FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT
Exhibit 2.4
FIRST
AMENDMENT TO
THIS
FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT (the “Amendment), dated as
of October 28, 2008 (the “Effective Date”), is
entered into by and among Waste Connections of Washington, Inc., a Washington
corporation (“WCWI”) on the one
hand, and Land Recovery, Inc., a Washington corporation (“LRI”), Resource
Investments, Inc., a Washington corporation (“RII” and, together
with LRI, the “Selling
Unitholders”), and Xxxxxx XxXxx, in his capacity as the Stakeholders’
Representative under the Agreement (defined below) on the other hand, with
reference to the following facts:
WHEREAS,
WCWI and the Selling Stakeholders entered into that certain Equity Purchase
Agreement (the “Agreement”), dated as
of August 1, 2008, whereby WCWI agreed to purchase from the Selling Unitholders
all of their membership interests of Xxxxxx County Recycling, Composting and
Disposal, LLC, a Washington limited liability company (the “LLC”), and all of
their respective shares of capital stock of Xxxxxx County Landfill Management,
Inc., a Washington corporation; and
WHEREAS,
WCWI, the Selling Unitholders and Xxxxxx XxXxx, acting in his capacity as the
Stakeholders’ Representative pursuant to Section 7.4 of the Agreement,
desire to amend the Agreement as set forth herein;
NOW,
THEREFORE, in consideration of the premises and of the mutual agreements,
representations, warranties, provisions and covenants herein contained, the
parties hereto, each intending to be bound hereby, agree as
follows:
1. Definitions. Capitalized
terms not otherwise defined herein shall have the respective meanings ascribed
to them in the Agreement.
2. Amendment to
Section 1.2. Section 1.2 of the Agreement is hereby
amended and restated in its entirety to read as follows:
“1.2 Purchase Price and
Payment.
“(a)
Purchase
Price. At
the Closing, in full consideration for the purchase and sale of the Subject
Units, WCWI shall pay or cause to be paid to the Selling Unitholders the
aggregate amount of one hundred three million six hundred sixty-five thousand
two hundred ninety-five dollars and fifty-three cents ($103,665,295.53) (the
“Purchase
Price”), which shall be paid to the Selling Unitholders by wire transfer,
in the respective amounts and to the respective bank accounts specified for the
Selling Unitholders on Schedule 1.2,
and which amount includes:
(i) $1,100,000.00,
in payment of 49% of all earnings before interest, taxes, depreciation and
amortization of the LLC from the Closing Date through November 30, 2008, based
on the good faith forecast of WCWI as of the Closing Date (the “Estimated
EBITDA”); and
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(ii) $2,565,295.53,
in payment of LRI’s and RII’s pro rata share of all Cash (as defined below) of
the LLC as of October 31, 2008, subject to Section 6.7.6 of the LLC
Operating Agreement. The term "Cash" for purposes of this Section
1.2(a)(ii) shall mean book cash (bank cash minus outstanding checks, and not
solely bank cash) of the LLC as of October 31, 2008, and (A) shall
include all amounts accrued and owed to the LLC by any of its members or their
Affiliates as of October 31, 2008 (including any amount owed for any
service provided by the LLC to any of its members or their Affiliates through
such date), all of which amounts shall be paid to the LLC, on or
prior to the Closing Date, by the member or Affiliate that owes such payment,
but (B) shall be reduced for all amounts accrued and owed by the LLC to any of
its members or their Affiliates as of October 31, 2008, to the extent that such
amounts have not been paid by the LLC, on or prior to the Closing Date, to the
member or Affiliate thereof that is owed such payment. All amounts
accrued and owed by the LLC to persons or entities other than its members and
their Affiliates shall be paid by the LLC in the ordinary course of business
consistent with past practices. For the avoidance of doubt,
distributions made to the LLC's members pursuant to this Section 1.2(a)
shall bring the LLC's book cash as of the Closing Date to
zero.
