EXHIBIT 4.8
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made as of this 15th day of
January, 2003, by and between XXXXXX X. XXXXXXXXX, XX. ("SELLER") and Capital
Environmental Resource Inc., an Ontario (Canada) corporation ("PARENT") and Omni
Waste, Inc., a Delaware corporation ("BUYER"). All capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to such terms in
that certain Operating Agreement of OMNI WASTE OF OSCEOLA COUNTY LLC (f/k/a Oak
Hammock Disposal Company LLC, the "COMPANY") dated November 22, 2000, as amended
by an Amendment to the Articles of Organization and Operating Agreement dated as
of March 31, 2001 (the "OPERATING AGREEMENT").
WHEREAS, Seller owns Membership Interests in the Company representing 23.5
Points and a Sharing Ratio of 23.5% (the "SUBJECT MEMBERSHIP INTERESTS");
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, the Subject Membership Interests on the terms and conditions set
forth herein;
WHEREAS, concurrently with execution of this Agreement, Parent and Buyer
are entering into that certain Purchase Agreement (the "OTHER MEMBERS' PURCHASE
AGREEMENT"), by and among Parent, Buyer and the other Members of the Company
designated therein (the "OTHER MEMBERS"), pursuant to the terms of which Buyer
shall purchase from the Other Members and the Other Members shall sell to Buyer,
all of such Other Members' Membership Interests in the Company on the terms set
forth therein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 PURCHASE AND SALE
1.1 PURCHASE AND SALE.
(a) Upon the terms and subject to the conditions contained herein,
and in reliance on the representations, warranties, covenants, terms and
conditions of this Agreement, Seller shall sell, transfer and assign to Buyer
the Subject Membership Interests free and clear of all Liens, and shall cause
Buyer to be admitted as a Member of the Company with 23.5 Points and a Sharing
Ratio of 23.5% (without giving effect to the transactions contemplated by the
other Members' Purchase Agreement), for a purchase price of (i) seven million
five hundred thousand United States dollars ($7,500,000 USD) payable in cash
(the "CASH CONSIDERATION"), and (ii) one million seven hundred thousand
(1,700,000) shares of Common Stock of Parent (the "STOCK CONSIDERATION" and
together with the Cash Consideration, the "TOTAL CONSIDERATION").
(b) If the Closing shall not have occurred by February 15, 2003,
Parent shall, on such date, pay on behalf of Buyer a deposit of seven million
five hundred thousand United States dollars (US $7,500,000) (the "DEPOSIT") to
Seller by wire transfer of immediately available funds to an account designated
by Seller. If the Closing occurs, the Deposit shall be applied toward the Cash
Consideration payable by Buyer pursuant to SECTION 1.1(a)(i) hereof in full
satisfaction of such
payment obligation. Upon termination of this Agreement pursuant to SECTION
7.1(b) or SECTION 7.1(d) hereof, the Deposit shall be returned to Parent by
Seller within five (5) business days after the effective date of termination. If
this Agreement is terminated pursuant to SECTION 7.1(a) or SECTION 7.1(c)
hereof, the Deposit shall be considered non-refundable and shall be and remain
the property of Seller, free of any claim, right, title or interest of Buyer or
Parent.
1.2 CLOSING. The purchase and sale of the Shares (the "CLOSING") shall take
place at 10:00 a.m. EDT on the next day after all of the conditions to closing
set forth in SECTIONS 4 and 5 hereof have been satisfied or waived or such other
date as the parties may mutually agree (the "CLOSING DATE") at the offices of
XxXxxxxxx, Will & Xxxxx, 000 Xxxxx Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxx,
Xxxxxxx 00000-0000. At the Closing, Seller shall deliver instruments evidencing
the transfer of the Subject Membership Interests to Buyer in consideration of
the payment in full of the Cash Consideration by wire transfer of immediately
available funds to an account designated by Seller or by check payable to the
order of Seller, at Seller's election, and the issuance and delivery by Parent
to Seller of stock certificates representing the Stock Consideration, free and
clear of any and all Liens.
SECTION 2 REPRESENTATIONS; WARRANTIES AND COVENANTS OF SELLER
Except as specifically set forth herein, Seller does not make any other
representations or warranties. Seller hereby represents and warrants to Parent
and Buyer as of the date hereof:
2.1 ORGANIZATION. The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Ohio, and is duly qualified or registered to do business as a foreign limited
liability company in Florida and, to Seller's Knowledge, in each jurisdiction in
which the failure to be so qualified could have a Material Adverse Effect. The
Company has the requisite power and authority to own and hold its properties and
to carry on its business as presently conducted. Accurate and complete copies of
the Articles of Organization and Operating Agreement of the Company and all
amendments thereto (the "GOVERNING DOCUMENTS") have been furnished to Parent
and/or its counsel and are attached hereto as EXHIBIT A. Seller is not, and to
Seller's Knowledge, no other party to the Governing Documents is, in violation
of any term or provision of the Governing Documents. The Company is not in
violation of any term or provision of any agreement, instrument, judgment,
decree or order by which it or its assets are bound.
2.2 AUTHORIZATION AND NON-CONTRAVENTION.
(a) Seller has all requisite power, authority and capacity to enter
into this Agreement and each and every other agreement, certificate, instrument
and document to be executed and delivered by Seller hereunder and to perform
Seller's obligations hereunder and thereunder.
(b) This Agreement and all documents executed pursuant hereto and
the Operating Agreement are valid and binding obligations of Seller, enforceable
in accordance with their respective terms.
(c) The admission of Buyer as a Member and the sale, transfer and
assignment of the Subject Membership Interests to Buyer by Seller as
contemplated herein have been approved by all of the Members of the Company in
accordance with the terms of the Operating Agreement (including, without
limitation, the terms of Section 5.5, Section 6.1 and Article 7 thereof) and no
other consents or approvals of any governmental authority or other Person are
required in connection with the sale, transfer and assignment of the Subject
Membership Interests to Buyer or admission of Buyer as a Member pursuant to this
Agreement.
2
(d) The execution of this Agreement and the sale, transfer and
assignment of the Subject Membership Interests to Buyer pursuant to this
Agreement will not (i) violate, conflict with or result in a default under any
contract or obligation to which the Company or Seller is a party or by which
either of them or their respective assets are bound, or any provision of the
Operating Agreement; (ii) cause the creation of any Lien upon any of the assets
of the Company or Seller; (iii) violate or result in a violation of, or
constitute a default (whether after the giving of notice, lapse of time or both)
under, any provision of any law, regulation or rule, or any order of, or any
restriction imposed by, any court or other governmental agency applicable to the
Company or Seller; (iv) except as set forth in SCHEDULE 2.2(d)(iv) hereto,
require from the Company or Seller any notice to, declaration or filing with any
governmental authority or other third party; or (v) except as set forth in
SCHEDULE 2.2(d)(v) hereto, constitute a violation of, accelerate any obligation
under, or give rise to a right of revocation or termination of, any agreement or
Permit to which the Company is a party or by which the Company is bound.
