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EXHIBIT 10.49
STOCK PURCHASE AGREEMENT
Dated as of October 30, 1998, by and among
Waste Connections, Inc.
Columbia Sanitary Service, Inc.
Xxxxxxxx Sanitary Service, Inc.
Xxxxxxx Xxxxx
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of October 30, 1998 (the "SIGNING
DATE"), is entered into by and among Waste Connections, Inc., a Delaware
corporation ("WCI"), Columbia Sanitary Service, Inc., an Oregon corporation
("CSS") and Xxxxxxxx Sanitary Service, Inc., an Oregon corporation ("MSS", and
together with CSS, the "CORPORATIONS") and Xxxxxxx Xxxxx (the "SHAREHOLDER").
WHEREAS, the Corporations are engaged in the collection and transport of
solid waste and recyclables in the Cities of Portland, Gresham and Fairview,
Oregon, and in the unincorporated areas of Multnomah County, Oregon and other
related activities;
WHEREAS, the Shareholder owns all of the issued and outstanding capital
stock of the Corporations (the "CORPORATIONS' STOCK");
WHEREAS, WCI wishes to acquire from the Shareholder all of the
Corporations' Stock; and
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto, each intending to be bound hereby, agree as
follows:
1. PURCHASE OF CORPORATIONS' STOCK
1.1 SHARES TO BE PURCHASED. At the Closing (as defined in Section 2),
the Shareholder shall sell and deliver to WCI all of the issued and outstanding
shares of the Corporations' Stock, being the number of shares of the Corporation
set forth on Schedule 3.2 opposite the Shareholder's name. At the Closing, WCI
shall purchase the Corporations' Stock and in exchange therefor shall deliver to
the Shareholder at the Closing or thereafter as provided by this Agreement the
purchase price described in Section 1.2 (the "PURCHASE PRICE").
1.2 PURCHASE PRICE : Two Million Two Hundred and Sixty Thousand
Dollars ($2,260,000), (i) minus the Closing Date Debt (as defined in Section
3.22(a)), (ii) plus or minus, as the case may be, the amount by which the
Balance Sheet Date Current Assets (as defined in Section 3.22(b)) are greater or
less than the Balance Sheet Date Current Liabilities (as defined in Section
3.22(b)), and (iii) plus or minus the adjustment based on the date (the "CONSENT
DATE") that CSS receives the Gresham Consent as described below in Sections
1.2(a) through 1.2(d) below (the "GRESHAM ADJUSTMENT"). The Gresham Consent
means the consent of the City of Gresham, Oregon, to the acquisition of CSS by
WCI and CSS' retention of the Solid Waste Collection License in the form
attached to Schedule 3.10(a) hereof after the Closing Date (the "GRESHAM
CONSENT").
(a) If the Consent Date and the Closing occur between November 1,
1998 and November 24, 1998: (i) WCI shall retain any profit or assume any loss
of the Corporations from November 1, 1998 to the Closing Date that are incurred
in accordance with
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Section 5 hereof, and (ii) the Shareholder shall receive payment of Twelve
Thousand Dollars ($12,000) per month (the "SHAREHOLDER'S SALARY/RENT") prorated
from November 1, 1998 through the Closing Date. At the Closing, the Shareholder
shall deliver to WCI Schedule 1.2(a) that will list estimates of the
Corporations' revenues and expenses from November 1, 1998 through the Closing
Date and the Shareholder's Salary/Rent prorated from November 1, 1998, through
the Closing Date.
(b) If the Consent Date and the Closing Date occur between
November 25, and December 15, 1998: (i) WCI shall retain the Corporation's
profits or losses incurred in accordance with Section 5 hereof from November 1
through November 24, 1998; (ii) all profits or losses of the Corporations that
are incurred in accordance with Section 5 hereof between November 25, 1998 and
the Closing Date shall be allocated fifty percent (50%) to each of WCI and the
Shareholder; and (iii) the Shareholder shall receive the Shareholder's
Salary/Rent prorated from November 1, 1998 through the Closing Date. At thc
Closing, the Shareholder shall deliver to WCI Schedule 1.2(b) that will list
estimates of the Corporations' revenues and expenses from November 1 through the
Closing Date and the Shareholder's Salary/Rent prorated from November 1, 1998
through the Closing Date.
(c) If the Consent Date and the Closing Date occur between
December 16, 1998 and December 31, 1998: (i) the Balance Sheet Date shall be
November 30, 1998; (ii) the Shareholder shall retain all profits or losses of
the Corporations up to and including November 30, 1998; (iii) WCI shall retain
the profits or assume the losses of the Corporations for the period of December
1, 1998 through and including December 24, 1998, that are incurred in accordance
with Section 5 hereof; (iv) all profits or losses of the Corporations for the
period of December 25, 1998 through and including the Closing Date that are
incurred in accordance with Section 5 hereof shall be allocated fifty percent
(50%) to each of WCI and the Shareholder; and (v) the Shareholder shall receive
the Shareholder's Salary/Rent prorated from December 1, 1998 through the Closing
Date. At thc Closing, the Shareholder shall deliver to WCI Schedule 1.2(c) that
will list estimates of the Corporations' revenues and expenses from December 1,
1998 through the Closing Date and the Shareholder's Salary/Rent prorated from
December 1, 1998 through the Closing Date.
(d) If the Consent Date and the Closing Date occur between
January 1, 1999 and February 15, 1999: (i) the Balance Sheet Date shall be
December 31, 1998; (ii) the Shareholder shall retain all profits and losses of
the Corporations up to and including December 31, 1998; (iii) WCI shall retain
the profits or assume the losses of the Corporations for the period of January
1, through and including January 24, 1999 that were incurred in accordance with
Section 5 hereof; (iv) all profits or losses of the Corporations incurred in
accordance with Section 5 hereof between January 25 and February 15, 1999 shall
be allocated fifty percent (50%) to each of WCI and the Shareholder; and (v) the
Shareholder shall receive the Shareholder's Salary/Rent prorated from January 1,
1999 through the Closing Date. At thc Closing, the Shareholder shall deliver to
WCI Schedule 1.2(d) that will list estimates of the revenues and expenses for
the Corporations from January 1, 1999 through the Closing Date and the
Shareholder's Salary/Rent prorated from January 1, 1999 through the Closing
Date.
If the Closing does not occur by 5:00 p.m. on December 31, 1998, either party to
this Agreement may terminate this Agreement in accordance with Section 12
hereof. The Purchase Price shall
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be paid to the Shareholder at Closing in cash by wire transfer or check payable
in clearinghouse funds. The adjustment to the Purchase Price based on the
Closing Date Debt, the Balance Sheet Date Current Assets, the Balance Sheet Date
Current Liabilities and the Gresham Adjustment shall be based on estimates of
such amounts. Within 120 days after the Closing, WCI and the Shareholder shall
determine the actual Closing Date Debt, Balance Sheet Date Current Assets,
Balance Sheet Date Current Liabilities and the Gresham Adjustment. If the
difference between the actual amounts of such items and the estimated amounts
provided at the Closing results in an increase in the amount that should have
been paid at the Closing over the amount that was so paid, WCI shall promptly
pay such amount to the Shareholder; if the result is a decrease in the amount
that should have been paid at the Closing from the amount that was so paid, the
Shareholder shall promptly pay such amount to WCI. If within 120 days after the
Closing, WCI and the Shareholder shall not agree on the actual Closing Date
Debt, the Balance Sheet Date Current Assets, the Balance Sheet Date Current
Liabilities and the Gresham Adjustment, WCI and the Shareholder shall submit the
dispute to arbitration in Roseville, California in accordance with the rules of
the Judicial Arbitration and Mediation Services ("JAMS") applying the laws of
California. Disputes will not be resolved in any other forum or venue. Such
arbitration will be conducted by a retired judge who is experienced in resolving
disputes regarding acquisitions. Discovery will not be permitted except as
required by the rules of JAMS. The arbitration award will not include factual
findings or conclusions of law. No punitive damages will be awarded. Any party's
right to appeal or seek modification of any ruling or award of the arbitrator is
severely limited. Any award rendered by the arbitrator will be final and
binding, and judgment may be entered upon it in any court of competent
jurisdiction in California or as otherwise provided by law.
1.3 ALLOCATION OF THE PURCHASE PRICE. Fifteen thousand dollars
($15,000) of the Purchase Price shall be allocated to the covenants not to
compete as described in Section 11.1(a) hereof. Three Hundred Fifty Thousand
Dollars ($350,000) of the Purchase Price shall be allocated to CSS' stock, and
the remainder of the Purchase Price shall be allocated to MSS' stock..
1.4 EXCLUDED ASSETS. The Assets of the Corporations listed on Schedule
1.4 (the "EXCLUDED ASSETS") shall be distributed to the Shareholder prior to the
Closing, and WCI shall acquire no interest in or claim to any of the Excluded
Assets.
2. CLOSING TIME AND PLACE
Subject to the terms and conditions of this Agreement, the closing of the
transactions contemplated herein (the "CLOSING") shall take place on such date
(the "CLOSING DATE") after the consents required by Section 6.7 have been
obtained (or WCI has waived the requirement that one or more such consents be
obtained) as WCI and the Shareholder shall agree. The Closing shall take place
at the Law Offices of Shartsis, Xxxxxx & Xxxxxxxx LLP, Xxx Xxxxxxxx Xxxxx, Xxxxx
0000, Xxx Xxxxxxxxx, Xxxxxxxxxx, 00000. At the Closing, WCI, the Corporations
and the Shareholder shall deliver to each other the documents, instruments and
other items described in Section 8 of this Agreement. At the election of WCI and
the Shareholder, the Closing of this transaction may take place through an
exchange of consideration and documents using overnight courier service or
facsimile. Without regard to the Closing Date and for tax and financial
reporting purposes, the Closing will be deemed effective either as of November
1, 1998, if the
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Closing occurs on or prior to December 31, 1998 , or as of January 1, 1999, if
the Closing occurs after December 31, 1998. The profits and losses of the
Corporations from the effective date through the Closing Date shall be allocated
as described in Section 1.2 hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATIONS AND THE
SHAREHOLDER
The Corporations and the Shareholder, jointly and severally, (i)
represent and warrant that each of the following representations and warranties
is true as of the Signing Date and will be true as of the Closing Date, and (ii)
agree that such representations and warranties shall survive the Closing.
3.1 ORGANIZATION, STANDING AND QUALIFICATION. Each of the Corporations
is duly organized, validly existing and in good standing under the laws of the
State of Oregon. Each of the Corporations has full corporate power and authority
to own and lease its properties and to carry on its business as now conducted.
Neither of the Corporations is required to be qualified or licensed to conduct
business as a foreign corporation in any other jurisdiction.
3.2 CAPITALIZATION. Schedule 3.2 sets forth, as of the Signing Date,
the authorized and outstanding capital of each of the Corporations, the names,
addresses and social security numbers or taxpayer identification numbers of the
record and beneficial owners thereof, the number of shares so owned and wire
transfer instructions for the Shareholder relating to the bank account to which
the Purchase Price should be sent. All of the issued and outstanding shares of
the capital stock of the Corporations are owned of record and beneficially by
the Shareholder, as set forth in Schedule 3.2, and are and as of the Closing
Date will be free and clear of all liens, security interests, encumbrances and
claims of every kind except as set forth in Schedule 3.2. Each share of the
capital stock of each of the Corporations is duly and validly authorized and
issued, fully paid and nonassessable, and was not issued in violation of any
preemptive rights of any past or present shareholder of either of the
Corporations. No option, warrant, call, conversion right or commitment of any
kind (including any of the foregoing created in connection with any indebtedness
of the Corporations) exists which obligates either of the Corporations to issue
any of its authorized but unissued capital stock or other equity interest or
which obligates the Shareholder to transfer any Corporations' Stock to any
person.
3.3 ALL STOCK BEING ACQUIRED. The Corporations' Stock being acquired
by WCI hereunder constitutes all of the outstanding capital stock of the
Corporations.
3.4 AUTHORITY FOR AGREEMENT. The Corporations and the Shareholder have
full right, power and authority to enter into this Agreement and to perform its,
his or her obligations hereunder. The execution and delivery of this Agreement
by the Corporations and the consummation of the transactions contemplated hereby
by the Corporations has been duly authorized by each of the Corporations' Boards
of Directors. This Agreement has been duly and validly executed and delivered by
the Corporations and the Shareholder and, subject to the due authorization,
execution and delivery by WCI, constitutes the legal, valid and binding
obligations of the Corporations and the Shareholder enforceable against the
Corporations and the Shareholder in accordance with its terms.
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3.5 NO BREACH OR DEFAULT. Except as disclosed on Schedule 3.5, the
execution and delivery by the Corporations and the Shareholder of this
Agreement, and the consummation by the Corporations and the Shareholder of the
transactions contemplated hereby, will not:
(a) result in the breach of any of the terms or conditions of, or
constitute a default under, or allow for the acceleration or termination of, or
in any manner release any party from any obligation under, any mortgage, lease,
note, bond, indenture, or material contract, agreement, license or other
instrument or obligation of any kind or nature to which either of the
Corporations or the Shareholder is a party, or by which either of the
Corporations or the Shareholder, or either of the Corporations' or the
Shareholder's assets, is or may be bound or affected; or
(b) violate any law or any order, writ, injunction or decree of
any court, administrative agency or governmental authority, or require the
approval, consent or permission of any governmental or regulatory authority; or
(c) violate the Articles of Incorporation or Bylaws of either of
the Corporations.
