall have been
irrevocably released and the Live Earth Parties shall have
delivered documentation reasonably acceptable to WCA Parent to
evidence that such Liens have been released.
(x) Stockholders’
Agreement. Xxxxxx X. XxXxxxx, Xxxxxx X.
Xxxxx, Xxxxxxx X. Skoda and Xxxxxxxx X. Skoda as Trustee of the
Xxxxxxxx X. Skoda Revocable Trust shall have executed and
delivered a Stockholders’ Agreement in form reasonably
acceptable to the parties thereto.
7.2 Conditions
to the Live Earth Parties’
Obligations. The obligations of the Live
Earth Parties to the WCA Parties under this Agreement are
subject to the fulfillment or waiver by Live Earth in writing on
or before each Closing of each of the following conditions by
the WCA Parties:
(a) Representations and
Warranties. The representations and
warranties of the WCA Parties contained in Article 4 shall
be true and correct on and as of the Closing with the same
effect as though such representations and warranties had been
made on and as of the date of the Closing, except where the
failure of any such representation or warranty to be true and
correct would not reasonably be expected to have a Material
Adverse Effect on the WCA Parties.
(b) Performance. The WCA Parties
shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement or the
Transaction Documents that are required to be performed or
complied with by the WCA Parties on or before the Closing,
except where the failure to so perform would not reasonably be
expected to have a Material Adverse Effect, it being
acknowledged that the failure to pay all or any portion of the
Purchase Price shall be deemed to be failure to perform that
would have a Material Adverse Effect.
(c) No Actions or Proceedings. No
Proceeding shall be pending or threatened before any
Governmental or Regulatory Authority which presents a
substantial risk of the restraint or prohibition of the
transactions contemplated by this Agreement or the Transaction
Documents.
(d) Government Approvals. Other
than the Ohio EPA Approval, all authorizations, permits,
consents, orders or approvals of, or declarations or filings
with, or expiration of waiting periods imposed by, any
Governmental or Regulatory Authority necessary for the
consummation of the transactions contemplated by this Agreement
shall have been filed, occurred or been obtained.
(e) Third-Party Consents. All
consents or waivers listed on Schedule 7.2(e) shall have
been obtained.
(f) Registration Rights
Agreement. The execution and delivery of the
Registration Rights Agreement in substantially the form attached
hereto as Exhibit D by the WCA Parties.
(g) Stockholder Approval. The
issuance of all the Securities pursuant to this Agreement shall
have been approved (and not rescinded) by the stockholders of
WCA Parent.
(h) Intercreditor Agreement with
Comerica. WCA Parent, Live Earth and Comerica
shall have entered into an intercreditor agreement upon terms
reasonably acceptable to WCA Parent pursuant to with the
Comerica Payment will be repaid to WCA Parent in connection with
the Unwinding and the secured credit arrangement between Live
Earth and Comerica would be reestablished upon the Unwinding.
(i) Instruction Letter to Transfer
Agent. WCA Parent shall have delivered, or
caused to be delivered, to Continental Stock
Transfer & Trust Company an instruction letter in
form reasonably acceptable to Live Earth regarding the issuance
of the Earn-Out Shares pursuant to the terms hereto.
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(j) WCA Party Deliveries. The
applicable WCA Party shall have delivered, or caused to be
delivered, to Live Earth the following (which shall be in form
and substance satisfactory to Live Earth):
(i) Compliance Certificate. The
President of WCA Parent shall have delivered to Live Earth at
the Closing a certificate stating that the conditions specified
in Sections 7.2(a) and (b) have been fulfilled.
(ii) Xxxx of Sale and Assignment and Assumption
Agreement. WCA Parent shall have executed and
delivered a Xxxx of Sale and Assignment and Assumption Agreement
in substantially the form attached hereto as
Exhibit C.