2.3 CAPITALIZATION; OWNERSHIP.
(a) Seller owns (beneficially and of record) and has the sole
unrestricted right, subject to the terms of the Operating Agreement, to sell the
Subject Membership Interests, free and clear of all Liens (other than the
security interest in the Subject Membership Interests held by Xxxxxxx Xxxx as
evidenced by the documentation attached hereto as EXHIBIT D (the "CASH SECURITY
INTEREST"), which security interest shall be released by Seller upon payment of
the Cash Consideration (or Deposit therefor) on or prior to the Closing). Upon
transfer to Buyer by Seller of the Subject Membership Interests, Buyer will have
good and marketable title to the Subject Membership Interests, free and clear of
all Liens. Except as provided in the Operating Agreement and the Cash Security
Interest, Seller is not a party to any, and, to Seller's Knowledge, there are
no, agreements, written or oral, relating to the acquisition, disposition or
voting of the securities of the Company. Effective as of the Closing Date, by
virtue of the transfer of the Subject Membership Interests to Buyer, without
taking into consideration the transactions contemplated by the Other Members'
Purchase Agreement, Buyer shall become a Member of the Company with 23.5 Points
and a Sharing Ratio of 23.5% and Buyer shall have all of the preferences and
rights of a Member set forth in the Operating Agreement, including without
limitation, Economic Rights and Voting Rights commensurate with a 23.5%
ownership interest in the Company, the right to receive information about the
Company and any other rights of a Member under the Act.
(b) As of the date hereof, the authorized and outstanding Membership
Interests of the Company are held beneficially and of record by the Persons set
forth on SCHEDULE 2.3A hereof, and the Points of each Member are as set forth on
SCHEDULE 2.3B hereof. Except as contemplated under this Agreement, there are no
outstanding securities of the Company or any subscriptions, options, warrants,
agreements, arrangements or commitments of any kind for or relating to the
issuance or sale of, or outstanding securities convertible into or exchangeable
for, any securities of the Company. The Company has no obligation to purchase,
redeem, or otherwise acquire any of its equity interests or any interests
therein, except as provided in the Governing Documents.
(c) All Membership Interests have been offered, issued, sold and
delivered in material compliance with all applicable federal and state
securities laws and not in violation of any preemptive rights. The relative
rights, preferences, provisions, qualifications, limitations and restrictions in
respect of the Membership Interests are as set forth in the Governing Documents
and the Act.
(d) Except as set forth in the Operating Agreement and the Cash
Security Interest, there are no (a) preemptive rights, rights of first refusal,
put or call rights or obligations or anti-dilution
3
rights with respect to the issuance, sale or redemption of the Company's
securities, including Membership Interests, and (b) no documents, instruments or
agreements, written or oral, relating to the acquisition, disposition or voting
of the Company's securities, including Membership Interests, or restrictions on
the transfer of the Company's securities, including Membership Interests.
2.4 ABSENCE OF UNDISCLOSED LIABILITIES. Seller has delivered to Parent an
unaudited balance sheet of the Company as of January 9, 2003, a copy of which is
attached hereto as EXHIBIT B (the "BALANCE SHEET"). The Balance Sheet has been
prepared in accordance with accounting principles generally accepted in the
United States and fairly and accurately presents in all material respects the
financial position of the Company as of the date thereof. Except as set forth in
the Balance Sheet or in SCHEDULE 2.4, the Company does not have any liabilities
or obligations of any nature, whether accrued, absolute, contingent or
otherwise, asserted or unasserted, known or unknown (including, without
limitation, liabilities as guarantor or otherwise with respect to obligations of
others, or material liabilities for Taxes due or to become due, regardless of
whether claims in respect thereof had been asserted as of such date), except
liabilities and obligations incurred in the ordinary course of business
consistent with past practice. Since the date of the Balance Sheet, no event or
series of events have occurred which have had or are reasonably likely to have a
Material Adverse Effect. Following the date of the execution of this Agreement,
Buyer and Parent shall assume and be responsible for all costs, expenses and
liabilities of the Company incurred in the ordinary course of business
consistent with past practice; PROVIDED that any such costs, expenses and
liabilities to be so assumed by Buyer and Parent in excess of US$10,000.00 shall
be subject to prior written approval by Parent.
2.5 TITLE TO PROPERTIES. The Company has good, valid and marketable title
to all of the assets used or held for use in, or which are necessary to conduct
the business of the Company as currently conducted, free and clear of all Liens,
except as set forth on SCHEDULE 2.5 hereto, and none of such assets is subject
to any conditional sale agreement. There are no defaults by the Company, or, to
Seller's Knowledge, by any other party, under any agreements that might
interfere with the conduct of the Company's business as currently conducted.
2.6 TAX MATTERS. The Company has timely and properly filed all federal,
state, local and foreign Tax returns required to be filed by it through the date
hereof, and has paid or caused to be paid all Taxes required to be paid by it
through the date hereof whether disputed or not, except Taxes which have not yet
accrued or otherwise become due. The Company has withheld and paid all Taxes
required to be withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, customer, creditor, member, or other third
party. For all periods since its inception, the Company has been classified as a
partnership for Federal income Tax purposes, and has taken all action necessary
to ensure that it is taxed as a partnership for Federal and state income Tax
purposes. All required Tax returns, including amendments to date, have been
prepared in good faith without negligence or willful misrepresentation and are
complete and accurate in all material respects. No governmental entity has
proposed (tentatively or definitively), asserted or assessed or, to Seller's
Knowledge, threatened to propose or assert, any deficiency, assessment or claim
for Taxes, and, to Seller's Knowledge, there is no basis for any such
delinquency, assessment or claim; and none of the Company, Seller, or any other
Member of the Company has executed any waiver of the statute of limitations for
the assessment or collection of any Tax with respect to the Company or its
operations. In the event it is necessary for the Company to file a final Tax
return with respect to the period the Company was owned by Seller, Parent and
Buyer agree to cooperate with respect to any information needed for such filing.
2.7 LITIGATION. With the exception of proceedings specifically relating to
the Pending Permits (as defined below) and except as otherwise set forth in
SCHEDULE 2.7 hereto, there is
4
no action, claim, litigation or governmental or administrative proceeding or
investigation pending or, to Seller's Knowledge, threatened (i) against the
Company, (ii) affecting the properties or assets of the Company, (iii) as to
matters relating to the Company, against any officer, director or member or key
employee of the Company, or (iv) which might call into question the validity of,
hinder the enforceability of, or otherwise restrict or limit the ability of
Seller to perform his obligations under this Agreement.