3.6 SUBSIDIARIES. Schedule 3.6 lists as of the Signing Date any and
all subsidiaries of the Corporations and any securities of any other corporation
or any securities or other interest in any other business entity owned by either
of the Corporations or any of the Corporations' subsidiaries.
3.7 FINANCIAL STATEMENTS. Each of the Corporations has delivered to
WCI, as Schedule 3.7, copies of financial statements ("FINANCIAL STATEMENTS")
for such Corporation's three most recent fiscal years and interim financial
statements for such Corporation for the period ended October 31, 1998 (the
"BALANCE SHEET DATE"). Such financial statements have been [COMPILED/AUDITED] by
____________________. The Financial Statements are true and correct and fairly
present (i) the financial position of each of the Corporations in accordance
with generally accepted accounting principles, applied as of the respective
dates of the balance sheets included in said statements, and (ii) the results of
operations for the respective periods indicated. The Financial Statements have
been prepared in accordance with generally accepted accounting principles,
applied consistently with prior periods. Except to the extent reflected or
reserved against in each of the Corporations' balance sheets as of the Balance
Sheet Date, or as disclosed on Schedule 3.7 or Schedule 3.8, neither of the
Corporations had as of the Balance Sheet Date, nor will either of the
Corporations have as of the Closing Date, any liabilities of any nature, whether
accrued, absolute, contingent or otherwise, including, without limitation, tax
liabilities due or to become due except, with respect to the period from the
Signing Date through the Closing Date, as permitted by Section 5.2(d).
3.8 LIABILITIES. Parts I, II, III and IV of Schedule 3.8, are accurate
lists and descriptions of all liabilities of each of the Corporations required
to be described below in the format set forth below.
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(a) Part I of Schedule 3.8 lists, as of the Signing Date, other
than with respect to trade payables and as of the end of the month prior to the
Signing Date with respect to trade payables, all indebtedness for money borrowed
and all other fixed and uncontested liabilities of any kind, character and
description (excluding all real and personal property leasehold interests
included in Part IV of Schedule 3.8), whether reflected or not reflected on the
Financial Statements and whether accrued or absolute, and states as to each such
liability the amount of such liability and to whom payable. From the end of the
month prior to the Closing Date through the Closing Date, trade payables have
been incurred only in the ordinary course of business consistent with comparable
prior periods.
(b) Part II of Schedule 3.8 lists, as of the Signing Date, all
claims, suits and proceedings which are pending against either of the
Corporations and, to the knowledge of the Corporations and the Shareholder, all
contingent liabilities and all claims, suits and proceedings threatened or
anticipated against either of the Corporations. Part II of Schedule 3.8 includes
a summary description of each such liability, including, without limitation, (A)
the name of each court, agency, bureau, board or body before which any such
claim, suit or proceeding is pending, (B) the date such claim, suit or
proceeding was instituted, (C) the parties to such claim, suit or proceeding,
(D) a brief description of the factual basis alleged to underlie such claim,
suit or proceeding, including the date or dates of all material occurrences, and
(E) the amount claimed and other relief sought, together with copies of all
material documents, reports and other records relating thereto to the extent
that they are in either of the Corporations' or the Shareholder's possession or
control.
(c) Part III of Schedule 3.8 lists, as of the Signing Date and to
the extent not otherwise included in Part I of Schedule 3.8, all liens, claims
and encumbrances secured by or otherwise affecting any asset of either of the
Corporations (including any Corporate Property, as hereafter defined), including
a description of the nature of such lien, claim or encumbrance, the amount
secured if it secures a liability, the nature of the obligation secured, and the
party holding such lien, claim or encumbrance.
(d) Part IV of Schedule 3.8 lists, as of the Signing Date and to
the extent not otherwise included in Part I or Part III of Schedule 3.8, all
real and personal property leasehold interests to which either of the
Corporations is a party as lessor or lessee or, to the knowledge of either of
the Corporations or the Shareholder, affecting or relating to any Corporate
Property, and includes a description of the nature and principal terms of such
leasehold interest, including, without limitation, the identity of the other
party thereto, the term of such leasehold interest (including renewal options),
the base rent and any additional rent owing thereunder (including any
adjustments thereto), security deposits, rights of first offer or first refusal,
purchase options, and restrictions on transfer.
Except as described on the applicable part of Schedule 3.8,
neither the Corporations nor the Shareholder has made any payment or committed
to make any payment since the Balance Sheet Date on or with respect to any of
the liabilities or obligations listed on Schedule 3.8 except, in the case of
liabilities and obligations listed on Parts I, III and IV of Schedule 3.8,
periodic payments required to be made under the terms of the agreements or
instruments governing such obligations or liabilities or made in the ordinary
course of business.
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3.9 ACCURATE AND COMPLETE RECORDS. The corporate minute books, stock
ledgers, books, ledgers, financial records and other records of the
Corporations:
(a) have been made available to WCI and its agents at the
respective Corporations' offices or at the offices of WCI's attorneys or the
respective Corporations' attorneys;
(b) have been, in all material respects, maintained in accordance
with all applicable laws, rules and regulations; and
(c) are accurate and complete, reflect all material corporate
transactions required to be authorized by the Board of Directors and/or
Shareholder of the Corporations and do not contain or reflect any material
discrepancies.
3.10 PERMITS AND LICENSES.
(a) Schedule 3.10(a) is a full and complete list, and includes
copies, of all material permits, licenses, franchises, and service agreements
pursuant to which each of the Corporations is authorized to collect and haul
industrial, commercial and residential solid waste (the "COLLECTION
FRANCHISES"), and of all other material permits, licenses, titles (including
motor vehicle titles and current registrations), fuel permits, zoning and land
use approvals and authorizations, including, without limitation, any conditional
or special use approvals or zoning variances, occupancy permits, and any other
similar documents constituting a material authorization or entitlement or
otherwise material to the operation of the business of each of the Corporations
(collectively the "GOVERNMENTAL PERMITS") owned by, issued to, held by or
otherwise benefiting either of the Corporations or the Shareholder as of the
Signing Date. The status of the Governmental Permits related to the disposal
areas owned or used by the Corporation, including, without limitation, any
conditions thereto and, if applicable, the expiration dates thereof, are also
described in Schedule 3.10(a). Schedule 3.10(a) also sets forth the name of any
governmental agency or other third party from whom the Shareholder, the
Corporations or WCI must obtain consent (the "REQUIRED GOVERNMENTAL CONSENTS")
in order to effect a direct or indirect transfer of the Collection Franchises or
other Governmental Permits required as a result of the consummation of the
transactions contemplated by this Agreement. All such consents have been
obtained. Except as set forth on Schedule 3.10(a), all of the Collection
Franchises and other Governmental Permits enumerated and listed on Schedule
3.10(a) are adequate for the operation of the business of either of the
Corporations and of each Corporate Property as presently operated and are valid
and in full force and effect. All of said Collection Franchises and other
Governmental Permits and agreements have been duly obtained and are in full
force and effect, and there are no proceedings pending or, to the knowledge of
the Corporations or the Shareholder, threatened which may result in the
revocation, cancellation, suspension or adverse modification of any of the same.
Neither the Corporations nor the Shareholder has any knowledge of any reason why
all such Governmental Permits and agreements will not remain in effect for the
period or term stated therein, subject to WCI's full compliance therewith, after
consummation of the transactions contemplated hereby.
(b) Schedule 3.10(b) includes: (i) all records, notifications,
reports, permit and license applications, engineering and geologic studies, and
environmental impact
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reports, tests or assessments (collectively, "RECORDS, NOTIFICATIONS AND
REPORTS") that (A) are material to the operation of the business of each of the
Corporations, or (B) relate to the discharge or release of materials into the
environment and/or the handling or transportation of waste materials or
hazardous or toxic substances or otherwise relate to the protection of the
public health or the environment, or (C) were filed with or submitted to
appropriate governmental agencies during the past 24 months by either of the
Corporations or the Shareholder or their agents with respect to the business of
either of the Corporations, and (ii) all material notifications from such
governmental agencies to the Corporations, the Shareholder or their agents in
response to or relating to any of such Records, Notifications and Reports.
(c) Schedule 3.10(c) lists, as of the Signing Date, each facility
owned, leased, operated or otherwise used by either of the Corporations, the
ownership, lease, operation or use of which is being transferred to, assumed by
or otherwise acquired directly or indirectly by WCI pursuant to this Agreement
(each, a "FACILITY" and collectively, the "FACILITIES"). Except as otherwise
disclosed on Schedule 3.10(c):
(i) Each Facility owned by either of the Corporations or
owned by the Shareholder or an Affiliate (as hereinafter defined) of the
Shareholder and leased to either of the Corporations is fully licensed,
permitted and authorized to carry on its current business under all applicable
federal, state and local statutes, orders, approvals, zoning or land use
requirements, rules and regulations, and, none of such Facilities or the current
use thereof constitutes a non-conforming use or is otherwise subject to any
restrictions regarding the operation, renovation or reconstruction thereof. To
the knowledge of the Corporations and the Shareholder, no Facility that is
leased by either of the Corporations from a non-Affiliate or the current use
thereof constitutes a material non-conforming use or is otherwise subject to any
material restrictions regarding the operation, renovation or reconstruction
thereof.
(ii) There are no circumstances, conditions or reasons which
are likely to be the basis for revocation or suspension of any Facility's site
assessments, permits, licenses, consents, authorizations, zoning or land use
permits, variances or approvals relating to any Facility owned by either of the
Corporations or owned by the Shareholder or an Affiliate (as hereinafter
defined) of the Shareholder and leased to either of the Corporation, and to the
knowledge of the Corporations and the Shareholder there are no circumstances,
conditions or reasons which are likely to be the basis for revocation or
suspension of any site assessment, permits, licenses, consents, authorizations,
zoning or land use permits, variances or approvals relating to any Facility
leased by either of the Corporations from a third party who is not an Affiliate
(as hereinafter defined) of the Shareholder.
3.11 CERTAIN RECEIVABLES. Schedule 3.11 is an accurate list as of the
Signing Date of the accounts and notes receivable of the Corporations from and
advances to employees, former employees, officers, directors, the Shareholder
and Affiliates of the foregoing which have not been repaid. For purposes of this
Agreement, the term "AFFILIATE" means, with respect to any person, any person
that directly or indirectly through one or more intermediaries controls or has
an ownership interest in, or is controlled or owned in whole or in part by, or
is under common control or ownership in whole or in part with such person, and
in the case of a corporation includes directors and officers, in the case of
individuals includes the individual's spouse, father,
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mother, grandfather, grandmother, brothers, sisters, children and grandchildren
and in the case of a trust includes the grantors, trustees and beneficiaries of
the trust.
3.12 FIXED ASSETS AND REAL PROPERTY.
(a) Schedule 3.12(a) lists, as of the Signing Date, substantially
all the fixed assets (other than real estate) of the Corporations, including,
without limitation, identification of each vehicle by description and serial
number, identification of machinery, equipment and general descriptions of
parts, supplies and inventory. Except as described on Schedule 3.12(a), all of
the Corporations' containers, vehicles, machinery and equipment necessary for
the operation of the Corporations' businesses are in operable condition, and all
of the motor vehicles and other rolling stock of the Corporations are in
compliance with all applicable laws, rules and regulations. All such containers,
vehicles, machinery and equipment are substantially free of known defects that
would cause them to fail. All leases of fixed assets are in full force and
effect and binding upon the parties thereto; neither the Corporations nor, to
the knowledge of the Corporations or the Shareholder, any other party to such
leases is in breach of any of the material provisions thereof.
(b) Each parcel of real property leased, owned or being purchased
by either of the Corporations as of the Signing Date (the "CORPORATE PROPERTY"),
including the street address and, in the case of Corporate Property owned or
being purchased, the legal description thereof, is listed on Schedule 3.12(b),
and attached to said Schedule 3.12(b), are copies of all leases, deeds,
outstanding mortgages, other encumbrances and any existing title insurance
policies or lawyer's title opinions relating to each Corporate Property, as well
as a current commitment for title insurance issued by a title insurance company
satisfactory to WCI with respect to each Corporate Property owned or being
purchased by either of the Corporations, together with copies of all of the
title exceptions referred to in each such commitment. All leases listed on
Schedule 3.12(b) are in full force and effect and binding on the parties
thereto; neither the Corporations nor any other party to any such lease is in
breach of any of the material provisions thereof; to the knowledge of the
Corporations and the Shareholder, the landlord's interest in each such lease has
not been assigned to any third party nor has any such interest been mortgaged,
pledged or hypothecated; and neither of the Corporations has assigned any such
lease or sublet all or any part of the Corporate Property which is the subject
of any such lease. Except as described on Schedule 3.12(b), there are no
material physical or mechanical defects in any Facility located on any Corporate
Property and each such Facility is in good condition and repair.
(c) Each of the Corporations has good, valid and marketable title
to all properties and assets, real, personal, and mixed, tangible and
intangible, actually used or necessary for the conduct of its business, free of
any encumbrance or charge of any kind except: (i) liens for current taxes not
yet due; (ii) minor imperfections of title and encumbrances, if any, that are
not substantial in amount, do not materially reduce the value or impair the use
of the property subject thereto, do not materially impair the value of the
Corporations, and have arisen only in the ordinary course of business and
consistent with past practice; and (iii) the liens identified on Parts I and III
of Schedule 3.8 (collectively, the "PERMITTED LIENS"). Except as described on
Schedule 3.12(b), there are no leases, occupancy agreements, options, rights of
first refusal or any other agreements or arrangements, either oral or written,
that create or confer in any person or entity the right to acquire, occupy or
possess, now or in the future, any Facility,
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any Corporate Property, or any portion thereof, or create in or confer on any
person or entity any right, title or interest therein or in any portion thereof.
