SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 1, 1998
WASTE CONNECTIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-19674
(Commission File Number)
94-3283464
(IRS Employer Identification No.)
2260 Douglas Boulevard, Suite 280, Roseville, California 95661
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (916) 772-2221
Not Applicable
(Former name or former address, if changed since last report.)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets
On June 1, 1998, Waste Connections of Utah, Inc. ("WCI-
Utah"), a Delaware corporation wholly owned by Waste Connections,
Inc. ("WCI"), acquired substantially all of the business assets of
Contractor's Waste Removal, L.C. ("CWR") from CWR. CWR is a Utah
limited liability company that was engaged in solid waste
collection and transportation in Orem, Utah. The assets acquired
include trucks, containers, equipment, contracts, governmental
permits, intellectual property and goodwill. WCI-Utah intends to
use the acquired assets to continue CWR's solid waste collection
and transportation business in Utah.
The purchase price was approximately $5.93 million,
consisting of approximately $3.75 million in cash (less certain
indebtedness of CWR) paid at the closing, 76,923 shares of WCI
Common Stock, $1.0 million in cash to be used to purchase
additional shares of WCI Common Stock in the open market, and notes
in the aggregate amount of $180,000 payable to the CWR members. In
addition, CWR may receive additional shares of WCI Common Stock if,
during specified periods, WCI-Utah attains specified revenue and
earnings targets or CWR or its members provide certain services to
WCI-Utah.
The purchase price of the acquisition was determined
based on the consideration paid by WCI for similar acquisitions in
the western United States. The cash portion of the acquisition was
funded with borrowings under WCI's credit facility with BankBoston,
N.A.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired. Pursuant to
Rule 3.05(b) of Regulation S-X, the financial statements of CWR are
not required to be included in this Form 8-K.
(b) Pro Forma Financial Information. Pursuant to Rule
3.05(b) of Regulation S-X, pro forma financial information relating
to CWR is not required to be included in this Form 8-K.
(c) Exhibits.
10.1 Asset Purchase Agreement dated as of
June 1, 1998, by and among
CWI, Waste Connections of
Utah, Inc., Contractor's Waste
Removal, L.C. and Brad Kitchen, Heath
Johnston and R. Scott McQuarrie
99.1 CWI's Press Release released
June 15, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
WASTE CONNECTIONS, INC.
(Registrant)
Date: June 15, 1998 By /s/ Ronald J. Mittelstaedt
Ronald J. Mittelstaedt
President and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
10.1 Asset Purchase Agreement dated as of
June 1, 1998, by and among
CWI, Waste Connections of
Utah, Inc., Contractor's Waste
Removal, L.C. and Brad Kitchen, Heath
Johnston and R. Scott McQuarrie
99.1 CWI's Press Release released
June 15, 1998
<PAGE>
Exhibit 10.1
ASSET PURCHASE AGREEMENT
Dated as of June 1, 1998, by and among
Waste Connections, Inc.,
Waste Connections of Utah, Inc.
and
Contractor's Waste Removal, L.C.