2.8 ENVIRONMENTAL MATTERS. (i) No hazardous wastes, substances or materials
or oil or petroleum products have been generated, transported, used, disposed
of, stored or treated by the Company and (ii) to Seller's Knowledge, no
hazardous wastes, substances or materials, or oil or petroleum products have
ever been released, discharged, disposed of, placed or stored under or upon any
real property ever owned, leased or operated by the Company. The Company has
complied with all applicable Environmental Laws (as defined below). Except for
proceedings and information requests specifically relating to the Pending
Permits, there is no pending or, to Seller's Knowledge, threatened civil or
criminal litigation, written notice of violation, formal administrative
proceeding, or investigation, inquiry or information request by any governmental
entity, relating to any Environmental Law involving the Company or any of its
assets. To Seller's Knowledge, the applications for the Pending Permits (copies
of which have been delivered to Buyer and Parent) set forth all environmental
audits or assessments undertaken by or on behalf of the Company or any
governmental agency with respect to the Company or its assets, employees,
facilities or properties, the results of groundwater and soil testing, the
results of underground fuel, water or waste tank tests and soil samples, and
written communications with Federal, state or local governments on environmental
matters. For purposes of this Agreement, "ENVIRONMENTAL LAW" means any federal,
state or local law, statute, rule or regulation or the common law relating to
the protection of human health or the environment, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Resource Conservation and Recovery Act of 1976, and any statute,
regulation or order pertaining to (i) the treatment, storage, disposal,
generation and transportation of industrial, toxic or hazardous materials or
substances or solid or hazardous waste; (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or threatened release
into the environment of industrial, toxic or hazardous materials or substances,
or solid or hazardous waste, including without limitation, emissions,
discharges, injections, spills, escapes or dumping of pollutants, contaminants,
or chemicals; (v) the protection of wildlife, marine life and wetlands,
including without limitation all endangered and threatened species; (vi) storage
tanks, vessels, abandoned or discarded barrels, containers and other closed
receptacles; (vii) the health and safety of employees and other Persons; and
(viii) the manufacture, processing, use, distribution, treatment, storage,
disposal, transportation or handling of pollutants, contaminants, toxic or
hazardous materials or substances or oil or petroleum products or solid or
hazardous waste. As used in this SECTION 2.8, the terms "release" and
"environment" shall have the meanings set forth in CERCLA.
2.9 PERMITS; COMPLIANCE WITH LAWS. The Company has obtained the Permits set
forth on SCHEDULE 2.9A (the "ISSUED PERMITS") and all such Issued Permits are
valid and in full force and effect, subject to appeal under applicable laws and
regulations after the date hereof. The Company has duly applied for the Permits
set forth on SCHEDULE 2.9B ("PENDING PERMITS"). Except for the Issued Permits
and the Pending Permits, to Seller's Knowledge, no other Permits are necessary
to conduct the business of the Company as currently conducted or as proposed to
be conducted, except as set forth on SCHEDULE 2.9C. The Company is in material
compliance with all applicable statutes, ordinances, orders, rules and
regulations promulgated by any federal, state, municipal or other governmental
authority, including, without limitation, the rules and regulations of the
Securities and Exchange
5
Commission and the Environmental Protection Agency. Except for requests for
information, notices and inquiries specifically relating to the Issued Permits
and the Pending Permits, the Company has never entered into or been subject to
any judgment, consent decree, compliance order or administrative order with
respect to any aspect of the business, affairs, properties or assets of the
Company or received any request for information, notice, demand letter,
administrative inquiry or formal or informal complaint or claim from any
regulatory agency with respect to any aspect of the business, affairs,
properties or assets of the Company.
2.10 REAL ESTATE. SCHEDULE 2.10A sets forth an accurate, correct and
complete list of each parcel of real property owned by the Company (the "REAL
ESTATE"), including a street address, complete legal description and a list of
all contracts and agreements, oral or written, relating to or affecting the Real
Estate or any interest therein. Seller has delivered to Parent accurate, correct
and complete copies of all such contracts and agreements. The Company is the
sole and exclusive legal and equitable owner of all right, title and interest in
and has good, marketable and insurable title in fee simple absolute to, and is
in possession of, all Real Estate which it purports to own. Neither the whole
nor any portion of any Real Estate or any real property leased, occupied or used
by the Company (the "LEASED REAL ESTATE") has been condemned, requisitioned or
otherwise taken by any public authority, and no notice of any such condemnation,
requisition or taking has been received by Seller or the Company. To Seller's
Knowledge, no such condemnation, requisition or taking is threatened or
contemplated. To Seller's Knowledge, there are no public improvements which may
result in special assessments against or otherwise affecting the Real Estate. To
Seller's Knowledge, no fact or condition exists which could result in the
termination or impairment of access to the Real Estate or the Leased Real Estate
or discontinuation of sewer, water, electric, gas, telephone, waste disposal or
other utilities or services to the extent such utilities currently exist at the
Real Estate. Seller has delivered to Parent complete copies of all existing
title insurance policies, title reports, and surveys, with respect to each
parcel of Real Estate. To Seller's Knowledge, the Company is not in violation of
any zoning, building or safety ordinance, regulation or requirement or other law
or regulation applicable to the operation of the Real Estate or the Leased Real
Estate, nor has it received any notice of such violation.
2.11 REAL ESTATE LEASES. SCHEDULE 2.11 sets forth an accurate, correct and
complete list of all real property leased or subleased by the Company, including
identification of the lease or sublease, street address, legal description and
list of contracts, agreements, leases, subleases, options and commitments, oral
or written, affecting such real property or any interest therein to which the
Company is a party or by which any of its interests in real property is bound
(the "REAL ESTATE LEASES"). The Company has been in peaceable possession of the
premises covered by each Real Estate Lease since the commencement of the
original term of such lease, and is not in default of, and to Seller's Knowledge
no other party thereto is in default of, any such lease. Seller has delivered to
Parent accurate, correct and complete copies of each Real Estate Lease and
copies of existing title insurance policies, title reports, surveys,
environmental audits and similar reports, if any, for the real property subject
to the Real Estate Leases.
2.12 BROKER'S OR FINDER'S FEES. There are no brokerage commissions,
finder's fees or similar fees or commissions payable by Seller or the Company in
connection with the transactions contemplated hereby.
2.13 INVESTMENT STATUS. Seller represents that he is an "accredited
investor" as such term is defined in Rule 501 under the Securities Act. Seller
represents that he is acquiring the Stock Consideration for his own account, for
investment only and not with a view to, or any present intention of, effecting a
distribution of such securities or any part thereof except pursuant to a
registration statement or an available exemption under applicable law. Seller
acknowledges that such securities
6
have not been registered under the Securities Act or the securities laws of any
state or other jurisdiction and cannot be disposed of unless they are
subsequently registered under the Securities Act and any applicable state laws
or unless an exemption from such registration is available. Seller (a) has such
knowledge and experience in financial and business matters so as to be capable
of evaluating and understanding the merits and risks of an investment in Parent,
(b) has received certain information concerning Parent and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks of an investment in Parent and (c) is able to bear the
economic risk of his investment in Parent and the Stock Consideration in that,
among other factors, Seller can afford to hold the Stock Consideration for an
indefinite period and can afford a complete loss of his investment in Parent.
Seller is a resident of the State of Texas and the offer and sale of the Stock
Consideration to him will take place in State of Texas.
Seller understands that because the Stock Consideration has not been
registered under the Securities Act or securities or "blue sky" laws of any
jurisdiction, none of the Stock may be sold unless such Stock Consideration is
subsequently registered under the Securities Act or exemptions from such
registration are available. Seller acknowledges and understands that he has no
independent right to require Parent to register the Stock Consideration. Seller
understands that the certificate(s) representing the Stock Consideration will
bear a legend in substantially the form provided below (in addition to any
legend required under applicable state securities laws):
"THE SHARES REPRESENTED HEREBY MAY NOT BE PLEDGED, SOLD OR IN ANY
OTHER WAY TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
IN EFFECT AT THAT TIME, OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT."