3.13 RELATED PARTY TRANSACTIONS. Neither the Shareholder nor his
respective Affiliates has entered into any transaction with or is a party to any
agreement, lease or other instrument, or as of the date of this Agreement is
indebted to or is owed money by, either of the Corporations not disclosed on the
Financial Statements. Except as disclosed in the Financial Statements, neither
the Shareholder nor his Affiliates owns any direct or indirect interest of any
kind in, or controls or is a director, officer, employee, shareholder or partner
of, or consultant or lender to or borrower from or has the right to participate
in the profits of, any Person which is a competitor, supplier, customer,
landlord, tenant, creditor or debtor of either of the Corporations.
3.14 CONTRACTS AND AGREEMENTS; ADVERSE RESTRICTIONS.
(a) Schedule 3.14(a) lists, as of the Signing Date, and includes
copies of, all material contracts and agreements (other than leases and
documents included with Schedule 3.12(b)) to which a Corporation is a party or
by which it or any of its property is bound (including, but not limited to,
joint venture or partnership agreements, contracts with any labor organizations,
promissory notes, loan agreements, bonds, mortgages, deeds of trust, liens,
pledges, conditional sales contracts or other security agreements). Except as
disclosed on Schedule 3.14(a), all such contracts and agreements included in
Schedule 3.14(a) are in full force and effect and binding upon the parties
thereto. Except as described or cross referenced on Schedule 3.14(a), neither of
the Corporations or, to the Corporations' or the Shareholder's knowledge, any
other parties to such contracts and agreements is in breach thereof, and none of
the parties has threatened to breach any of the material provisions thereof or
notified the Corporations or the Shareholder of a default thereunder, or
exercised any options thereunder.
(b) Except as set forth on Schedule 3.14(b), there is no
outstanding judgment, order, writ, injunction or decree against either of the
Corporations, the result of which could materially adversely affect either of
the Corporations or its business or any of the Corporate Properties, nor has
either of the Corporations been notified that any such judgment, order, writ,
injunction or decree has been requested.
3.15 INSURANCE. Schedule 3.15 is a complete list and includes copies,
as of the Signing Date, of all insurance policies in effect on the Signing Date
or, with respect to "OCCURRENCE" policies that were in effect, carried by either
of the Corporations in respect of the Corporate Properties or any other property
used by the Corporations specifying, for each policy, the name of the insurer,
the type of risks insured, the deductible and limits of coverage, and the annual
premium therefor. Each of the Corporations currently carries insurance in the
type and amount ordinarily carried by owners or corporations in similar
circumstances, in respect to such Corporation's properties, assets and business.
During the last five years, there has been no lapse in any material insurance
coverage of either of the Corporations. For each insurer providing coverage for
any of the contingent or other liabilities listed on Schedule 3.8, except to the
extent otherwise set forth in Part II of Schedule 3.8, each such insurer, if
required, has been properly and timely notified of such liability, no
reservation of rights letters have been received by either of the Corporations
and the insurer has assumed defense of each suit or legal proceeding. All such
proceedings are fully covered by insurance, subject to normal deductibles.
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3.16 PERSONNEL. Schedule 3.16 is a complete list, as of the Signing
Date, of all officers, directors and employees (by type or classification) of
each of the Corporations and their respective rates of compensation, including
(i) the portions thereof attributable to bonuses, (ii) any other salary, bonus,
stock option, equity participation, or other compensation arrangement made with
or promised to any of them, and (iii) copies of all employment agreements with
non-union officers, directors and employees. Schedule 3.16 also lists the
driver's license number for each driver of the Corporations' motor vehicles.
3.17 BENEFIT PLANS AND UNION CONTRACTS.
(a) Schedule 3.17(a) is a complete list as of the Signing Date,
and includes complete copies (or, in the case of oral arrangements,
descriptions), of all employee benefit plans and agreements (written or oral)
currently maintained or contributed to by either of the Corporations, including
employment agreements and any other agreements containing "GOLDEN PARACHUTE"
provisions, retirement plans, welfare benefit plans and deferred compensation
agreements, together with copies of such plans, agreements and any trusts
related thereto, and classifications of employees covered thereby as of the
Signing Date. Except for the employee benefit plans described on Schedule
3.17(a), neither Corporation has any other pension, retirement, welfare, profit
sharing, deferred compensation, stock option, employee stock purchase or other
employee benefit plans or arrangements with any party. Except as disclosed on
Schedule 3.17(a), all employee benefit plans listed on Schedule 3.17(a) are
fully funded and in substantial compliance with all applicable federal, state
and local statutes, ordinances and regulations. All such plans that are intended
to qualify under Section 401(a) of the Internal Revenue Code have been
determined by the Internal Revenue Service to be so qualified, and copies of
such determination letters are included as part of Schedule 3.17(a). Except as
disclosed on Schedule 3.17(a), all reports and other documents required to be
filed with any governmental agency or distributed to plan participants or
beneficiaries (including, but not limited to, actuarial reports, audits or tax
returns) have been timely filed or distributed, and copies thereof are included
as part of Schedule 3.17(a). All employee benefit plans listed on such Schedule
have been operated in accordance with the terms and provisions of the plan
documents and all related documents and policies. Neither of the Corporations
has incurred any liability for excise tax or penalty due to the Internal Revenue
Service or U.S. Department of Labor nor any liability to the Pension Benefit
Guaranty Corporation for any employee benefit plan, and neither the
Corporations, nor a party-in-interest or disqualified person, has engaged in any
transaction or other activity which would give rise to such liability. Neither
of the Corporations has participated in or made contributions to any
"MULTI-EMPLOYER PLAN" as defined in the Employee Retirement Income Security Act
of 1974 ("ERISA"), nor would either of the Corporations or any affiliate be
subject to any withdrawal liability with respect to such a plan if any such
employer withdrew from such a plan immediately prior to the Signing Date. No
employee pension benefit plan is under funded on a termination basis as of the
date of this Agreement.
(b) Schedule 3.17(b) is a complete list, as of the Signing Date,
and includes complete copies of all union contracts and agreements between
either of the Corporations and any collective bargaining group. Each of the
Corporations is in compliance in all material respects with all applicable
federal and state laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, and nondiscrimination in employment,
and is not engaged in any unfair labor practice. There is no
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charge pending or, to either of the Corporations' or the Shareholder's
knowledge, threatened, against either of the Corporations before any court or
agency and alleging unlawful discrimination in employment practices and there is
no charge of or proceeding with regard to any unfair labor practice against it
pending before the National Labor Relations Board. There is no labor strike,
dispute, slow down or stoppage as of the Signing Date, existing or threatened
against either of the Corporations nor has either of the Corporations
experienced any labor strike, slow-down, work stoppage, labor difficulty or
other job action during the last five years. No union organizational activity
exists respecting employees of either of the Corporations not currently subject
to a collective bargaining agreement. The union contracts or other agreements
delivered as part of Schedule 3.17(b) constitute all agreements with the unions
or other collective bargaining groups, and there are no other arrangements or
established practices relating to the employees covered by any collective
bargaining agreement; and Schedule 3.17(b) will contain as of the date it is
delivered a list of all arbitration or grievance proceedings that have occurred
since the Balance Sheet Date. No one has petitioned within the last five years,
and no one is now petitioning, for union representation of any employees of
either of the Corporations.
(c) No payment made to any employee, officer, director or
independent contractor of either of the Corporations (the "RECIPIENT") pursuant
to any employment contract, severance agreement or other arrangement (the
"GOLDEN PARACHUTE PAYMENT") will be nondeductible by such Corporation because of
the application of Sections 280G and 4999 of the Code to the Golden Parachute
Payment, nor will such Corporation be required to compensate any Recipient
because of the imposition of an excise tax (including any interest or penalties
related thereto) on the Recipient by reason of Sections 280G and 4999 of the
Code.
3.18 TAXES.
(a) Both of the Corporations have timely filed or will timely
file all requisite federal, state, local and other tax and information returns
due for all fiscal periods ended on or before the Closing Date. All such returns
are accurate and complete. Except as set forth on Schedule 3.18, there are no
open years (other than those within the statute of limitations), examinations in
progress, extensions of any statute of limitations or claims against either of
the Corporations relating to federal, state, local or other taxes (including
penalties and interest) for any period or periods prior to and including the
Signing Date and no notice of any claim for taxes has been received. Copies of
(i) any tax examinations, (ii) extensions of statutory limitations and (iii) the
federal income, and state franchise, income and sales tax returns of both of the
Corporations for their last three fiscal years are attached as part of Schedule
3.18. Copies of all other federal, state, local and other tax and information
returns for all prior years of the Corporations' existence have been made
available to WCI and are among the records of the Corporations that will accrue
to WCI at the Closing. The Corporation has not been contacted by any federal,
state or local taxing authority regarding a prospective examination.
(b) Except as set forth on Schedule 3.18 (which schedule also
includes the amount due with respect to each of the Corporations) each of the
Corporations has duly paid all taxes and other related charges required to be
paid prior to the date of this Agreement. The reserves for taxes contained in
the Financial Statements of each of the Corporations are adequate to cover its
tax liability as of the Closing Date.
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(c) Each of the Corporations has withheld all required amounts
from its employees for all pay periods in full and complete compliance with the
withholding provisions of applicable federal, state and local laws. All required
federal, state and local and other returns with respect to income tax
withholding, social security, and unemployment taxes have been duly filed by
each of the Corporations for all periods for which returns are due, and the
amounts shown on all such returns to be due and payable have been paid in full.
3.19 COPIES COMPLETE; REQUIRED CONSENTS. Except as disclosed on
Schedule 3.19, the certified copies of the Articles of Incorporation and Bylaws
of each of the Corporations, as amended to the Signing Date, and the copies of
all leases, instruments, agreements, licenses, permits, certificates or other
documents that have been delivered to WCI in connection with the transactions
contemplated hereby are complete and accurate as of the Signing Date and are
true and correct copies of the originals thereof. Except as specifically
disclosed on Schedule 3.19, the rights and benefits of the Corporation will not
be adversely affected by the transactions contemplated hereby, and the execution
of this Agreement and the performance of the obligations hereunder will not
violate or result in a breach or constitute a default under any of the terms or
provisions thereof. None of such leases, instruments, agreements, licenses,
permits, site assessments, certificates or other documents requires notice to,
or consent or approval of, any governmental agency or other third party to any
of the transactions contemplated hereby, except the Required Governmental
Consents, such consents and approvals as are listed on Schedule 3.19, all of
which have been given or obtained.
3.20 CUSTOMERS, XXXXXXXX, CURRENT RECEIPTS AND RECEIVABLES. Schedule
3.20 is a current, accurate and complete list of, and includes:
(a) the customers that each of the Corporations serves on an
ongoing basis, including name, location and current billing rate, as of the
Signing Date;
(b) an accurate and complete aging of all accounts and notes
receivable from customers as of the last day of the month preceding the month in
which such Schedule is delivered, showing amounts due in 30-day aging
categories. Except to the extent of the allowance for bad debts reflected on the
Financial Statements or otherwise disclosed on Schedules 3.11 and 3.20, each of
the Corporations' accounts and notes receivable are collectible in the amounts
shown on Schedules 3.11 and 3.20 and
(c) the average monthly revenues of each of the Corporations
derived from xxxxxxxx to its customers for each of the twelve (12) months
preceding the Signing Date. Except as set forth on Schedule 3.20, neither the
Corporations nor the Shareholder has any knowledge of any reason why either of
the Corporations' average monthly revenues derived from xxxxxxxx to its
customers after the Closing Date should not continue at approximately the same
rate as before the Signing Date.
3.21 NO CHANGE WITH RESPECT TO THE CORPORATION. Except as set forth on
Schedule 3.21, since the Balance Sheet Date, the business of each of the
Corporations has been conducted only in the ordinary course and there has been
no change in the condition (financial or otherwise) of the assets, liabilities
or operations of either of the Corporations other than changes in the ordinary
course of business, none of which either singly or in the aggregate has been
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materially adverse. Specifically, and without limiting the generality of the
foregoing, except as set forth on Schedule 3.21, with respect to each of the
Corporations, since the Balance Sheet Date, there has not been:
(a) any material change in its financial condition, assets,
liabilities (contingent or otherwise), income, operations or business which
would have a material adverse effect on the financial condition, assets,
liabilities (contingent or otherwise), income, operations or business of such
Corporation, taken as a whole;
(b) any material damage, destruction or loss (whether or not
covered by insurance) adversely affecting any material portion of its properties
or business;
(c) any change in or agreement to change (i) its Shareholder,
(ii) ownership of its authorized capital or outstanding securities, or (iii) its
securities;
(d) any declaration or payment of, or any agreement to declare or
pay, any dividend or distribution in respect of its capital stock or any direct
or indirect redemption, purchase or other acquisition of any of its capital
stock;
(e) any increase or bonus or promised increase or bonus in the
compensation payable or to become payable by it, in excess of usual and
customary practices, to any of its directors, officers, employees or agents, or
any accrual or arrangement for or payment of any bonus or other special
compensation to any employee or any severance or termination pay paid to any of
its present or former officers or other key employees;
(f) any labor dispute or any other event or condition of any
character with respect to either of the Corporations' employees, materially
adversely affecting such Corporation's business or future prospects;
(g) any sale or transfer, or any agreement to sell or transfer,
any of its material assets, property or rights to any other person, including,
without limitation, the Shareholder and his Affiliates, other than in the
ordinary course of business;
(h) any cancellation, or agreement to cancel, any material
indebtedness or other material obligation owing to it, including, without
limitation, any indebtedness or obligation of the Shareholder or any Affiliate
thereof;
(i) any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of its assets, property or
rights or requiring consent of any party to the transfer and assignment of any
such assets, property or rights;
(j) any purchase or acquisition of, or any agreement, plan or
arrangement to purchase or acquire, any of its property, rights or assets
outside the ordinary course of its business;
(k) any waiver of any of its material rights or claims;
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(l) any new or any amendment or termination of any existing
material contract, agreement, license, permit or other right to which it is a
party; or
(m) any other material transaction outside the ordinary course of
its business.