(iii) Earn-Out Escrow
Agreement. WCA Parent shall have executed and
delivered the Earn-Out Escrow Agreement in substantially the
form attached hereto as Exhibit A and the Earn-Out
Certificates to the Escrow Agent.
(iv) Closing Shares Escrow
Agreement. WCA Parent shall have executed and
delivered the Closing Shares Escrow Agreement in
substantially the form attached hereto as Exhibit B
and the Closing Shares to the Escrow Agent.
(v) the Cash Purchase Price to the Live Earth Parties as
set forth on Schedule 2.1(a).
(vi) payment of the Comerica Payment.
(vii) payment of the Other Indebtedness Payment.
(viii) the Earn-Out Certificates to the Escrow Agent to be
held in the Earn-Out Escrow in accordance with Section 2.2.
(ix) the Closing Shares to the Escrow Agent to be held in
the Closing Shares Escrow for the benefit of the Live Earth
Parties as set forth on Schedule 2.1(f).
(x) the Estimated Working Capital Payment Amount.
(xi) Registration Rights
Agreement. WCA Parent shall have executed and
delivered the Registration Rights Agreement in substantially the
form attached as Exhibit D hereto.
(xii) Voting Agreement. WCA Parent
shall have executed and delivered a Voting Agreement in
substantially the form attached hereto as Exhibit E
hereto.
(xiii) Stockholders’
Agreement. WCA Parent shall have executed and
delivered a Stockholders’ Agreement in form reasonably
acceptable to the parties thereto.
(xiv) Ohio EPA Notice. The WCA
Parties shall have received a notification from the Ohio EPA
exempting the WCA Parties from compliance with
Section 3734.42(F)(1) of the Ohio Revised Code and
Rule 109:6-1-02(A)(3)
of the Ohio Administrative Code.
8. Termination
8.1 Termination. This
Agreement may be terminated, and the transactions contemplated
hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of the Live Earth Parties and the WCA Parties;
(b) at any time before the Closing, by the Live Earth
Parties or the WCA Parties, in the event (i) of a material
breach hereof by the non-terminating party if such
non-terminating party fails to cure such breach within five
(5) Business Days following notification thereof by the
terminating party or (ii) upon notification of the
non-terminating party by the terminating party that the
satisfaction of any condition to the terminating party’s
obligations under this Agreement becomes impossible or
impracticable with the use of commercially reasonable efforts if
the failure of such condition to be satisfied is not caused by a
breach hereof by the terminating party; or
33
(c) at any time after April 30, 2010 by the Live Earth
Parties or the WCA Parties upon notification of the
non-terminating party by the terminating party if the Closing
shall not have occurred on or before such date and such failure
to consummate is not caused by a breach of this Agreement by the
terminating party.
8.2 Effect
of Termination. If this Agreement is validly
terminated pursuant to Section 8.1, this Agreement will
forthwith become null and void, and there will be no liability
or obligation on the part of the Live Earth Parties or the WCA
Parties (or any of their respective officers, directors,
employees, agents or other representatives or Affiliates),
except as provided in the next succeeding sentence and except
that the provisions with respect to expenses in
Section 10.1 will continue to apply following any such
termination. Notwithstanding any other provision in this
Agreement to the contrary, upon termination of this Agreement
pursuant to Article 8, the Live Earth Parties will remain
liable to the WCA Parties for any willful breach of this
Agreement by the Live Earth Parties existing at the time of such
termination, and the WCA Parties will remain liable to the Live
Earth Parties for any willful breach of this Agreement by the
WCA Parties existing at the time of such termination, and the
Live Earth Parties or the WCA Parties may seek such remedies,
including damages and fees of attorneys, against the other with
respect to any such breach as are provided in this Agreement or
as are otherwise available at Law or in equity.
9. Certain Definitions
“Acquired Businesses” means the business
conducted by the Live Earth Companies.