SECTION 3 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer and Parent, jointly and severally, hereby represent and warrant to
Seller as of the date hereof:
3.1 INVESTMENT STATUS. Parent represents that it is an "accredited
investor" as such term is defined in Rule 501 under the Securities Act. Buyer
represents that it is purchasing the Subject Membership Interests for its own
account, for investment only and not with a view to, or any present intention
of, effecting a distribution of such securities or any part thereof except
pursuant to a registration statement or an available exemption under applicable
law. Buyer acknowledges that such securities have not been registered under the
Securities Act or the securities laws of any state or other jurisdiction and
cannot be disposed of unless they are subsequently registered under the
Securities Act and any applicable state laws or unless an exemption from such
registration is available. Buyer (a) has such knowledge and experience in
financial and business matters so as to be capable of evaluating and
understanding the merits and risks of an investment in the Company, (b) has
received certain information concerning the Company and has had the opportunity
to obtain additional information as desired in order to evaluate the merits and
the risks of an investment in the Company and (c) is able to bear the economic
risk of its investment in the Company and the Subject Membership Interests in
that, among other factors, Buyer can afford to hold the Subject Membership
Interests for an indefinite period and can afford a complete loss of its
investment in the Company.
7
3.2 AUTHORITY. Each of Buyer and Parent represents that it has full right,
authority and power under its charter and by-laws to enter into this Agreement
and each agreement, document and instrument to be executed and delivered by or
on behalf of Buyer and/or Parent pursuant to or as contemplated by this
Agreement and to carry out the transactions contemplated hereby and thereby, and
the execution, delivery and performance by Buyer and/or Parent of this Agreement
and each such other agreement, document and instrument have been duly authorized
by all necessary action under their respective charter and by-laws. This
Agreement and each agreement, document and instrument executed and delivered by
Buyer and/or Parent pursuant to or as contemplated by this Agreement constitute,
or when executed and delivered will constitute, valid and binding obligations of
Buyer and/or Parent, as applicable, enforceable in accordance with their
respective terms.
3.3 ORGANIZATION. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified or registered to do business as a foreign corporation in Florida and
in each jurisdiction in which the failure to be so qualified might call into
question the validity of, hinder the enforceability of, or otherwise restrict or
limit the ability of Buyer to perform its obligations under this Agreement.
Parent is a corporation duly organized, validly existing and in good standing
under the laws of Ontario, Canada.
3.4 SEC REPORTS. Parent has filed all forms and reports required to be
filed with the SEC since December 31, 2001 pursuant to the requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and all rules
and regulations promulgated thereunder. All such forms and reports filed with
the SEC since December 31, 2001 have been prepared and filed on a timely basis
in accordance with the applicable requirements of the Exchange Act, and all
rules and regulations promulgated thereunder, and did not at the time they were
filed (or if amended or superseded by a filing prior to the date hereof, then on
the date of such filing) 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 therein or in light of the circumstances under which they
were made, not misleading.
3.5 BROKER'S OR FINDER'S FEES. There are no brokerage commissions, finder's
fees or similar fees or commissions payable by Buyer or Parent in connection
with the transactions contemplated hereby.
3.6 LITIGATION. There is no action, claim, litigation or governmental or
administrative proceeding or investigation pending or, to Buyer's or Parent's
knowledge, threatened against Buyer or Parent which might call into question the
validity of, hinder the enforceability of, or otherwise restrict or limit the
ability of Buyer or Parent to perform its obligations under this Agreement.
SECTION 4 CLOSING CONDITIONS OF BUYER. Buyer's obligation to purchase and pay
for the Subject Membership Interests at the Closing, and Parent's obligation to
issue the Stock Consideration, shall be subject to the fulfillment to Parent's
satisfaction, or the waiver by Parent, on or before the Closing Date of the
following conditions:
4.1 REPRESENTATIONS, WARRANTIES, COVENANTS. The representations and
warranties of Seller contained in this Agreement shall be, if specifically
qualified by materiality or Material Adverse Effect, true in all respects and,
if not so qualified, shall be true in all material respects, in each case on and
as of the Closing Date with the same effect as if made on and as of the Closing
Date, and the covenants and agreements contained in this Agreement to be
complied with by Seller on or before
8
the Closing Date shall have been complied with in all material respects. Seller
shall have delivered to Buyer and Parent a certificate executed by Seller, dated
the Closing Date to the foregoing effect.
4.2 SUBJECT MEMBERSHIP INTERESTS. Seller shall have delivered to Buyer and
Parent instruments in form and substance satisfactory to Buyer and Parent
evidencing (a) the sale, transfer and assignment of the Subject Membership
Interests to Buyer, and properly vesting in Buyer title to, and ownership of,
the Subject Membership Interests free and clear of all Liens and (b) admission
of Buyer as a Member of the Company owning 23.5 Points, representing a Sharing
Ratio of 23.5%.
4.3 AUTHORIZATION. Seller shall have delivered to Buyer and Parent written
consents of each of the Members of the Company permitting the sale, transfer and
assignment of the Subject Membership Interests to Buyer and the admission of
Buyer as a Member of the Company.
4.4 PURCHASE AGREEMENT. The transactions contemplated under the Other
Members' Purchase Agreement shall have been consummated such that Buyer shall
own Membership Interests in the Company representing 100 Points with a Sharing
Ratio of 100%.
4.5 AMENDED OPERATING AGREEMENT. An Amendment to the Operating Agreement
shall have been duly executed by each Member in order to admit Buyer as a Member
of the Company and set forth the Points and Sharing Ratio of Buyer as the sole
Member and to effect the resignation of Seller's and the Other Members'
designees to the Company's Management Committee, such Amendment to be in form
and substance satisfactory to Parent in its sole discretion.
4.6 MATERIAL ADVERSE CHANGE. Since the date of this Agreement, no event or
series of events shall have occurred which has or is likely to have a Material
Adverse Effect.
4.7 OPINION OF COUNSEL. Buyer and Parent shall have received an opinion of
counsel to Seller, dated the Closing Date, in form and substance reasonably
satisfactory to Parent.
4.8 COMPLIANCE WITH LAW. The sale of the Subject Membership Interests to
Buyer and the issuance by Parent of the Stock Consideration shall be in
conformity with all applicable state and federal securities laws.
4.9 NO ORDERS. No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Closing or any of the other
transactions contemplated hereby shall be in effect.
4.10 CONSENTS. Buyer and Parent shall have obtained all authorizations,
consents and approvals of third parties, governments and governmental agencies
required for them to consummate the transactions contemplated hereby, including,
without limitation, all consents required under applicable federal and state
securities laws, and the expiration or termination of all applicable waiting
periods under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, each of which are set forth in SCHEDULE 4.10 hereto (collectively, the
"BUYER CONSENTS AND APPROVALS").
