EXHIBIT 2.4
*** Indicates material has been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission. A complete copy
of this Agreement has been filed with the Securities and Exchange
Commission.
--------------------------------------------------------------------------------
MEMBERSHIP INTEREST PURCHASE AGREEMENT
AMONG
WCA OF NORTH CAROLINA, L.P.,
AS BUYER,
AND
MRR SOUTHERN, L.L.C.,
AS SELLER,
AND
MATERIAL RECOVERY, LLC,
MATERIAL RECLAMATION, LLC,
MRR OF HIGH POINT, LLC,
AND
MRR WAKE TRANSFER STATION, LLC
AS THE COMPANIES
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is made
effective the 14th day of January, 2005, between WCA of North Carolina, L.P., a
Delaware limited partnership ("Buyer"), as Buyer, and MRR Southern, LLC, a North
Carolina limited liability company ("Seller"), Material Recovery, LLC, a North
Carolina limited liability company ("Recovery"), Material Reclamation, LLC, a
North Carolina limited liability company ("Reclamation"), MRR of High Point,
LLC, a North Carolina limited liability company ("High Point") and MRR Wake
Transfer Station, LLC, a North Carolina limited liability company ("Wake" and
collectively, with High Point, Recovery and Reclamation, the "Companies and each
a "Company"), and is joined herein by WCA Waste Corporation, a Delaware
corporation ("WCA") and by F. Xxxxxxx Xxxxxx, Xx., X. X. Xxxxxxx, Xxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxxx, Xx. and Xxxxx Xxxxxxx, Jr. (each a "Principal" and
collectively the "Principals") to the limited extent expressly provided herein.
Buyer, Seller and the Companies are sometimes hereinafter referred to
individually as a "Party" and collectively as the "Parties."
RECITALS
Seller is the sole member of each of the Companies. The Companies have C&D
landfill operations in Guilford and Wake Counties, North Carolina. Recovery,
Reclamation and Wake own and operate a C&D landfill, reclamation center, and a
transfer station, respectively, in Wake County, North Carolina, and High Point
owns and operates a C&D landfill in the city of High Point, North Carolina.
Buyer has agreed to purchase and Seller has agreed to sell Seller's entire
membership interest in each of the Companies in accordance with the terms of
this Agreement.
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 hereto do
hereby agree as follows:
1. PURCHASE OF MEMBERSHIP INTERESTS
Subject to the terms and conditions of this Agreement, Buyer will purchase
from Seller, and Seller will sell, deliver and assign to Buyer, the sole
membership interest in each of the Companies (each a Membership Interest" and
collectively, the "Membership Interests") for the consideration specified below.
2. CONSIDERATION
2.1 CASH PURCHASE PRICE. Subject to the terms and conditions set forth in
this Agreement, the aggregate purchase price to be paid for the membership
interests of the Companies shall be THIRTY-EIGHT MILLION FIVE HUNDRED THOUSAND
DOLLARS AND NO/100 DOLLARS ($38,500,000.00) (the "Cash Purchase Price"), as
adjusted by the Working Capital Adjustment (as so adjusted, the "Adjusted Cash
Purchase Price"). Buyer and Seller acknowledge that a portion of the Purchase
Price will be wired or otherwise paid to the applicable creditors of the
Companies to discharge all Funded Debt.
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2.2 EARNOUT.
(a) In addition, $1,500,000.00 (the "Earnout Holdback") shall be
retained by Buyer and paid to Seller as set forth on Schedule 2.2(a)
attached hereto.
(b) In addition, $1,500,000.00 (the "Approval-Based Holdback") shall
be retained by Buyer and paid to Seller not more than fifteen (15) days
after Buyer (or an Affiliate thereof) has obtained all material permits,
licenses, consents, and approvals required by the North Carolina
Department of Environment and Natural Resources ("DENR") for the operation
of a transfer station/materials recovery facility at a site in the county
of Guilford or Forsyth, North Carolina approved and purchased by Buyer
(which approval and purchase of a site identified by Seller shall not be
unreasonably withheld or delayed); provided, however, that Seller may
elect to forego all payments pursuant to this Section 2.2(b) by notifying
(pursuant to Section 12.4 herein) Buyer of such election, and provided
further, that all obligations of Buyer pursuant to this Section 2.2(b)
shall terminate on the third anniversary of the Closing Date; and provided
further, that Buyer shall pay Seller the Approval-Based Holdback
regardless of whether Seller is in any way responsible for Buyer or any of
the Companies (or any Affiliates of any of the Companies) obtaining such
permits, licenses, consents, and approvals within said three-year period,
except if Seller is not responsible, to a material extent, for Buyer or
any of its Affiliates obtaining such permits, licenses, consents, and
approvals within such period, then the Approval-Based Holdback will be
reduced by the amounts of the reasonable costs incurred by Buyer to obtain
same, but in no event may such reduction exceed $100,000 so as to cause
Seller to receive less than $1,400,000. If, pursuant to the preceding
sentence, Buyer pays Seller less than $1,500,000, then Buyer will provide
such information as Seller may reasonably request that establishes the
amount of Buyer's cost to obtain the permit, license, consent or approval.
Fifty percent (50%) of the Approval-Based Holdback will be paid by Buyer
to Seller by wire transfer of immediately available funds to a bank
account designated by Seller, and fifty percent (50%) of the
Approval-Based Holdback will be paid by Buyer to Seller in the form of
Shares (as defined in Section (c) of Schedule 2.2(a)); provided, that the
number of Shares to be delivered to Buyer upon payment of the
Approval-Based Holdback shall be determined by dividing fifty percent
(50%) of the Approval-Based Holdback by the average of the closing price
per Share on each of the 10 Business Days immediately preceding the date
that Buyer (or an Affiliate thereof) has obtained all material permits,
licenses, consents, and approvals required by DENR as set forth above;
provided, further, that either Party, in its sole discretion, may elect to
pay, on the one hand, or receive, on the other hand cash in lieu of
Shares. In no event shall any payment of cash in lieu of Shares exceed
$750,000.00.
2.3 WORKING CAPITAL ADJUSTMENT. If the Companies' ratio of Current Assets
to Current Liabilities (each as defined in Article 11) is not *** to *** as of
the Closing Date, then the Purchase Price will be adjusted as follows:
(a) Prior to Closing, Seller shall estimate the Current Assets and
Current Liabilities of the Companies as of the Closing Date. In connection
therewith, Seller shall develop a worksheet and the basis for making the
computations of Current Assets and Current Liabilities (the "Worksheet")
that will also be used to determine the Actual Working Capital Adjustment.
If the estimated Current Liabilities exceed the estimated
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Current Assets, the amount of such excess shall be deducted on a *** basis
from the Adjusted Cash Purchase Price. If the estimated Current Assets
exceed the estimated Current Liabilities, the amount of such excess shall
be added on a *** basis to the Adjusted Cash Purchase Price. Any such
adjustment is referred to as the "Working Capital Adjustment." A form of
this Worksheet, reflecting Current Assets and Current Liabilities of the
Companies as of December 31, 2004, and supporting information is attached
hereto as Exhibit A for illustrative purposes only.
(b) Within 75 days after the Closing Date, Buyer shall deliver to
Seller a statement (the "Statement") setting forth what it believes are
the actual Current Assets and Current Liabilities as of the Closing Date,
together with the amount of the proposed Actual Working Capital
Adjustment. Buyer 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 Adjustment, and be accompanied with copies
of the work papers and back up materials used by Buyer in preparing the
Statement. If the Actual Working Capital Adjustment is a positive amount,
Buyer shall pay to Seller, within fifteen (15) days from the date of
delivery of the Statement, an amount equal to such positive amount. If the
Actual Working Capital Adjustment is a negative amount, Seller shall
promptly pay to Buyer, within fifteen (15) days from the date of delivery
of the Statement, an amount equal to such negative amount.
(c) Seller 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 WCA's and Buyer's accounting
personnel. If Seller disagrees with the calculation of the Actual Working
Capital Adjustment, it must deliver to Buyer, within 30 days after the
date Buyer delivered the Statement to Seller, a written description of
each such disagreement. Seller and Buyer 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, Seller and Buyer
have not resolved each such disagreement, then either Seller or Buyer will
be entitled to submit such disagreements to Xxxxx Xxxxxxxx LLP (the
"Resolution Accountants") so long as such submitting party provides
written notice of such submission to the nonsubmitting party. Within five
Business Days after receipt of such written notice, Seller and Buyer will
each deliver to the Resolution Accountants a written settlement offer
setting forth its calculation of the Actual Working Capital Adjustment
(each, a "Settlement Offer"). Buyer will grant (and will cause each of the
Companies to grant) to the Resolution Accountants reasonable access to
Buyer's and the Companies' books and records. WCA and Buyer will cause
their accounting personnel to discuss with the Resolution Accountants the
preparation of the Statement and the calculation of Actual Working Capital
Adjustment and to grant to the Resolution Accountants reasonable access to
the work papers of WCA's and Buyer's accountants and accounting personnel.
The Resolution Accountants 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 Adjustment by the
Resolution Accountants will be binding upon the Parties. The cost of the
services of the Resolution Accountants 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
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Liabilities) as finally determined by the Resolution Accountants. If both
Settlement Offers differ equally, such cost will be borne half by Seller
and half by Buyer. If any Party fails to deliver a Settlement Offer in
accordance with this Section 2.3(c), such cost will be borne by such
Party.
2.4 EXCLUDED ASSETS. Prior to Closing, the Companies will distribute to
Seller, and the Purchase Price will not relate to, the following property, which
property will not be directly or indirectly conveyed to Buyer (the "Excluded
Assets"):
(a) The CBI Magnum Force Grinder (SN: 0570), as more fully described
on that certain invoice (Invoice Number 2079) from X. X. Xxxxxxx of Texas,
Inc. to the Company dated September 8, 2003 (referred to in the
negotiations as the portable grinder).
(b) The land described in the attachments to Exhibit B attached
hereto that is currently titled in the name of MRR High Point, LLC. Such
distribution shall be made pursuant to a special warranty deed which shall
include certain restrictions, all as set forth in the form attached hereto
as Exhibit B (the "Deed").
(c) That certain Agreement for Purchase and Sale of Real Property
between High Point and Xxxxxx X. and Xxxx X. Xxxxxx dated on or around
March 3, 2003 and that certain Agreement for Purchase and Sale of Real
Property between High Point and Xxxxxx X. Xxxxxx dated on or around March
2003.
(d) All trade name, trademark and other rights to "MRR;" provided,
however, that Buyer may use "MRR" for a period not to exceed 120 days
following closing, so long as Buyer diligently pursues the substitution of
"WCA" for "MRR" during such period.
Notwithstanding anything to the contrary in this Agreement, the representations
and warranties in Article 3 shall not apply to Excluded Assets.
2.5 ALLOCATION OF PURCHASE PRICE. The Parties acknowledge and agree that
under the principles of Sections 301.7701-3(a) and (b)(ii) of the Treasury
Regulations the sale and assignment of the Membership Interests by Seller to
Buyer shall be treated for federal tax purposes as a sale of the assets of the
Companies by Seller to Buyer. The Purchase Price shall be allocated by the
Parties among the assets of the Companies in the manner required by Section 1060
of the Internal Revenue Code of 1986, as amended and consistent with Schedule
2.5 hereto (the "Allocation"), and the Parties hereby agree to adhere to the
Allocation in all reports, returns and other documents filed with any
governmental authority (including Internal Revenue Service Form 8594 and any
other filings required by Section 1060 of the Code); provided, however, that
nothing contained herein shall require any Party to contest or to litigate in
any forum any proposed deficiency or adjustment by any taxing authority or
agency which challenges the Allocation. Amounts of the Purchase Price allocated
to items included in Current Assets and Current Liabilities will be subject to
appropriate adjustment to reflect the final determination of Current Assets,
Current Liabilities and the Working Capital Adjustment in accordance with
Section 2.3.
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2.6 BREAK-UP FEE. If the transactions to be consummated at Closing are not
consummated on or before March 1, 2005, then WCA shall pay Seller, on or before
March 10, 2005 in immediately available funds, $1,250,000.00 in consideration
for the covenants and agreements of Seller set forth herein (the "Break-up
Fee"); provided, however, that WCA shall not be obligated to pay Seller the
Break-up Fee if, but only if, (a) the conditions set forth in Section 8.7
(determined without regard to (i) any condition or requirement that local
authorities may impose requiring DENR or any other state agency to issue any
permit, license, approval or franchise with respect to the transactions to be
consummated pursuant to, otherwise contemplated by, this Agreement prior to such
local authority issuing its permit, license, approval or franchise or (ii) any
issues relating to WCA or Buyer or their Affiliates) have not been satisfied or
waived in writing on or before Xxxxx 0, 0000, (x) Buyer terminates this
Agreement as a result of the condition in Section 8.1 having not been satisfied,
after giving Seller written notice to cure the nonsatisfaction of such
condition, and Seller fails to cure same within 30 days following such notice or
Seller declines to cure same, or (c) Buyer terminates this Agreement as a result
of the condition in Section 8.2 having not been satisfied, after giving Seller
written notice to cure the nonsatisfaction of such condition, and Seller fails
to cure same within 30 days following such notice or Seller declines to cure
same. Payment of the Break-up Fee as set forth herein shall constitute a mutual
release by the parties with respect to all matters and obligations set forth
herein.
2.7 EXTENSION OPTION. If the Closing has not occurred prior to or on March
1, 2005, Buyer will have the option, to be exercised by giving written notice to
Seller on or before 12:00 noon (CST) on March 1, 2005, to pay the following
amount(s) by the following payment date(s) in order to extend the March 1st
termination dates in Sections 10.5(b) to the following termination date(s): (a)
$1,500,000 (the "Deposit"), plus $25,000 by March 1, 2005 to extend until March
7, 2005; (b) an additional $35,000 by March 7, 2005 to extend until March 14,
2005; (c) an additional $45,000 by March 14, 2005 to extend until March 21,
2005; and (d) an additional $55,000 by March 21, 2005 to extend until April 1,
2005; provided, however, that if Buyer has notified Seller of nonsatisfaction of
a condition in accordance with Section 2.6(b) or (c) and Seller is attempting to
cure such nonsatisfaction and such cure period extends beyond March 1, 2005,
then Buyer will still need to notify Seller in writing on or before 12:00 noon
(CST) on March 1, 2005, of its exercise of any options to extend under this
Section 2.7, but Buyer will not have to pay the amounts in clauses (a) - (d)
above until the earlier of the date of cure or waiver of the applicable
condition, if Buyer does not close on such earlier date. All of the
aforementioned payments (the "Payments") shall be made by Buyer to Seller via
wire transfer of immediately available funds and shall be accompanied by written
notice of the extension. The extensions in clauses (b), (c) and (d) are also
conditioned upon the proper exercise of each preceding potential extension. If
Buyer exercises any or all of the extensions above, (i) the Payments (including
the Deposit) shall be nonrefundable, (ii) the Payments shall be in lieu of the
Break-Up Fee and Section 2.6 shall be of no force or effect, (iii) the Deposit
will be applied toward the Cash Purchase Price if the Closing occurs prior to or
on the date the termination date was extended to under the applicable clause
(a), (b), (c) or (d) above and (iv) if the Closing does not occur, the Payments
will constitute a mutual release by the parties with respect to all matters and
obligations set forth herein.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants 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 Companies is a limited liability company duly
organized and validly existing under the laws of the State of North
Carolina. Copies of the Articles of Organization of each Company
(certified by the Secretary of State of North Carolina) are attached
hereto as Schedule 3.1(a).
(b) Seller is a limited liability company, duly organized and
validly existing under the laws of the State of North Carolina.
3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS.