“Affiliate” means (a) any entity directly
or indirectly controlled by, controlling or under common control
with a Party; (b) any director or executive officer of such
party or of any entity referred to in (a) above; and
(c) if any Party is an individual, any member of the
immediate family (including parents, spouse, siblings, children
and grandchildren) of such individual and any trust whose
principal beneficiary is such individual or one or more members
of such immediate family and any Person who is controlled by any
such member or trust. For purposes of this definition, any
Person which owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of
directors or other governing body of a corporation or 10% or
more of the partnership or other ownership interests of any
entity (other than as a limited partner of such other entity)
will be deemed to “control” (including, with its
correlative meanings, “controlled by” and “under
common control with”) such Person.
“Benefit Plan” means any collective bargaining
agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical,
dependent care, cafeteria, employee assistance, scholarship or
other plan, program, arrangement or understanding (whether or
not legally binding) maintained in whole or in part, contributed
to, or required to be contributed to by the Companies for the
benefit of any of their respective present or former officers,
employees or directors which is not a Pension Plan or Welfare
Plan.
“Cash Flow” shall mean, for the period from the
Closing Date to the Unwind Closing Date, Cash Flow determined in
accordance with GAAP.
“Claims” means any claims, liabilities,
actions, causes of action (arising under common law, contract or
statute), suits, judgments, demands, liens, or governmental
investigations by any Person relating to the Live Earth
Companies, any Transferred Asset or Assumed Liability including,
but not limited to, any Employee Benefit Claim, Environmental
Claim, Litigation Claim, Tax Claim or Title Claim.
“Current Assets” has the meaning assigned to it
under GAAP.
“Current Liabilities” has the meaning assigned
to it under GAAP.
“Disposal” or
“disposed” means the discharge, deposit,
injection, dumping, spilling, leaking or placing of any
Polluting Substance into or on any land or water so that such
Polluting Substance or any constituent thereof may enter the
environment or be emitted into the air or discharged into any
waters, including ground waters.
34
“EBITDA” shall mean, for any period,
consolidated net income for such period determined in accordance
with GAAP plus, (A) without duplication and only to the
extent reflected as a charge or reduction in the statement of
such consolidated net income for such period, the sum of
(a) income taxes expense, (b) interest and
amortization expense, (c) restructuring charges and
(d) any corporate office overhead allocations, such as
management fees and acquisition costs but excluding operating
cost pass-through expenses such as insurance premiums.
“Employee Benefits Claim” means all claims,
liabilities notices, actions, causes of action (arising under
common law, contract or statute), suits, judgments, demands,
liens, governmental or private investigations arising under any
Pension Plan, Welfare Plan or other Benefit Plan.
“Environmental Claim(s)” means all claims,
liabilities, notices, actions, causes of action (arising under
common law, contract or statute), suits, judgments, demands,
liens, governmental or private investigations or testing,
demands to study or notification of status of being potentially
responsible for
clean-up of
any facility or for being in violation or in potential violation
of any requirement of Environmental Law, whether threatened,
sought, brought or imposed relating to or which seeks to impose
liability or to recover damages, losses, payments, penalties,
costs, fines, penalties, disbursements or expenses (including,
without limitation, fees disbursements and expenses of attorneys
and other professional advisors and of expert witnesses and
costs of investigation, testing and preparation) regarding any
Live Earth Company or any of its facilities, its assets or any
operations conducted by such Live Earth Company for:
(a) improper use or treatment of wetlands, pinelands or
other protected land or wildlife; (b) pollution,
contamination, preservation, protection, decontamination,
remediation or
clean-up of
the air, surface water, groundwater, soil or protected lands;
(c) exposure of persons or property to Polluting Substances
and the effects thereof; or (d) the release, threatened
release, generation, extraction, mining, presence, manufacture,
processing, distribution in commerce, use, handling, discharge,
recycling, management, transfer, transportation, treatment,
storage, Disposal or remediation of Polluting Substances. The
term “Environmental Claim” also includes any costs
incurred in responding to efforts to require or in testing for
the need for Remediation and any claim based upon any asserted
or actual breach or violation of any requirements of
Environmental Law.