4.11 COUNTY WAIVER. The County of Osceola (the "COUNTY") shall have waived
in writing its right of first refusal as set forth in SCHEDULE 2.2(d)(v) hereto
with respect to the transactions contemplated hereby (the "RIGHT OF FIRST
REFUSAL") or said Right of First Refusal shall have expired by its terms without
exercise thereof by the County.
9
4.12 ROYALTY AGREEMENT. The Company, Seller and the Other Members shall
have entered into a Royalty Agreement, substantially in the form of EXHIBIT C
hereto.
4.13 BRONSONS LAND. The Company shall have reached definitive agreement
with Bronsons to satisfy the Company's obligations under the Bronsons Agreement
(by exchange of the Xxxxxx Land or other alternative real property available to
the Company), upon satisfaction of which the Company shall acquire all right,
title and interest, free and clear of all Liens, in the real property owned by
Bronsons and identified in the Bronsons Agreement, under terms and conditions
reasonably satisfactory to Parent (provided that it shall be presumed that in
the event that the costs of satisfying the obligations do not exceed $300,000
the economic terms shall be deemed reasonable).
SECTION 5 CLOSING CONDITIONS OF SELLER. Seller's obligation to sell the Subject
Membership Interests at the Closing shall be subject to the fulfillment to
Seller's satisfaction, or the waiver by Seller, on or before the Closing Date of
the following conditions:
5.1 REPRESENTATIONS, WARRANTIES, COVENANTS. The representations and
warranties of Buyer and Parent contained in this Agreement shall be, if
specifically qualified by materiality, true in all respects and, if not so
qualified, shall be true in all material respects, in each case on and as of the
Closing Date with the same effect as if made on and as of the Closing Date, and
the covenants and agreements contained in this Agreement to be complied with by
Buyer and Parent on or before the Closing Date shall have been complied with in
all material respects. Buyer and Parent shall have delivered to Seller a
certificate executed by each of them, dated the Closing Date, to the foregoing
effect.
5.2 PURCHASE PRICE. Buyer shall have paid to Seller the Cash Consideration,
and Parent shall have delivered to Seller instruments in form and substance
satisfactory to Seller evidencing the Stock Consideration.
5.3 NO ORDERS. No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Closing or any of the other
transactions contemplated hereby shall be in effect.
5.4 COUNTY WAIVER. The County shall have waived in writing its Right of
First Refusal or said Right of First Refusal shall have expired by its terms
without exercise thereof by the County.
5.5 ROYALTY AGREEMENT. The Company, Seller and the Other Members shall have
entered into a Royalty Agreement, substantially in the form of EXHIBIT C hereto.
5.6 RELEASE FROM MORTGAGE. Seller shall have been released at the Closing
from his guarantee of the Company's mortgage loan from Southern Community Bank.
5.7 COMPLIANCE WITH LAW. The sale of the Subject Membership Interests to
Buyer shall be in conformity with all applicable state and federal securities
laws.
10
SECTION 6 COVENANTS OF SELLER.
6.1 NO SOLICITATION OF TRANSACTIONS; ASSISTANCE WITH OTHER MEMBERSHIP
INTERESTS.
(a) Seller covenants and agrees that he will not, directly or
indirectly, and will instruct his investment bankers, attorneys, accountants and
other advisers or representatives (collectively, the "REPRESENTATIVES") not to,
directly or indirectly, solicit, initiate or encourage (including by means of
furnishing non-public information), or take any other action to facilitate, any
inquiries or the making of any proposal or offer that constitutes, or may
reasonably be expected to lead to, any Competing Transaction, or enter into or
maintain or continue discussions or negotiate with any Person in furtherance of
such inquiries or to effect a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any Representative retained by it
to take any such action. For purposes of this Agreement, "COMPETING TRANSACTION"
shall mean the occurrence of a transaction resulting in any of the following:
(i) the sale, assignment or other Transfer by Seller of any Membership Interests
(or interest therein) to any Person other than Buyer and/or Parent; (ii) any
Person other than Buyer and/or Parent becoming the beneficial owner, directly or
indirectly, of any of the Membership Interests; (iii) the merger or
consolidation of the Company with any other entity; or (iv) the sale or transfer
(in one transaction or a series of related transactions) of all or substantial
part of the assets of the Company.
(b) Seller shall promptly advise Parent in writing of any offer of a
Competing Transaction, the material terms and conditions of such offer and the
identity of the Person making such offer.
6.2 ALL REASONABLE EFFORTS; AGREEMENT TO COOPERATE.
(a) Seller shall use his best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, including, without limitation, obtaining a waiver of the County's
Right of First Refusal by no later than March 15, 2003, satisfying the condition
to Closing set forth in Section 4.13 hereof, and obtaining all consents and
approvals required under the Governing Documents.
(b) Without limiting the generality of the foregoing, and
notwithstanding anything in this Agreement to the contrary, Seller shall use his
commercially reasonable efforts to take or cause to be taken all action and to
do, or cause to be done, and to assist and cooperate with the other parties
hereto in doing, all things necessary, proper or advisable to obtain all Pending
Permits and all consents, amendments or waivers required in connection with the
transactions contemplated by this Agreement, including, without limitation, all
necessary consents, approvals and authorizations as are required to be obtained
under any federal or state law or regulation.
(c) Parent shall use its commercially reasonable efforts to obtain
all authorizations, consents and approvals of third parties, governments and
governmental agencies required by Buyer and Parent to consummate the
transactions contemplated by this Agreement, including, without limitation, the
Buyer Consents and Approvals.
11
SECTION 7 TERMINATION
7.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the Closing
Date, pursuant to a written notice of such termination, as follows:
(a) by mutual written consent of each of Parent and Seller;
(b) by Parent upon a material breach of any representation,
warranty, covenant or agreement on the part of Seller set forth in this
Agreement, or if any representation or warranty made by Seller in this Agreement
shall have become untrue or inaccurate in any material respect; and
(c) by Seller (i) upon a material breach of any representation,
warranty, covenant or agreement on the part of Buyer or Parent set forth in this
Agreement, or if any representation or warranty made by Buyer or Parent in this
Agreement shall have become untrue or inaccurate in any material respect, or
(ii) if the Closing has not occurred on or before March 31, 2003 due to the
failure of Buyer and/or Parent to obtain the Buyer Consents and Approvals; and
(d) by Parent in the event Seller has not satisfied the condition to
Closing set forth in SECTION 4.11 or SECTION 4.13 hereof on or before March 15,
2003.
EFFECT OF TERMINATION. In the event of termination of this Agreement
pursuant to SECTION 7.1, this Agreement shall forthwith become void, there shall
be no liability under this Agreement on the part of Parent, Buyer or Seller, and
all rights and obligations of each party hereto shall cease; PROVIDED that
nothing herein shall relieve any party from liability for any breach of any
representation, warranty, covenant or agreement of such party contained in this
Agreement prior to the date of termination.