(a) This Agreement (i) 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
Seller enforceable in accordance with their terms, subject to (A)
applicable bankruptcy, insolvency or other similar laws relating to
creditor's rights generally and (B) general principles of equity,
regardless of whether considered in a proceeding in equity or at law, and
(ii) has been duly authorized in accordance with the Articles of
Organization and Operating Agreement of Seller.
(b) The execution and delivery of this Agreement by Seller does not,
and the consummation of the transactions contemplated hereby by Seller
will not except as set forth on Schedule 3.2 hereof, (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 Seller pursuant to
any provision of, any order, judgment, arbitration award, injunction,
decree, indenture, mortgage, lease, license, lien, or other agreement or
instrument to which Seller is a party or by which it is bound; or (iii)
violate or conflict with any provision of the Articles of Organization or
Operating Agreement of Seller as amended to the date hereof.
3.3 MEMBERSHIP INTERESTS OF THE COMPANY. Seller is the sole member and
owns and otherwise holds, the only membership interest in each of the Companies.
Each Membership Interest has been duly authorized and validly issued, is owned
of record and beneficially by Seller and is free and clear of all liens,
encumbrances and claims of every kind. All of the Membership Interests were
offered, issued, sold and delivered in compliance with all applicable state and
federal laws concerning the issuance of securities. Further, none of the
Membership Interests were issued in violation of the preemptive rights of any
past or present member.
3.4 OBLIGATIONS TO ISSUE OR SELL MEMBERSHIP INTERESTS. No right of first
refusal, option, warrant, call, conversion right or commitment of any kind
exists which obligates any
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Company to issue any of its authorized but unissued membership interests. In
addition, there are no (a) outstanding securities or obligations which are
convertible into or exchangeable for any membership interests or other
securities of any Company, or (b) contracts, arrangements or commitments,
written or otherwise, under which any Company is or may become bound to sell or
otherwise issue any membership interests or any other securities. Without
limiting the generality of the foregoing, there is no valid basis upon which any
person (other than any Company or Seller) may claim to be in any way the record
or beneficial owner of, or to be entitled to acquire (of record or
beneficially), any membership interest or other security of any Company, and no
person has made or, to Seller's Knowledge, threatened to make any such claim. In
addition, none of the Companies has any obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its membership interests or any
interests therein or to pay any dividend or make any distribution in respect
thereof.
3.5 SUBSIDIARIES. None of the Companies (a) presently owns, of record or
beneficially, or controls, directly or indirectly, any capital stock, securities
convertible into capital stock or any other equity interest in any corporation,
association or business entity; or (b) is, directly or indirectly, a participant
in any joint venture, partnership or other non-corporate entity.
3.6 PREDECESSOR STATUS; ETC. None of the Companies has been a subsidiary
or division of a corporation nor been a part of an acquisition which was later
rescinded.
3.7 FINANCIAL STATEMENTS.
(a) Seller has furnished to Buyer (and copies of which are attached
hereto as Schedule 3.7(a)): (i) each Company's balance sheet as of
December 31, 2003; (ii) each Company's income statement for the year
ending December 31, 2003; (iii) each of Recovery's and Reclamation's
balance sheet as of December 31, 2002; (iv) each of Recovery's and
Reclamation's income statement for the year ended December 31, 2002; and
(v) Reclamation's income statement for the year ended December 31, 2001.
The financial statements referred to in this subsection are herein
collectively referred to as the "Financial Statements."
(b) Seller has furnished to Buyer (and copies of which are attached
hereto as Schedule 3.7(b)): (i) each Company's balance sheet as of
November 30, 2004; and (ii) each Company's income statement for the period
beginning January 1, 2004 and ending November 30, 2004; provided, however,
that such interim financial statements are subject to normal, recurring
year-end adjustments and lack notes. The financial statements referred to
in this subsection are herein collectively referred to as the "Interim
Financial Statements."
(c) Each Company's Financial Statements and Interim Financial
Statements do as the date hereof and will as of the Closing Date, and each
Company's Post-Signing Financial Statements (as defined in Section 5.9)
will as of the Closing Date, fully and fairly set forth the financial
condition of such Company in all material respects as of the dates
indicated, and the results of its operations for the periods indicated,
and are in accordance with generally accepted accounting principles
consistently applied, except as
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otherwise stated therein or in any attachment to Schedules 3.7(a) and
3.7(b) attached hereto.
3.8 LIABILITIES AND OBLIGATIONS. Except as disclosed in the Financial
Statements and Interim Financial Statements and arising in due course since
November 30, 2004, there are no liabilities of any Company required to be
disclosed pursuant to generally accepted accounting principles. Schedule 3.8(a)
lists all liabilities of any Company that are required to be recorded as such
pursuant to generally accepted accounting principles as of the Closing, except
for Current Liabilities and liabilities that will be discharged or assumed by
Seller at Closing (all such liabilities, if any, shall be referred to herein as
the "Retained Liabilities"). At the time of the Closing, Seller will deliver to
Buyer on Schedule 3.8(b) an accurate list of all of the liabilities of each of
the Companies that are required to be recorded as such pursuant to generally
accepted accounting principles as of the moment immediately preceding the
Closing that are not Current Liabilities, Funded Debt or Retained Liabilities
(the "Seller Assumed Liabilities").
3.9 THIS SECTION INTENTIONALLY DELETED.
3.10 ACCOUNTS AND NOTES RECEIVABLE. Seller has delivered to Buyer on
Schedule 3.10 an accurate list as of November 30, 2004 of each Company's
accounts and notes receivable, including receivables from and advances to Seller
and amounts which are not reflected in the most recent available balance sheet.
Seller shall provide Buyer with an aging of all accounts and notes receivable
showing amounts due in 30-day aging categories for each Company.
3.11 PERMITS AND INTANGIBLES. Seller has delivered to Buyer on Schedule
3.11 an accurate list and summary description of all material permits, titles
(including motor vehicle titles and current registrations), fuel permits,
licenses, orders, approvals, franchises, certificates, trademarks, trade names,
patents, patent applications, copyrights and similar rights of approvals owned
or held by each Company, all of which are now valid, in good standing and in
full force and effect. Except as set forth on Schedule 3.11, such permits,
titles, fuel permits, licenses, orders, approvals, franchises, certificates,
trademarks, trade names, patents, patent applications, copyrights and similar
rights of approvals are adequate for the operation of each Company's business in
all material respects, as constituted immediately prior to the Closing. Except
as set forth on Schedule 3.11 Seller has delivered to Buyer a description and
copies as of the date of this Agreement, of all of its material records,
reports, notifications, certificates of need, permits, pending permit
applications, and engineering studies filed or submitted or required to be filed
or submitted to governmental agencies, other governmental approvals or
applications for approval and of all material notifications from such
governmental agencies.
3.12 PERSONAL PROPERTY, OPTIONS AND LEASES. Seller has delivered to Buyer
on Schedule 3.12 an accurate list and a description as of the date hereof of all
material personal property, leases for equipment and real properties on which
are situated buildings, warehouses, workshops, garages and other structures used
in the operation of its business, and any option to purchase real property. All
leases set forth on Schedule 3.12 are in full force and effect and constitute
valid and binding agreements of Companies and, to Seller's Knowledge, the
parties (and their successors) thereto in accordance with their respective
terms. All fixed assets used by each Company in the operation of its business
are either owned by such Company or leased under an agreement indicated on
Schedule 3.12. Except as described on Schedule 3.12, each Company owns, leases
or otherwise has the rights to use all of the assets and properties it uses in,
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and that are material to, its business. Except for Permitted Exceptions and as
otherwise described on Schedule 3.12, there are no liens, mortgages, charges,
restrictions, pledges, security interests, options, leases, claims, easements,
encroachments or encumbrances on any property or assets owned or used by any
Company.
3.13 CUSTOMERS; CONTRACTS AND COMMITMENTS.
(a) Schedule 3.13(a) sets forth a true and complete list of all of
the Companies' written contracts, written agreements and other written
instruments that will be outstanding immediately after the Closing (and
not discharged or otherwise terminated or assumed by Seller as a Seller
Assumed Liability at the Closing) (a) by which any Company is bound or
affected or (b) to which any Company is a party or by which any Company is
bound (the "Contracts"), including but not limited to: (i) arrangements
relating to providing solid waste collection, transportation or disposal
services to any person or entity; (ii) licenses, permits, insurance
policies and other arrangements concerning or relating to real estate;
(iii) employment, consulting, collective bargaining or other similar
arrangements relating to or for the benefit of current, future or former
employees, 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;
(ix) arrangements limiting or restraining any Company or Seller from
engaging or competing in any lines of business or with any person; (x)
documents granting a power of attorney; and (xi) any other agreements or
arrangements that are material to such Company's business, as presently
constituted.
(b) Except as set forth on Schedule 3.13(b): (i) this Agreement will
not give rise to the right of any party to terminate or modify any
contract or agreement, and (ii) none of the Companies is bound by or
subject to (and no assets or properties of any Company are bound by or
subject to) any arrangement with any labor union.
(c) Except as set forth on Schedule 3.13(c), none of the Companies
is a party to any oral agreement that will be binding at or after the
Closing.
3.14 REAL PROPERTY. Except as set forth on Schedules 3.14(a) and 3.14(d)
attached hereto:
(a) Each Company owns good and marketable title to its real property
described on Schedule 3.14(a) (the "Company's Real Property," which does
not include any of the Excluded Assets or the Leased Property), free and
clear of any lien, mortgage, charge, restriction, pledge, security
interest, option, lease, claim, easement, encroachment or encumbrance
("Lien"), other than Permitted Exceptions, and no person has an option to
purchase all or any portion of such real property;
(b) Except for Permitted Exceptions, no Company's Real Property is
subject to any pending or, to Seller's Knowledge, threatened condemnation
Proceedings against all or part thereof;
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(c) None of the Companies has ever granted any person or entity a
lease, sublease, license, concession, or other right, written or oral, to
use or occupy such Company's Real Property, nor has any Company ever
entered into an option, right of first refusal, or other agreement that
would permit any person or entity to purchase all or part of such
Company's Real Property; and
(d) Except for the leased property described on Schedule 3.14(d)
(the "Leased Property"), none of the Companies has ever owned, occupied,
or conducted operations on any lands, other than such Company's Real
Property.
3.15 INSURANCE. Seller has delivered to Buyer on Schedule 3.15 an accurate
list of all insurance policies on which any Company is a named insured. With
respect to such insurance policies and except as set forth on Schedule 3.15, (a)
there are no open claims and (b) there are no claims against any Company listed
on its insurance loss runs since December 18, 2002. Such insurance policies are
currently in full force and effect and such policies (or comparable policies)
shall remain in full force and effect through the Closing Date. No Company's
insurance has ever been canceled, and none of the Companies has ever been denied
coverage.
3.16 EMPLOYMENT MATTERS. Except as set forth on Schedule 3.16, none of the
Companies has ever had any employees.
3.17 PARACHUTE PROVISIONS. None of the Companies has ever been a party to
any employment agreements or any other agreements containing "parachute"
provisions, or any deferred compensation agreements.
3.18 BENEFIT PLANS; ERISA COMPLIANCE. Except as set forth on Schedule
3.16, none of the Companies have ever had any employees. Neither Seller nor any
ERISA Affiliate of Seller maintains or contributes to, and is not obligated to
maintain or contribute to, any defined benefit plan or any multi-employer plan
subject to Title IV of ERISA.
3.19 CONFORMITY WITH LAW.
(a) Each Company has complied in all material respects with, and
none of the Companies is in material default under, any law, rule,
ordinance, ruling, directive, or regulation or under any order, award,
judgment or decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over such Company or any of its assets
or businesses; there are no claims, actions, suits or Proceedings, pending
or, to Seller's Knowledge, threatened, against or affecting any Company,
at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over any Company or its business; and
to Seller's Knowledge no notice of any claim, action, suit or Proceeding,
whether pending or threatened, has been received by any Company.
(b) Each Company has conducted and is conducting its business in
material compliance with 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 all such laws, rules, ordinances,
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decrees and orders relating to intellectual property protection,
transportation, wage and hour, antitrust matters, consumer protection,
currency exchange, 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.
(c) None of the Companies has received any notification of any
asserted present or past unremedied failure by it to comply with any of
such laws, rules, ordinances, decrees or orders.
3.20 TAXES. Each Company has timely filed all requisite federal and other
Tax Returns for all fiscal periods ended on or before the Closing Date; there
are no open years, examinations in progress or claims against any Company for
federal and other Taxes (including penalties and interest) for any period or
periods prior to and including the Closing Date; and, except as set forth on
Schedule 3.20, no notice of any claim, whether pending or threatened, for Taxes
has been received. None of the Companies is a party to any Tax allocation or
sharing agreement (i.e., any agreement or arrangement for the payment of Tax
liabilities or payment for Tax benefits with respect to a consolidated, combined
or unitary Tax Return which includes any Company); there are no requests for
rulings in respect of any Tax pending by any Company with any tax authority;
except as set forth on Schedule 3.20, no penalty or deficiency in respect of any
Taxes which has been assessed against any Company remains unpaid; and, except as
set forth on Schedule 3.20, all taxes (whether or not shown on any Tax Return)
for all fiscal years ending on or before November 30, 2004 have been fully paid
or appropriate deposits or adequate accruals have been made therefor in the
Financial Statements of each Company. The amounts shown as accruals for Taxes on
the Interim Financial Statements of each Company as of November 30, 2004
delivered to Buyer as a part of Schedule 3.7 are sufficient for the payment of
all Taxes of the kinds indicated (including penalties and interest) for all
fiscal periods ended on or before the Closing Date, each Company has reserved an
amount sufficient to pay all such Taxes, and the working capital of each Company
is sufficient to pay any such Tax applicable to it. Copies of (a) any tax
examinations, (b) extensions of statutory limitations, and (c) the federal and
local income tax returns and franchise tax returns of each Company for the last
three (3) fiscal years, or such shorter period of time as each Company has
existed, are attached hereto as Schedule 3.20. For purposes of this Section
3.20, "Tax" shall mean any material amount of United States or other federal,
state, provincial, local or foreign income, gross receipts, property, sales,
goods and services use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge, together with any material amount of interest or penalty, imposed by any
governmental authority. "Tax Return" shall mean any return, report or similar
statement required to be filed with respect to any Tax (including any attached
schedules), including any information return, claim for refund, amended return
and declaration of estimated Tax.
3.21 THIS SECTION INTENTIONALLY DELETED.
3.22 GOVERNMENT CONTRACTS. Except as set forth on Schedule 3.22, none of
the Companies is now, or has ever been, a party to any governmental contract
subject to price redetermination or renegotiation.
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3.23 ABSENCE OF CHANGES. Except for the distribution and transfer of the
Excluded Assets on or before the Closing Date and except as set forth in
Schedule 3.23, since November 30, 2004, there has not been:
(a) any damage, destruction or loss (whether or not covered by
insurance), change in zoning, or, to Seller's Knowledge, change in any
law, rule, regulation, ordinance, or condition or term of any permit,
materially adversely affecting the properties or business of any Company;
(b) any change in the authorized or outstanding membership interests
of any Company or any grant of any options, warrants, calls, conversion
rights or commitments;
(c) any declaration or payment of any dividend or distribution in
respect of the membership interests or any direct or indirect redemption,
purchase or other acquisition of any of the membership interests of any
Company;
(d) to Seller's Knowledge, any proposed law or regulation or any
event or condition of any character, materially adversely affecting any
Company's business, as presently constituted;
(e) any sale or transfer, or any agreement to sell or transfer, any
material assets, property or rights of any Company to any person;
(f) any cancellation, or agreement to cancel without receiving full
payment therefor, any material indebtedness or other material obligation
owing to any Company;
(g) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in the assets, property or
rights of any Company or requiring consent of any party to the transfer
and assignment of any such assets, property or rights;
(h) any purchase or acquisition, or agreement, plan or arrangement
to purchase or acquire, any material property, rights or assets of any
Company;
(i) any waiver of any material rights or claims of any Company;
(j) any material breach, amendment or termination of any material
contract, agreement, license, permit or other right to which any Company
is a party; or
(k) any material transaction by any Company outside the ordinary
course of its business.