“(b)
True-Up
Calculation. Within one hundred twenty (120) days after the
Closing Date (the “True Up Date”) and in
any event within ten (10) business days after the True Up Calculation is
completed, WCWI shall determine and provide a statement to the Stakeholders’
Representative showing the actual amount of 49% of all earnings before interest,
taxes, depreciation and amortization of the LLC from the Closing Date through
November 30, 2008 (such actual amount being referred to as the “Actual EBITDA” and
such calculation being referred to as the “True Up
Calculation”). If the Stakeholders’ Representative accepts the
True Up Calculation, or if the Stakeholders’ Representative fails to give notice
to WCWI of any objection within thirty (30) days after receipt of the True Up
Calculation, the True Up Calculation shall be the final and binding calculation
of the Purchase Price adjustments set forth in Section 1.2(c)
(the “Adjustments”). If
the Stakeholders’ Representative gives notice to WCWI of an objection to the
True Up Calculation within thirty (30) days after receipt of the True Up
Calculation, WCWI and the Stakeholders’ Representative shall attempt in good
faith to resolve their differences. If WCWI and the Stakeholders’
Representative are able to resolve their differences, the True Up Calculation,
as modified to reflect the resolution of the differences between WCWI and the
Stakeholders’ Representative, shall be the final and binding calculation of the
Purchase Price Adjustments. If, however, WCWI and the Stakeholders’
Representative are unable to resolve their differences, WCWI and the
Stakeholders’ Representative shall submit any disputed items to the Seattle or
Tacoma office of Xxxx Xxxxx LLP. The determination of either such
office of Xxxx Xxxxx LLP shall be final and binding on WCWI and the Selling
Stakeholders, and the True Up Calculation, as modified to reflect (i) those
differences, if any, that WCWI and the Stakeholders’ Representative were able to
resolve, and (ii) the certified public accountant’s determination with
regard to the remaining disputed items, shall be the final and binding
resolution of the Purchase Price Adjustments.
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“(c)
Purchase Price
Adjustment. If the Actual EBITDA as determined by the True Up
Calculation is less than the Estimated EBITDA as determined on the Closing Date,
the Selling Stakeholders shall promptly pay to WCWI an amount equal to the
difference. If the Actual EBITDA as determined by the True Up
Calculation is greater than the Estimated EBITDA as determined on the Closing
Date, WCWI shall promptly pay to the Selling Stakeholders, in the respective
amounts and to the respective bank accounts specified for the Selling
Unitholders on Schedule 1.2, an
amount equal to the difference.”
“(d)
Tacoma
Receivable. As of the date of the Amendment, the City of
Tacoma is past due on amounts owed to the LLC in the amount of
$2,199,307.57 (the
“Tacoma Receivable”). Within five business (5) days after receipt of
the Tacoma Receivable by the LLC, whether before or after the Closing, WCWI
shall cause the LLC to pay to the Selling Unitholders 49% of the Tacoma
Receivable, less any amount in respect thereof paid to the Selling Unitholders
as part of the Cash payment made to the Selling Unitholders pursuant to
Section 1.2(a)(ii), by wire transfer in the respective percentages and to
the respective bank accounts specified for the Selling Unitholders on Schedule 1.2.”
3. Effective
Date. This Amendment shall be effective from and after the
Effective Date.
4. Effect. Except
as expressly modified by this Amendment, the Agreement shall remain unchanged
and in full force and effect.
5. Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.
[Signatures
appear on the following page.]
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IN
WITNESS WHEREOF, the parties hereto have executed this First Amendment to Equity
Purchase Agreement by persons thereunto duly authorized as of the date first
above written.
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WCWI:
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SELLING
UNITHOLDERS:
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Waste
Connections of Washington, Inc.
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Land
Recovery, Inc.
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By: __________________________
Xxxxxx X.
Xxxxxxxxxxxx,
Chief Executive
Officer
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By:
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Xxxxx
X. XxXxx
President
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Resource
Investments, Inc.
By
________________________________________
Xxxxx
X. XxXxx
President
STAKEHOLDERS’
REPRESENTATIVE:
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Xxxxxx
XxXxx
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CONSENTED
AND AGREED:
Xxxxxx
County Landfill Management, Inc.
By: _________________________
Xxxxxx X. Xxxxxxxxxxxx
Chief Executive Officer
Xxxxxx
County Recycling, Composting and Disposal, LLC
By: Xxxxxx
County Landfill Management, Inc.
By: ______________________
Xxxxxx X. Xxxxxxxxxxxx
Chief Executive Officer
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