INDEMNIFICATION
INDEMNIFICATION BY SELLER. Seller agrees, subsequent to the Closing, to
indemnify and hold harmless Buyer, Parent, the Company and their respective
subsidiaries and affiliates and persons serving as managers, officers,
directors, partners or employees of any of the foregoing (individually a "BUYER
INDEMNIFIED PARTY" and collectively the "BUYER INDEMNIFIED PARTIES") from and
against any damages, liabilities, losses, taxes, fines, penalties, costs, and
expenses (including, without limitation, reasonable fees of counsel) of any kind
or nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in the investigation, defense or settlement of the
foregoing) which may be sustained or suffered by any of them arising out of or
based upon any breach of any representation, warranty or covenant of Seller
under this Agreement or in any certificate, schedule or exhibit delivered
pursuant hereto, or by reason of any claim, action or proceeding arising from
any breach of such representations, warranties or covenants.
LIMITATIONS ON INDEMNIFICATION BY SELLER. Notwithstanding the foregoing,
the right of Buyer Indemnified Parties to indemnification under SECTION 8.1
(other than with respect to a claim of fraud or intentional misrepresentation)
shall be subject to the following provisions:
No indemnification shall be payable to a Buyer Indemnified Party
with respect to any claim asserted pursuant to SECTION 8.1 after the eighteenth
(18th) month following the Closing Date (the "INDEMNIFICATION CUT-OFF DATE");
PROVIDED, HOWEVER, (i) the Indemnification Cut-Off Date for a claim of breach of
the representations and warranties set forth in SECTION 2.6 shall be the
applicable statute of limitations for such claim, (ii) the Indemnification
Cut-Off Date for a claim of breach of the
12
representations and warranties set forth in SECTION 2.8 shall be the earlier of
the seventh (7th) anniversary of the Closing Date and the applicable statute of
limitations for such claim, and (iii) the limitation on indemnification set
forth in this SECTION 8.2(a) shall not apply to a claim of breach of the
representations and warranties set forth in SECTIONS 2.1, 2.2(a), 2.2(b), 2.2(c)
and 2.3.
No indemnification shall be payable to any Buyer Indemnified Party,
except to the extent that the total of all claims for indemnification pursuant
to SECTION 8.1 exceeds $100,000 in the aggregate.
The maximum aggregate amount of indemnification payable pursuant to
SECTION 8.1 to Buyer Indemnified Parties shall be the amount of the Total
Consideration actually paid to Seller by Buyer or Parent.
INDEMNIFICATION BY PARENT. Parent agrees to indemnify and hold Seller and
his respective heirs and legal representatives (the "SELLER INDEMNIFIED
PARTIES") harmless from and against any damages, liabilities, losses and
expenses (including, without limitation, reasonable fees of counsel) of any kind
or nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by any of them arising out of or
based upon any breach of any representation, warranty or covenant of Parent
and/or Buyer under this Agreement or in any certificate, schedule or exhibit
delivered pursuant hereto, or by reason of any claim, action or proceeding
arising from any breach of such representations, warranties or covenants.
LIMITATION ON INDEMNIFICATION BY PARENT. Notwithstanding the foregoing, the
right of Seller to indemnification under SECTION 8.3 (other than with respect to
a claim of fraud or intentional misrepresentation) shall be subject to the
following provisions:
No indemnification shall be payable with respect to claims asserted
pursuant to SECTION 8.3 after the eighteenth (18th) month following the Closing
Date; PROVIDED, HOWEVER, that the limitation on indemnification set forth in
this SECTION 8.4(A) shall not apply to a claim of breach of the representations
and warranties set forth in SECTIONS 3.2 and 3.3 hereof.
No indemnification shall be payable pursuant to SECTION 8.3, except
to the extent the total of all claims for indemnification pursuant to SECTION
8.3 shall exceed US $100,000 in the aggregate.
The maximum aggregate amount of indemnification to be payable
pursuant to SECTION 8.3 to the Seller Indemnified Parties shall be limited to
the amount of the Total Consideration (to the extent due under this Agreement
but unpaid by Buyer or Parent).
NOTICE; DEFENSE OF CLAIMS. An indemnified party may make claims for
indemnification hereunder by giving written notice thereof to the indemnifying
party within the period in which indemnification claims can be made hereunder
promptly upon becoming aware of any such claim. If indemnification is sought for
a claim or liability asserted by a third party, the indemnified party shall also
give written notice thereof to the indemnifying party promptly after it receives
notice of the claim or liability being asserted. The failure to provide prompt
notice as required by the preceding sentences shall not relieve the indemnifying
party from any liability except to the extent that it is prejudiced by the
failure or delay in giving such notice. Such notice shall summarize the bases
for the claim for indemnification and any claim or liability being asserted by a
third party. Within thirty (30) days after receiving such notice the
indemnifying party shall give written notice to the indemnified party stating
13
whether it disputes the claim for indemnification and whether it will defend
against any third party claim or liability at its own cost and expense. If the
indemnifying party fails to give notice that it disputes a non-third party
indemnification claim within thirty (30) days after receipt of notice thereof,
it shall be deemed to have accepted and agreed to such claim, which shall become
immediately due and payable. The indemnifying party shall be entitled to direct
the defense against a third party claim or liability with counsel selected by it
(subject to the consent of the indemnified party, which consent shall not be
unreasonably withheld) as long as the indemnifying party is conducting a good
faith and diligent defense, and to compromise or settle such claim exercising
reasonable business judgment. The indemnified party shall at all times have the
right to fully participate in the defense of a third party claim or liability at
his or its own expense directly or through counsel; PROVIDED that an indemnified
party shall have the right to retain its own counsel, with the reasonable fees
and expenses to be paid by the indemnifying party, if such indemnified party
shall have reasonably concluded that representation of such indemnified party or
parties by the counsel retained by the indemnifying party or parties would be
inappropriate due to actual or potential differing interests between such
indemnified party or parties and any other party represented by such counsel in
such proceeding. If no such notice of intent to dispute and defend a third party
claim or liability is given by the indemnifying party, or if such good faith and
diligent defense is not being or ceases to be conducted by the indemnifying
party, the indemnified party shall have the right, at the expense of the
indemnifying party, to undertake the defense of such claim or liability (with
counsel selected by the indemnified party), and to compromise or settle it,
exercising reasonable business judgment. If the third party claim or liability
is one that by its nature cannot be defended solely by the indemnifying party,
then the indemnified party shall make available such information and assistance
as the indemnifying party may reasonably request and shall cooperate with the
indemnifying party in such defense, at the expense of the indemnifying party.
7.2 SOLE AND EXCLUSIVE REMEDY. From and after the Closing, the sole and
exclusive remedy of the parties hereto with respect to all monetary claims
(other than a claim of fraud or intentional misrepresentation) relating to this
Agreement or the transactions contemplated hereby shall be the indemnification
provisions set forth in this SECTION 8; PROVIDED that the foregoing shall not
limit the right of Buyer and/or Parent to enforce their rights for a breach by
Seller of the covenants set forth in SECTION 6 hereof.
SECTION 8 GENERAL
8.1 PUBLICITY. No party other than Parent or Buyer shall issue any press
release or public announcement pertaining to this Agreement or the transactions
contemplated hereby. Seller shall keep the terms and substance of this Agreement
(including, without limitation, with respect to the payment terms), and the
other agreements, instruments and documents to be entered into by and among
Seller, Buyer and/or Parent in connection herewith or otherwise contemplated
hereby, in confidence and will not disclose or communicate in any way any such
information to any person or entity except as permitted by Parent in advance and
in writing.