3.24 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Seller has delivered to Buyer
on Schedule 3.24 an accurate list as of the date of this Agreement, of:
(a) the name of each financial institution in which each Company has
accounts or safe deposit boxes;
(b) the names in which such accounts or boxes are held;
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(c) the type of accounts; and
(d) the name of each person authorized to draw thereon or have
access thereto.
No person, corporation, firm or other entity holds a general or special
power of attorney from any Company.
3.25 PROPRIETARY RIGHTS. Except as set forth on Schedule 3.25, none of the
Companies owns or has any right or interest in any material item of Intellectual
Property, or any license or assignment with respect thereto. None of the
Companies has granted to any third party a license or other authorization to use
any material item of Intellectual Property of such Company, and no third party
owns any ownership interest in or holds any claim, lien or other encumbrance
other than Permitted Exceptions, on such Company's Intellectual Property.
Neither of the Companies nor Seller has received any notification that any
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; and there is no pending or,
to Seller's Knowledge, threatened claim with respect to any such infringement,
unauthorized use or misappropriation. None of the Companies owes any third party
royalties for the use of Intellectual Property.
3.26 THIS SECTION INTENTIONALLY DELETED.
3.27 RELATIONS WITH GOVERNMENTS. None of the Companies, and to Seller's
Knowledge no member, manager, director, officer, agent, employee or other person
acting on behalf of any Company, has used any funds of any 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. None of the Companies, and to Seller's
Knowledge no member, manager, director, officer, agent, employee or other person
acting on behalf of any Company, has accepted or received any improper or
unlawful contributions, payments, gifts or expenditures.
3.28 RELATED PARTY TRANSACTIONS. Except as set forth on Schedule 3.28,
neither (a) any past or present officer, manager or member of any of the
Companies, nor (b) Seller, nor (c) any corporation, partnership, trust or other
entity of which any such past or present officer, manager or member of any of
the Companies, has a direct or indirect interest or is a director, officer,
member, manager, stockholder, partner or trustee, is or has ever been a party,
directly or indirectly, to any material transaction with any Company, including
any agreement or other arrangement providing for the furnishing of material
services by or to any Company or the rental of any property from or to any
Company, or otherwise requiring or contemplating any material payments by or to
any Company. Except as set forth in Schedule 3.28, Seller does not have any
claims against, or is owed any amounts (including, any bonuses, commissions,
royalties, rentals or other payments) by, any of the Companies.
3.29 ENVIRONMENTAL MATTERS. To the Knowledge of Seller, Seller has made
available to Buyer all of the correspondence, agreements, notices or other
documents it has in its possession directly related to the items set forth on
Schedule 3.29. To the Knowledge of Seller,
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Schedule 3.29 also contains a list of all sites used by any of the Companies to
dispose of C&D waste.
Except as set forth in Schedule 3.29 to the Knowledge of Seller:
(a) Each Company and any 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 Company or any of its organizational
predecessors (individually, any "Business Facility," and collectively, the
"Business Facilities") and all operations of each Company and its Business
Facilities, are in material compliance and during their ownership or
operation by Seller have been in material compliance with all applicable
Environmental Laws;
(b) each Company and its Business Facilities have obtained and are
in material compliance with all 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 Company as currently conducted (collectively, "Environmental
Permits"), and Schedule 3.29 contains an accurate and complete listing of
all of its Business Facilities and all of its Environmental Permits of
such Company;
(c) during the term of each Company's ownership of or control of its
Business Facilities ("Ownership Term"), such Company and its Business
Facilities, and any operations thereon, have not been and are not
currently subject to an unresolved Environmental Claim;
(d) there are no Environmental Claims or investigations pending or
threatened, involving the release or threat of release of any Polluting
Substances from or on (i) any Business Facility of any Company, or (ii)
any other property where Polluting Substances generated by any Company or
originating from any Business Facility of any Company have been recycled,
stored, treated, released or disposed, or (iii) any property to which
Polluting Substances were transported by any Company or (iv) any property
on which any Company performs or performed or may be required to perform
Remediation;
(e) there are no Polluting Substances on any Business Facility of
any Company in an amount or concentration which would require reporting to
any governmental authority by any Company or Remediation by any Company to
comply with the requirements of Environmental Laws and which have not been
so reported;
(f) none of the Companies 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;
(g) there are no Environmental Claims for which any 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;
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(h) none of the Companies is, as a result of the operation or
condition of any Business Facility of such Company or the businesses
thereon as conducted prior to 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 such 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;
(i) except as referenced in the Environmental Permits, there are no
obligations, undertakings or liabilities arising out of or relating to
Environmental Laws which any Company has agreed to by contract;
(j) there are no, and there have never been any, storage tanks on or
under any Business Facility of any Company, and any Business Facility of
any Company containing such tanks during the Ownership Term has been
remediated, to the extent required by, and in compliance with all
Environmental Laws;
(k) no drinking water intakes or water xxxxx exist within a two-mile
radius of any Business Facility of any Company, which have been impacted
by the operation of any Company and which could have an adverse effect on
the Environmental Permits; and
(l) there are no polychlorinated biphenyls on or in the Properties
or any Business Facility of any Company or any equipment or fixtures
thereon.
This Section 3.29 sets out all of Seller's representations and warranties
concerning or relating to environmental matters, including its representations
and warranties concerning or relating to Disposal, Environmental Claims,
Environmental Laws, Polluting Substances and Remediation and supersedes and
otherwise preempts all other provisions of this Article 3 (including Sections
3.2, 3.8, 3.11, 3.19 and 3.23) related to the same subject matter.
3.30 NO BROKER'S OR FINDER'S FEES. No agent, broker, investment banker,
person or firm has acted directly or indirectly on behalf of Seller or any
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.
3.31 LITIGATION. Except as set forth in Schedule 3.31, there are no
Proceedings pending or, to the Knowledge of Seller, threatened against any
Company, challenging the validity or propriety of the transactions contemplated
by this Agreement or any permit or other governmental authorization and there is
no outstanding order, writ, injunction or decree of any court, administrative
agency, governmental body or arbitration tribunal against any Company or its
assets. Set forth on Schedule 3.31 are all Proceedings during the last five
years to which any Company was a party, or which, to the Knowledge of Seller,
were threatened against any Company.
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3.32 INCORPORATION OF OTHER DISCLOSURES. The schedules referenced in this
Article 3 are located in the those certain 5 binders reviewed by the Parties in
the offices of Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P on the date hereof;
provided, that references to any schedule (other than Schedule 3.8(b)) to this
Agreement shall also include all information contained in any other schedule to
this Agreement or any other provision of this Agreement.
3.33 THE MORE SPECIFIC REPRESENTATIONS AND WARRANTIES CONTROL. No matter
is intended to be covered by more than one representation and warranty. If not
for this Section 3.33 two or more representations and warranties could cover the
same matter, the representation and warranty that covers the matter more
specifically shall control and preempt the more general of the representations
and warranties with respect to such matter. Notwithstanding anything in Section
3.2, 3.11, 3.19 or 3.29 or any other provision in this Agreement to the
contrary, the Seller and the Companies shall not be deemed to be in breach of
any provision of this Agreement to the extent any alleged breach relates to the
permits, licenses or approvals described in Sections 8.6 or 8.7
4. REPRESENTATIONS OF WCA AND BUYER
Buyer, WCA or Buyer and WCA (jointly and severally), as the case may be,
represent and warrant that all of the following representations and warranties
are true as of the date of this Agreement and shall be true as of the Closing
Date.
4.1 DUE ORGANIZATION.
(a) Buyer and WCA jointly and severally represent and warrant that
Buyer is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware.
(b) WCA represents and warrants that WCA is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
4.2 EXECUTION.
(a) Buyer and WCA jointly and severally represent and warrant that
(i) the execution, delivery and performance of this Agreement and the
transactions contemplated hereby are duly and validly authorized by Buyer,
and (ii) this Agreement constitutes the legal, valid and binding
obligation of Buyer enforceable in accordance with its terms.
(b) WCA represents and warrants that (i) the execution, delivery and
performance of this Agreement and the transactions contemplated hereby are
duly and validly authorized by all requisite corporate action on the part
of WCA, and (ii) this Agreement constitutes the legal, valid and binding
obligation of WCA enforceable in accordance with its terms.
4.3 CONFORMITY WITH LAW.
(a) Buyer and WCA jointly and severally represent and warrant that
(i) Buyer has the requisite power and right to enter into and perform this
Agreement and the
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transactions contemplated herein and (ii) neither Buyer's execution of
this Agreement nor the consummation of the transactions contemplated
herein violate or conflict with (A) any law, rule, regulation, ordinance
or decree applicable to Buyer, (B) any provision of Buyer's limited
partnership agreement, certificate of limited partnership or other
organizational documents, or (C) any material agreement or instrument to
which Buyer is a party or by which it is bound.
(b) WCA represents and warrants that (i) WCA has the corporate power
and right to enter into and perform this Agreement and the transactions
contemplated herein and (ii) neither WCA's execution of this Agreement nor
the consummation of the transactions contemplated herein violate or
conflict with (A) any law, rule, regulation, ordinance or decree
applicable to WCA, (B) any provision of WCA's certificate of
incorporation, bylaws and other organizational documents, or (C) any
material agreement or instrument to which WCA is a party or by which it is
bound.
4.4 NO BROKER'S OR FINDER'S FEES. Buyer and WCA jointly and severally
represent and warrant that no agent, broker, investment banker, person or firm
has acted directly or indirectly on behalf of Buyer or WCA 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.
4.5 ACCESS TO INFORMATION; COUNSEL. Buyer and WCA jointly and severally
represent and warrant that Buyer and WCA have been provided access to
information concerning each Company, and have had the opportunity to consult
with counsel regarding this Agreement. Notwithstanding the foregoing, Buyer's
investigation and representation by counsel shall not limit or diminish Buyer's
reliance upon the representations, warranties and covenants set forth in this
Agreement.
5. COVENANTS OF THE PARTIES
5.1 NOTICES AND APPROVALS. Seller on the one hand, and Buyer and WCA on
the other, shall timely give all notices and request all approvals and
assignments that may be required under applicable law or any of the permits,
agreements, orders or other instruments to which any Company on the one hand,
and Buyer and WCA on the other, is bound on the Closing Date, in connection with
the transactions to be consummated under this Agreement. The parties will
cooperate to change the names of the Companies by substituting "WCA" for "MRR."
5.2 ACCESS TO INFORMATION.
(a) On and after the date of this Agreement through the Closing
Date, Seller will furnish to Buyer such information with respect to each
Company as Buyer shall reasonably request. Without limitation of the
foregoing, Seller shall (i) afford to Buyer and its officers, employees,
accountants, consultants, counsel and other authorized representatives
reasonable access, throughout the period prior to the earlier of the
Closing Date or the date this Agreement is terminated pursuant to Section
10.5 hereof, to each Company's plants, properties (including each
company's Real Property), and books and records relating to each Company;
(ii) use its best efforts to cause its representatives to
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furnish to Buyer and its authorized representatives such additional
financial and operating data and other information as to each Company as
Buyer or its duly authorized representatives may from time to time
reasonably request; and (iii) afford Buyer and its representatives
reasonable access, throughout the period prior to the Closing Date, to
each Company's present and potential customers relating to the Companies'
respective businesses, such that Buyer may conduct such due diligence
investigation relating to the customer relations as Buyer deems reasonably
necessary or appropriate.
(b) Buyer and WCA covenant and agree that all due diligence
materials will be used solely for the purposes of assessing the Companies
in connection with Buyer's possible acquisition thereof pursuant to this
Agreement, and that any other use shall be strictly prohibited. The
parties acknowledge that a certain Confidentiality and Non-disclosure
Agreement dated November 23, 2004 was executed by WCA and Seller and
remains in full force and effect.
5.3 THIS SECTION INTENTIONALLY DELETED
5.4 COMPLIANCE WITH LAWS. Seller and Buyer shall comply with all
applicable laws as may be required for the sale and transfer of the Companies
and for the performance of all other acts and things contemplated by this
Agreement.
5.5 REASONABLE EFFORTS. Each of the parties hereto agrees to use
reasonable efforts to take or cause to be taken all actions, and to do or cause
to be done all things reasonably necessary, proper or advisable to satisfy
promptly all conditions required hereby to be satisfied by such party in order
to consummate and make effective the transactions contemplated hereby. WCA and
Buyer shall use their commercially reasonable efforts to obtain additional
financing necessary to consummate this transaction prior to Closing. Between the
date hereof and Closing, Seller, WCA and Buyer shall fully cooperate with each
other and the applicable governmental authorities to try to satisfy the
conditions in Sections 8.6 and 8.7 and shall promptly provide all requested
information and attend all meetings that Seller or Buyer, as the case may be,
reasonably deems to be appropriate in connection with satisfying such
conditions.
5.6 NOTIFICATION. Seller shall notify Buyer, and Buyer shall immediately
notify Seller, of any litigation, arbitration or administrative proceeding
pending or, to its knowledge, threatened against any Company, Seller or Buyer,
as the case may be, which challenges the transactions contemplated hereby. If
Seller becomes aware prior to Closing of any fact or condition that may
constitute a breach of any representation or warranty of Seller or may
constitute a breach of any representation or warranty of Seller if such
representation or warranty were made on the date of the occurrence or discovery
of such fact or condition, then Seller will promptly notify Buyer of such fact
or condition, amend any affected schedules to the Agreement and deliver such
amended schedules to Buyer. If Buyer becomes aware prior to Closing of any fact
or condition that may constitute a breach of any representation or warranty of
Seller or Buyer or may constitute a breach of any representation or warranty of
Seller or Buyer if such representation or warranty were made on the Closing Date
or the date of the occurrence or discovery of such fact or condition, then Buyer
will promptly notify Seller of such fact or condition.
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5.7 AUDIT. Beginning on the date hereof, Buyer, at its own cost and
expense, may engage external auditors to audit any Company's financial records
(including up to three years of historical data). Seller, to the extent
reasonable and appropriate and otherwise consistent with the terms of this
Agreement, shall cooperate with such audit and will assist in the completion of
such audit, including by providing such documents that are necessary to complete
the audit and by making representations regarding the Companies' businesses and
the Companies' financial records relating to any period preceding the Closing,
but only to the extent that such actions are requested in writing by, or at the
direction of, WCA's external auditors. Buyer shall pay Seller for all of the
out-of-pocket expenses incurred by Seller in complying with this Section 5.7.
5.8 TAX RETURNS. With respect to any Tax Return of a Company, any audit or
other examination by any governmental authority after the Closing Date with
respect to that Company which includes any period ending on or before the
Closing Date, Buyer shall consult with Seller and Seller shall provide Buyer
such assistance as reasonably necessary in connection with the preparation of
such Tax Return, audit or other examination or any judicial or administrative
proceeding relating to that Company's liability for Taxes for such period, and
Seller will provide Buyer with any nonconfidential records or information
related to the Companies that it may have that may be relevant to any of the
foregoing. Seller, however, shall not be obligated to incur more than de minimis
expense with respect to providing such assistance.
5.9 FINANCIAL INFORMATION. Seller shall provide to Buyer (a) by January
31, 2005 the balance sheet and list of accounts and notes receivable for each
Company as of December 31, 2004 and the income statement for each Company for
the year ended December 31, 2004, and (b) by February 21, 2005 the balance sheet
and list of accounts and notes receivable for each Company as of January 31,
2005 and the income statement for each Company for the period beginning January
1, 2005 and ending January 31, 2005; provided, however, that all such statements
and lists will be subject to normal, recurring year-end adjustments and will
lack notes. The financial statements referred to in this Section 5.9 are herein
collectively referred to as the "Post-Signing Financial Statements."