3.22 CLOSING DATE DEBT; BALANCE SHEET DATE CURRENT ASSETS AND BALANCE
SHEET DATE CURRENT LIABILITIES.
(a) On the Closing Date, the Shareholder shall deliver to WCI
Schedule 3.22(a) that will list (i) the amount of the aggregate debt (excluding
trade payables) of each of the Corporations outstanding on the Closing Date
required to be repaid by WCI or one of the Corporations at or immediately after
the Closing Date and all prepayment penalties incurred or to be incurred by WCI
or one of the Corporations in connection with the repayment of any such debt,
(ii) the amount of the aggregate debt (excluding trade payables) of each of the
Corporations outstanding on the Closing Date which will remain outstanding
obligations of such Corporation after the Closing Date, and all prepayment
penalties applicable to such debt if repaid prior to maturity, including in each
case all interest accrued through and including the Closing Date, (iii) the
aggregate amount of the present value as of the Closing Date, discounted at the
lease rate factor, if known, inherent in the lease or, if the lease rate factor
is not known, at the rate charged to each of the Corporations by a third party
lender in connection with its most recent borrowing to finance equipment, of all
lease obligations of the Corporations that are not capitalized lease obligations
and (iv) the aggregate amount of the present value as of the Closing Date of all
capitalized lease obligations (determined in accordance with generally accepted
accounting principles) of the Corporations (the "CLOSING DATE DEBT"). Schedule
3.22(a) includes wire transfer instructions for creditors whose Closing Date
Debt WCI has designated for payment, and attached to Schedule 3.22(a) are
pay-off letters or instructions from such creditors in the form provided by
WCI's bank or acceptable to WCI.
(b) On the Closing Date, the Shareholder shall deliver to WCI
Schedule 3.22(b) that will list as of the Balance Sheet Date the amount of the
aggregate current liabilities (including any reserve for unpaid taxes and
excluding the current portion of long-term debt to the extent such current
portion will be included in Closing Date Debt) and trade payables of the
Corporation as of the Balance Sheet Date (the "BALANCE SHEET DATE CURRENT
LIABILITIES") and the amount of the aggregate cash and other current assets of
the Corporation as of the Balance Sheet Date, including prepaid expenses the
benefit of which survives the Balance Sheet Date and the accounts receivable of
the Corporation earned prior to the Balance Sheet Date and collectible (less an
allowance for doubtful accounts) on or after the Balance Sheet Date (the
"BALANCE SHEET DATE CURRENT ASSETS").
3.23 BANK ACCOUNTS.
(a) Schedule 3.23(a) is a complete and accurate list, as of the
Signing Date, of:
(i) the name of each bank in which either of the
Corporations has accounts or safe deposit boxes;
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(ii) the name(s) in which the accounts or boxes are held;
(iii) the type of account; and
(iv) the name of each person authorized to draw thereon or
have access thereto.
(b) Schedule 3.23(b) is a complete and accurate list, as of the
Closing Date, of:
(i) each credit card or other charge account issued to
either of the Corporations; and
(ii) the name of each person to whom such credit cards or
other charge accounts have been issued.
3.24 COMPLIANCE WITH LAWS. Except as disclosed on Schedule 3.24, each
of the Corporations has complied with, and each of the Corporations is presently
in compliance with, federal, state and local laws, ordinances, codes, rules,
regulations, Governmental Permits, orders, judgments, awards, decrees, consent
judgments, consent orders and requirements applicable to it (collectively
"LAWS"), including, but not limited to, the Americans with Disabilities Act, the
Federal Occupational Safety and Health Act, and Laws relating to the public
health, safety or protection of the environment (collectively, "ENVIRONMENTAL
LAWS"). Except as disclosed on Schedule 3.24, there has been no assertion by any
party that either of the Corporations is in violation of any Laws. Specifically
and without limiting the generality of the foregoing, except as disclosed on
Schedule 3.24:
(a) Except as permitted under applicable laws and regulations,
including, without limitation, the federal Resource Conservation Recovery Act,
42 USC Section 6901 et seq. ("RCRA"), neither of the Corporations has accepted,
processed, handled, transferred, generated, treated, stored or disposed of any
Hazardous Material (as defined in Section 3.24(e) below) nor has either of the
Corporations accepted, processed, handled, transferred, generated, treated,
stored or disposed of asbestos, medical waste, radioactive waste or municipal
waste, except in compliance with Environmental Laws.
(b) During each of the Corporations' ownership or leasing of the
Corporate Property owned or leased by it and, to the knowledge of the
Corporations and the Shareholder, prior to the Corporations' ownership or
leasing of such Corporate Property, no Hazardous Material, other than that
allowed under Environmental Laws, including, without limitation, RCRA, has been
disposed of, or otherwise released on any Corporate Property.
(c) During each of the Corporations' ownership or leasing of the
Corporate Property owned or leased by it and, to the knowledge of the
Corporations and the Shareholder, prior to the Corporations' ownership or
leasing of such Corporate Property, no Corporate Property has ever been subject
to or received any notice of any private, administrative or judicial action, or
notice of any intended private, administrative or judicial action relating to
the presence or alleged presence of Hazardous Material in, under, upon or
emanating from any Corporate Property or any real property now or previously
owned or leased by a Corporation.
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There are no pending and, to the Corporations' and the Shareholder's knowledge,
no threatened actions or proceedings from any governmental agency or any other
entity involving remediation of any condition of the Corporate Property,
including, without limitation, petroleum contamination, pursuant to
Environmental Laws.
(d) Except as allowed under Environmental Laws, neither of the
Corporations has knowingly sent, transported or arranged for the transportation
or disposal of any Hazardous Material, to any site, location or facility.
(e) As used in this Agreement, "HAZARDOUS MATERIAL" means the
substances (i) defined as "HAZARDOUS WASTE" in 40 CFR 261, and substances
defined in any comparable Oregon statute or regulation; (ii) any substance the
presence of which requires remediation pursuant to any Environmental Laws; and
(iii) any substance required to be disposed of in a manner expressly prescribed
by Environmental Laws.
3.25 POWERS OF ATTORNEY. Neither of the Corporations has granted any
power of attorney (except routine powers of attorney relating to representation
before governmental agencies) or entered into any agency or similar agreement
whereby a third party may bind or commit either of the Corporations in any
manner.
3.26 UNDERGROUND STORAGE TANKS. Except as set forth on Schedule 3.26,
no underground storage tanks containing petroleum products or wastes or other
hazardous substances regulated by 40 CFR 280 or Environmental Laws are currently
or have been located on any Corporate Property. Except as set forth on Schedule
3.26, neither of the Corporations has owned or leased any real property not
included in the Corporate Property having any underground storage tanks
containing petroleum products or wastes or other hazardous substances regulated
by 40 CFR 280. As to each such underground storage tank ("UST") identified on
Schedule 3.26, each of the Corporations has provided to WCI, on Schedule 3.26:
(a) the location of the UST, information and material, including
any available drawings and photographs, showing the location, and whether either
of the Corporations currently owns or leases the property on which the UST is
located (and if neither of the Corporations currently owns or leases such
property, the dates on which one of the Corporations did and the current owner
or lessee of such property);
(b) the date of installation and specific use or uses of the UST;
(c) copies of tank and piping tightness tests and cathodic
protection tests and similar studies or reports for each UST;
(d) a copy of each notice to or from a governmental body or
agency relating to the UST;
(e) other material records with regard to the UST, including,
without limitation, repair records, financial assurance compliance records and
records of ownership; and
(f) to the extent not otherwise set forth pursuant to the above,
a summary description of instances, past or present, in which, to either of the
Corporations', or the
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Shareholder's knowledge, the UST failed to meet applicable standards and
regulations for tightness or otherwise and the extent of such failure, and any
other operational or environmental problems with regard to the UST, including,
without limitation, spills, including spills in connection with delivery of
materials to the UST, releases from the UST and soil contamination.
Except to the extent set forth on Schedule 3.26, each of the
Corporations has complied with Environmental Laws regarding the installation,
use, testing, monitoring, operation and closure of each UST described on
Schedule 3.26.
3.27 PATENTS, TRADEMARKS, TRADE NAMES, ETC. Schedule 3.27 lists all
patents, tradenames, fictitious business names, trademarks, service marks, and
copyrights owned by either of the Corporations or which either of the
Corporations is licensed to use (other than licenses to use software for
personal computer operating systems that were provided when the computer was
purchased and licenses to use software for personal computers that are granted
to retail purchasers of such software). No patents, trade secrets, know-how,
intellectual property, trademarks, trade names, assumed names, copyrights, or
designations used by either of the Corporations in its business infringe on any
patents, trademarks, or copyrights, or any other rights of any person. Neither
the Corporations nor the Shareholder knows or has any reason to believe that
there are any claims of third parties to the use of any such names or any
similar name, or knows of or has any reason to believe that there exists any
basis for any such claim or claims.
3.28 ASSETS, ETC., NECESSARY TO BUSINESS. Each of the Corporations
owns or leases all properties and assets, real, personal, and mixed, tangible
and intangible, and, except as disclosed on Schedules 3.5, 3.10(a), 3.10(c),
3.14(a) and 3.19, is a party to all Collection Franchises and Governmental
Permits and other agreements necessary to permit it to carry on its business as
presently conducted. All of said Collection Franchises and Governmental Permits
and agreements have been duly obtained and, except as disclosed on Schedules
3.5, 3.8-Part II, 3.10(a), 3.10(c) 3.14(a) and 3.19, are in full force and
effect and there are no proceedings pending or threatened which may result in
the revocation, cancellation, suspension or adverse modification of any of the
same. Neither the Corporations nor the Shareholder has any knowledge of any
reason why all such Collection Franchises and Governmental Permits and
agreements will not remain in effect after consummation of the transactions
contemplated hereby.
3.29 CONDEMNATION. No Corporate Property owned or leased by either of
the Corporations is the subject of, or would be affected by, any pending
condemnation or eminent domain proceedings, and, to the knowledge of the
Corporations and the Shareholder, no such proceedings are threatened.
3.30 SUPPLIERS AND CUSTOMERS. The relations between each of the
Corporations and its customers are good. Neither of the Corporations or the
Shareholder has knowledge of any fact (other than general economic and industry
conditions) which indicates that any of the suppliers supplying products,
components, materials or providing use of, or access to, landfills or disposal
sites to either of the Corporations intends to cease providing such items to
either of the Corporations, nor do the Corporations or the Shareholder have
knowledge of any fact (other than general economic and industry conditions)
which indicates that any of the
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customers of the Corporations intends to terminate, limit or reduce its business
relations with either of the Corporations.
3.31 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither of the
Corporations nor the Shareholder has directly or indirectly within the past five
years given or agreed to give any gift or similar benefit to any customer,
supplier, governmental employee or other person who is or may be in a position
to help or hinder the business of either of the Corporations in connection with
any actual or proposed transaction which (a) might subject either of the
Corporations to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (b) if not given in the past, might have had an
adverse effect on the financial condition, business or results of operations of
either of the Corporations, or (c) if not continued in the future, might
adversely affect the financial condition, business or operations of either of
the Corporations or which might subject either of the Corporations to suit or
penalty in any private or governmental litigation or proceeding.
3.32 DISCLOSURE SCHEDULES. Any matter disclosed on any Schedule to
this Agreement shall be deemed to have been disclosed on every other Schedule
that refers to such Schedule by cross reference so long as the nature of the
matter disclosed is obvious from a fair reading of the Schedule on which the
matter is disclosed.
3.33 NO MISLEADING STATEMENTS. The representations and warranties of
the Corporations and the Shareholder contained in this Agreement, the Exhibits
and Schedules hereto and all other documents and information furnished to WCI
and its representatives pursuant hereto are complete and accurate in all
material respects and do not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made not
misleading.
3.34 KNOWLEDGE. Wherever reference is made in this Agreement to the
"KNOWLEDGE" of the Shareholder, such term means the actual knowledge of the
Shareholder or any knowledge which should have been obtained by the Shareholder
upon reasonable inquiry by a reasonable business person. Wherever reference is
made in this Agreement to the "KNOWLEDGE" of either of the Corporations, such
term means the actual knowledge of any management employee, officer or director
of such Corporation or any knowledge which should have been obtained by any such
person upon reasonable inquiry by a reasonable business person.