and
Brad Kitchen, Heath Johnston and R. Scott McQuarrie
<PAGE>
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 1, 1998, entered
into by and among Waste Connections, Inc., a Delaware corporation
("WCI"), Waste Connections of Utah, Inc., a Delaware corporation
("Buyer"), Contractor's Waste Removal, L.C., a Utah limited
liability company ("Seller"), and Brad Kitchen, Heath Johnston and
R. Scott McQuarrie (the "Members").
WHEREAS, Seller is engaged in the collection and
transportation of solid waste in the City of Orem, Utah, and other
related activities (collectively, the "Business"). The Business is
generally conducted using two types of systems, one which is
commonly known in the waste collection and transportation industry
as a Roll-off system (the "Roll-off Business") and one which is
commonly known as a Front-load system (the "Front-load Business");
WHEREAS, the Members own all of the limited liability company
membership interests of the Seller; and
WHEREAS, Buyer wishes to purchase, and Seller wishes to sell,
substantially all of the assets, properties, rights, privileges and
interests owned leased, held or used by Seller in connection with
the operation of the Business except certain nonbusiness related
assets.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements, representations, warranties, provisions and
covenants herein contained, the parties hereto, each intending to
be bound hereby, agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 Sale and Transfer of Assets. Subject to and in
accordance with the terms and conditions of this Agreement, at the
Closing on the Closing Date (as defined below) Seller shall convey,
transfer, deliver and assign to Buyer, and Buyer shall accept from
Seller all of the assets, rights, privileges and interests,
tangible, intangible, real, personal or mixed, and wherever
located, now or hereafter owned, leased, held or used primarily in
connection with the ownership, operation and management of the
Business, including without limitation (collectively, the
"Assets"):
(a) the trucks, containers, operating machinery and
equipment, processing equipment, shop tools, parts, supplies,
accessories, inventory, physical assets and other tangible personal
property used primarily in connection with the ownership,operation
and management of the Business;
(b) all contracts, leases, agreements, customer
accounts, commitments and arrangements specifically identified in
Schedule 3.12(a) as contracts contemplated to be assumed by Buyer
pursuant to this Agreement (the "Assumed Contracts");
(c) all 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 from
any and all governmental authorities constituting a material
authorization or entitlement or otherwise material to the operation
or management of the Business owned by, issued to, or held by or
otherwise benefiting Seller (the "Governmental Permits");
(d) all customer lists of Seller relating to the
Business;
(e) the logos, trade names, fictitious business
names and service marks of Seller, including without limitation,
the right to use the name "Contractor's Waste Removal";
(f) the goodwill of the Business;
(g) all claims, causes of action, choses in action,
rights of recovery and rights of set-off of any kind, against any
person or entity, including without limitation any liens, security
interests, pledges or other rights to payment or to enforce payment
in connection with products delivered by Seller on or prior to the
Closing Date;
(h) all accounts receivable, deposits, credits,
prepaid expenses, advance payments, claims or rights relating to
the Assets or the Business arising after the Closing Date, all
guarantees, warranties, indemnities and similar rights in favor of
Seller with respect to any of the Assets and all books and records
primarily in connection with the operation of the Business; and
(i) All operating and financial records relating to
the Business, including without limitation all ledgers, books of
account, deprecation schedules, inventory information, records
relating to payables and receivables, cancelled checks, bank
statements, equipment records, maintenance records, disposal
records and information concerning customers.
Notwithstanding the foregoing, Buyer shall not acquire any of the
assets listed on Schedule 3.2 (the "Excluded Assets").
1.2 Assumption by Buyer of Certain Contracts. Buyer
hereby assumes and agrees to pay, perform and discharge in a timely
manner, effective the day after the Closing Date, (i) all of the
obligations, liabilities and commitments of Seller accruing after
the Closing Date under or with respect to each Assumed Contract,
but not including any obligation or liability for any breach
thereof occurring on or prior to the Closing Date, (ii) all of the
Closing Date Current Liabilities (as defined in Section 3.19(b))
and (iii) all of the Closing Date Debt (as defined in Section
3.19(a)).
1.3 Excluded Liabilities. Notwithstanding the
provisions of Section 1.2 or any other provision hereof or any
Schedule or Exhibit hereto and regardless of any disclosure to
Buyer, Buyer shall not assume or be bound by any other duties,
responsibilities, obligations, indebtedness or other liabilities of
Seller or to which Seller or any of the Assets or the Business may
be bound or affected, of whatever kind or nature, whether known,
unknown, contingent or otherwise, arising before, on or after the
Closing Date (including without limitation trade payables and taxes
arising from the operation of the Business or the sale of the
Assets) except, as to obligations and liabilities arising after the
Closing Date only, those obligations and liabilities expressly
assumed by Buyer pursuant to Section 1.2 (the "Excluded
Liabilities").
1.4 Purchase Price. The purchase price (the "Purchase
Price") for the Assets shall be Five Million Seven Hundred Fifty
Thousand Dollars ($5,750,000), (i) minus the Closing Date Debt and
(ii) plus or minus, as the case may be, the amount by which the
Closing Date Current Assets (as defined in Section 3.19(b)) are
greater or less than the Closing Date Current Liabilities (the
difference between the Closing Date Current Assets and Closing Date
Current Liabilties is herein referred to as the "Closing Date
Working Capital Adjustment"). The Purchase Price shall be paid as
provided in Section 1.5.
1.5 Payment of Purchase Price. The Purchase Price shall
be payable as follows: (i) WCI shall pay Three Million Seven
Hundred Fifty Thousand Dollars ($3,750,000), minus the Closing Date
Debt, in cash to the Seller at the Closing by wire transfer or
check payable in clearinghouse funds; (ii) WCI shall deliver to
Seller Seventy Six Thousand Nine Hundred Twenty Three (76,923)
restricted shares of WCI's Common Stock, $0.01 par value (the "WCI
Stock"); (iii) WCI shall pay One Million Dollars ($1,000,000) in
cash to the Seller at the Closing by wire transfer or check payable
in clearinghouse funds, which Seller must entirely use to purchase,
with WCI's assistance, unrestricted shares of WCI's Common Stock,
$0.01 par value, in the open market within ten (10) business days
of one (1) day after the Closing Date; (iv) WCI shall pay the
Closing Date Debt by wire transfer to the holders of such debt; and
(v) within 90 days after the Closing Date, Buyer and Seller shall
determine the actual Closing Date Current Assets and Closing Date
Current Liabilities, which difference shall adjust the Purchase
Price as described below. The Purchase Price paid at the Closing
will be based on Schedule 3.19(a) and Schedule 3.19(b) as delivered
at the Closing, which the parties understand will include only
estimates of the Closing Date Debt, the Closing Date Current Assets
and Closing Date Current Liabilities as of the Closing Date.