“Environmental Law(s)” means any and all
federal, state and local laws, ordinances, rules, regulations,
operational memoranda, interpretations and orders of courts or
administrative agencies or authorities relating to pollution,
contamination, preservation, protection or cleanup of the
environment (including, without limitation, ambient air, surface
water, ground water, land surface, wildlife, wetlands and
subsurface strata), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Solid Waste Disposal Act, as
amended (“RCRA”); the Atomic Energy Act
of 1954, as amended; the Hazardous Materials Transportation Act,
as amended; the Toxic Substances Control Act, as amended; the
Pollution Prevention Act of 1990, as amended; the Emergency
Planning and Community Right to know Act, as amended; the Clean
Air Act, as amended; the Clean Water Act, as amended; the Oil
Pollution Act of 1990, as amended; the Safe Drinking Water Act,
as amended; the Occupational Safety and Health Act, as amended;
all regulations promulgated under any of the foregoing from time
to time; and any and all other laws, rules and regulations
relating to (a) improper use or treatment of wetlands,
pinelands or other protected land or wildlife;
(b) pollution, contamination, preservation, protection,
decontamination, remediation or
clean-up of
the air, surface water, groundwater, soil or protected lands;
(c) exposure of persons or property to Polluting Substances
and the effects thereof; or (d) the release, threatened
release, generation, extraction, mining, presence, manufacture,
processing, distribution in commerce, use, handling, discharge,
recycling, management, transfer, transportation, treatment,
storage, Disposal or remediation of Polluting Substances. Any
specific references to a law shall include any amendments to it
promulgated from time to time.
“Governmental or Regulatory Authority” means
any court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality
having jurisdiction over such Live Earth Company or any of their
respective assets or businesses.
“Knowledge of the Live Earth Parties” means the
actual knowledge of Christopher Valerian, Xxxxxx Xxxxx, Xxxxx
Xxxx, Xxxxxx Xxxxxxx, Xxxxxx XxXxxxx and Xxxxxxx Xxxx after
reasonable inquiry of officers, directors and other employees or
consultants of such party (or subsidiaries of such party)
reasonably believed
35
to have knowledge of or who is responsible for such matters
after such officer, director or employee shall have performed
reasonable due diligence to investigate such matter.
“Knowledge of the WCA Parties” means the actual
knowledge of the executive officers of WCA Parent after
reasonable inquiry of officers, directors and other employees or
consultants of such party (or subsidiaries of such party)
reasonably believed to have knowledge of or who is responsible
for such matters after such officer, director or employee shall
have performed reasonable due diligence to investigate such
matter.
“Laws” means the requirements, standards,
criteria and conditions set forth in applicable federal, state
and local statutes, ordinances, permits, licenses, orders,
approvals, variances, rules and regulations, including, without
limitation, all such laws, rules, ordinances, decrees and orders
relating to intellectual property protection, transportation,
wage and hour, antitrust matters, consumer protection, currency
exchange, environmental protection, equal employment
opportunity, health and occupational safety, pension and
employee benefit matters, securities and investor protection
matters, labor and employment matters, and
trading-with-the-enemy matters.
“Lien” means any lien, mortgage, charge,
restriction, pledge, security interest, option, lease, claim,
easement, encroachment or other encumbrance of any kind or
nature whatsoever or however arising, including any Tax lien.
“Licenses” means all licenses, permits
(including, without limitation, environmental, construction and
operation permits), franchises, certificates (including, without
limitation, certificates of occupancy) and other authorizations.
“Litigation Claim” means all claims,
liabilities notices, actions, causes of action (arising under
common law, contract or statute), suits, judgments, demands,
liens, governmental or private investigations arising pursuant
to any Proceedings involving any Live Earth Party.
