EXHIBIT 10.12
Form of
CAPITAL CONTRIBUTION
COMMITMENT AGREEMENT
This Capital Contribution Commitment Agreement ("Agreement") is made as of
the _____ day of April, 2004 by and between WCA Waste Corporation, a Delaware
corporation, (referred to herein as "Subscriber") and Waste Corporation of
America, Inc., a Delaware corporation ("WCA"), with Waste Management, Inc., a
Delaware corporation (the "Beneficiary"), as a third party beneficiary hereof.
WHEREAS, on September 28, 2000 WCA and the Beneficiary entered into that
certain Promissory Note in the initial principal amount of $10,446,582.00 (the
"Note") pursuant to which WCA undertook to pay to Beneficiary that amount in
connection with the purchase of certain waste collection and disposal assets;
WHEREAS, Subscriber, WCA and other affiliated entities have entered into
that certain Reorganization Agreement, effective April ___, 2004 and as may be
amended (the "Reorganization Agreement"), pursuant to which, among other things,
WCA to merge into WCA Merger Corporation, a Delaware corporation and wholly
owned subsidiary of the Subscriber, which in turn is a wholly-owned subsidiary
of WCA, with the result that WCA will survive the merger and become a
wholly-owned subsidiary of the Subscriber (the "Inversion Merger");
WHEREAS, following the Inversion Merger and other transactions
contemplated by the Reorganization Agreement, the Subscriber intends to complete
an initial public offering of its common stock and list such stock on the Nasdaq
Stock Market (the "IPO");
WHEREAS, the Subscriber intends to contribute a portion of the proceeds
from the IPO to WCA in order that WCA will make full payment to the Beneficiary
of the amount due under the Note, which will be approximately $13.8 million
(including principal and accrued but unpaid interest);
WHEREAS, pursuant to the Contribution Agreement, if the IPO does not close
by August 31, 2004, then the Subscriber will not make a capital contribution to
WCA, but will instead agree to guarantee the payment of the Note to the
Beneficiary, and the Subscriber and Beneficiary have entered into a Guaranty
Agreement, dated as of a date even herewith ("Guaranty"), to such effect;
WHEREAS, in order to facilitate the Inversion Merger and consummate that
and other transactions contemplated by the Reorganization Agreement, Subscriber
has agreed to execute and deliver an agreement reflecting its commitment to make
a capital contribution to WCA to fund the repayment of the Note;
WHEREAS, Beneficiary has consented to the Inversion Merger and the other
transactions set forth in the Reorganization Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements
herein, the parties hereto agrees as follows:
1. AGREEMENT REGARDING SUBSCRIPTION FOR COMMON STOCK. In partial
consideration for WCA entering into the Inversion Merger and delivering shares
of common stock, par value $0.01 per share, of WCA ("Common Stock") to
Subscriber in the Inversion Merger, Subscriber hereby subscribes for such Common
Stock and WCA hereby accepts the above subscription for Common Stock on the
terms set forth in this Agreement, and agrees to issue and deliver such Common
Stock in the Inversion Merger.
2. CONSIDERATION. The consideration for the issuance of such Common Stock
is either (i) $20,000,000, which shall be delivered by Subscriber to WCA via
wire transfer at the Closing (as defined below) or (ii) the Guaranty (as defined
below).
3. COMMON STOCK CERTIFICATES. Company shall cause to be issued and
delivered to Subscriber in the Inversion Merger certificates representing the
Common Stock to be issued to Subscriber.
4. CONDITION PRECEDENT. The commitment of Subscriber to contribute capital
as provided in Section 2(i) shall be conditioned on Subscriber completing an
initial public offering of its common stock ("IPO") on or before August 31,
2004. If such date passes without a closing of an IPO, then the commitment by
Subscriber to contribute capital shall be terminated, and by its terms, the
Guaranty Agreement, dated a date even herewith, by Subscriber as guarantor in
favor of the Beneficiary (the "Guaranty") shall become effective and shall be
deemed to be the consideration for the Common Stock as provided by Section
2(ii).
5. CLOSING. (a) If a closing of an IPO occurs, then effective immediately
after such closing, there shall be deemed to be a closing under this Agreement
("Closing") at which the consideration for the Common Stock set forth in Section
2(i) shall be delivered and Section 2(ii) shall cease to be of effect and shall
be null and void.
(b) If August 31, 2004 passes without the closing of an IPO, then there
shall be deemed to be a closing under this Agreement on such date
(alternatively, the "Closing") at which time the consideration for the Common
Stock set forth in Section 2(ii) shall be deemed to have been delivered and
Section 2(i) shall cease to be of effect and shall be null and void.
6. REPRESENTATIONS AND WARRANTIES OF WCA. WCA hereby represents and
warrants that all Common Stock issued by it hereunder are and shall be duly
authorized, fully paid and non-assessable; and shall be issued to Subscriber
subject to no pre-emptive rights and no other adverse rights of any other party.
7. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. Subscriber represents and
warrants that it understands and agrees that the Common Stock have not and will
not be registered under any federal or state securities laws including, but not
limited to, the Securities Act of 1933, as amended, and that no federal or state
governmental agency or authority has approved or passed upon the issuance of
such Common Stock. Subscriber further acknowledges, understands and agrees that
WCA may affix the following legend in substantially the following form to the
certificates evidencing the Common Stock:
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"THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF SUCH ACTS. THE COMMON STOCK MAY
NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION UNDER SUCH ACTS OR THE RECEIPT OF AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED."
8. APPLICABLE LAW. Disagreement and the rights of the parties hereto shall
be interpreted, governed and construed in accordance with the laws of the State
of Texas.
9. TRANSFER TAXES. Any transaction, privilege, sales, transfer or other
taxes payable by reason of the purchase and sale of shares provided for in this
Agreement shall be paid by the Subscribers.
10. THIRD PARTY BENEFICIARY. This Agreement is expressly intended to
confer upon the Beneficiary certain rights of a third party beneficiary to
require Subscriber to perform its obligations under this Agreement in
accordance with the terms and conditions of this Agreement.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which upon execution shall be deemed to be an original.
[signature page to follow]
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SUBSCRIBER:
WCA WASTE CORPORATION
By:
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Name:
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Title:
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COMPANY:
WASTE CORPORATION OF
AMERICA, INC.
By:
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Name:
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Title:
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