8.2 AMENDMENTS, WAIVERS AND CONSENTS. For the purposes of this Agreement
and all agreements executed pursuant hereto, no course of dealing between or
among any of the parties hereto and no delay on the part of any party hereto in
exercising any rights hereunder or thereunder shall operate as a waiver of the
rights hereof and thereof. No provision hereof may be waived otherwise than by a
written instrument signed by the party or parties so waiving such covenant or
other provision. No amendment to this Agreement may be made without the written
consent of each of the parties hereto.
14
8.3 GOVERNING LAW. This Agreement shall be deemed to be a contract made
under, and shall be construed in accordance with, the laws of the State of
Florida, without giving effect to conflict of laws principles thereof.
8.4 SECTION HEADINGS AND GENDER. The descriptive headings in this Agreement
have been inserted for convenience only and shall not be deemed to limit or
otherwise affect the construction of any provision thereof or hereof. The use in
this Agreement of the masculine pronoun in reference to a party hereto shall be
deemed to include the feminine or neuter, and vice versa, as the context may
require.
8.5 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall constitute but one and the same instrument. One or more
counterparts of this Agreement may be delivered via facsimile, with the
intention that they shall have the same effect as an original counterpart
hereof.
8.6 NOTICES AND DEMANDS. Any notice or demand which is required or provided
to be given under this Agreement shall be deemed to have been sufficiently given
and received for all purposes when delivered by hand or facsimile with
confirmation of receipt by the receiving machine, or five (5) business days
after being sent by certified or registered mail, postage and charges prepaid,
return receipt requested, or two (2) business days after being sent by overnight
delivery providing receipt of delivery, to the following addresses (or at such
other address designated a party to the other party in writing):
if to Seller:
Xxxxxx X. Xxxxxxxxx, Xx.
Highland Holdings
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
FAX: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxxx and Xxxxx
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: X.X. Xxxxx, III
FAX: (000) 000-0000
if to Parent or Buyer:
Capital Environmental Resources Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx XX, Xxxxxx X0X 0X0
Attn: General Counsel
FAX: (000) 000-0000
with a copy to:
XxXxxxxxx, Will & Xxxxx
15
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxx, Esq.
FAX: (000) 000-0000
8.7 JURISDICTION; VENUE; WAIVER OF JURY TRIAL.
(a) Each of the parties to this Agreement hereby agrees that the
state and federal courts of the State of Florida shall have exclusive
jurisdiction to hear and determine any claims or disputes between the parties
hereto pertaining directly or indirectly to this Agreement, and all documents,
instruments and agreements executed pursuant hereto, or to any matter arising
hereunder (unless otherwise expressly provided for herein or therein). To the
extent permitted by law, each party hereby expressly submits and consents in
advance to such jurisdiction in any action or proceeding commenced by any of the
other parties hereto in any of such courts, and agrees that service of such
summons and complaint or other process or papers may be made by registered or
certified mail addressed to such party at the address to which notices are to be
sent pursuant to this Agreement. Each of the parties waives any claim that
Florida is an inconvenient forum or an improper forum based on lack of venue.
The choice of forum set forth in this SECTION 9.7 shall not be deemed to
preclude the enforcement of any judgment obtained in such forum or the taking of
any action to enforce the same in any other appropriate jurisdiction.
(b) Each party hereto hereby waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with
this Agreement. Each party hereto (i) certifies that no representative, agent or
attorney of the other party has represented, expressly or otherwise, that the
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this SECTION 9.7.
8.8 REMEDIES; SEVERABILITY. It is specifically understood and agreed that
any breach of the provisions of this Agreement by any Person subject hereto will
result in irreparable injury to the other parties hereto, that the remedy at law
alone will be an inadequate remedy for such breach, and that, in addition to any
other remedies which they may have, such other parties may enforce their
respective rights by actions for specific performance in the federal or state
courts in State of Florida (to the extent permitted by law). Whenever possible,
each provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be deemed prohibited or invalid under such applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or the other provisions of this Agreement.
ENTIRE AGREEMENT; INTEGRATION. This Agreement, including the exhibits,
schedules, documents and instruments referred to herein, constitutes the entire
agreement, and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
SECTION 1031 EXCHANGE. So long as the Closing shall not be delayed thereby
and no additional expense shall be incurred by Buyer and/or Parent, should
Seller desire to structure a portion of this transaction as a like-kind exchange
under Section 1031 of the Internal Revenue Code of 1986, as amended, PROVIDED
that such Section can be properly applied to the transaction contemplated
hereby, Buyer agrees to cooperate fully in such endeavor.
16
ASSIGNMENT. No party may assign its right or obligations under this
Agreement (by operation of law or otherwise). Notwithstanding the foregoing, (i)
a Seller may assign its right to receive payment of the Cash Consideration and,
subject to compliance with applicable Federal and state securities laws, the
Stock Consideration to his spouse, or his ancestors, descendents or siblings
(each, a "FAMILY MEMBER"), to a trust of which such Seller is the settlor and a
trustee for the benefit of such Seller or his Family Members, to such Seller's
heirs, executors or administrators, to a trust for the benefit of such Seller or
his Family Members, under his will, or to a corporation, partnership, limited
liability company or other entity which is controlled by Seller (collectively,
the "PERMITTED TRANSFEREES"), provided that any such Permitted Transferee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement; and (ii) Parent or Buyer may assign its rights and obligations under
this Agreement to any person or entity without the consent of the Sellers. For
purposes of this Section 9.11, Seller shall be deemed to "control" a
corporation, partnership, limited liability company or other entity if Seller
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such corporation, partnership, limited liability
company or other entity, whether through the ownership of voting securities, by
contract or otherwise.
SECTION 9 DEFINITIONS
Unless the context specifically requires otherwise, capitalized terms used
in this Agreement shall have the meaning specified below:
"ACT" means Chapter 1705 of the Ohio Revised Code and any successor
statute, as amended from time to time.
"LIEN" means any lien, claim, option, charge, pledge, mortgage, security
interest, voting agreement, trust, encumbrance, right or restriction of any
nature.
"MATERIAL ADVERSE EFFECT" means any change or effect that is materially
adverse to the properties, assets, business or condition (financial or
otherwise) of the Company. Material Adverse Effect shall not include the denial
or appeal of any Pending Permit.
"PERMITS" means any franchises, authorizations, approvals, orders,
consents, licenses, certificates, permits, registrations, qualifications or
other rights and privileges.
"PERSON" means any individual, association, corporation, partnership,
limited liability company, joint venture, estate, trust or unincorporated
organization or any government or any agency or political subdivision thereof
including, without limitation, any partner, officer, stockholder, director,
member or employee of such Person.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER'S KNOWLEDGE," "KNOWLEDGE OF SELLER" (or words of similar import)
means receipt of notice by, or actual or constructive knowledge of, Seller after
due inquiry.