“Loss” means any loss, damage, injury,
liability, claim, demand, Proceeding, settlement, judgment,
award, punitive damage, fine, penalty, tax, fee, charge, cost or
expense (including, without limitation, costs of attempting to
avoid or in opposing the imposition thereof, interest,
penalties, costs of preparation and investigation, and the
reasonable fees, disbursements and expenses of attorneys,
accountants and other professional advisors) with respect to any
claim, as well as with respect to compliance with the
requirements of the Environmental Laws or Environmental Claims.
“Material Adverse Effect” shall mean any
material adverse change in or effect on, or any change that may
reasonably be expected to have a material adverse effect on,
(a) the business, operations, assets, liabilities,
condition (financial or otherwise), or results of operations of
such Person or (b) the ability of such Person to consummate
the transactions contemplated by this Agreement or any related
agreement to which it is a party.
“NASDAQ” shall mean The Nasdaq Global Market.
“Parties” means the WCA Parties and the Live
Earth Parties, collectively.
“Permitted Liens” means (a) those
encumbrances to title listed on Section 3.12 of the Live
Earth Disclosure Schedule, (b) mechanic’s,
materialmen’s, landlord’s and similar liens,
(c) liens arising under worker’s compensation,
unemployment insurance, social security, retirement and similar
legislation, (d) liens on goods in transit incurred
pursuant to documentary letters of credit, in each case arising
in the ordinary course of business, (e) liens for Taxes not
yet due and payable, (f) liens for Taxes which are being
contested in good faith and by appropriate proceedings,
(g) liens relating to capitalized lease financings or
purchase money financings that have been entered into in the
ordinary course of business, (h) liens arising solely by
action of the WCA Parties, and (h) liens which do not
materially and adversely impair the use or value of the
Transferred Assets.
“Person” means an individual, corporation,
partnership, association, joint stock company, limited liability
company, Governmental or Regulatory Authority, trust,
unincorporated organization or other legal entity.
“Polluting Substances” means (a) any
material, waste or substance designated, classified, regulated
or included within the statutory
and/or
regulatory definitions of “hazardous substances,”
“radioactive material,”
36
“hazardous waste,” “extremely hazardous
substance,” “hazardous chemical,” “regulated
substance,” “contaminant,” “pollutant,”
“hazardous material,” or “toxic substance”
under any Environmental Law; (b) any material, waste or
substance which is or contains hydrocarbons, petroleum, oil or a
fraction thereof; (c) radioactive material (including
regulated naturally occurring radioactive materials);
(d) solid waste, as defined under RCRA other than which is
disposed of in compliance with applicable Environmental Laws,
that poses an imminent and substantial endangerment to health or
the environment; (e) such other substances, materials, or
wastes that become classified or regulated as hazardous or toxic
under any federal, state or local law or regulation from time to
time; and (f) methane to the extent it is not being managed
in accordance with applicable Law. To the extent that the laws
or regulations of any applicable state or local jurisdiction
establish a meaning for any term defined herein through
reference to federal Environmental Laws which is broader than
the meaning under such federal Environmental Laws, such broader
meaning shall apply.
“Proceeding” means any action, suit, claim,
investigation, review or other judicial, administrative,
arbitral, investigatory or other proceeding.
“Proceeding” includes all post-judgment actions
(including but not limited to appeals and actions for
collection), and shall be considered a “Proceeding”
until such time as a final, non-appealable determination has
been issued. If any Proceeding is settled, such Proceeding shall
be deemed final upon the completion of all obligations of all
parties to such settlement.
“Remediation” means any action necessary to
bring about compliance with the requirements of Environmental
Law related to release of Polluting Substances including
(a) services of professionals; (b) the removal and
Disposal, in situ remediation, or containment (if containment is
practical under the circumstances and is permissible within
requirements of Environmental Law), investigation, or monitoring
of any and all Polluting Substances at or on any Business
Facility of any Company; or (c) the taking of reasonably
necessary precautions to protect against the release or
threatened release of Polluting Substances at, on, in, about,
under, within or near the air, soil, surface water, groundwater
or soil vapor at any Business Facility of any Company or any
surrounding areas thereof.