Within 90 days after the Closing Date, Buyer and Seller will
determine the actual Closing Date Debt, the actual Closing Date
Current Assets and the actual Closing Date Current Liabilties. If
the Purchase Price increases, Buyer will promptly pay any
additional amount due to Seller; if the Purchase Price declines,
Seller will promptly repay any amount due to Buyer. The
adjustments made to the Purchase Price based on the actual Closing
Date Debt and the Closing Date Working Capital Adjustment shall be
paid in cash.
1.6 Certain Taxes. Seller shall pay any and all sales,
use, excise, transfer and conveyance taxes payable or assessable in
connection with or as a result of the transfer of the Assets under
the terms of this Agreement and the transactions contemplated
hereby. Buyer shall not be responsible for any business,
occupation, withholding, possessory interest or similar tax or
assessment or any other tax or fee of any kind relating to any
period on or prior to the Closing Date with respect to Seller, the
Assets or the ownership, operation or management of the Business.
1.7 Installment Note. WCI shall also deliver to each of
Brad Kitchen, Heath Johnston and Craig Lewis a non-interest bearing
promissory note (the "Notes") in the principal amount of Sixty
Thousand Dollars ($60,000) each, which Notes shall be unsecured and
paid to each of them respectively in twenty-four (24) equal monthly
installments of Two Thousand Five Hundred Dollars ($2,500) and
shall be substantially in the form of Exhibit 1.7 attached hereto.
1.8 Allocation of Purchase Price. Fifty Thousand
Dollars ($50,000) of the Purchase Price shall be allocated to the
covenant not to compete described in Section 10.1(a) hereof and the
balance of the Purchase Price shall be allocated to the Assets in
accordance with Schedule 1.8.
1.9 Additional Contingent Purchase Price. The Purchase
Price may be increased by the additional contingent payments
described in this section.
(a) If Buyer's gross revenue ("Gross Revenue") and
earnings before income taxes, depreciation and amortization
("EBITDA") attributable exclusively to Buyer's Roll-off Business
are at least Two Million Eight Hundred Thousand Dollars
($2,800,000) and One Million Dollars ($1,000,000) respectively, for
the period June 1, 1998 to July 31, 1999, WCI shall pay to Seller
a number of shares ("Shares") of WCI Stock, calculated by dividing
One Million Dollars ($1,000,000) by the Market Price (as defined
below). This contingent payment may be priced over four (4)
periods (collectively, the "Periods" and each, a "Period") as
follows: (i) for each Period that Gross Revenue and EBITDA are at
least Seven Hundred Thousand Dollars ($700,000) and Two Hundred
Fifty Thousand Dollars ($250,000), respectively (the "Targets"), a
certain number of Shares will be determined at such time by
dividing Two Hundred Fifty Thousand Dollars ($250,000) by the
Market Price as of the end of each such Period; and (ii)
notwithstanding (i), if Gross Revenue and EBITDA do not meet the
Targets for a given Period, but at least average the Targets for
the first and second Periods combined, the first, second and third
Periods combined or all four Periods combined, a number of Shares
will be determined (in addition to that number of Shares determined
pursuant to (i)) as of end of the latest Period of the above Period
combinations in which such average Targets have been achieved (the
"Latest Period") by dividing (A) the product of (1) $250,000 and
(2) the difference between the number of the Latest Period (i.e.,
2 for the second Period, 3 for the third Period and 4 for the
fourth Period) and the number of Periods, other than the Latest
Period, in which the Targets have been achieved, by (B) the Market
Price as of the end of the Latest Period. By way of example and
not limitation, if the average Targets are met for the first and
second Periods combined, (1) a number of Shares will be determined
as of the end of the second Period by dividing Five Hundred
Thousand Dollars ($500,000) by the Market Price as of the end
second Period (if the Targets are not met for the first Period, but
are met for the second Period) or (2) a number of Shares will be
determined as of the end of the first Period by dividing Two
Hundred Fifty Thousand Dollars ($250,000) by the Market Price as of
the end of the first Period and an additional number of Shares will
be determined as of the end of the second Period by dividing Two
Hundred Fifty Thousand Dollars ($250,000) by the Market Price as of
the end of the second Period (if the Targets are met for the first
Period, but are not met for the second Period). The Periods shall