"SUBSIDIARY" means any corporation more than fifty percent (50%) of the
outstanding voting securities of which, or any partnership, joint venture or
other entity more than fifty percent (50%) of the total equity interest of
which, is directly or indirectly owned by the Company or any other entity
otherwise controlled by or under common control with the Company.
"TAXES" means any federal, state, local, foreign or other taxes, including
without limitation income taxes, estimated taxes, excise taxes, sales taxes, use
taxes, gross receipts taxes, franchise taxes,
17
employment and payroll related taxes, withholding taxes, stamp taxes, transfer
taxes and property taxes, whether or not measured in whole or in part by net
income.
"TRANSFER" means any direct or indirect transfer, donation, sale,
assignment, or other disposal or attempted disposal of all or any portion of
Membership Interests.
[Signature Page Follows]
18
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be duly executed and delivered by their proper and duly authorized
representatives as of the day and year first above written.
SELLER:
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
PARENT/BUYER:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ Xxxxx Xxxxxxxxxx-Xxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxxx-Xxxxx
Title: Chairman and Chief Executive Officer
OMNI WASTE, INC.
By: /s/ Xxxxx Xxxxxxxxxx-Xxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxxx-Xxxxx
Title: President
AMENDMENT TO PURCHASE AGREEMENT
THIS AMENDMENT TO PURCHASE AGREEMENT (the "AMENDMENT") dated as of
February 14, 2003 amends that certain Purchase Agreement (the "PURCHASE
AGREEMENT") dated January 15, 2003 by and between XXXXXX X. XXXXXXXXX, XX.
("SELLER") and CAPITAL ENVIRONMENTAL RESOURCE INC., an Ontario (Canada)
corporation ("PARENT"), and OMNI WASTE, INC., a Delaware corporation ("BUYER").
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Purchase Agreement.
WHEREAS, the parties hereto desire to amend the Purchase Agreement to
modify the amount and form of the consideration to be paid to Seller by Buyer
and Parent and the timing of the Closing.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The Purchase Agreement is hereby amended by striking in its entirety
Section 1.1 thereof and replacing such Section with the following:
"1.1 PURCHASE AND SALE. Upon the terms and subject to the conditions
contained herein, and in reliance on the representations,
warranties, covenants, terms and conditions of this Agreement,
Seller shall sell, transfer and assign to Buyer the Subject
Membership Interests free and clear of all Liens, and shall cause
Buyer to be admitted as a Member of the Company with 23.5 Points and
a Sharing Ratio of 23.5% (without giving effect to the transactions
contemplated by the Other Members' Purchase Agreement), for a
purchase price of (i) eight million two hundred and fifty thousand
United States dollars ($8,250,000.00 USD) payable in cash (the "CASH
CONSIDERATION"), and (ii) two million fifty thousand (2,050,000)
shares of Common Stock of Parent (the "STOCK CONSIDERATION" and
together with the Cash Consideration, the "TOTAL CONSIDERATION")."
2. The Purchase Agreement is hereby amended by striking in its entirety
Section 1.2 thereof and replacing such Section with the following:
"1.2 CLOSING. The purchase and sale of the Subject Membership
Interests (the "CLOSING") shall take place at 10:00 a.m. EDT on the
date (the "CLOSING DATE") that is the earlier to occur of (i) the
next day after all of the conditions to closing set forth in
Sections 4 and 5 hereof have been satisfied or waived, and (ii)
March 28, 2003, or such other date as the parties may mutually
agree, at the offices of XxXxxxxxx, Will & Xxxxx, 000 Xxxxx Xxxxxxxx
Xxxxxxxxx, 00xx Xxxxx, Xxxxx, Xxxxxxx 00000-0000. At the Closing,
Seller shall deliver instruments evidencing the transfer of the
Subject
Membership Interests to Buyer in consideration of the
payment in full of the remainder of the Cash Consideration (after
the application of the Deposit) by wire transfer of immediately
available funds to an account designated by Seller or by check
payable to the order of Seller, at Seller's election, and the
issuance and delivery by Parent to Seller of stock certificates
representing the Stock Consideration, free and clear of any and all
Liens."
3. Upon the execution and delivery of this Amendment, and in consideration
thereof, Parent (on behalf of Buyer) shall:
(a) pay, on the date hereof, to Seller a deposit of seven hundred
and fifty thousand United States dollars ($750,000.00 USD) (the "CASH
DEPOSIT") by wire transfer of immediately available funds to an account
designated by Seller; and
(b) issue and deliver to Seller 350,000 shares of the Common Stock
of Parent (the "STOCK DEPOSIT"), 225,000 shares of which shall be
registered in the name of Seller, and 125,000 shares of which shall be
registered, at Seller's request, in the name of the designee of Sanders,
Morris, Xxxxxx, in each case within seven (7) business days after delivery
of written instructions to Parent by Seller of the name, address, tax
identification number and such other information as may be required by
Parent's transfer agent to issue such shares.
If the Closing occurs, (x) the Cash Deposit shall be applied toward
the Cash Consideration payable by Buyer pursuant to Section 1.1 of the
Purchase Agreement and the remainder of the Cash Consideration (I.E.,
$7,500,000.00 USD) shall be paid to Seller by Parent (on behalf of Buyer)
at Closing and (y) the Stock Deposit shall be applied toward the Stock
Consideration payable by Buyer pursuant to Section 1.1 of the Purchase
Agreement and the remainder of the Stock Consideration (I.E., 1,700,000
shares of Common Stock of Parent) shall be issued to Seller by Parent at
Closing. If the Purchase Agreement is terminated pursuant to Section
7.1(b) or Section 7.1(d) thereof, the Cash Deposit and Stock Deposit shall
be returned by Seller to Parent within five (5) business days after the
effective date of termination. If the Purchase Agreement is terminated
pursuant to Section 7.1(a) or Section 7.1(c) thereof, the Cash Deposit and
Stock Deposit shall be considered non-refundable and shall be and remain
the property of Seller, free of any claim, right, title or interest of
Buyer or Parent.
4. Except as otherwise set forth herein, all other terms and conditions of
the Purchase Agreement shall remain in full force and effect. The Purchase
Agreement, including the exhibits, schedules, documents and instruments referred
to therein, as amended by this Amendment, constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter thereof and hereof.
5. This Amendment shall be governed by and construed in accordance with
the laws of the State of Florida, without regard to the conflict of laws
principles thereof. This Amendment may be executed in multiple counterparts,
each of which shall constitute but one
2
and the same instrument. One or more counterparts of this Amendment may be
delivered via facsimile, with the intention that they shall have the same effect
as an original counterpart hereof.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Purchase Agreement to be duly executed and delivered by their proper and duly
authorized representatives as of the day and year first above written.
SELLER:
/s/ XXXXXX X. XXXXXXXXX, XX.
-------------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
PARENT/BUYER:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ XXXXX XXXXXXXXXX-XXXXX
---------------------------------
Name: Xxxxx Xxxxxxxxxx-Xxxxx
Title: Chairman and Chief Executive Officer
OMNI WASTE, INC.
By: /s/ XXXXX XXXXXXXXXX-XXXXX
---------------------------------
Name: Xxxxx Xxxxxxxxxx-Xxxxx
Title: President