“Seller Parties” means those Persons set forth
on Schedule 2.1(f).
“Subsidiary” means, when used with respect to
any party, any corporation, partnership or other organization,
whether incorporated or unincorporated, which such party owns
more than fifty percent (50%) of the aggregate voting power (or
of any other form of voting equity interests in the case of a
Person that is not a corporation) of which is beneficial owned
by that party directly or indirectly through one or more other
Persons.
“Tax” means any tax of any kind, however
denominated, including any interest, penalties, fines or other
additions to tax that may become payable in respect thereof or
in respect of a failure to comply with any requirement relating
to any Tax Return, imposed by any federal, territorial, state,
local or foreign Governmental Entity, including all income,
gross income, gross receipts, profits, goods and services,
social security, health, old age security, federal pension plan,
state pension plan, sales and use, ad valorem, excise, custom,
franchise, business license, property, occupation, real property
gains, payroll and employee withholding, unemployment or
employment insurance, real and personal property, stamp,
environmental, transfer, workers’ compensation, payroll,
severance, alternative minimum, windfall, and capital gains
taxes, premiums, surtaxes, charges, levies, assessments,
reassessments, and other obligations of the same or a similar
nature to any of the foregoing whether or not shown on a Tax
Return, whether computed on a separate or consolidated, unitary
or combined basis or in any other manner, whether disputed or
not and including any obligation to indemnify or otherwise
assume or succeed to the Tax liability of any other Person.
“Tax Claim” means any tax owed, due or payable
by any Live Earth Party.
“Tax Return” means all tax returns,
declarations, reports, estimates, information returns and
statements or any other schedule or attachment thereto and
including any amendment thereof required to be filed with any
Taxing Authority, or provided to any partner, stockholder, joint
venturer or member under federal, state, local or foreign Laws
(including reports with respect to backup withholding and
payments to Persons other than Taxing Authorities), and annual
tax returns or information returns on behalf of employee benefit
plans sponsored by Sun or any of its respective ERISA Affiliates.
37
“Taxing Authority” means any Governmental
Entity responsible for the imposition, assessment, enforcement
or collection of any Tax.
“Title Claims” means any claims,
liabilities notices, actions, causes of action (arising under
common law, contract or statute), suits, judgments, demands,
liens, governmental or private investigations arising due to any
Lien or encumbrance, other than a Permitted Lien, on any
property or assets owned or used by any Live Earth Company.
10. General
10.1 Costs. The
parties shall pay their respective expenses (including, without
limitation, the fees, disbursements and expenses of their
attorneys and accountants) in connection with the negotiation
and preparation of this Agreement and the consummation of the
transactions contemplated hereby.
10.2 Entire
Agreement. This Agreement, together with all
exhibits and schedules hereto, each of which are hereby
incorporated by this reference and made a part hereof, embodies
the entire agreement and understanding between the parties
hereto relating to the subject matter hereof and supersedes any
prior agreements and understandings relating to the subject
matter hereof.
10.3 Counterparts. This
Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which collectively
shall constitute one and the same instrument representing this
Agreement between the parties hereto, and it shall not be
necessary for the proof of this Agreement that any party produce
or account for more than one such counterpart. Facsimile
signatures shall be given the same force and effect as original
signatures and shall be treated for all purposes and intents as
original signatures.