3.35 BROKERS; FINDERS. No person has acted directly or indirectly as a
broker, finder or financial advisor for either of the Corporations or the
Shareholder in connection with the transactions contemplated by this Agreement
and no person is entitled to any broker's, finder's, financial advisory or
similar fee or payment in respect thereof based in any way on any agreement,
arrangement or understanding made by or on behalf of either of the Corporations
or the Shareholder.
3.36 S CORPORATION. Each of the Corporations has elected to be treated
as an S Corporation within the meaning of the Internal Revenue Code of 1986, as
amended (the "CODE"), for the years listed on Schedule 3.36.
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4. REPRESENTATIONS AND WARRANTIES OF WCI
WCI represents and warrants to the Shareholder that each of the
following representations and warranties is true as of the Closing Date:
4.1 EXISTENCE AND GOOD STANDING. WCI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
WCI has full corporate power and authority to own and lease its properties and
to carry on its business as now conducted. WCI is not required to be qualified
or licensed to conduct business as a foreign corporation in any jurisdiction
where the failure to be so qualified would have a material adverse effect on its
financial condition.
4.2 NO CONTRACTUAL RESTRICTIONS. No provisions exist in any article,
document or instrument to which WCI is a party or by which it is bound which
would be violated by consummation of the transactions contemplated by this
Agreement.
4.3 AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by WCI and, subject to the due authorization,
execution and delivery by the Corporations and the Shareholder, constitutes a
legal, valid and binding obligation of WCI. WCI has full corporate power, legal
right and corporate authority to enter into and perform its obligations under
this Agreement and to carry on its business as presently conducted. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and the fulfillment of and compliance with the
terms and conditions hereof do not and will not, after the giving of notice, or
the lapse of time or otherwise: (a) violate any provisions of any judicial or
administrative order, award, judgment or decree applicable to WCI; (b) conflict
with any of the provisions of the Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws of WCI; or (c) conflict with,
result in a breach of or constitute a default under any material agreement or
instrument to which WCI is a party or by which it is bound.
4.4 NO MISLEADING STATEMENTS. The representations and warranties of
WCI contained in this Agreement, the Exhibits and Schedules hereto and all other
documents and information furnished to the Shareholder pursuant hereto are
accurate and complete in all material respects, and do not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made not misleading.
4.5 BROKERS; FINDERS. No person has acted directly or indirectly as a
broker, finder or financial advisor for WCI in connection with the transactions
contemplated by this Agreement and no person is entitled to any broker's,
finder's, financial advisory or similar fee or payment in respect thereof based
in any way on any agreement, arrangement or understanding made by or on behalf
of WCI.
4.6 DISCLOSURE SCHEDULES. Any matter disclosed by WCI on any Schedule
to this Agreement shall be deemed to have been disclosed on every other Schedule
that refers to such Schedule by cross reference so long as the nature disclosed
is obvious from a fair reading of the Schedule on which the matter is disclosed.
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5. COVENANTS FROM SIGNING TO CLOSING DATE
5.1 OPERATIONS. Between the Signing Date and the Closing Date, each of
the Corporations and the Shareholder will cause each of the Corporations to:
(a) Carry on its business in substantially the same manner as it
has heretofore and not introduce any material new method, or discontinue any
existing material method, of operation or accounting;
(b) Maintain its properties and facilities, including those held
under leases, in as good working order and condition as at present, ordinary
wear and tear excepted;
(c) Perform all of its material obligations under agreements
relating to or affecting its assets, properties, business operations and rights;
(d) Keep in full force and effect present insurance policies or
other comparable insurance coverage;
(e) Use its best efforts to maintain and preserve its business
organization intact, retain its present employees and maintain its relationship
with suppliers, customers and others having business relations with it;
(f) file on a timely basis all notices, reports or other filings
required to be filed with or reported to any federal, state, municipal or other
governmental department, commission, board, bureau, agency or any
instrumentality of any of the foregoing wherever located with respect to the
continuing operations of each of the Corporations;
(g) maintain material compliance with all Collection Franchises
and Governmental Permits and all laws, rules, regulations and consent orders;
(h) file on a timely basis all complete and correct applications
or other documents necessary to maintain, renew or extend any site assessment,
permit, license, variance or any other approval required by any governmental
authority necessary and/or required for the continuing operation of each of the
Corporations' business operations, whether or not such approval would expire
before or after the Closing; and
(i) advise WCI promptly in writing of any material change in any
document, Schedule, Exhibit, or other information delivered pursuant to this
Agreement.
5.2 NO CHANGE. Between the Signing Date and the Closing Date, neither
of the Corporations nor the Shareholder will permit either of the Corporations
to take any action described below without the prior written consent of WCI:
(a) make any change in its Articles of Incorporation or Bylaws;
(b) authorize, issue, transfer or distribute any securities;
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(c) declare or pay any dividend or make any distribution in
respect of its capital stock whether now or hereafter outstanding, or purchase,
redeem or otherwise acquire or retire for value any shares of its capital stock;
(d) enter into any contract or commitment or incur or agree to
incur any liability other than in the ordinary course of business other than the
transactions contemplated by this Agreement or make any single capital
expenditure in excess of $10,000 or in excess of $25,000 in the aggregate during
any consecutive thirty (30) day period without regard to whether such capital
expenditure is in the ordinary course of business;
(e) except as set forth on Schedule 3.16, change or promise to
change the compensation payable or to become payable to any director, officer,
employee or agent, or make or promise to make any bonus payment to any such
person;
(f) create, assume or otherwise permit the imposition of any
mortgage, pledge or other lien or encumbrance upon or grant any option or right
of first refusal with respect to any assets or properties whether now owned or
hereafter acquired;
(g) sell, assign, lease or otherwise transfer or dispose of any
property or equipment other than in the ordinary course of business;
(h) merge or consolidate or agree to merge or consolidate with or
into any firm, corporation or other entity;
(i) waive any material rights or claims;
(j) amend or terminate any material agreement or any site
assessment, permit, license or other right;
(k) enter into any other transaction outside the ordinary course
of that Corporation's business or prohibited hereunder; or
(l) take any action or suffer or permit any event to occur that
would cause any representation or warranty of either of the Corporations or the
Shareholders to become untrue as of the Closing Date.
5.3 OBTAIN CONSENTS. Promptly after the execution of this Agreement,
each of the Corporations will, and the Shareholder shall cause the Corporations
to, make all filings and take all steps reasonably necessary to obtain all other
approvals and consents required to be obtained by the Corporations or the
Shareholder to consummate the transactions contemplated by this Agreement and
otherwise to satisfy the conditions of Section 6.7.
5.4 ACCESS; CONFIDENTIAL INFORMATION. Between the Signing Date and the
Closing Date, the Shareholder and the Corporations will, and the Shareholder
will cause the Corporations to, afford to the officers and authorized
representatives of WCI, including, without limitation, its engineers, counsel,
independent auditors and investment bankers, access to the Facilities, plants,
Corporate Properties and other properties, books and records of each of the
Corporations, and will furnish WCI with such additional financial and operating
data and other
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information as to the business and properties of the Corporations as WCI may
from time to time reasonably request. The Shareholders will and will cause the
Corporations to cooperate with WCI, its representatives and counsel in the
preparation of any documents or other material which may be required by any
governmental agency. WCI will cause all information obtained from the
Shareholder and the Corporations in connection with the negotiation and
performance of this Agreement which the Shareholder or the Corporations have
stamped or otherwise marked as confidential to be treated as confidential
(except such information which is in the public domain or which WCI may be
required to disclose to any governmental agency, or pursuant to any court or
regulatory agency order) and will not use, and will not knowingly permit others
to use, any such confidential information in a manner detrimental to the
Corporations or the Shareholder. The Corporations will not, and the Shareholder
will not and will cause the Corporations not to, disclose to any third persons
other than their accountants, bankers or legal counsel any of the terms or
provisions of this Agreement prior to or after the Closing Date without the
prior written consent of WCI.
5.5 NOTICE OF MATERIAL ADVERSE CHANGE. WCI shall promptly notify the
Shareholder of any material adverse change in its business or financial
condition between the Signing Date and the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATION OF WCI TO CLOSE.
The obligations of WCI under this Agreement are subject to the
satisfaction, at or before Closing, of all of the following conditions
precedent, unless waived in writing by WCI:
6.1 REPRESENTATIONS AND WARRANTIES. All representations and warranties
of the corporations and the Shareholder contained in this Agreement or in any
statement, Exhibit, Schedule, certificate or document delivered by the
Corporations or the Shareholder under this Agreement shall be true, correct and
complete on and as of the date when made and at all times prior to the Closing
Date, shall be deemed to be made again on the Closing Date, and shall then be
true, correct and complete in all material respects as of the Closing Date
6.2 CONDITIONS. The Corporations and the shareholder shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by them
on or before the Closing Date.
6.3 NO MATERIAL ADVERSE CHANGE. Since the Signing Date, there shall
not have been any material adverse change in the condition (financial or
otherwise), business, properties or assets of the Corporations.
6.4 CERTIFICATES. The President of each of the Corporations shall have
delivered to WCI a certificate, dated as of the Closing Date, in form and
substance satisfactory to WCI, certifying to the fulfillment of the conditions
set forth in Sections 6.1, 6.2 and 6.3, and the Shareholders shall have
delivered to WCI a certificate dated as of the Closing Date, in form and
substance satisfactory to WCI, certifying to the fulfillment of the conditions
set forth in Section 6.1, 6.2 and 6.3 applicable to the Shareholder.
6.5 NO LITIGATION. None of the transactions contemplated hereby shall
have been enjoined by any court or by any federal or state governmental branch,
agency, commission or
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regulatory authority and no suit or other proceeding challenging the
transactions contemplated hereby shall have been threatened or instituted and no
investigative or other demand shall have been made by any federal or state
governmental branch, agency, commission or regulatory authority.
6.6 OTHER DELIVERIES. The Shareholder shall have delivered the items
which they are required to deliver under Section 8 of this Agreement.
6.7 GOVERNMENTAL APPROVALS; CONSENTS TO TRANSFER. All governmental
consents and approvals, if any, necessary to permit the consummation of the
transactions contemplated by this Agreement shall have been received, and each
other party whose consent is required to the transactions contemplated by this
Agreement, including without limitation (if applicable) each party to any
contract with either of the Corporations, the Xxxxxxx Consent, and each
jurisdiction issuing or granting any other Governmental Permit, shall have
consented to such transactions, and every other Required Governmental Consent
shall have been obtained. Provided however, the parties hereto agree that the
Closing shall not be contingent on the receipt of the consent of the City of
Fairview or the City of Portland.
6.8 RELEASE OF SECURITY INTERESTS. All securities interests in assets
of each of the Corporations that have been created in favor of financial
institutions or other lenders to secure indebtedness of the Shareholder or his
Affiliates shall have been released.
6.9 SCHEDULES. WCI shall have received all of the schedules to this
Agreement not provided by the Signing Date, and all such schedules shall be
satisfactory to WCI or any problems reflected in, or indicated by, such
schedules shall have been resolved to the satisfaction of WCI.
6.10 VEHICLE TITLES. The Corporations and the Shareholder shall have
delivered to WCI copies of titles to all vehicles listed on Schedule 3.12, and
such titles shall reflect that the vehicles are owned by CSS or MSS.
7. CONDITIONS PRECEDENT TO OBLIGATION OF THE SHAREHOLDER TO CLOSE.
The obligations of the Shareholder under this Agreement are subject to
the satisfaction, at or before Closing, of all of the following conditions
precedent, unless waived in writing by the Shareholder:
7.1 REPRESENTATIONS AND WARRANTIES. All representations and warranties
of WCI contained in this Agreement or in any statement, Exhibit, Schedule,
certificate or document delivered by WCI under this Agreement shall be true,
correct and complete on and as of the date when made and at all times prior to
the Closing Date, shall be deemed to be made again on the Closing Date, and
shall then be true, correct and complete in all respects as of the Closing Date.
7.2 CONDITIONS. WCI shall have performed, satisfied and complied with
all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by it on or before the Closing Date.
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7.3 CERTIFICATE. WCI shall have delivered to the Shareholder a
certificate, dated as of the Closing Date, in form and substance satisfactory to
the Shareholder, certifying to the fulfillment of the conditions set forth in
Sections 7.1 and 7.2.
7.4 NO LITIGATION. None of the transactions contemplated hereby shall
have been enjoined by any court or by any federal or state governmental branch,
agency, commission or regulatory authority and no suit or other proceeding
challenging the transactions contemplated hereby shall have been threatened or
instituted and no investigative or other demand shall have been made by any
federal or state governmental branch, agency, commission or regulatory
authority.
7.5 OTHER DELIVERIES. WCI shall have delivered the items which it is
required to deliver under Section 8 of this Agreement.
8. CLOSING DELIVERIES.
At the Closing, the respective parties shall make the deliveries
indicated:
8.1 WCI DELIVERIES. WCI shall deliver the Purchase Price required to
be delivered on the Closing Date pursuant to Section 1.2.
8.2 SHAREHOLDER DELIVERIES.
(a) The Shareholder shall deliver to WCI the certificates
representing the outstanding Corporations' Stock free and clear of all liens,
security interests, claims and encumbrances, accompanied by a stock power duly
executed in blank.