5.10 EMPLOYEES. Buyer shall offer employment to all employees of Seller
who work at any of the Company sites (except Xxx Xxxxx) at wages no less
favorable to the employees than their current employment terms, and Seller shall
provide such assistance in connection therewith as Buyer shall reasonably
request.
6. NONCOMPETITION
6.1 PROHIBITED ACTIVITIES:
(a) Except as set forth in the following paragraphs (b) and (e) and
except to the extent permitted in the disposal agreement between Buyer and
X. X. Xxxxxxx (or any of their Affiliates), neither Seller nor any of the
Principals (the "Restricted Parties"), shall for any reason whatsoever,
directly or indirectly, for himself or on behalf of or in conjunction with
any other person, company, partnership, corporation or business of
whatever kind or nature, whether as an officer, director, shareholder,
owner, member, partner, joint venturer, lender, whether as an employee,
independent contractor, consultant, advisor, or otherwise, or as a sales
representative of, engage in the operation of, or own a direct or indirect
interest in, a landfill that accepts the disposal of loads of
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C&D waste or a transfer station for C&D waste or a material reclamation
center for C&D waste and that is located within *** (the "Non-Compete
Area"). The parties, however, acknowledge and agree that the Restricted
Parties (or one or more of their Affiliates) may engage in the operation
of or own a direct or indirect interest in MSW, LCID or other landfills
(but excluding any LCID landfill that is greater than 2 acres in size, if
it is opened after Closing), transfer stations and material reclamation
centers in which incidental amounts of C&D waste may be discarded,
transferred, reclaimed or recycled as part of (and commingled with) other
waste that is not C&D waste, but any such landfills, transfer stations or
material reclamation centers in the Non-Compete Area may not receive for
disposal, transfer, reclamation or recycling any loads that are entirely
or primarily comprised of C&D waste.
(b) Notwithstanding Section 6.1(a), Seller (including through an
Affiliate thereof) may pursue and obtain the necessary permits and
approvals from the applicable governmental agencies and authorities to
develop, own and operate one or more Designated Sites (as defined in
6.1(c)) and develop, own and operate such Designated Sites, if within one
year after the Trigger Date, Seller offers to sell to Buyer (and Seller
shall be required to so offer) Seller's interest in the Designated Site
and related assets for a price, to be paid in immediately available funds,
equal to the sum of (A) the product of *** multiplied by the Designated
Site's projected annual EBITDA (as projected by Seller in good faith),
which amount shall be paid to Seller at the time of consummation of the
purchase (the "Initial Payment"), and (B) an amount equal to (i) the
product of *** multiplied by the Designated Site's actual EBITDA for the
Test Period, minus (ii) the Initial Payment, which amount shall be paid
within 90 days after the end of the Test Period. All owners of any
Designated Site shall be the Seller and its Affiliates. The "Trigger Date"
means the later of (i) the date such Designated Site opens to the public
or (ii) if Seller acquires an operating Designated Site, the date of such
acquisition. "Test Period" means any 12 consecutive month period (as
selected by Seller in its sole discretion) during the 30-month period
beginning on the Trigger Date; provided, that Seller shall notify Buyer of
its selection of the Test Period within 60 days following the beginning of
the Test Period (and if no such notification occurs, the default Test
Period shall be the last 12 months of the aforementioned 30-month period).
If Buyer accepts Seller's offer (which acceptance must be within 60 days
after the date such offer is made), Buyer will pay Seller the purchase
price on such conditions as may be set forth in a purchase agreement to be
entered into by the parties. If Buyer declines, refuses or fails to reach
agreement with Seller for the purchase of a Designated Site described in
this Section 6.1(b), then such Designated Site and the operations thereof
will cease to be subject to Section 6.1(a) and the restrictions against
competition provided therein.
(c) "Designated Site" means: (a) one landfill in either *** or ***
County, North Carolina, together with any related transfer stations or
material reclamation centers, in either such county; (b) one landfill in
*** County, North Carolina, together with any related transfer stations or
material reclamation centers, in such county; and (c) any transfer station
or material reclamation center in ***, *** or *** County, North Carolina
that is not related to a landfill owned or operated by Seller in such
county.
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(d) During the Restricted Period, Seller will not sell any
Designated Site to any person or entity other than to Buyer or any
Affiliate thereof.
(e) Notwithstanding the foregoing provisions of this Section 6.1
each Restricted Party may (i) be a passive investor owning no more than
five percent (5%) of the outstanding equity securities of any corporation
or other entity the equity securities of which are listed on a national
securities exchange or traded on the NASDAQ National Market System (or the
price of such securities is quoted at least once a week or in Wall Street
Journal or New York Times) and with which such persons have no other
connection and/or (ii) invest in or act as an employee of, consultant for,
or hold another position with, WCA;
(f) The Restricted Parties shall not, and each of them shall use
reasonable efforts to cause each of their Affiliates not to, offer to
employ any person who was an employee of Seller on any of the *** before
the Closing Date and who is hired by Buyer, WCA or any of their Affiliates
within *** of the Closing if that person has been an employee of Buyer,
WCA or any of their Affiliates within one (1) year prior to the time such
offer is made;
(g) With respect to Buyer's (or any of its Affiliates') operations
of the Companies (to the extent they relate to the collection,
transportation and disposal of C&D waste in the Non-Compete Area (the
"Purchased Business")), the Restricted Parties shall not, and each of them
shall use reasonable efforts to cause his Affiliates not to, engage or
participate in any effort or act to solicit or induce any customer,
supplier, associate, employee, sales or other agent, independent
contractor, or other person in a business relationship with any of the
Companies or which has been a customer, supplier, associate, employee,
sales or other agent, independent contractor, or other person in a
business relationship with any of the Companies within three (3) years
prior to that time, to discontinue such relationship with any of the
Companies; provided, however that this Section 6.1(e) relates only to the
Purchased Business and not with respect to any customer, supplier, etc. of
any of the Companies on matters that do not directly pertain to the
Purchased Business;
(h) For the avoidance of doubt, the parties agree that the
restrictions set forth in this Article 6 shall not apply to any landfill,
transfer station or material reclamation centers owned or operated by
Seller or any Affiliate thereof in ***, North Carolina.
(i) The time period for the restrictions set forth in this Article 6
shall be *** after the Closing Date (the "Restricted Period").
6.2 DAMAGES. The Restricted Parties each acknowledge that the damages that
would be suffered by Buyer as a result of any breach of the provisions of this
Article 6 may not be calculable and that an award of a monetary judgment for
such a breach would be an inadequate remedy. Consequently, Buyer shall have the
right, in addition to any other rights it may have, to obtain, in any court of
competent jurisdiction, injunctive relief to restrain any breach or threatened
breach of any provision of this Article 6 or otherwise to specifically enforce
any of the provisions hereof, and Buyer shall not be obligated to post a bond or
other security in seeking
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such relief. This remedy is in addition to damages directly or indirectly
suffered by Buyer and reasonable attorneys fees.
6.3 INDEPENDENT COVENANT. All of the covenants contained in this Article 6
shall be construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of any Restricted
Party against Buyer, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by Buyer or the Companies of such
covenants.
6.4 MATERIALITY AND ENFORCEABILITY. The Restricted Parties each agree that
the covenants contained in this Article 6 are a material and substantial part of
this transaction. The parties hereto agree that a portion of the consideration
paid by Buyer pursuant to this Agreement is in exchange for the covenants
contained in this Article 6, and therefore, the duration and area for which the
covenants in this Article 6 are to be effective are reasonable. In the event
that any court finally determines that the time period or the geographic scope
of any such covenant is unreasonable or excessive and any covenant is to that
extent made unenforceable, the parties hereto agree that the restrictions of
this Article 6 shall remain in full force and effect for the greatest time
period and within the greatest geographic area that would not render it
unenforceable. The parties intend that each of the covenants in Article 6 shall
be deemed to be a separate covenant.
7. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
7.1 SURVIVAL AND TIME LIMITATIONS. All representations, warranties,
covenants and agreements of the parties in this Agreement will survive the
Closing. If the Closing occurs:
(a) The covenants set forth in Article 6 shall survive for a period
of *** after the Closing, and the remedies for any breach thereof shall be
cumulative, and shall not be limited by the terms of Section 7.2 herein.
Accordingly, if one Principal breaches his covenants to Buyer under
Article 6, that Principal, and only that Principal, will be liable to
Seller with respect to that breach;
(b) Seller will have no liability with respect to any claim for any
breach or inaccuracy of any representation or warranty in this Agreement,
or any covenant or agreement in this Agreement to be performed or complied
with prior to or on the Closing Date, unless Buyer notifies Seller of such
a claim on or before the date that is 12 months after the Closing Date,
except this period shall be extended to 48 months after the Closing Date
with respect to the representations and warranties of Seller provided in
Section 3.29 (Environmental);
(c) Buyer will have no liability with respect to any claim for any
breach or inaccuracy of any representation or warranty in this Agreement,
or any covenant or agreement in this Agreement to be performed and
complied with prior to the Closing Date, unless Seller notifies Buyer of
such a claim on or before the date that is 12 months after the Closing
Date;
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(d) If Buyer or Seller, as applicable, provides proper notice of a
claim within the applicable time period set forth above, liability for
such claim will continue until such claim is resolved.
7.2 LIMITATIONS ON INDEMNIFICATION BY SELLER. Seller will have no
liability with respect to the matters described in *** for any Loss of Buyer or
any of the Companies *** unless the total of all such Losses exceeds ***, in
which event Seller will be liable for all such Losses. Seller's maximum
aggregate liability with respect to the matters described in *** will be limited
to (a) *** (the "Cap") for any claim brought by Buyer (or any of the Companies)
under this Article 7 *** on or before the *** anniversary of the Closing Date,
(b) with respect to any claims relating to an alleged breach of Seller's
representations and warranties under *** brought by Buyer (or any of the
Companies) under this Article 7 after the *** anniversary of the Closing Date,
the Cap will be (i) *** for any such claims brought with respect to *** after
the *** anniversary of the Closing Date and on or before the *** anniversary of
the Closing Date *** regardless of the basis on which the earlier claim was
made), (ii) *** for any such claims brought with respect to *** after the ***
anniversary of the Closing Date and on or before the *** anniversary of the
Closing Date *** and (iii) *** for any such claims brought (and, therefore, no
such claims may be brought) after the *** anniversary of the Closing Date.
Seller will have no liability for any Loss to the extent such Loss: ***. The
limitations provided in this Section 7.2 shall not apply with respect to any
Loss incurred by Buyer or any of the Companies with respect to *** and otherwise
disclosed in ***, and the parties hereby acknowledge that all liability with
respect to *** shall be borne exclusively by Seller.
7.3 INDEMNIFICATION BY SELLER.
(a) After the Closing, subject to the terms and conditions of this
Article 7, Seller will indemnify and hold harmless Buyer for all Losses
incurred or suffered by WCA or any of its Affiliates (including any of the
Companies) relating to or arising from: (i) any breach or inaccuracy of
any representation or warranty made by Seller as of the Closing Date in
Article 3; or (ii) any breach of any covenant or agreement of Seller in
this Agreement.
(b) After the Closing, each Principal will indemnify and hold
harmless Buyer for all Losses incurred or suffered by WCA or any of its
Affiliates (including any of the Companies) relating to or arising from
any breach by that Principal of his noncompetition covenant in Article 6.
7.4 INDEMNIFICATION BY BUYER. After the Closing, subject to the terms and
conditions of this Article 7, Buyer will indemnify and hold harmless Seller for
all Losses incurred or suffered by Seller or the Principals (or any of their
respective Affiliates) relating to or arising from: (a) any breach or inaccuracy
of any representation or warranty made by Buyer in Article 4; or (b) any breach
of any covenant or agreement of Buyer in this Agreement.
7.5 THIRD PARTY CLAIMS.
(a) If a third party initiates a claim, demand, dispute, lawsuit or
arbitration (a "Third-Party Claim") against any Person (the "Indemnified
Party") with respect to any matter that the Indemnified Party might make a
claim for indemnification against any
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Party (the "Indemnifying Party") under this Article 7, then the
Indemnified Party must immediately notify the Indemnifying Party in
writing of the existence of such Third-Party Claim and must deliver copies
of any documents served on the Indemnified Party with respect to the
Third-Party Claim.
(b) Upon receipt of the notice described in Section 7.5(a), the
Indemnifying Party will have the right to defend the Indemnified Party
against the Third-Party Claim with counsel reasonably satisfactory to the
Indemnified Party. The Indemnifying Party will keep the Indemnified Party
apprised of all material developments, including settlement offers, with
respect to the Third-Party Claim and permit the Indemnified Party to
participate in the defense of the Third-Party Claim. So long as the
Indemnifying Party is conducting the defense of the Third-Party Claim in
accordance with this Section 7.5(b), the Indemnifying Party will not be
responsible for any attorneys' fees or other expenses incurred by the
Indemnified Party regarding the Third-Party Claim.
(c) If the Indemnifying Party declines or fails to exercise its
right to defend under Section 7.5(b), the Indemnified Party will have the
authority to defend against the Third-Party Claim. Promptly following
resolution of the Third-Party Claim, the Indemnifying Party will reimburse
the Indemnified Party for the costs of defending against the Third-Party
Claim, including attorneys' fees and expenses, and any other Losses the
Indemnified Party has incurred relating to or arising out of the
Third-Party Claim to the extent provided in this Article 7.
(d) Neither the Indemnified Party (unless the Indemnified Party
declines or fails to exercise its right to defend under Section 7.5(b))
nor the Indemnifying Party will consent to the entry of any judgment or
enter into any settlement with respect to the Third-Party Claim without
the prior written consent of the other party, which consent will not be
unreasonably withheld or delayed.
7.6 OTHER INDEMNIFICATION MATTERS. Any claim for indemnification under
this Article 7 must be asserted by providing, within 30 days after the date such
claim arises, written notice to Seller (or Buyer, in the case of a claim by
Seller) specifying the factual basis and amount of the claim in reasonable
detail to the extent then known by the Person asserting the claim. All
indemnification payments under this Article 7 will be deemed adjustments to the
Purchase Price.
7.7 EXCLUSIVE REMEDY. After the Closing, this Article 7 will provide the
exclusive remedy for the matters covered by this Agreement except as otherwise
set forth in Section 7.1(a). This Article 7 will not affect any remedy any Party
may have under this Agreement prior to the Closing or upon termination of this
Agreement.
8. BUYER'S CONDITIONS TO CLOSING.
The obligations of Buyer to effect the transactions contemplated hereby
and in the other agreements referred to herein shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, unless the satisfaction of such conditions are either waived in
writing by Buyer or does not occur primarily due to the breach by Buyer or WCA
of the terms or conditions of this Agreement:
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8.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of Seller in this Agreement (including the disclosures contained in
the exhibits and schedules to this Agreement) shall be true at and as of the
Closing Date as though each such representation and warranty was made and
delivered at and as of the Closing Date, except for matters that would not
result in a Material Adverse Change (the "Rep Condition"), and Buyer shall have
received a certificate from Seller dated the Closing Date to that effect;
provided, however, that the Rep Condition shall be deemed satisfied for the
purposes of this Section 8.1 and Section 2.6 if Buyer was required by Section
5.6 to notify Seller of a fact or condition giving rise to the failure of the
Rep Condition and Buyer failed to so notify Seller.