10.4 Notices. All
notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been
duly given (i) on the day of service if served personally
on the party to whom notice is to be given, (ii) on the day
of transmission if sent via facsimile transmission to the
facsimile number given below, (iii) on the day after
delivery to an overnight courier service, or (iv) on the
fifth day after mailing, if mailed to the party to whom notice
is to be given, by first class mail, registered or certified,
postage prepaid and properly addressed, to the party as follows:
If to the WCA Parties:
|
WCA Waste Corporation Xxx Xxxxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000 Attention: President Facsimile: 000-000-0000 |
|
Copy to:
|
Xxxxxxx Xxxxx LLP 000 Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000 Attention: Xxxx Xxxx Facsimile: 000-000-0000 |
|
If to Live Earth:
|
Live Earth LLC 0000 Xxxxxxxx Xxxx., Xxxxx 000 Xxxxxxxx Xxxxxxx, Xxxx 00000 Attention: Xxxxxx Xxxxx Facsimile: 440-995-5111 |
|
Copy to:
|
Xxxxx & Xxxxxxxxx LLP 3200 National City Center 0000 Xxxx Xxxxx Xxxxxx Xxxxxxxxx, XX 00000 Attention: Xxxxxxx Xxxxxxxx Facsimile: 000-000-0000 |
Any party may change its address for the purpose of this
Section 10.4 by giving the other party written notice of
its new address in the manner set forth above.
38
10.5 Modification
or Waiver. This Agreement may be amended,
modified or superseded, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived,
but only by a written instrument executed by the parties hereto.
No waiver of any nature, in any one or more instances, shall be
deemed to be or construed as a further or continued waiver of
any condition or any breach of any other term, covenant,
representation or warranty in this Agreement.
10.6 Binding
Effect and Assignment. Except as otherwise
provided in this Agreement, no party hereto shall assign this
Agreement or any rights or obligations hereunder without the
prior written consent of the other Party hereto and any such
attempted assignment without such prior written consent shall be
void and of no force and effect. This Agreement shall inure to
the benefit of and shall be binding upon the successors and
permitted assigns of the parties hereto.
10.7 Governing
Law; Venue.
(a) THIS AGREEMENT, AND ALL QUESTIONS RELATING TO ITS
VALIDITY, INTERPRETATION, PERFORMANCE AND ENFORCEMENT
(INCLUDING, WITHOUT LIMITATION, PROVISIONS CONCERNING
LIMITATIONS OF ACTION), SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO (EXCLUSIVE OF THE
CONFLICT OF LAW PROVISIONS THEREOF) APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
(b) THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND
FOR ANY COUNTERCLAIM THEREIN.
10.8 Section Headings. The
section headings contained in this Agreement are inserted for
convenience of reference only and shall not affect the meaning
or interpretation of this Agreement.
10.9 Severability. If
for any reason whatsoever, any one or more of the provisions
hereof shall be held or deemed to be illegal, inoperative,
unenforceable or invalid as applied to any particular case or in
all cases, such circumstances shall not have the effect of
rendering such provision illegal, inoperative, unenforceable or
invalid in any other case or of rendering any of the other
provisions hereof illegal, inoperative, unenforceable or
invalid. Furthermore, in lieu of each such illegal, invalid,
unenforceable or inoperative provision, there shall be added
automatically, as part of this Agreement, a provision similar in
terms of such illegal, invalid, unenforceable or inoperative
provision as may be possible and as shall be legal, valid,
enforceable and operative.
10.10 Drafting. The
parties acknowledge and confirm that they
and/or their
respective attorneys have participated jointly in the review and
revision of this Agreement and that it has not been written
solely by any one party or counsel for any one party. The
parties therefore stipulate and agree that the rule of
construction to the effect that any ambiguities are to be or may
be resolved against the drafting party shall not be employed in
the interpretation of this Agreement to favor any party against
another.
10.11 References. The
use of the words “hereof,” “herein,”
“hereunder,” “herewith,” “hereto,”
“hereby,” and words of similar import shall refer to
this entire Agreement, and not to any particular article,
section, subsection, clause, or paragraph of this Agreement,
unless the context clearly indicates otherwise.