(b) The Shareholder shall deliver to WCI an opinion of counsel
for the Shareholder, dated as of the Closing Date, in substantially the form
attached hereto as Exhibit 8.2(b).
(c) The Shareholder shall deliver evidence reasonably
satisfactory to WCI that all required third-party consents to the transactions
contemplated hereby, including without limitation all Required Governmental
Consents and all required consents of the landlords under all real estate leases
to which either of the Corporations is a party, were obtained and the
Shareholder shall deliver an estoppel certificate from the landlords under all
real estate leases to which either of the Corporations is a party confirming the
terms thereof and the rental amount owing thereunder, certifying that such lease
is in full force and effect, that such Corporation is not in default under any
of the terms or conditions thereof, that there have been no amendments or
modifications to any such lease (or specifying the same), and otherwise
containing such statements and certifications as WCI may require.
(d) Each of the Corporations shall deliver to WCI evidence
satisfactory to WCI showing that all written employment contracts and all oral
employment contracts other than those that are terminable "AT WILL" without
payment of severance (other than normal severance benefits approved by WCI) or
other benefits with non-union employees of that Corporation (including, without
limitation, stock options or other rights to obtain equity in that Corporation)
have been terminated, effective on or before the Closing Date.
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(e) The Corporations shall deliver Schedules 1.2(a), 1.2(b),
1.2(c), 1.2(d) and 3.22(b) to WCI at the Closing.
(f) The Shareholder shall cause each officer and director of each
of the Corporations to deliver a resignation as an officer and/or director of
that Corporation together with a general release releasing that Corporation from
all obligations under any indemnification agreements, the charter documents of
that Corporation, or otherwise, arising out of or relating to this Agreement or
the consummation of the transactions contemplated thereby, other than
obligations arising after the Closing Date under this Agreement.
9. ADDITIONAL COVENANTS OF WCI, THE CORPORATIONS AND THE SHAREHOLDER
9.1 NO DELAY. The Corporations, the Shareholder and WCI covenant and
agree from and after the date hereof not to hinder in any way or unreasonably
delay the Closing Date and to use their respective reasonable efforts to obtain
required Governmental Consents and otherwise to cause the Closing Date to occur
as soon as reasonably practicable after the Signing Date, provided, however,
that in using its reasonable efforts WCI shall not be required to take any
action or to agree to any condition, including without limitation any condition
imposed by any government authority with respect to the transfer of any
Governmental Permit, that, in WCI's reasonable judgment, imposes a materially
adverse financial burden or operating condition on WCI
9.2 RELEASE OF GUARANTIES. WCI shall use reasonable efforts to obtain
the termination and release promptly after the Closing Date of the personal
guaranties of the Shareholder listed on Schedule 9.2, all of which relate to
indebtedness of either of the Corporations included in the Financial Statements
as of the Balance Sheet Date or WCI shall indemnify the Shareholder and hold him
harmless from and against all losses, expenses or claims by third parties to
enforce or collect indebtedness owed by either of the Corporations as of the
Closing Date which is personally guaranteed by the Shareholder pursuant to such
guaranties. The Shareholder may notify the obligees under such guaranties that
he has terminated his obligations under such guaranties. The Shareholder shall
cooperate with WCI in obtaining such releases.
9.3 RELEASE OF SECURITY INTERESTS. Between the Signing Date and the
Closing Date, the Shareholder and his respective Affiliates shall cause those
security interests in the assets of the Corporations that have been created in
favor of financial institutions or other lenders to secure indebtedness (other
than indebtedness of that Corporation) of the Shareholder or his respective
Affiliates to be released in a manner reasonably satisfactory to WCI, and shall
cause all guaranties by that Corporation relating to the indebtedness of the
Shareholder to be released to the reasonable satisfaction of WCI.
9.4 CONFIDENTIALITY. Neither of the Corporations nor the Shareholder
shall disclose or make any public announcements of the transactions contemplated
by this Agreement without the prior written consent of WCI, unless required to
make such disclosure or announcement by law, in which event the party making the
disclosure or announcement shall notify WCI at least 24 hours before such
disclosure or announcement is expected to be made. WCI shall not disclose or
make any public announcement of the financial terms of this
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Agreement without the prior written consent of the Shareholder, unless required
to make such disclosure or announcement by law, including, but not limited to,
disclosures required to comply with the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended.
9.5 BROKERS AND FINDERS FEES. Each party shall pay and be responsible
for any broker's, finder's or financial advisory fee incurred by such party in
connection with the transactions contemplated by this Agreement.
9.6 TAXES. WCI shall reasonably cooperate, at the expense of the
Shareholder, with the Shareholder with respect to any matters involving the
Shareholder arising out of the Shareholder's ownership of the Corporations prior
to the Closing, including matters relating to tax returns and any tax audits,
appeals, claims or litigation with respect to such tax returns or the
preparation of such tax returns. In connection therewith, WCI shall make
available to the Shareholder such files, documents, books and records of the
Corporations for inspection and copying as may be reasonably requested by the
Shareholder and shall cooperate with the Shareholder with respect to retaining
information and documents which relate to such matters.
9.7 SHORT YEAR TAX RETURNS. After the Closing Date, the Shareholder
shall prepare at his sole cost and expense, all short year federal, state,
county, local and foreign tax returns required by law for the period beginning
with the first day of each of the Corporations' fiscal years in which the
Closing occurs and ending with the Effective Date. Each such return shall be
prepared in a financially responsible and conservative manner and shall be
delivered to WCI together with all necessary supporting schedules within 120
days following the Closing Date for its approval (but such approval shall not
relieve the Shareholder of his responsibility for the taxes assessed under these
returns). The Shareholder shall be responsible for the payment of all taxes
shown to be due or that may come to be due on such returns or otherwise relating
to the period prior to the Effective Date in excess of the amount of any reserve
for taxes included in Balance Sheet Date Current Liabilities. The Shareholder
shall also be responsible for all taxes arising from the conversion of either of
the Corporations from a cash to accrual basis of reporting whether or not due on
such returns or on the first return filed by either of the Corporations for the
period commencing after the Effective Date. At the time of the delivery of the
returns, the Shareholder shall contemporaneously deliver to WCI checks payable
to the respective taxing authorities in amounts equal to the amount due. WCI
shall sign tax returns and cause such returns to be timely filed with the
appropriate authorities. The Shareholder shall be entitled to receive all
refunds shown on said returns and any such refunds received by either of the
Corporations or WCI shall be remitted to the Shareholder.
9.8 GENERAL RELEASE BY SHAREHOLDER. The Shareholder hereby fully
releases and discharges each of the Corporations and its directors, officers,
agents and employees from all rights, claims and actions, known or unknown, of
any kind whatsoever, which the Shareholder now has or may hereafter have against
either of the Corporations and its directors, officers, agents and employees,
arising out of or relating to events arising prior to or on the Closing Date,
except (a) as may be described in written contracts disclosed in Schedule 9.8
and expressly described and specifically excepted from this release in Schedule
9.8, (b) compensation as an employee of either of the Corporations for current
periods expressly described and excepted from such release on Schedule 9.8, and
(c) for the obligations of either of the Corporations
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arising after the Closing Date under this Agreement. Specifically, but not by
way of limitation, the Shareholder waives any right of indemnification,
contribution or other recourse against the Corporations which he now has or may
hereafter have against either of the Corporations with respect to
representations, warranties or covenants made in this Agreement by such
Corporation.
The Shareholder hereby waives and relinquishes all rights and
benefits afforded by Section 1542 of the California Civil Code, which states as
follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS TO WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR.
The Shareholder understands and acknowledges the significance and consequence of
this waiver of Section 1542 and nevertheless elects to, and does, release those
claims described in this Section 9.8, known or unknown, that it may have now or
in the future arising out of or relating to any event arising on or prior to the
date of this Agreement.
9.9 CERTAIN TAX MATTERS. The Shareholder acknowledges that WCI has
indicated its intention to make an election under Section 338(h)(10) of the
Internal Revenue Code of 1986, as amended. The Shareholder agrees that WCI, in
its discretion, may make such election; provided, however, that such election
shall be made no later than the due date for such election. If such election is
made by WCI:
(a) WCI shall be authorized to complete Form 8023-A;
(b) The Shareholder shall sign such completed Form 8023-A at the
Closing; and
(c) WCI and the Shareholder shall agree upon the allocation of
the Purchase Price among the assets (including intangible assets) of each of the
Corporations.
10. INDEMNIFICATION
10.1 INDEMNITY BY THE SHAREHOLDER. The Shareholder, subject to the
limitations set forth in Section 10.2, covenants and agrees that he will
indemnify and hold harmless WCI, the Corporations and their respective
directors, officers and agents and their respective successors and assigns
(collectively the "WCI INDEMNITEES"), from and after the date of this Agreement
and until the expiration of the applicable statute of limitations against any
and all losses, damages, assessments, fines, penalties, adjustments,
liabilities, claims, deficiencies, costs, expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of investigation),
expenditures, including, without limitation, any "ENVIRONMENTAL SITE LOSSES" (as
such term is hereinafter defined) identified by a WCI Indemnitee in a Claims
Notice (as defined in Section 10.3(a)), or asserted by a WCI Indemnitee in
litigation commenced against the Shareholder provided that in either case any
such Claims Notice shall be given or the litigation commenced prior to the
expiration of the applicable statute of limitations (irrespective of the date of
discovery), with respect to each of the following contingencies (all, the "10.1
INDEMNITY EVENTS"):
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(a) Any misrepresentation, breach of warranty, or nonfulfillment
of any agreement or covenant on the part of the Shareholder or either of the
Corporations pursuant to the terms of this Agreement or any misrepresentation in
or omission from any Exhibit, Schedule, list, certificate, or other instrument
furnished or to be furnished to WCI pursuant to the terms of this Agreement,
regardless of whether, in the case of a breach of a representation or a
warranty, WCI relied on the truth of such representation or warranty or had any
knowledge of any breach thereof.
(b) The design, development, construction or operation of any
Facility or any other "ENVIRONMENTAL SITE" as hereinafter defined, or the
installation or operation of a UST during any period on or prior to the Closing
Date, in excess of the amount of liability with respect thereto, if any, set
forth on Part II of Schedule 3.8. As used in this Agreement, "ENVIRONMENTAL
SITE" shall mean any Facility, any UST and any other waste storage, processing,
treatment or disposal facility, and any other business site or any other real
property owned, leased, controlled or operated by either of the Corporations or
by any predecessor thereof on or prior to the Closing Date. As used in this
Agreement, "ENVIRONMENTAL SITE LOSSES" shall mean any and all losses, damages
(including exemplary damages and penalties), liabilities, claims, deficiencies,
costs, expenses, and expenditures (including, without limitation, expenses in
connection with site evaluations, risk assessments and feasibility studies)
arising out of or required by an interim or final judicial or administrative
decree, judgment, injunction, mandate, interim or final permit condition or
restriction, cease and desist order, abatement order, compliance order, consent
order, clean-up order, exhumation order, reclamation order or any other remedial
action that is required to be undertaken under federal, state or local law in
respect of operating activities on or affecting any Facility, any UST or any
other Environmental Site, including, but not limited to (x) any actual or
alleged violation of any law or regulation respecting the protection of the
environment, including, but not limited to, RCRA and CERCLA or any other law or
regulation respecting the protection of the air, water and land and (y) any
remedies or violations, whether by a private or public action, alleged or sought
to be assessed as a consequence, directly or indirectly, of any "RELEASE" (as
defined below) of pollutants (including odors) or Hazardous Substances from any
Facility, any UST or any other Environmental Site resulting from activities
thereat, whether such Release is into the air, water (including groundwater) or
land and whether such Release arose before, during or after the Closing Date.
The term "RELEASE" as used herein means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the ambient environment. Notwithstanding anything in this
paragraph to the contrary, it is specifically understood and agreed that a
Release composed solely of Hazardous Substances contained in household waste
lawfully disposed of in a landfill during the time either of the Corporations
owned and/or operated such landfill does not constitute an Environmental Site
Loss.
(c) All matters on Schedule 3.8, Part II, or required to be
described on Schedule 3.8, Part II, of which either of the Corporations or the
Shareholder have knowledge on the Closing Date and which are not so described.
(d) All actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but without limitation,
reasonable attorneys' fees and reasonable expenses of investigation) incident to
any of the foregoing.
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10.2 LIMITATIONS ON SHAREHOLDER'S INDEMNITIES.
(a) The obligations of the Shareholder to indemnify the WCI
Indemnitees as provided in Section 10.1 shall be equal to the amount by which
the cumulative amount of all such liabilities, claims, damages deficiencies,
actions, suits, proceedings, demands, assessments, adjustments, costs and
expenses, expenditures and Environmental Site Losses with respect to any or all
10.1 Indemnity Events exceed fifty thousand ($50,000) (the "GENERAL DEDUCTIBLE
AMOUNT"); provided, that the amount of any obligation of indemnity arising
pursuant to Section 10.1(a) with respect to any representation, warranty or
covenant contained in Sections 3.1 through 3.5; 3.12(c), 3.18, 3.22 and 9.6
hereof and pursuant to Section 10.1(c) shall not be subject to the General
Deductible Amount and shall not count toward the General Deductible Amount.
(b) The maximum amount which WCI can recover as a result of one
or more 10.1 Indemnity Events pursuant to the provisions hereof for Claims shall
not in the aggregate exceed the Purchase Price as adjusted.