8.2 COMPLIANCE WITH CONDITIONS. Seller shall perform and comply in all
material respects with all agreements and covenants in this Agreement required
to be performed and complied with by it before Closing, and Buyer shall have
received a certificate from Seller dated the Closing Date to that effect;
provided, however, that this condition shall be deemed satisfied for the
purposes of this Section 8.2 and Section 2.6 if Buyer was required by Section
5.6 to notify Seller of a fact or condition giving rise to the failure of this
condition and Buyer failed to so notify Seller.
8.3 SUIT OR PROCEEDING. No suits or proceedings, legal or administrative,
relating to any of the transactions contemplated by this Agreement shall be
overtly threatened or commenced that, in the reasonable discretion of Buyer,
would make it inadvisable for Buyer to consummate the transactions contemplated
by this Agreement.
8.4 MATERIAL ADVERSE CHANGE. As of the Closing, there shall have been no
Material Adverse Change since the date of this Agreement.
8.5 PAYOFF LETTERS. Payoff letters with respect to the Funded Debt, dated
as of (or within a reasonable time prior to) the Closing Date, and all
documentation necessary to obtain releases of all encumbrances related to Funded
Debt, in each case in form and substance reasonably satisfactory to Buyer.
8.6 PERMITS, LICENSES AND APPROVALS FROM DENR. All permits, licenses and
approvals from DENR necessary for the current operation of the Companies'
businesses as presently conducted shall have been granted, are in full force and
effect, and will continue to be in full force and effect immediately after the
Closing.
8.7 PERMITS, LICENSES AND APPROVALS FROM WAKE COUNTY AND CITY OF HIGH
POINT. All permits, licenses, approvals and franchises from Wake County and the
City of High Point, North Carolina necessary for the current operation of the
Companies' businesses as presently conducted shall have been granted, are in
full force and effect, and will continue to be in full force and effect
immediately after the Closing.
8.8 ASSUMPTION AGREEMENT. Seller shall have executed an assumption
agreement, a form of which is attached hereto as Exhibit C, pursuant to which
Seller assumes all Seller Assumed Liabilities that are not discharged at Closing
(the "Assumption Agreement").
8.9 RESIGNATION OF MANAGERS. Resignation of the manager of each of the
Companies.
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8.10 FINANCING. Buyer shall have received additional financing as set
forth in Section 5.5.
9. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE
The obligation of Seller to close under this Agreement is subject to the
following conditions (any one of which, at the option of Seller, may be waived
in writing by Seller) existing on the Closing Date, unless the satisfaction of
such conditions are either waived in writing by Seller or does not occur due to
the breach by Seller of the terms or conditions of this Agreement.
9.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of Buyer and WCA in this Agreement shall be true in all material
respects at and as of the Closing Date as though each such representation and
warranty was made and delivered at and as of the Closing Date, and Seller shall
have received a certificate from Buyer and WCA dated the Closing Date to that
effect.
9.2 COMPLIANCE WITH CONDITIONS. Buyer shall perform and comply in all
material respects with all agreements and covenants in this Agreement required
to be performed and complied with by it before Closing, and Seller shall have
received a certificate from Buyer dated the Closing Date to that effect.
9.3 SUIT OR PROCEEDING. No suits or proceedings, legal or administrative,
relating to any of the transactions contemplated by this Agreement shall be
overtly threatened or commenced that would make it inadvisable for Seller to
consummate the transactions contemplated by this Agreement.
9.4 EXCLUDED ASSETS. The Excluded Assets shall have been distributed and
otherwise conveyed to Seller or Seller's designee.
10. THE CLOSING; DELIVERIES; TERMINATION
10.1 THE CLOSING. The transfer of the Membership Interests to Buyer (the
"Closing") shall take place at the offices of Xxxxxxx Xxxxxxxxx Xxxxxxx &
Xxxxxxx, L.L.P., Hearst Tower, 000 X. Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000 at 10:00 a.m. local time on the second Business Day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions to be performed on the Closing Date (other than
conditions with respect to actions the Parties will take at the Closing) (the
"Closing Date"), or at such other time or place as Seller and Buyer may mutually
agree upon.
10.2 DELIVERIES BY SELLER. At the Closing, Seller shall deliver the
following, all duly executed, to Buyer:
(a) an assignment by Seller to Buyer of the Membership Interests
substantially in the form attached hereto as Exhibit D (the "Assignment");
(b) such resolutions and authorizations by the Manager and the
members of Seller as are necessary or required by Buyer in connection with
the transactions to be
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consummated hereunder and including a certificate dated as of the Closing
Date duly executed by the Manager of Seller certifying as to incumbency,
specimen signatures, and the resolutions authorizing this Agreement and
the transactions to be consummated hereunder;
(c) officer's certificates, reasonably satisfactory in form and
substance to Buyer, executed by the appropriate member or manager of
Seller, and certifying, as of the Closing Date, (i) that the Companies'
representations herein are true and correct in all material respects, and
(ii) that the Companies have performed their covenants hereunder in all
material respects (unless waived by Buyer in writing);
(d) wiring instructions duly executed by Seller directing Buyer as
to the proper payment of the Adjusted Cash Purchase Price;
(e) a compact disc (plus a printed copy of such information)
containing all manual and automated routing and billing information, data
and components thereof related to the Companies in a machine readable
format; and
(f) the Assumption Agreement.
10.3 DELIVERIES BY BUYER. At the Closing, Buyer shall deliver to Seller:
(a) the Adjusted Cash Purchase Price, by wire transfer or other form of
immediately available funds; (b) officer's certificates, reasonably satisfactory
in form and substance to Seller, executed by the appropriate officers of WCA and
Buyer (including the appropriate officers of Buyer's general partner), (i) that
Buyer's and WCA's representations herein are true and correct in all material
respects, and (ii) that Buyer and WCA have performed their covenants hereunder
in all material respects (unless waived by Seller in writing); (c) such
resolutions and authorizations by the board of directors of each of WCA and the
general partner of Buyer as are necessary or required by Seller in connection
with the transactions to be consummated hereunder and including a certificate
dated as of the Closing Date duly executed by the Secretary of each of those
corporations certifying as to incumbency, specimen signatures, and the
resolutions authorizing this Agreement and the transactions to be consummated
hereunder; and (d) all other documents, instruments and writings reasonably
requested by Seller to be delivered by Buyer, WCA or Buyer's general partner at
or prior to the Closing.
10.4 DELIVERIES BY THE COMPANIES. At or before the Closing, the Companies
shall deliver a xxxx of sale or other conveyance documents (including the Deed)
transferring and otherwise conveying title to the Excluded Assets to Seller or
Seller's designee.
10.5 TERMINATION EVENTS. This Agreement may, by written notice given to
the non-terminating Parties prior to the Closing, be terminated:
(a) by (i) Buyer, if any representation or warranty made by Seller
is inaccurate (except for matters that would not result in a Material
Adverse Change) or Seller has breached any covenant or agreement in this
Agreement in any material respect or (ii) Seller, if any representation or
warranty made by Buyer is inaccurate in any material respect or Buyer has
breached any covenant or agreement in this Agreement in any material
respect;
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(b) by (i) Buyer, if any condition in Article 8 has not been
satisfied or waived in writing by March 1, 2005 or if satisfaction of any
such condition is or becomes impossible (in either case, for reasons other
than the failure of Buyer to comply with its obligations under this
Agreement) or (ii) Seller, if any condition in Article 9 has not been
satisfied or waived in writing by March 1, 2005 or if satisfaction of any
such condition is or becomes impossible (in either case, for reasons other
than the failure of Seller to comply with its obligations under this
Agreement); or
(c) by mutual consent of Buyer and Seller.
If this Agreement is terminated pursuant to this Section 10.5, all further
obligations of the parties under this Agreement will terminate; provided,
however, that the obligations in Section 5.2(b) (confidentiality) and Article 12
(miscellaneous) will survive the termination. Nothing in this Section 10.5 will
release any party from any liability for any breach of any representation,
warranty, covenant or agreement in this Agreement. Regardless of the cause or
manner of termination (except for the failure of the conditions set forth in the
proviso in Section 2.6 to be satisfied or waived), WCA shall pay Seller the
Break-up Fee, subject to the application of Section 2.7.
11. CERTAIN DEFINITIONS
"Actual Working Capital Adjustment" means the difference (which may be
positive or negative) between the calculation set forth in Section 2.3(b) (which
is subject to further adjustment under Section 2.3(c)) and the amount of the
Working Capital Adjustment estimated and used at the Closing pursuant to Section
2.3(a).
"Affiliate" means, with respect to an entity, any other entity directly or
indirectly controlled by, controlling or under common control with that entity.
For purposes of the preceding sentence, "control" of an entity means possession,
directly or indirectly (through one or more intermediaries or other means), of
the power to direct or cause the direction of management and policies of that
entity through the ownership of voting securities (or any other interest or
interests), contract or other means.
"Business Day" means any day other than Saturday, Sunday or any other day
on which national banking associations in the State of North Carolina generally
are closed for commercial banking business.
"C&D" means, as defined on the Closing Date in Section 130A-290(a)(4) of
the North Carolina General Statutes, solid waste resulting from construction,
remodeling, repair, or demolition operations on pavement, buildings, or other
structures, but does not include inert debris, land clearing debris or yard
debris.
"Current Assets" has the meaning assigned to it under GAAP, except that
the Accounts Receivable shall be reduced for collectability pursuant to the
following formula: (i) all Accounts Receivable that are 60 days old or less as
of the Closing Date shall be credited ***; (ii) all the Accounts Receivable that
are between 61 and 90 days old as of the Closing Date shall be credited ***;
(iii) all the Accounts Receivable that are between 91 and 120 days old as of the
Closing Date shall be credited ***; and (iv) any Accounts Receivable that are
more than 120
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days old as of the Closing Date shall ***; provided, however, that no reduction
shall be made with respect to any particular Accounts Receivable to the extent
of the allowance for doubtful accounts recorded therefor.
"Current Liabilities" has the meaning assigned to it under GAAP; provided,
however, that Current Liabilities shall not include any current portions of
Funded Debt.
"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.
"EBITDA" means: (a) net income, determined in accordance with GAAP, plus
(b) to the extent deducted in determining net income, (i) interest expense, (ii)
income tax expense, (iii) depreciation expense and (iv) amortization expense.
"Environmental Claim(s)" means all claims, liabilities, notices, actions,
causes of action (arising under common law, contract or statute), suits,
judgments, demands, liens, governmental 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 fees disbursements and expenses of expert witnesses and costs of
investigation, testing and preparation) regarding any Company, any of its
Business Facilities, its assets or any operations conducted by any Company for:
(a) improper use or treatment of wetlands, pinelands or other protected land or
wildlife; (b) pollution, contamination, 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;
(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; or (e) the implementation of spill
prevention and/or disaster plans relating to 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. An "Environmental Claim" further includes a Proceeding to issue, modify,
revoke or terminate an Environmental Permit.
"Environmental Law(s)" means any and all currently applicable federal,
state and local laws, ordinances, rules, regulations, and orders of courts or
administrative agencies or authorities relating to pollution, contamination,
protection or cleanup of the environment (including ambient air, surface water,
ground water, land surface, wildlife, wetlands and subsurface strata), including
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 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; state environmental laws in all
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jurisdictions in which any Company's Business Facilities or other operations are
located; 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, 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; (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; or (e) the implementation of spill
prevention and/or disaster plans relating to Polluting Substances. Any specific
references to a law shall include any amendments to it promulgated from time to
time.
"Funded Debt" means the debt owed by the Companies to Branch Banking &
Trust Company and Caterpillar Financial Services Corporation as of the Closing
Date, which debt shall be discharged at Closing.
"GAAP" means generally accepted accounting principles.
"Intellectual Property" means patents, trademarks, trade names,
copyrights, and trade secrets, processes, designs, inventions, methods,
formulas, and other know-how and technology that is not generally known within
the industry and lends a competitive advantage.
"Knowledge" of Seller means the actual knowledge of F. Xxxxxxx Xxxxxx,
Xx., Xxxx X. Xxxxxx, Xxxxx Xxxxxxx, Jr., Xxx Xxxxx or Xxxxx Roof; provided, that
with respect to Xxxxx Roof, Xxxxx Roof does not become an employee or consultant
of any Company, Buyer or WCA or any of their Affiliates.
"LCID" means, as defined on the Closing Date by the Solid Waste Section of
the DENR, land clearing waste, concrete, brick, concrete block, uncontaminated
soil, gravel and rock, untreated and unpainted wood, and yard trash.
"Loss" means, with respect to a Party to be indemnified under Article 7 of
this Agreement (an "Indemnitee"), any loss, damage, injury, liability, claim,
demand, Proceeding, settlement, judgment, fine, penalty, tax, fee, charge, cost
or expense (including 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), as well as with respect to compliance with the
requirements of Environmental Law or Environmental Claims suffered or borne by
that Indemnitee, but shall not include punitive, exemplary, loss of profits,
diminution of value, special, indirect, incidental or consequential damages of
the Indemnitee (but will include such damages for which the Indemnitee may be
liable to a third party in connection with a Third Party Claim brought against
that Indemnitee).
"Material Adverse Change" means any material adverse change in the
business, operations or financial condition of the Companies, taken as a whole,
except for any changes or effects resulting from (a) changes in general
economic, financial, regulatory, weather or political conditions or changes that
affect generally companies in the same or similar industries as the
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Companies or (b) the announcement or proposed consummation of the transactions
contemplated in this Agreement.
"MSW" means, as defined on the Closing Date in Section 130A-290(a)(18a),
any solid waste resulting from the operation of residential, commercial,
industrial, governmental, or institutional establishments that would normally be
collected, processed, and disposed of through a public or private solid waste
management service and does not include hazardous waste, sludge, industrial
waste managed in a solid waste management facility owned and operated by the
generator of the industrial waste for management of that waste, or solid waste
from mining or agricultural operations.
"Permitted Exceptions" (a) any mechanic's, materialmen's or similar
statutory lien incurred in the ordinary course of business for monies not yet
due, (b) any lien for Taxes not yet due, (c) any easement, covenant, zoning or
other restriction on any company's Real Property that, together with all other
Permitted Exceptions, does not prohibit or impair the current use, occupancy,
value, or marketability of title of the property subject thereto, (d) all
applicable ordinances and other governmental classifications, (e) any matters
identified in any survey or title insurance commitment or policy, and (f) liens
relating to Funded Debt to be paid off at Closing.
"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,"
"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, 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 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 or other judicial, administrative,
arbitral, investigatory or other proceeding, whether commenced, conducted, heard
or pending.
"Reclamation Fuel Rod" is defined in Schedule 3.29.
"Remediation" means any action necessary to bring about compliance with
the requirements of Environmental Law including (a) services of professionals
necessary for negotiation of assessment and remedial obligations with
governmental agencies and authorities; (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; (c) any action necessary to meet the requirements of an
Environmental Permit or
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(d) any other action reasonably required to satisfy requirements of
Environmental Law imposed upon any Company, any of its Business Facilities
and/or any operation thereon.
"Seller Assumed Liabilities" is defined in Section 3.8.
12. GENERAL
12.1 COSTS. The parties shall pay their respective expenses (including 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; provided, however, that
Buyer shall pay any filing fees, transfer taxes, sales taxes, or other charges
levied by any government entity on account of the sale of the Membership
Interests.
12.2 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.
12.3 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.
12.4 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 delivery is
made by a courier service to the address provided below of the Party to whom
notice is to be given, 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 Seller: MRR Southern, LLC
000 Xxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attn: F. Xxxxxxx Xxxxxx, Xx., Manager
Telecopy: 000-000-0000
Copy to: Cresset Capital Partners
0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Manager
Telecopy: 000-000-0000
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If to Buyer: WCA of North Carolina, L.P.