10.12 Calendar
Days, Weeks, Months and Quarters. Unless
otherwise specified herein, any reference to “day,”
“week,” “month” or “quarter”
herein shall mean a calendar day, week, month or quarter.
10.13 Gender;
Plural and Singular. Unless the context
clearly indicates otherwise, the singular shall include the
plural and vice versa. Whenever the masculine, feminine or
neuter gender is used inappropriately in this Agreement, this
Agreement shall be read as if the appropriate gender had been
used.
10.14 Cumulative
Rights. All rights and remedies specified
herein are cumulative and are in addition to, not in limitation
of, any rights or remedies the parties may have by statute, at
law, in equity, or otherwise, and all such rights and remedies
may be exercised singularly or concurrently.
39
10.15 No
Implied Covenants. Each party, against the
other, waives and relinquishes any right to assert, either as a
claim or as a defense, that any other Party is bound to perform
or liable for the nonperformance of any implied covenant or
implied duty or implied obligation.
10.16 Indirect
Action. Where any provision hereof refers to
action to be taken by any person or party, or which such person
or party is prohibited from taking, such provision shall be
applicable whether the action in question is taken directly or
indirectly by such person or party.
10.17 Attorneys’
Fees. The prevailing party in any dispute
between the parties arising out of the interpretation,
application or enforcement of any provision hereof shall be
entitled to recover all of its reasonable attorneys’ fees
and costs whether suit be filed or not, including without
limitation costs and attorneys’ fees related to or arising
out of any trial or appellate proceedings.
10.18 Time
of the Essence. With regard to all dates and
time periods set forth or referred to in this Agreement, time is
of the essence.
10.19 No
Third-Party Beneficiaries. This Agreement
shall not confer any rights or remedies upon any person other
than the parties and their respective successors and permitted
assigns, except for Sections 2.1(f), 2.2, 2.3, 2.4, 4.2,
4.3, 4.4, 4.12, 4.14, 4.15, 5.7, 5.10, 6.1 and 7.2(f) shall be
deemed to be for the benefit of LEF, HBK/Xxxxxxx and Xxxxxxx
Xxxxx.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
40
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first above stated.
WCA PARTIES:
WCA WASTE CORPORATION, a Delaware corporation
By: |
/s/ Xxx
X. Xxxxx, Xx.
|
Name: Xxx X. Xxxxx, Xx.
Title: | Chief Executive Officer |
WCA OF MASSACHUSETTS, LLC, a
Delaware limited liability company
Delaware limited liability company
By: |
/s/ Xxx
X. Xxxxx, Xx.
|
Name: Xxx X. Xxxxx, Xx.
Title: | Chairman |
WCA OF OHIO, LLC, a Delaware limited liability company
By: |
/s/ Xxx
X. Xxxxx, Xx.
|
Name: Xxx X. Xxxxx, Xx.
Title: | Chairman |
Signature Page to
41
LIVE EARTH PARTIES:
LIVE EARTH LLC, an Ohio limited liability company
By: |
/s/ Christopher
Valerian
|
Name: Christopher Valerian
Title: | President |
CHAMPION CITY RECOVERY, LLC, a
Massachusetts limited liability company
Massachusetts limited liability company
By: |
/s/ Christopher
Valerian
|
Name: Christopher Valerian
Title: | President |
BOXER REALTY REDEVELOPMENT, LLC, a Massachusetts limited
liability company
By: |
/s/ Christopher
Valerian
|
Name: Christopher Valerian
Title: | President |
SUNNY FARMS LANDFILL, LLC, an Ohio
limited liability company
limited liability company
By: |
/s/ Christopher
Valerian
|
Name: Christopher Valerian
Title: | President |
NEW AMSTERDAM & SENECA RAILROAD COMPANY, LLC,
an Ohio limited liability company
By: |
/s/ Christopher
Valerian
|
Name: Christopher Valerian
Title: | President |
42