(c) The obligations of the Shareholder under Section 10.1 shall
expire, unless a Claims Notice is given or litigation is commenced on or prior
to the expiration of the applicable statute of limitations.
10.3 NOTICE OF INDEMNITY CLAIM.
(a) In the event that any claim ("CLAIM") is hereafter asserted
against or arises with respect to any WCI Indemnitee as to which such Indemnitee
may be entitled to indemnification hereunder, the WCI Indemnitee shall notify
the Shareholder (as applicable collectively, the "INDEMNIFYING PARTY") in
writing thereof (the "CLAIMS NOTICE") within 60 days after (i) receipt of
written notice of commencement of any third party litigation against such WCI
Indemnitee, (ii) receipt by such WCI Indemnitee of written notice of any third
party claim pursuant to an invoice, notice of claim or assessment, against such
WCI Indemnitee, or (iii) such WCI Indemnitee becomes aware of the existence of
any other event in respect of which indemnification may be sought from the
Indemnifying Party (including, without limitation, any inaccuracy of any
representation or warranty or breach of any covenant). The Claims Notice shall
describe the Claim and the specific facts and circumstances in reasonable
detail, and shall indicate the amount, if known, or an estimate, if possible, of
the losses that have been or may be incurred or suffered by the WCI Indemnitee.
(b) The Indemnifying Party may elect to defend any Claim for
money damages where the cumulative total of all Claims (including such Claims)
do not exceed the limit set forth in Section 10.2 at the time the Claim is made,
by the Indemnifying Party's own counsel; provided, however, the Indemnifying
Party may assume and undertake the defense of such a third party Claim only upon
written agreement by the Indemnifying Party that the Indemnifying Party is
obligated to fully indemnify the WCI Indemnitee with respect to such action. The
WCI Indemnitee may participate, at the WCI Indemnitee's own expense, in the
defense of any Claim assumed by the Indemnifying Party. Without the written
approval of the WCI Indemnitee, which approval shall not be unreasonably
withheld, the Indemnifying Party shall not agree to any compromise of a Claim
defended by the Indemnifying Party.
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(c) If, within ten (10) days of the Indemnifying Party's receipt
of a Claims Notice, the Indemnifying Party shall not have provided the written
agreement required by Section 10.3(b) and elected to defend the Claim, the WCI
Indemnitee shall have the right to assume control of the defense and/or
compromise of such Claim, and the costs and expenses of such defense, including
reasonable attorneys' fees, shall be added to the Claim. The Indemnifying Party
shall promptly, and in any event within ten (10) days after demand therefor,
reimburse the WCI Indemnitee for the costs of defending the Claim, including
attorneys' fees and expenses.
(d) The party assuming the defense of any Claim shall keep the
other party reasonably informed at all times of the progress and development of
its or their defense of and compromise efforts with respect to such Claim and
shall furnish the other party with copies of all relevant pleadings,
correspondence and other papers. In addition, the parties to this Agreement
shall cooperate with each other and make available to each other and their
representatives all available relevant records or other materials required by
them for their use in defending, compromising or contesting any Claim. The
failure to timely deliver a Claims Notice or otherwise notify the Indemnifying
Party of the commencement of such actions in accordance with this Section 10.3
shall not relieve the Indemnifying Party from the obligation to indemnify
hereunder but only to the extent that the Indemnifying Party establishes by
competent evidence that it has been prejudiced thereby.
(e) In the event both the WCI Indemnitee and the Indemnifying
Party are named as defendants in an action or proceeding initiated by a third
party, they shall both be represented by the same counsel (on whom they shall
agree), unless such counsel the WCI Indemnitee, or the Indemnifying Party shall
determine that such counsel has a conflict of interest in representing both the
WCI Indemnitee and the Indemnifying Party in the same action or proceeding and
the WCI Indemnitee and the Indemnifying Party do not waive such conflict to the
satisfaction of such counsel.
10.4 LIABILITY FOR BREACHES OF REPRESENTATIONS AND WARRANTIES. The
liability of a party making the representations and warranties contained in this
Agreement and in any certificate, Exhibit or Schedule delivered pursuant hereto,
or in any other writing delivered pursuant to the provisions of this Agreement
(the "REPRESENTATIONS AND WARRANTIES") for a breach thereof shall survive the
consummation of the transactions contemplated hereby.
10.5 NO EXHAUSTION OF REMEDIES OR SUBROGATION; RIGHT OF SET OFF. The
Shareholder waives any right to require any WCI Indemnitee to (i) proceed
against either of the Corporations; (ii) proceed against any other person; or
(iii) pursue any other remedy whatsoever in the power of any WCI Indemnitee. WCI
may, but shall not be obligated to, set off against any and all payments due the
Shareholder any amount to which any WCI Indemnitee is entitled to be indemnified
hereunder with respect to any 10.1 Indemnity Event. Such right of set off shall
be separate and apart from any and all other rights and remedies that the
Indemnities may have against the Shareholder or his successors. WCI agrees to
use reasonable efforts to pursue recovery under insurance policies in effect at
the time of a 10.1 Indemnity Event before pursuing indemnification from the
Shareholder.
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11. OTHER POST-CLOSING COVENANTS OF THE SHAREHOLDER AND WCI
11.1 RESTRICTIVE COVENANTS. As to the Corporations, the Shareholder
and his Affiliates acknowledge that (i) WCI, as the purchaser of the
Corporations' Stock, is and will be engaged in the same business as the
Corporations (the "BUSINESS"); (ii) the Shareholder and his Affiliates are
intimately familiar with the Business; (iii) the Business is currently conducted
in the State of Oregon and WCI intends to continue the Business in Oregon and
intends, by acquisition or otherwise, to expand the Business into other
geographic areas of Oregon where it is not presently conducted; (iv) the
Shareholder and his Affiliates have had access to trade secrets of, and
confidential information concerning, the Business; (v) the agreements and
covenants contained in this Section 11.1 are essential to protect the Business
and the goodwill being acquired; and (vi) the Shareholder and his Affiliates
have the means to support themselves and their dependents other than by engaging
in a business substantially similar to the Business and the provisions of this
Section 11 will not impair such ability. The Shareholder covenants and agrees as
set forth in (a), (b) and (c) below with respect to the Corporations:
(a) NON-COMPETE. For a period commencing on the Closing Date and
terminating five years thereafter (the "RESTRICTED PERIOD"), neither the
Shareholder nor any of his Affiliates shall, anywhere within a 000-xxxx xxxxxx
xx Xxxxxxxx, Xxxxxx or in any county in Oregon where either of the Corporations
or WCI or one of its subsidiaries as of the Closing Date owns or operates a
business similar to the Business (the "RESTRICTED AREA"), directly or
indirectly, acting individually or as the owner, shareholder, partner, or
employee of any entity other than WCI or one of its subsidiaries, (i) engage in
the operation of a solid waste collection, transporting, disposal and/or
composting business, transfer facility, recycling facility, materials recovery
facility or solid waste landfill; (ii) enter the employ of, or render any
personal services to or for the benefit of, or assist in or facilitate the
solicitation of customers for, or receive remuneration in the form of salary,
commissions or otherwise from, any business engaged in such activities; (iii) as
owner or lessor of real estate or personal property, rent to or lease any
facility, equipment or other assets to any business engaged in the same business
as either of the Corporations; or (iv) receive or purchase a financial interest
in, make a loan to, or make a gift in support of, any such business in any
capacity, including, without limitation, as a sole proprietor, partner,
shareholder, officer, director, principal, agent, trustee or lender; provided,
however, that the Shareholder may own, directly or indirectly, solely as an
investment, securities of any business traded on any national securities
exchange or NASDAQ, provided the Shareholder is not a controlling person of, or
a member of a group which controls, such business and further provided that the
Shareholder does not, directly or indirectly, own 2% or more of any class of
securities of such business, provided, however, that the Shareholder's ownership
of more than 2% of the outstanding common stock of WCI and the Shareholder's
leasing a portion of his property to Xxxx Xxxxx, will not be considered a
violation of the covenants in Section 8.1(a) hereof.
(b) CONFIDENTIAL INFORMATION. During the Restricted Period and
thereafter, the Shareholder and his Affiliates shall keep secret and retain in
strictest confidence, and shall not use for the benefit of himself or others,
all data and information relating to the Business ("CONFIDENTIAL INFORMATION"),
including without limitation, know-how, trade secrets, customer lists, supplier
lists, details of contracts, pricing policies, operational methods,
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marketing plans or strategies, bidding information, practices, policies or
procedures, product development techniques or plans, and technical processes;
provided, however, that the term "CONFIDENTIAL INFORMATION" shall not include
information that (i) is or becomes generally available to the public other than
as a result of disclosure by the Shareholder or (ii) is general knowledge in the
solid waste handling and landfill business and not specifically related to the
Business. Notwithstanding the foregoing, Shareholder may disclose and discuss
confidential information with his legal and tax advisors, and as is required in
connection with any legal proceedings, and the Shareholder shall give WCI prior
written notice of such disclosure at least forty-eight (48) hours before such
disclosure is made, if possible.
(c) PROPERTY OF THE BUSINESS. All memoranda, notes, lists,
records and other documents or papers (and all copies thereof) relating to the
Business, including such items stored in computer memories, on microfiche or by
any other means, made or compiled by or on behalf of the Shareholder or the
Corporations or made available to them relating to the Business, but excluding
any materials (other than the minute books of the Corporations) maintained by
any attorneys for the Corporations or the Shareholder prior to the Closing, are
and shall be the property of WCI and have been delivered or will be delivered or
made available to WCI at the Closing.
(d) NON-SOLICITATION. Without the consent of WCI, which may be
granted or withheld by WCI in its discretion, the Shareholder and his Affiliates
shall not solicit any employees of the Corporations to leave the employ of the
Corporations and join the Shareholder or any Affiliate in any business endeavor
owned or pursued by the Shareholder.
(e) NO DISPARAGEMENT. From and after the Closing Date, the
Shareholder shall not, in any way or to any person or entity or governmental or
regulatory body or agency, denigrate or derogate WCI or any of its subsidiaries,
or any officer, director or employee, or any product or service or procedure of
any such company whether or not such denigrating or derogatory statements shall
be true and are based on acts or omissions which are learned by the Shareholder
from and after the date hereof or on acts or omissions which occur from and
after the date hereof, or otherwise. A statement shall be deemed denigrating or
derogatory to any person or entity if it adversely affects the regard or esteem
in which such person or entity is held by investors, lenders or licensing,
rating, or regulatory entities. Without limiting the generality of the
foregoing, the Shareholder shall not, directly or indirectly in any way in
respect of any such company or any such directors or officers, communicate with,
or take any action which is adverse to the position of any such company with any
person, entity or governmental or regulatory body or agency who or which has
dealings or prospective dealings with any such company or jurisdiction or
prospective jurisdiction over any such company. This paragraph does not apply to
the extent that testimony is required by legal process, provided that WCI has
received not less than five days' prior written notice of such proposed
testimony.
11.2 RIGHTS AND REMEDIES UPON BREACH. If the Shareholder or any
Affiliate breaches, or threatens to commit a breach of, any of the provisions of
Section 11.1 herein (the "RESTRICTIVE COVENANTS"), WCI shall have the following
rights and remedies, each of which rights and remedies shall be independent of
the others and severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to WCI at law or in
equity:
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(a) SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to WCI and that money
damages would not provide an adequate remedy to WCI. Accordingly, in addition to
any other rights or remedies, WCI shall be entitled to injunctive relief to
enforce the terms of the Restrictive Covenants and to restrain the Shareholder
from any violation thereof.
(b) ACCOUNTING. The right and remedy to require the Shareholder
to account for and pay over to WCI all compensation, profits, monies, accruals,
increments or other benefits derived or received by the Shareholder as the
result of any transactions constituting a breach of the Restrictive Covenants.
(c) SEVERABILITY OF COVENANTS. The Shareholder acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in geographical
and temporal scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.
(d) BLUE-PENCILING. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographic scope of such provision, such court shall reduce the
duration or scope of such provision, as the case may be, to the extent necessary
to render it enforceable and, in its reduced form, such provision shall then be
enforced.
(e) ENFORCEABILITY IN JURISDICTION. WCI and the Shareholder
intend to and hereby confer jurisdiction to enforce the Restrictive Covenants
upon the courts of any jurisdiction within the geographic scope of the
Restrictive Covenants. If the courts of any one or more of such jurisdictions
hold the Restrictive Covenants unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of WCI and the Shareholder that such
determination not bar or in any way affect WCI's right to the relief provided
above in the courts of any other jurisdiction within the geographic scope of the
Restrictive Covenants as to breaches of such covenants in such other respective
jurisdictions, such covenants as they relate to each jurisdiction being, for
this purpose, severable into diverse and independent covenants.
12. TERMINATION OF AGREEMENT
12.1 TERMINATION DATE. If the Closing Date has not occurred by
December 31, 1998, any party hereto shall have the option to terminate this
Agreement.
12.2 NOTICE AND EFFECT OF TERMINATION. On termination of this
Agreement, the transactions contemplated herein shall forthwith be abandoned and
all continuing obligations and liabilities of the parties under or in connection
with this Agreement shall be terminated and of no further force or effect;
provided, however, that nothing herein shall relieve any party from liability
for any misrepresentation, breach of warranty or breach of covenant contained in
this Agreement prior to such termination.