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, President
Telecopy: 000-000-0000
Copy to: WCA Waste Corporation
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: J. Xxxxxx Xxxxxx,
Vice President and General Counsel
Telecopy: 000-000-0000
Any Party may change its address for the purpose of this Section 12.4 by
giving the other Party written notice of its new address in the manner set forth
above.
12.5 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
Buyer and Seller (except for Article 6, which also requires the written consent
of any Principal which is to be bound by such amendment or modification). 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.
12.6 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; provided, however, that Buyer may
assign any or all of its rights hereunder, whether before or after the Closing
Date, to one or more of its subsidiaries or affiliates; provided further, that
no such assignment shall reduce or otherwise vitiate any of the obligations of
Buyer or WCA hereunder. This Agreement shall inure to the benefit of and shall
be binding upon the successors and permitted assigns of the parties hereto.
12.7 GOVERNING LAW; VENUE.
(a) THIS AGREEMENT, AND ALL QUESTIONS RELATING TO ITS VALIDITY,
INTERPRETATION, PERFORMANCE AND ENFORCEMENT (INCLUDING PROVISIONS
CONCERNING LIMITATIONS OF ACTION), SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA (EXCLUSIVE OF THE
CONFLICT OF LAW PROVISIONS THEREOF) APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED ENTIRELY WITHIN SUCH STATE.
(b) IF ANY DISPUTE ARISES OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR THE TERMINATION THEREOF, OR THE RELATIONSHIP CREATED BY OR
DESCRIBED IN THIS AGREEMENT, THE PARTIES AGREE TO
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BRING SUIT UPON ALL SUCH MATTERS THEN IN DISPUTE ONLY IN THE UNITED STATES
DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA, OR, IF SAID
COURT LACKS JURISDICTION, IN THE DISTRICT COURTS IN AND FOR MECKLENBURG
COUNTY, NORTH CAROLINA.
(c) 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.
(d) THE PARTIES HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SELLER AT ITS ADDRESS
SET FORTH IN SECTION 12.4 HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING.
12.8 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.
12.9 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.
12.10 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. Whenever used herein, "or"
shall include both the conjunctive and disjunctive, "any" shall mean "one or
more," and "including" shall mean "including without limitation."
12.11 REFERENCES. Unless otherwise indicated, "Articles" and "Sections,"
mean and refer to the numbered or lettered Articles and Sections of this
Agreement. 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. All
headings in this Agreement are for convenience of reference only and are not
intended to define or limit the scope or intent of this Agreement. All exhibits,
schedules, instruments and other documents referred to herein, and as the same
may be amended from time to time, are by this reference made a part hereof as
though fully set forth herein.
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12.12 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.
12.13 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.
12.14 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.
12.15 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.
12.16 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.
12.17 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 costs and attorneys' fees
related to or arising out of any trial or appellate proceedings.
12.18 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.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above stated.
BUYER:
WCA OF NORTH CAROLINA, L.P., a Delaware
limited partnership
By: WCA NC General, Inc., a Delaware
corporation, as its general partner
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------
Title: President
-------------------------------
SELLER:
MRR SOUTHERN, LLC, a North Carolina
limited liability company
By: /s/ F. Xxxxxxx Xxxxxx, Xx.
------------------------------------------
Name: F. Xxxxxxx Xxxxxx, Xx.
-------------------------------------
Title: Manager
------------------------------------
COMPANIES:
MRR OF HIGH POINT, LLC, a North Carolina
limited liability company
By: /s/ F. Xxxxxxx Xxxxxx, Xx. - Manager
------------------------------------------
F. Xxxxxxx Xxxxxx, Xx., Manager
MRR WAKE TRANSFER STATION, LLC, a
North Carolina limited liability company
By: MRR Southern, LLC, Manager
By: /s/ F. Xxxxxxx Xxxxxx, Xx. - Manager
--------------------------------------
F. Xxxxxxx Xxxxxx, Xx., Manager
MATERIAL RECOVERY, LLC, a North Carolina
limited liability company
By: /s/ F. Xxxxxxx Xxxxxx, Xx. - Manager
------------------------------------------
F. Xxxxxxx Xxxxxx, Xx., Manager
MATERIAL RECLAMATION, LLC, a North Carolina
limited liability company
By: /s/ F. Xxxxxxx Xxxxxx, Xx. - Manager
------------------------------------------
F. Xxxxxxx Xxxxxx, Xx., Manager
EACH OF THE FOLLOWING PARTIES JOIN IN THE
EXECUTION OF THIS AGREEMENT ONLY TO THE
LIMITED EXTENT THAT IT EXPRESSLY PERTAINS TO
THEM, WHICH IN THE CASE OF WCA INCLUDES ONLY
ARTICLES 4, 7 AND 12 AND SECTIONS 2.3(c),
2.6, 5.1, 5.2(b), 5.5, 9.1, 10.3 AND 10.5;
AND, IN THE CASE OF THE PRINCIPALS, INCLUDES
ONLY ARTICLES 6, 7 AND 12.
WCA WASTE CORPORATION, a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
-------------------------------------
Title: President
------------------------------------
PRINCIPALS:
/s/ F. Xxxxxxx Xxxxxx, Xx.
------------------------------------------
F. Xxxxxxx Xxxxxx, Xx., Individually
/s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx, Individually
/s/ X. X. Xxxxxxx
------------------------------------------
X. X. Xxxxxxx, Individually
/s/ Xxxxxx X. Xxxxxxxx, Xx.
------------------------------------------
Xxxxxx X. Xxxxxxxx, Xx., Individually
/s/ Xxxxx X. Xxxxxxx, Xx.
------------------------------------------
Xxxxx Xxxxxxx, Jr., Individually
EXHIBITS
A Form of Worksheet
B Form of Deed
C Form of Assumption Agreement
D Form of Assignment
SCHEDULES
2.2(a) Earnout Holdback
2.5 Allocation
3.1(a) Due Organization
3.2 Authorization, Validity and Effect of Agreements
3.7(a) Financial Statements
3.7(b) Interim Financial Statements
3.8(a) Retained Liabilities
3.8(b) Seller Assumed Liabilities
3.10 Accounts and Notes Receivable
3.11 Permits and Intangibles
3.12 Personal Property, Options and Leases
3.13(a) Written Contracts
3.13(b) No Materially Adverse Effects
3.13(c) Oral Agreements
3.14(a) Company's Real Property
3.14(d) Leased Property
3.15 Insurance
3.16 Employment Matters
3.20 Taxes
3.22 Government Contracts
3.23 Absence of Changes
3.24 Deposit Accounts
3.25 Proprietary Rights
3.28 Related Party Transactions
3.29 Environmental Matters
3.31 Litigation
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EXHIBIT A
FORM OF WORKSHEET
[ILLUSTRATIVE SPREADSHEET SHOWING CURRENT ASSETS AND CURRENT LIABILITIES AS
OF DECEMBER 31, 2004 FOLLOWS]
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SECTION 2.3 - WORKING CAPITAL ADJUSTMENT
Material Reclamation, LLC
Material Recovery, LLC
MRR Wake Transfer Station, LLC
MRR of High Point, LLC
December 31, 2004
MATERIAL MATERIAL MRR WAKE MRR OF ELIMINATIONS COMBINED
RECLAMATION RECOVERY TRANSFER HIGH POINT TOTALS (SEE NOTE B) TOTALS
----------- -------- -------- ---------- -------- ------------ --------
Current assets:
Cash on hand and in banks $ *** $ *** $ *** $ *** $ *** $ *** $ ***
Accounts receivable *** *** *** *** *** *** ***
Other receivables *** *** *** *** *** *** ***
Prepaid assets *** *** *** *** *** *** ***
----------- -------- -------- ---------- -------- ----------- --------
Total current assets *** *** *** *** *** *** ***
Less A/R adjustment per attached
schedule 2.3(a) *** ***
Current assets as adjusted *** ***
-------- --------
Current liabilities (See Note A):
Accounts payable $ *** $ *** $ *** $ *** $ *** $ *** $ ***
Accrued expenses *** *** *** *** *** *** ***
----------- -------- -------- ---------- -------- ----------- --------
Total current liabilities *** *** *** *** *** *** ***
Adjusted Working Capital $904,265 $ (33,469) $870,796
======== =========== ========
A. Excluding liabilities which will be paid at closing or retained by seller,
including the current portion of notes payable.
B. Eliminations for inter-company receivables/payables and prepaid insurance
amounts that won't transfer to buyer.
Buyer has been provided supporting information on January 14, 2005. The
information provided is illustrative of the supported information to be provided
for the Actual Working Capital Adjustment.
EXHIBIT B
FORM OF DEED
[SPECIAL WARRANTY DEED AND RESTRICTIONS FOLLOWS]
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Prepared by: Xxxxxxxxxx Xxxxxxxx LLP (CPC)
Return to: Xxxxxxxxxx Xxxxxxxx LLP (Box 123)
Tax ID No. __________________________
Excise Tax $_____________
STATE OF NORTH CAROLINA
SPECIAL WARRANTY DEED
COUNTY OF GUILFORD
THIS SPECIAL WARRANTY DEED (this "Deed"), made and entered into this
______ day of January, 2005, by and between MRR OF HIGH POINT, LLC, a North
Carolina limited liability company (hereinafter called "Grantor"), and MRR HIGH
POINT REAL ESTATE, LLC, a North Carolina limited liability company (hereinafter
called "Grantee"), whose mailing address is: __________________________________.
The designation Grantor and Grantee as used herein shall include
said parties, their heirs, successors, and assigns, and shall include singular,
plural, masculine, feminine or neuter as required by context.
WITNESSETH, that the Grantor, for a valuable consideration paid by
the Grantee, the receipt of which is hereby acknowledged, has and by these
presents does grant, bargain, sell and convey unto the Grantee in fee simple,
that certain lot or parcel of land situated in Jamestown Township, Guilford
County, North Carolina and more particularly described as follows:
See Exhibit "A" attached hereto and incorporated herein by
reference.
TO HAVE AND TO HOLD the aforesaid lot or parcel of land and all
privileges and appurtenances thereto belonging to the Grantee in fee simple.
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And the Grantor covenants with the Grantee, that Grantor has done
nothing to impair such title as Grantor received, and Grantor will warrant and
defend the title against the lawful claims of all persons claiming by, under or
through Grantor, other than the following exceptions:
Ad valorem taxes for the year 2004, which are to be prorated through the
date of closing; easements, restrictions and reservations of record, if
any, and those restrictive covenants more particularly described on
Exhibit "B" attached hereto and incorporated herein by reference; the lien
of that certain Deed of Trust from Grantor to L. Xxxxx Xxxxxxxxx II,
Trustee, in favor of Xxxx X. Xxxxxxx, recorded in Book 5286 at Page 1615
of the Guilford County Register of Deeds, dated August 6, 2001 securing a
note in the original principal amount of $75,000 and encumbering a portion
of the property described thereon, which Grantee assumes by its acceptance
of this Deed; and that certain Lease between Grantor and Xxxx X. Xxxxxxx,
dated the 7th day of August, 2001 relative to a portion of the property
conveyed herewith which Grantee assumes and accepts by its acceptance of
this Deed.
IN WITNESS WHEREOF, the Grantor has duly executed the foregoing
instrument as of the day and year first above written.
MRR OF HIGH POINT, LLC, (SEAL)
a North Carolina limited liability company
By: __________________________________
Title ________________________________
STATE OF NORTH CAROLINA - COUNTY OF ______________________
I, ___________________________, a Notary Public of the County and state
aforesaid, certify that _______________ _____________________________________,
personally appeared before me this day and acknowledged the execution of the
foregoing instrument. Witness my hand and official stamp or seal, this _____ day
of __________________________, 20____.
_________________________________ Notary Public
My Commission expires: ______________________
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TRACT 1:
ALL of that property generally known as Guilford County Tax Map #: ACL 94-7043;
941;23 and a portion of ACL 94-7041; 940; 16, more particularly described as
follows:
BEGINNING at a new iron pin at the intersection of the southwestern
right-of-way line of Xxxxxx Drive and the western right-of-way line of
Riverdale Road, said beginning point being South 56 degrees 23' 30" West
34.18 feet from a mag nail at the intersection of the centerline of
rights-of-way of Riverdale Road and Xxxxxx Drive; thence from said
beginning point along the western right-of-way line of Riverdale Road
South 6 degrees 19' 27" East 549.76 feet to an existing iron pin, at the
northeastern corner of that property now or formerly owned by Xxxxxxx
Xxxxxxx Xxxxx as described in Deed recorded in Deed Book 3504, Page 134,
Guilford County Public Registry; thence leaving the western right-of-way
line of Riverdale Road and along the northern boundary line of the
property now or formerly owned by Xxxxx as described in the aforesaid Deed
North 81 degrees 30' 52" West 249.84 feet to an existing iron pin; thence
South 6 degrees 4' 40" East 91.54 feet to an existing iron pin, the
southwestern corner of the aforesaid property now or formerly owned by
Xxxxx and further being on the northern boundary of that property now or
formerly owned by Xxxxx Xxxx Queen and wife as described in Deed recorded
in Deed Book 4576, Page 354, Guilford County Public Registry; thence
running along the northern boundary of the property now or formerly owned
by Queen as described in the aforesaid Deed North 79 degrees 12' 16" West
564.06 feet to an existing iron pin; thence along the eastern boundary of
the property now or formerly owned by Xxx X. Xxxxxx and X. X. Xxxxxx as
described in Deed recorded in Deed Book 3014, Page 653, Guilford County
Public Registry, North 53 degrees 49' 0" East 521.81 to an existing iron
pin; thence North 59 degrees 43' 53" 234.00 feet to an existing iron pin;
thence North 43 degrees 45' 39" East 324.95 feet to a new iron pin in the
southwestern right-of-way line of Xxxxxx Drive; thence with the
southwestern right-of-way line of Xxxxxx Drive, South 62 degrees 14' 13"
East 375.61 feet to the point and place of beginning, containing
approximately 8.27 acres more or less and being in accordance with survey
prepared by Xxxx Xxxxx & Assoc., Inc., P.C., dated July 17, 2001.
The above described Tract 1 is further all that property heretofore
conveyed to Grantor by Deed recorded in Book 5286, Page 1612, Guilford County
Public Registry and Grantor by this Deed intends to convey all of Grantor's
interest in the property described in the aforesaid Deed.
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TRACT 2:
ALL that property generally known as 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx, Xxxxxxxx Xxxxxx Tax Map No. 94-7043;941; 7, lying and being in
Xxxxxxxxx Xxxxxxxx Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxxx more particularly described
as follows:
BEGINNING at an existing iron pin; said existing iron pin being located in
the southern right-of-way margin of Riverdale Drive and also being the
northwestern most corner of that property owned (now or formerly) by
Xxxxxxx Xxxxx Xxxxxxxx (See Deed recorded in Book 3125, Page 163, Guilford
County Registry); running thence from said Beginning Point and along the
western boundary line of that property owned by Xxxxxxxx South 09 degrees
56' 49" West 165.19 feet to an existing iron pin; running thence from said
existing iron pin and along the northern boundary of Xxxxxxxx property
North 79 degrees 55' 02" West 100.12 feet to an existing iron pin; running
thence from said existing iron pin North 09 degrees 58' 20" East 234.52
feet to an existing iron pin in the southern margin of the right-of-way of
Riverdale Drive; running thence from said existing iron pin and along the
southern margin of the right-of-way of Riverdale Drive South 45 degrees
13' 44" East 121.84 feet to the Point and Place of Beginning, according to
a map entitled "Survey for Xxxxxxx X. Xxxxxx and wife, Xxxx Xxxxxx" dated
July 17, 1996 as drawn by Xxxxxx Surveying & Design.
The above described Tract 2 is further all that property heretofore
conveyed to Grantor by Deed recorded in Book 5758, Page 1843, Guilford County
Public Registry and Grantor by this Deed intends to convey all of Grantor's
interest in the property described in the aforesaid Deed.