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12.3 EXCLUSIVE NEGOTIATIONS. Following execution of this Agreement,
the Corporations and the Shareholder shall not, and the Shareholder shall not
permit the Corporations' officers, directors, employees or agents to, initiate,
negotiate or discuss with any other person or entity the possible sale of all or
substantially all of the assets, business or stock of the Corporations, or to
effect the merger of the Corporations with any party other than WCI. The
Shareholder hereby confirms that no person or entity presently has or may
acquire any rights to purchase or otherwise acquire the assets or the stock of
either of the Corporations.
13. GENERAL
13.1 ADDITIONAL CONVEYANCES. Following the Closing, the Shareholder
and WCI shall each deliver or cause to be delivered at such times and places as
shall be reasonably agreed upon such additional instruments as WCI or the
Shareholder may reasonably request for the purpose of carrying out this
Agreement. The Shareholder will cooperate with WCI and/or the Corporations on
and after the Closing Date in furnishing information, evidence, testimony and
other assistance in connection with any actions, proceedings or disputes of any
nature with respect to matters pertaining to all periods prior to the date of
this Agreement.
13.2 ASSIGNMENT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, the successors or assigns of WCI and the
heirs, legal representatives or assigns of the Shareholder; provided, however,
that any such assignment shall be subject to the terms of this Agreement and
shall not relieve the assignor of its or his responsibilities under this
Agreement.
13.3 PUBLIC ANNOUNCEMENTS. Except as required by law, no party shall
make any public announcement or filing with respect to the transactions provided
for herein prior to the Closing Date without the prior consent of the other
parties hereto.
13.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
13.5 NOTICES. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if in writing and either
delivered personally, sent by facsimile transmission or by air courier service,
or mailed by postage prepaid registered or certified U.S. mail, return receipt
requested, to the addresses designated below or such other addresses as may be
designated in writing by notice given hereunder, and shall be effective upon
personal delivery or facsimile transmission thereof or upon delivery by
registered or certified U.S. mail or one business day following deposit with an
air courier service:
If to the Shareholder: at his respective address set forth on
Schedule 3.2
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With a copy to: Xxxxxxx X. Xxxxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxxxx Xxxxx
0000 XX Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Fax: (000) 000-0000
If to WCI: Waste Connections, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx X. Xxxxx, Esq.
Shartsis, Xxxxxx & Xxxxxxxx LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
13.6 ATTORNEYS' FEES.. In the event of any dispute or controversy
between WCI on the one hand and either of the Corporations or the Shareholder on
the other hand relating to the interpretation of this Agreement or to the
transactions contemplated hereby, the prevailing party shall be entitled to
recover from the other party reasonable attorneys' fees and expenses incurred by
the prevailing party, as awarded by the court. Such award shall include
post-judgment attorney's fees and costs.
13.7 APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without regard to its
conflict of laws provisions.
13.8 PAYMENT OF FEES AND EXPENSES. Whether or not the transactions
herein contemplated shall be consummated, each party hereto will pay its own
fees, expenses and disbursements incurred in connection herewith and all other
costs and expenses incurred in the performance and compliance with all
conditions to be performed hereunder (including, in the case of the Shareholder,
any such fees, expenses and disbursements paid or accrued by, or charged to, the
Corporations).
13.9 INCORPORATION BY REFERENCE. All Schedules and Exhibits attached
hereto are incorporated herein by reference as though fully set forth at each
point referred to in this Agreement.
13.10 CAPTIONS. The captions in this Agreement are for convenience
only and shall not be considered a part hereof or affect the construction or
interpretation of any provisions of this Agreement.
13.11 NUMBER AND GENDER OF WORDS; CORPORATION. Whenever the singular
number is used herein, the same shall include the plural where appropriate, and
shall apply to all
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of such number, and to each of them, jointly and severally, and words of any
gender shall include each other gender where appropriate.
13.12 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits hereto) and the other documents delivered pursuant hereto constitute
the entire Agreement and understanding between the Corporations, the Shareholder
and WCI and supersedes any prior agreement and understanding relating to the
subject matter of this Agreement. This Agreement may be modified or amended only
by a written instrument executed by the Corporations, the Shareholder and WCI
acting through its officers, thereunto duly authorized by its Board of
Directors.
13.13 WAIVER. No waiver by any party hereto at any time of any breach
of, or compliance with, any condition or provision of this Agreement to be
performed by any other party hereto may be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
13.14 CONSTRUCTION. The language in all parts of this Agreement must
be in all cases construed simply according to its fair meaning and not strictly
for or against any party. Unless expressly set forth otherwise, all references
herein to a "DAY" are deemed to be a reference to a calendar day. All references
to "BUSINESS DAY" mean any day of the year other than a Saturday, Sunday or a
public or bank holiday in California. Unless expressly stated otherwise,
cross-references herein refer to provisions within this Agreement and are not
references to the overall transaction or to any other document.
14. GLOSSARY
The definitions of the terms used below can be found at the Section
indicated:
Term Page #
---- ------
AFFILIATE 8
AT WILL 25
BALANCE SHEET DATE 5
BALANCE SHEET DATE CURRENT ASSETS 15
BALANCE SHEET DATE CURRENT LIABILITIES 15
BUSINESS 32
BUSINESS DAY 37
CLAIM 30
CLAIMS NOTICE 30
CLOSING 3
CLOSING DATE 3
CLOSING DATE DEBT 15
CODE 19
COLLECTION FRANCHISES 7
CONFIDENTIAL INFORMATION 32
CONSENT DATE 1
CORPORATE PROPERTY 9
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CORPORATIONS 1
CORPORATIONS' STOCK 1
CSS 1
DAY 37
ENVIRONMENTAL LAWS 16
ENVIRONMENTAL SITE 29
ENVIRONMENTAL SITE LOSSES 28
ERISA 11
EXCLUDED ASSETS 3
FACILITIES 8
FACILITY 8
FINANCIAL STATEMENTS 5
GENERAL DEDUCTIBLE AMOUNT 30
GOLDEN PARACHUTE 11
GOLDEN PARACHUTE PAYMENT 12
GOVERNMENTAL PERMITS 7
XXXXXXX ADJUSTMENT 1
XXXXXXX CONSENT 1
HAZARDOUS MATERIAL 17
HAZARDOUS WASTE 17
INDEMNIFYING PARTY 30
JAMS 3
KNOWLEDGE 19
LAWS 16
MSS 1
MULTI-EMPLOYER PLAN 11
OCCURRENCE 10
PERMITTED LIENS 9
PURCHASE PRICE 1
RCRA 16
RECIPIENT 12
RECORDS, NOTIFICATIONS AND REPORTS 8
RELEASE 29
REPRESENTATIONS AND WARRANTIES 31
REQUIRED GOVERNMENTAL CONSENTS 7
RESTRICTED AREA 32
RESTRICTED PERIOD 32
RESTRICTIVE COVENANTS 33
SHAREHOLDER 1
SHAREHOLDER'S SALARY/RENT 2
SIGNING DATE 1
UST 17
WCI 1
WCI INDEMNITEES 28
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
persons thereunto duly authorized as of the date first above written.
THE CORPORATIONS: COLUMBIA SANITARY SERVICE, INC.
By:______________________________________
Xxxxxxx Xxxxx, President
XXXXXXXX SANITARY SERVICE, INC.
By:______________________________________
Xxxxxxx Xxxxx, President
WCI: WASTE CONNECTIONS, INC.
By:______________________________________
Xxxxxx X. Xxxxxxxxxxxx
Chief Executive Officer & President
THE SHAREHOLDER: _________________________________________
Xxxxxxx Xxxxx
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TABLE OF CONTENTS
PAGE
1. PURCHASE OF CORPORATIONS' STOCK...........................................1
1.1 Shares to be Purchased.............................................1
1.2 Purchase Price.....................................................1
1.3 Allocation of the Purchase Price...................................3
1.4 Excluded Assets....................................................3
2. CLOSING TIME AND PLACE....................................................3
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATIONS AND THE SHAREHOLDER....4
3.1 Organization, Standing and Qualification...........................4
3.2 Capitalization.....................................................4
3.3 All Stock Being Acquired...........................................4
3.4 Authority for Agreement............................................4
3.5 No Breach or Default...............................................5
3.6 Subsidiaries.......................................................5
3.7 Financial Statements...............................................5
3.8 Liabilities........................................................5
3.9 Accurate and Complete Records......................................7
3.10 Permits and Licenses...............................................7
3.11 Certain Receivables................................................8
3.12 Fixed Assets and Real Property.....................................9
3.13 Related Party Transactions........................................10
3.14 Contracts and Agreements; Adverse Restrictions....................10
3.15 Insurance.........................................................10
3.16 Personnel.........................................................11
3.17 Benefit Plans and Union Contracts.................................11
3.18 Taxes.............................................................12
3.19 Copies Complete; Required Consents................................13
3.20 Customers, Xxxxxxxx, Current Receipts and Receivables.............13
3.21 No Change With Respect to the Corporation.........................13
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TABLE OF CONTENTS
(CONTINUED)
PAGE
3.22 Closing Date Debt; Balance Sheet Date Current Assets and
Balance Sheet Date Current Liabilities ...........................15
3.23 Bank Accounts.....................................................15
3.24 Compliance With Laws..............................................16
3.25 Powers of Attorney................................................17
3.26 Underground Storage Tanks.........................................17
3.27 Patents, Trademarks, Trade Names, etc.............................18
3.28 Assets, etc., Necessary to Business...............................18
3.29 Condemnation......................................................18
3.30 Suppliers and Customers...........................................18
3.31 Absence of Certain Business Practices.............................19
3.32 Disclosure Schedules..............................................19
3.33 No Misleading Statements..........................................19
3.34 Knowledge.........................................................19
3.35 Brokers; Finders..................................................19
3.36 S Corporation.....................................................19
4. REPRESENTATIONS AND WARRANTIES OF WCI....................................20
4.1 Existence and Good Standing.......................................20
4.2 No Contractual Restrictions.......................................20
4.3 Authorization of Agreement........................................20
4.4 No Misleading Statements..........................................20
4.5 Brokers; Finders..................................................20
4.6 Disclosure Schedules..............................................20
5. COVENANTS FROM SIGNING TO CLOSING DATE...................................21
5.1 Operations........................................................21
5.2 No Change.........................................................21
5.3 Obtain Consents...................................................22
5.4 Access; Confidential Information..................................22
5.5 Notice of Material Adverse Change.................................23
6. CONDITIONS PRECEDENT TO OBLIGATION OF WCI TO CLOSE.......................23
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TABLE OF CONTENTS
(CONTINUED)
PAGE
6.1 Representations and Warranties....................................23
6.2 Conditions........................................................23
6.3 No Material Adverse Change........................................23
6.4 Certificates......................................................23
6.5 No Litigation.....................................................23
6.6 Other Deliveries..................................................24
6.7 Governmental Approvals; Consents to Transfer......................24
6.8 Release of Security Interests.....................................24
6.9 Schedules.........................................................24
6.10 Vehicle Titles....................................................24
7. CONDITIONS PRECEDENT TO OBLIGATION OF THE SHAREHOLDER TO CLOSE...........24
7.1 Representations and Warranties....................................24
7.2 Conditions........................................................24
7.3 Certificate.......................................................25
7.4 No Litigation.....................................................25
7.5 Other Deliveries..................................................25
8. CLOSING DELIVERIES.......................................................25
8.1 WCI Deliveries....................................................25
8.2 Shareholder Deliveries............................................25
9. ADDITIONAL COVENANTS OF WCI, THE CORPORATIONS AND THE SHAREHOLDER........26
9.1 No Delay..........................................................26
9.2 Release of Guaranties.............................................26
9.3 Release of Security Interests.....................................26
9.4 Confidentiality...................................................26
9.5 Brokers and Finders Fees..........................................27
9.6 Taxes.............................................................27
9.7 Short Year Tax Returns............................................27
9.8 General Release by Shareholder....................................27
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TABLE OF CONTENTS
(CONTINUED)
PAGE
9.9 Certain Tax Matters...............................................28
10. INDEMNIFICATION..........................................................28
10.1 Indemnity by the Shareholder......................................28
10.2 Limitations on Shareholder's Indemnities..........................30
10.3 Notice of Indemnity Claim.........................................30
10.4 Liability for Breaches of Representations and Warranties..........31
10.5 No Exhaustion of Remedies or Subrogation; Right of Set Off........31
11. OTHER POST-CLOSING COVENANTS OF THE SHAREHOLDER AND WCI..................32
11.1 Restrictive Covenants.............................................32
11.2 Rights and Remedies Upon Breach...................................33
12. TERMINATION OF AGREEMENT.................................................34
12.1 Termination Date..................................................34
12.2 Notice and Effect of Termination..................................34
12.3 Exclusive Negotiations............................................35
13. GENERAL..................................................................35
13.1 Additional Conveyances............................................35
13.2 Assignment........................................................35
13.3 Public Announcements..............................................35
13.4 Counterparts......................................................35
13.5 Notices...........................................................35
13.6 Attorneys' Fees...................................................36
13.7 Applicable Law....................................................36
13.8 Payment of Fees and Expenses......................................36
13.9 Incorporation by Reference........................................36
13.10 Captions .........................................................36
13.11 Number and Gender of Words; Corporation ..........................36
13.12 Entire Agreement .................................................37
13.13 Waiver ...........................................................37
13.14 Construction .....................................................37
14. GLOSSARY.................................................................37
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