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TRACT 3:
ALL that property generally known as 0000 Xxxxxx Xxxxx (also known as 6306
through 6322 Xxx Xxx Road), Jamestown, North Carolina, Guilford County Tax Map
No. 94-70411 940; 8, lying and being in Xxxxxxxxx Xxxxxxxx Xxxxxxxx Xxxxxx,
Xxxxx Xxxxxxxx more particularly described as follows:
BEGINNING at a point, said point being the common intersecting point of
the southern right-of-way line of Xxxxxx Drive and the eastern
right-of-way line of Danlee Street, said point also being Xxxxxx X.
Xxxxxxx' northwest property corner; thence with Xxxxxxx' western line
along the western right-of-way line of Danlee Street South 35 degrees 58'
32" West 330.24 feet to a point, Xxxxxxx corner; thence leaving Danlee
Street, following a line with Xxxxxxx, South 67 degrees 31' 00" East
234.00 feet to a point, said point being a corner with Xxxxxxx; thence
following a line with Xxxxxxx' property line South 46 degrees 01' 03" West
521.84 feet to a point in the line of Xxxxx X. Xxxxxx; thence following
the northern line of Xxxxxx North 87 degrees 11" 57" West 474.46 feet to a
point, said point being Xxxxxx'x northwest corner and the northeast corner
of H.P. Mortgage & Investment Company, said point also being the southeast
corner of another tract with Xxxxx X. Xxxxxx; thence following Xxxxxx'x
eastern line, North 02 degrees 55' 56" East 30.00 feet to a new corner,
said point being the southwest corner of Lot A, Xxxxxx X. Xxxxxx Plat as
duly recorded in the Guilford County Register of Deeds, Book 59, Page 141;
thence following the south line of Lot A of aforesaid subdivision, South
87 degrees 04' 04" East 14.99 to a point, another corner of said Lot A;
thence following the east line of said Lot A, North 36 degrees 00' 04"
East 808.52 feet to a point; thence North 20 degrees 36' 14" East 120.88
feet to a point, said point being the southern right-of-way line of Xxxxxx
Drive; thence following the southern right-of-way line of Xxxxxx Drive,
South 72 degrees 55' 56" East 50.00 feet to a point; thence continuing
along the southern right-of-way line of Xxxxxx Drive South 71 degrees 37'
41" East 100.00 feet to a point; thence South 70 degrees 07' 10" East 6.81
feet to a point, said point being the northwest property corner of Xxxxxx
X. Xxxxxx; thence along the western line of Xxxxxx X. Xxxxxx South 40
degrees 41' 34" West 164.54 feet to a point, the southwestern corner of
the Xxxxxx X. Xxxxxx Property; thence along the southern line of Xxxxxx X.
Xxxxxx South 54 degrees 19' 40" East 125.94 feet to a point on the western
right-of- way line of Danlee Street; thence following Xxxxxx X. Xxxxxx'x
eastern line along the western right-of-way line of Danlee Street North 35
degrees 58' 32" East 195.76 feet to a point in the southern right-of-way
line of Xxxxxx Drive; thence following the southern right-of-way line of
Xxxxxx Drive, South 70 degrees 07' 10" East 35.89 feet to the point and
place of BEGINNING.
The above described Tract 3 is further all that property heretofore
conveyed to Grantor by Deed recorded in Book 5758, Page 1847, Guilford County
Public Registry and Grantor by this Deed intends to convey all of Grantor's
interest in the property described in the aforesaid Deed.
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EXHIBIT B
RESTRICTIVE COVENANTS
Grantor hereby creates and imposes on the Property and the conveyance more
particularly described in the Deed is made and accepted expressly subject to the
following restrictions, covenants and conditions:
1. Definitions. For purposes hereof, the following terms shall have the
following meanings:
"Existing Permit" shall mean any solid waste permit or permits
currently issued to Grantor by the North Carolina Department of
Environmental and Natural Resources or other agency of the State of North
Carolina which permits or authorizes the use of the Benefited Tract for
the construction and operation of a landfill and related uses.
"Applicable Laws" shall mean all rules, regulations, statutes, laws
and ordinances which currently authorize, govern or otherwise affect the
use and operation of the Benefited Property as a landfill and related uses
including, without limitation, all applicable rules and regulations issued
by the North Carolina Department of Environment and Natural Resources.
2. Development/Use Restriction. Grantee hereby agrees that for a term
lasting from the date of this Deed to the sooner to occur of (a) ninety-nine
(99) years thereafter or (b) the cessation for a period of twelve (12)
consecutive months of the operation of a landfill on the tract of land more
particularly described on Schedule "1" attached hereto and incorporated herein
by reference (the "Benefited Tract") (provided, however, any cessation of
operation for purposes of restoration of the Benefited Tract as a result of a
casualty or condemnation affecting the Benefited Tract or the improvements
thereon shall not constitute a cessation of operation for purposes of this
Exhibit "B", provided that in the event of a permitted cessation, Grantor
resumes landfill operations on the Property as soon as is reasonable) (the
"Term"), the Property shall be subject to the following restrictions: (i) no
part of the Property shall be used during such Term nor shall any part of the
Property be developed or otherwise improved (or the improvements located on the
Property as of the date of this Deed altered or otherwise improved) for use as a
school or park or other recreational area, (ii) no part of the Property which,
in relation to the Benefited Property, would be considered a "buffer" or
"no-build" zone (or term of similar import) under the Existing Permit or under
Applicable Laws shall be used during such Term nor shall any part of the
Property lying within any part of said "buffer," "no-build" or similar zone be
developed or otherwise improved (or the improvements located on any such portion
of the Property as of the date of this Deed altered or otherwise improved) for
residential purposes (single family or otherwise) other than existing residences
or for the installation or operation of water xxxxx other than to serve existing
residences, and (iii) Grantee shall comply with any development and/or use
restrictions set forth in the Existing Permit and Applicable Laws with respect
to the operation of the Property necessary to enable Grantor to use the
Benefited Property for the operation of a landfill and uses reasonably related
thereto.
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IN CONNECTION WITH THE FOREGOING, GRANTEE, ON BEHALF OF ITSELF, ITS
SUCCESSORS AND/OR ASSIGNS (INCLUDING, WITHOUT LIMITATION, ANY FUTURE OWNERS OF
THE PROPERTY OR ANY PORTION THEREOF) (I) WAIVES ANY AND ALL RIGHTS TO OBJECT OR
OTHERWISE CHALLENGE THE USE OF THE BENEFITED PROPERTY FOR THE OPERATION OF A
LANDFILL OR ANY OTHER USE REASONABLY RELATED THERETO AND (II) AGREES NOT TO
FILE, JOIN IN, PURSUE OR OTHERWISE PARTICIPATE IN ANY PROCEEDINGS THAT WOULD
PREVENT, HINDER OR PROHIBIT THE USE OF THE PROPERTY AS A LANDFILL OR ANY OTHER
USE REASONABLY RELATED THERETO. GRANTEE ACKNOWLEDGES THAT ITS AGREEMENT TO THE
FOREGOING WAIVER AND AGREEMENT CONTAINED IN THIS PARAGRAPH IS A MATERIAL PORTION
OF THE CONSIDERATION TO GRANTOR TO EXECUTE AND DELIVER THIS DEED AND THAT BUT
FOR SUCH WAIVER AND AGREEMENT, THIS DEED WOULD NOT HAVE BEEN EXECUTED BY
GRANTOR.
Grantor hereby acknowledges that various water xxxxx and residences are
located on the Property as of the date of this Deed and that the continued use
of said existing water xxxxx and use and occupancy of said existing residences
is permitted subject to the terms of clauses (i) - (iii) above and the remaining
terms and provisions of this Exhibit "B".
3. Termination/Demolition Obligation. At any time and from time to time
after the date of this Deed, and so long as (a) the provisions of Section 1 of
this Exhibit "B" remain in effect, (b) Grantor is in the process of the
expansion of the landfill as allowed by the Existing Permit and (c) the terms of
the Existing Permit so require. Grantor shall have the right, upon delivery of
not less than sixty (60) days prior written notice to Grantee (the "Demolition
Notice"), to cause Grantee to (i) terminate the then existing lease, license
and/or occupancy agreement (collectively, the "Leases") in one or more of the
residences located on the Property and having the following addresses (as of the
date of this Deed): 0000 Xxxxxx Xxxx, 0000 Xxxxxx Xxxx, 0000 Xxxxxx Road, 0000
Xxxxxx Xxxx or 0000 Xxxxxx Xxxx (collectively, the "Residences"), (ii) demolish
one or more of said Residences described in the Demolition Notice and (iii)
remove or cap any water xxxxx located on the Property and identified in said
Demolition Notice. Grantee shall terminate the Leases and perform the work more
particularly described in the Demolition Notice within the time period set forth
in said Demolition Notice, which time period shall not be less than sixty (60)
days from the date of the Demolition Notice.
4. Collateral Assignment of Leases.
(a) As security for the performance of the Secured Obligations
(defined below) ,Grantee hereby grants, transfers and assigns to Grantor
and Grantor's successors and assigns all of Grantee's right, title, and
interest in and to the leases, licenses and occupancy agreements now
existing or hereafter made and affecting the Residences, including,
without limitation, the Leases, as the same may have been or may from time
to time be modified, extended, and renewed (collectively, the
"Agreements"). The aforementioned collateral assignment of the Agreements
is made to secure Grantee's obligation to terminate one or more Leases
following receipt of the Demolition Notice from Grantor in accordance with
Section 2 of this Exhibit "B" (the "Secured Obligations").
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(b) Grantor shall not be obligated to perform or discharge, nor does
Grantor hereby undertake to perform or discharge, any obligation, duty or
liability of Grantee under the Agreements, or under or by reason of the
collateral assignment thereof, and Grantee shall and does hereby agree to
indemnify and hold Grantor harmless of and from any and all liability,
loss or damage, including reasonable costs, expenses and professional
fees, which Grantor may or might incur under the Agreements subsequent to
the date hereof and prior to exercise by Grantor of any right granted to
Grantor hereunder and/or under or by reason of the execution and delivery
to Grantor this date of this Deed and of and from any and all claims and
demands whatever which may be asserted against Grantor by reason of any
alleged obligation claimed to have been undertaken on Grantor's part to
perform or discharge any of the terms, covenants or agreements contained
in the Agreements solely by reason of the execution by Grantee of this
Deed.
(c) Until the Secured Obligations are fully performed, Grantee
covenants and agrees to transfer and assign to Grantor any and all
subsequent Agreements affecting the Residences, upon the same or
substantially the same terms and conditions as are herein contained, and
to make, execute and deliver to the Grantor upon demand any and all
instruments that may be necessary therefor.
(d) Upon the fulfillment of the Secured Obligations, any collateral
assignment of the Agreements shall be and become void and of no further
force and effect.
5. Rights Upon Event of Default.
(a) In the event Grantee (i) defaults in the payment of any amount
which Grantee is obligated to pay hereunder or (ii) defaults in the
performance of any of the covenants or obligations required to be observed
or performed by Grantee pursuant to the terms of this Exhibit "B" and such
default has not been cured within thirty (30) days after written notice to
Grantee describing such default (in either event, an "Event of Default"),
Grantor shall have the right, but not the obligation to do any or all of
the following:
(A) to cure such Event of Default on behalf of the Grantee and in
that connection, Grantor shall have the right to enter upon the
Property of Grantee to perform any necessary work or furnish any
necessary materials or services to cure the Event of Default of
Grantee as Grantor shall deem necessary or appropriate, and Grantee
shall reimburse Grantor for all reasonable costs incurred by Grantor
in effectuating such cure within fifteen (15) days following receipt
by Grantee of written invoices evidencing such costs;
(B) to prosecute any proceedings at law or in equity (including,
without limitation, actions for injunctive relief, Grantee hereby
acknowledging that any Event of Default hereunder would lead to
irreparable harm to Grantor) against Grantee and to recover damages
for any such Event of Default; and/or
(C) in the event of an Event of Default in the performance of the
Secured Obligations, terminate the Agreements on behalf of Grantee
and do any and all
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other acts which Grantor may then deem proper to succeed to the
fullest extent possible in and to all rights, title and interest of
Grantee under the Agreements and any and all renewals, modifications
or extensions thereof and/or exercise any other rights or pursue any
other remedies available at law.
(b) Any amounts which are not paid or reimbursed timely pursuant to
this Exhibit "B" shall bear interest at the lesser of (i) eighteen percent
(18%) per annum, or (ii) the maximum non-usurious rate of interest allowed
by applicable law.
6. Covenants Running with the Land. The restrictions, benefits,
obligations, terms and provisions hereunder shall be and are hereby deemed to be
covenants running with the Property, and shall be binding upon and enforceable
against all legal and beneficial owners of the Property or any portion thereof,
their heirs, successors or assigns for the Term; provided, however, in no event
for a period in excess of ninety-nine (99) years from the date hereof. Upon the
transfer of all or a portion of the Property by Grantee, Grantee shall have no
further liability for the performance of any of the covenants set forth in this
Exhibit "B"; provided, however, Grantee shall not be released from liability for
any Event of Defaults hereunder by Grantee occurring prior to the date of such
transfer. The restrictions, benefits, obligations, terms and provisions
hereunder shall be enforceable by and inure solely to the benefit of Grantor and
its successors and assigns owning all or any portion of the Benefited Tract.
7. Notices. All notices, requests, demands and other communications under
this Exhibit "B" shall be in writing, and shall be effective only if either
delivered by courier with signed receipt or sent by certified mail, return
receipt requested, postage prepaid to the party to receive such notice at the
address below, with copies to the remaining parties, or to such other address as
any party may have furnished to all the parties listed above in writing in any
of the foregoing manners. Such notice shall be deemed given on the date of
receipt if delivered by courier or three (3) business days after the date of
deposit if sent by certified mail and periods of time of notice shall begin from
such date. Notices shall be sent to the following addresses:
(a) to Grantee:
______________________________
______________________________
______________________________
______________________________
Attention: ___________________
(b) to Grantor:
______________________________
______________________________
______________________________
______________________________
Attention: ___________________
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However, the parties and their successors and assigns shall have the right from
time to time and at any time to change their respective addresses and add
addresses for additional parties (including any mortgagee of the Property) to
receive notices hereunder by specifying such other address or additional parties
to receive notices hereunder in a written notice given in the manner provided
above to the other parties then entitled to receive notices hereunder.
8. Amendments. This Exhibit "B" (including exhibits hereto) may be
modified or terminated only by all of the owners of the Property and the owners
of the Benefited Tract.
9. Attorney's Fees. In the event of any litigation between Grantor and
Grantee with respect to this Exhibit "B", the prevailing party shall be entitled
to recover from the non-prevailing party in such litigation, all costs and
expenses relating to such litigation, including reasonable attorney's fees.
10. Superiority. The terms and provisions of this Exhibit "B" shall be
superior to the lien of any mortgage or deed of trust filed against the Property
and therefore, notwithstanding any foreclosure under any document evidencing any
such liens, or any conveyance or reconveyance in lieu of such foreclosure and/or
cancellation of all or part of the indebtedness secured by such liens, the
provisions of this Exhibit "B" shall remain in full force and effect.
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SCHEDULE I
DESCRIPTION OF THE BENEFITED PROPERTY
All of that property lying and being in High Point Township, City of High Point,
Guilford County, North Carolina more particularly described as follows:
BEING all of that property consisting of approximately 149.83 acres
described as New Lot "A" as more fully described in the plats thereof
entitled "Exclusion Map for MRR of High Point, LLC" consisting of Sheets 1
and 2 and being as per plats thereof recorded in Plat Book 150, Page 96,
and Plat Book 150, Page 97, Guilford County Public Registry.
The above described property being further all of that property heretofore
acquired by Grantor by Deeds recorded in the Office of the Register of Deeds of
Guilford County, North Carolina in Book 5248, Page 911; Book 5248, Page 914
(SAVE AND EXCEPT that portion described in said Deed which was conveyed by Deed
recorded in Book 5350, Page 1560); Book 5350, Page 1568 and Book 5759, Page
1144, Guilford County Public Registry, the descriptions therein contained in
said Deeds being incorporated herein by reference.
Together with the above described Tract, Grantor does hereby convey all of
its right, title and interest in and to that certain Access Easement for the
benefit of the above described Tract granted by City of High Point to MRR of
High Point, LLC by Right-of-Way Access Easement Agreement recorded in Book 5350,
Page 1563, the terms and provisions of which Right-of-Way Access Easement
Agreement including the description therein contained being incorporated herein
by reference.
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EXHIBIT C
FORM OF ASSUMPTION AGREEMENT
[ASSUMPTION AGREEMENT FOLLOWS]
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ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assumption Agreement") is
effective this ____ day of _________, 2005, by and between _____________, a
North Carolina limited liability company (the "Assignor") and MRR High Point
Real Estate, LLC, a North Carolina limited liability company (the "Assignee").
The Assignor, on the one hand, and the Assignee, on the other hand, each may be
referred to in this Assumption Agreement individually as a "Party" and
collectively as the "Parties."
RECITALS:
Pursuant to that certain Membership Interest Purchase Agreement dated as
of January 14, 2005 (the "Purchase Agreement") by and among the Assignor, the
Assignee, WCA of North Carolina, L.P., a Delaware limited partnership ("Buyer"),
MRR Southern, LLC, a North Carolina limited liability company ("Seller"), and
the other parties thereto, Seller agreed to deliver to Buyer this Assumption
Agreement whereby all of the Seller Assumed Liabilities (defined therein) would
be assigned to and assumed by the Assignee. As such, the Assignor has agreed to
assign to the Assignee, and the Assignee has agreed to assume from the Assignor,
the Seller Assumed Liabilities.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereby agree as follows:
1. Assignment and Assumption of Liabilities. The Assignor hereby transfers
and assigns to the Assignee the Seller Assumed Liabilities, as more fully
described on the attached Schedule I, and the Assignee hereby agrees to pay,
perform and discharge when due all liabilities and obligations associated with
the Seller Assumed Liabilities.
2. Governing Agreement. This Assumption Agreement is expressly made
subject to the terms and provisions of the Purchase Agreement. The delivery of
this Assumption Agreement shall not affect, enlarge, diminish, or otherwise
impair any of the representations, warranties, covenants, conditions,
indemnities, terms, or provisions of the Purchase Agreement, and all of the
representations, warranties, covenants, conditions, indemnities, terms, and
provisions contained in the Purchase Agreement shall survive the delivery of
this Assumption Agreement to the extent, and in the manner, set forth in the
Purchase Agreement. In the event of a conflict between the terms and provisions
of this Assumption Agreement and the terms and provisions of the Purchase
Agreement, the terms and provisions of the Purchase Agreement shall govern and
control.
3. Further Assurances. The Parties agree to take all such further actions
and to execute, acknowledge, and deliver all such further documents as are
necessary or useful for the assumption by the Assignee of the Seller Assumed
Liabilities, or to otherwise carry into effect the intent and purposes of the
Purchase Agreement and this Assumption Agreement.
4. Successors and Assigns. The provisions of this Assumption Agreement
shall bind and inure to the benefit of the Parties and their respective
successors and assigns.
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5. GOVERNING LAW. THIS ASSUMPTION AGREEMENT AND THE LEGAL RELATIONS
BETWEEN THE PARTIES HEREUNDER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA, EXCLUDING ANY CONFLICTS OF LAW RULE OR
PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF
ANOTHER JURISDICTION.
6. Defined Terms. Any capitalized term not otherwise defined in this
Assumption Agreement shall have the meaning set forth for such term in the
Purchase Agreement.
7. Captions. The captions and article and section numbers in this
Assumption Agreement are for convenience only and shall not be considered a part
of or affect the construction or interpretation of any provision of this
Assumption Agreement.
8. Counterparts. This Assumption Agreement may be executed in one or more
originals, but all of which together shall constitute one and the same
instrument.
9. Exhibits. All exhibits and schedules attached hereto are hereby made a
part hereof and incorporated herein by this reference.
[Signature page to follow]
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This Assumption Agreement is executed and delivered effective for all
purposes as of the date set forth above.
ASSIGNOR:
________________________________________
By: ____________________________________
Name: __________________________________
Title: _________________________________
ASSIGNEE:
MRR HIGH POINT REAL ESTATE, LLC
By: ____________________________________
Name: __________________________________
Title: _________________________________
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ASSIGNMENT AND ASSUMPTION AGREEMENT
SCHEDULE I
SELLER ASSUMED LIABILITIES
Liabilities set forth on Schedule 3.8(b) to the Purchase Agreement
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EXHIBIT D
FORM OF ASSIGNMENT
[ASSIGNMENT FOLLOWS]
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ASSIGNMENT
OF
MEMBERSHIP INTERESTS
THIS ASSIGNMENT OF MEMBERSHIP INTERESTS (the "ASSIGNMENT") is made and
entered into as of __________ __, 2005, by and between MRR Southern, LLC, a
North Carolina limited liability company ("ASSIGNOR"), and WCA of North
Carolina, L.P., a Delaware limited partnership ("ASSIGNEE").
STATEMENT OF PURPOSE
Assignor is the sole member of each of Material Reclamation, LLC
("RECLAMATION"), Material Recovery, LLC ("RECOVERY"), MRR of High Point, LLC
("HIGH POINT") and MRR Wake Transfer Station, LLC ("WAKE"), each a North
Carolina limited liability company (each of Reclamation, Recovery, High Point
and Wake, a "SUBSIDIARY" and collectively the "SUBSIDIARIES"). Assignor and
Assignee are parties to that certain Membership Interest Purchase Agreement
dated January __, 2005 (the "PURCHASE AGREEMENT"), pursuant to which Assignor
has agreed to sell, and Assignee has agreed to purchase, Assignor's entire
membership interest in each of the Subsidiaries (the "ASSIGNED INTERESTS"). This
Assignment is being entered into to transfer and assign the Assigned Interests
from Assignor to Assignee in accordance with the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Conveyance. Assignor hereby conveys unto Assignee all of Assignor's
right, title and interest in the Assigned Interests, to have and to hold
forever, such that upon the execution hereof Assignor shall be deemed to have
withdrawn as, and shall cease to be, a member of each of the Subsidiaries.
Assignee hereby accepts all of such right, title and interest in the Assigned
Interests.
2. Withdrawal of Assignor from the Subsidiaries. Upon the conveyance,
pursuant to this Assignment, by Assignor of the Assigned Interest to Assignee on
the date hereof, Assignor shall be deemed to have withdrawn from each
Subsidiary, and shall thereafter no longer be a member of any Subsidiary nor
have any membership interest or other equity or beneficial ownership interest in
any Subsidiary.
3. Miscellaneous.
(a) This Assignment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.
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(b) This Assignment shall be construed, interpreted, enforced and
governed by and under the laws of the State of North Carolina, without
reference to its conflict of laws provisions.
(c) This Assignment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment of
Membership Interests as of the date first above written.
ASSIGNOR:
MRR SOUTHERN, LLC
By: ______________________________________
Name: F. Xxxxxxx Xxxxxx, Xx.
Title: Manager
ASSIGNEE:
WCA OF NORTH CAROLINA, L.P.
By: WCA NC General, Inc, a Delaware corporation
By: ______________________________________
Name: ________________________________
Title: _______________________________
MRR Southern, LLC - Assignment of Membership Interests
SCHEDULE 2.2(a)
EARNOUT HOLDBACK
(a) CERTAIN DEFINITIONS.
"Competing Act" means WCA, Buyer or any Company or any of their
Affiliates during the First Earnout Period and/or the Second Earnout Period
opening directly or indirectly, for itself or on behalf of or in conjunction
with any other person, company, partnership, corporation or business of whatever
kind or nature, whether as a shareholder, owner, member, partner, joint
venturer, lender, whether as an independent contractor, consultant, advisor, or
otherwise, or as a sales representative of, engaging in the operation of, or
owning a direct or indirect interest in, a landfill that engages in C&D Disposal
(as defined in Section 6.1(a) of the Agreement) and that is located within a ***
radius of the High Point Landfill (except the landfill located at 0000 Xxxxx
Xxxxx Xxxx, Xxxxxxx, XX 00000 and owned by Recovery as of the date hereof);
provided, however, that such activity shall not be deemed a Competing Act solely
by virtue of WCA, Buyer or any Company or any of their Affiliates, as the case
may be, (A) engaging in such activity as a passive investor owning no more than
five percent (5%) of the outstanding equity securities of any corporation or
other entity the equity securities of which are listed on a national securities
exchange or traded on the NASDAQ National Market System (or the price of such
securities is quoted at least once a week or in Wall Street Journal or New York
Times) and with which such persons have no other connection or (B) investing in,
or acting as a consultant for, Seller.
"First Earnout Period" means the 12 month period beginning on the first
day of the first full month following the Closing Date. If the Closing Date
occurs on the first day of a month, such month will be the first month of the
Earnout Period.
"Second Earnout Period" means the 12 month period immediately following
the First Earnout Period.
"Earnout Quarter" means, on a rolling basis, each period of 3
consecutive months during the First Earnout Period and/or the Second Earnout
Period.
"High Point Landfill" means that certain landfill located at 0000
Xxxxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxxx and, as of the date
hereof, owned and operated by High Point.
"Revenue" means, with respect to any Earnout Quarter, all revenue
during such period at, or in connection with, the High Point Landfill. All
components of Revenue will be determined in accordance with GAAP applied on a
basis consistent with the practices used by Seller during calendar year 2004.
Buyer will not (and will cause High Point and the employees, contractors and
agents of Buyer and High Point to not) (i) defer or accelerate Revenue or
otherwise manipulate the records of the High Point Landfill in a manner that
would reduce Revenue during any Earnout Quarter, (ii) temporarily or permanently
close the High Point
Landfill or (iii) divert any waste away from the High Point Landfill or
otherwise manipulate the operations of the High Point Landfill (including the
volume of waste accepted).
"New Baseline" means the greater of (i) $*** or (ii) the amount of
Revenue during the New Baseline Quarter (if any).
"New Baseline Quarter" means the Earnout Quarter (if any) during the
First Earnout Period during which (i) Revenue was greater than any other Earnout
Quarter during the First Earnout Period and (ii) Revenue equaled or exceeded
$*** but was less than $***.
(b) EARNOUT HOLDBACK. The amount of the Earnout Holdback to be
paid by Buyer to Seller will be determined as follows:
(i) If a Competing Act occurs, then within 30 days following
such Competing Act Buyer shall pay Seller as final payment of the Earnout
Holdback an amount equal to $1,500,000 less the amount (if any) of Earnout
Holdback previously paid to Seller pursuant to Section (b)(iii) of this Schedule
2.2(a).
(ii) If Revenue during any Earnout Quarter equals or exceeds
$***, then within 30 days following the end of such Earnout Quarter Buyer will
pay Seller as final payment of the Earnout Holdback an amount equal to
$1,500,000 less the amount (if any) of Earnout Holdback previously paid to
Seller pursuant to Section (b)(iii) of this Schedule 2.2(a).
(iii) At the end of the First Earnout Period, if a Competing
Act has not occurred and there has been no Earnout Quarter during which Revenue
equaled or exceeded $*** but there has been an Earnout Quarter during which
Revenue equaled or exceeded $***, then within 30 days following the end of the
First Earnout Period Buyer will pay Seller a portion of the Earnout Holdback
equal to the product of *** times the amount by which Revenue during the New
Baseline Quarter exceeded $***.
(iv) At the end of the Second Earnout Period, if a Competing
Act has not occurred and there has been no Earnout Quarter during which Revenue
has equaled or exceeded $*** but there has been an Earnout Quarter during which
Revenue equaled or exceeded the New Baseline, then within 30 days following the
end of the Second Earnout Period Buyer will pay Seller as final payment of the
Earnout Holdback an amount equal to the product of $*** times the amount by
which Revenue during such Earnout Quarter exceeded the New Baseline.
(c) PAYMENT. Fifty percent (50%) of the Earnout Holdback to be
paid hereunder will be paid by Buyer to Seller by wire transfer of immediately
available funds to a bank account designated by Seller, and fifty percent (50%)
of the Earnout Holdback will be paid by Buyer to Seller in the form of shares of
WCA common stock, par value $0.01, delivered to Buyer in certificated form (the
"Shares"); provided, that the number of Shares to be delivered to Buyer upon any
payment of the Earnout Holdback shall be determined by dividing the fifty
percent (50%) portion of such payment to be paid in Shares by the average of the
closing price per Share on each of the 10 Business Days immediately preceding
the date of the event
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under subsection (b) above that triggered payment of the Earnout Holdback;
provided, further, that either Party, in its sole discretion, may elect to pay,
on the one hand, or receive, on the other hand cash in lieu of Shares. In no
event shall any payment of cash in lieu of Shares exceed $750,000.00.
(d) REPORTING PROCEDURE. No later than 20 days after the end of
each Earnout Quarter, Buyer will provide Seller with a copy of Buyer's
calculations of the Revenue for such Earnout Quarter, along with a supporting
schedule detailing volume, rates and customers. Seller and its accounting
representatives will be entitled to examine the work papers and back up
materials related to the preparation of the financial statements of High Point
and the calculations of Revenue and the Earnout Holdback and to discuss the
preparation of such statements and calculations with Buyer's and High Point's
accountants and accounting personnel.
(e) DISPUTE RESOLUTION. If Seller disagrees with the calculation
of the Earnout Holdback or the Revenue for any Earnout Quarter, Seller may at
any time deliver to Buyer a written description of any such disagreement;
provided, however, that all such written descriptions must be submitted within
60 days following the end of the Second Earnout Period. Seller and Buyer will
negotiate in good faith to resolve any such disagreements. If, after a period of
30 days following the date on which any such written description is delivered,
Seller and Buyer have not resolved such disagreement, then either Seller or
Buyer may submit such disagreements to the Resolution Accountants so long as
such submitting party provides written notice of such submission to the
nonsubmitting party. Within five Business Days after receipt of such written
notice, Seller and Buyer will each deliver to the Resolution Accountants a
written settlement offer setting forth its calculation of the Earnout Holdback
(each, an "Earnout Settlement Offer"). Buyer will grant (and will cause High
Point to grant) to the Resolution Accountants reasonable access to Buyer's and
High Point's books and records. Buyer and High Point will cause their
accountants and accounting personnel to discuss with the Resolution Accountants
the preparation of the financial statements of High Point and the calculation of
the Revenue and the Earnout Holdback and to grant to the Resolution Accountants
reasonable access to the work papers of Buyer's and High Point's accountants and
accounting personnel. The Resolution Accountants 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 Earnout Holdback by the Resolution Accountants
will be binding upon the Parties. The cost of the services of the Resolution
Accountants will be borne by the Party whose Earnout Settlement Offer differs
the most from the Earnout Holdback as finally determined by the Resolution
Accountants. If both Earnout Settlement Offers differ equally, such cost will be
borne half by Seller and half by Buyer. If any Party fails to deliver a Earnout
Settlement Offer in accordance with this Section (e), such cost will be borne by
such Party. To the extent that the Earnout Holdback as determined pursuant to
this Section (e) has not been paid, then within two Business Days after the
final determination of the Earnout Holdback pursuant to this Section (e) Buyer
will pay such unpaid Earnout Holdback to Seller, by wire transfer of immediately
available funds to a bank account designated by Seller.
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