be divided as follows: June 1, 1998 to August 31, 1998; September
1, 1998 to November 30, 1998; December 1, 1998 to March 31, 1999;
and April 1, 1999 to July 31, 1999. Net Revenue and EBITDA shall
be calculated without taking into account any other Roll-off
Business acquisitions by Buyer after June 1, 1998. For purposes of
this Agreement, "Market Price" means, for each Period, the average
closing price of the WCI Stock as quoted on the NASDAQ Stock Market
or the principal exchange for the WCI Stock for the five (5)
successive days for which a closing price is quoted ending on the
last day of that Period;
(b) If WCI acquires, by stock or asset purchase,
merger or other business combination, any other company engaged in
any type of business primarily in Utah and introduced to Buyer by
Seller or a Member, at any time between the Closing Date and
December 31, 1998, whose combined Net Revenue is at least Three
Million Five Hundred Thousand Dollars ($3,500,000) and whose
combined EBITDA ratio (as defined in Section 9) (the "EBITDA
Ratio") does not exceed 5:1, for the period June 1, 1998 to
December 31, 1998, WCI shall pay to Seller a number of Shares,
calculated by dividing One Million Dollars ($1,000,000) by the
Market Price. This contingent payment may be priced over four (4)
Periods in the same manner as described in Section 1.9(a), except
that the Targets shall be Eight Hundred Seventy Five Thousand
Dollars ($875,000) for Net Revenue and 5:1 for the EBITDA Ratio.
The Periods shall be divided as follows: June 1, 1998 to July 31,
1998; August 1, 1998 to September 30, 1998; October 1, 1998 to
November 30, 1998; and December 1, 1998 to December 31, 1998;
(c) If Buyer's Net Revenue and EBITDA attributable
exclusively to Buyer's Front-Load Business are at least Three
Million Five Hundred Thousand Dollars ($3,500,000) and Seven
Hundred Thousand Dollars ($700,000) respectively, for the period
June 1, 1998 to December 31, 2000, WCI shall pay to Seller a number
of Shares, calculated by dividing One Million Dollars ($1,000,000)
by the Market Price. This contingent payment may be priced over
four (4) Periods in the same manner as described in Section 1.9(a),
except that the Targets shall be Eight Hundred Seventy Five
Thousand Dollars ($875,000) for Net Revenue and One Hundred Seventy
Five Thousand Dollars ($175,000) for EBITDA. The Periods shall be
divided as follows: June 1, 1998 to January 31, 1999; February 1,
1999 to September 30, 1999; October 1, 1999 to May 31, 2000; and
June 1, 2000 to December 31, 2000. Net Revenue and EBITDA shall be
calculated without taking into account any other Front-Load
Business acquisitions by Buyer after June 1, 1998.
(d) The parties expressly acknowledge that the
contingent payments described in (a), (b) and (c) shall not be
earned or paid over four (4) Periods. The Periods and Targets are
used only as a pricing mechanism for the Shares. The total dollar
amounts or ratio, as the case may be, for the entire periods set
forth in each of (a), (b) and (c) must be achieved before the
applicable contingent payment will be owed and paid to Seller.
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 at such time on June 1, 1998 (the "Closing Date"),
at the offices of Shartsis, Friese & Ginsburg LLP, in San
Francisco, California, or through an exchange of consideration and
signed documents using overnight courier service. At the Closing,
Buyer and Seller shall deliver to each other the documents,
instruments and other items described in Section 5 of this
Agreement. For financial reporting purposes, the Closing will be
deemed effective June 1, 1998.
3. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE MEMBERS
Seller and the Members, jointly and severally, (i) represent
and warrant that each of the following representations and
warranties is true as of the Closing Date, and (ii) agree that such
representations and warranties shall survive the Closing.
3.1 Standing and Authority for the Business. Seller is
duly organized, validly existing and in good standing under the
laws of the State of Utah. Seller has full power and authority to
own and lease the Assets and to carry on the Business as now
conducted. Seller is not required to be qualified or licensed to
conduct business as a foreign company in any other jurisdiction
where the failure to qualify would have a material adverse effect
on the Seller.
3.2 All Assets Being Acquired. The Assets being
acquired by Buyer hereunder constitute all of the assets of Seller
used and necessary to conduct and operate the Business as presently
conducted and operated (other than certain assets set forth on
Schedule 3.2, which are the Excluded Assets).
3.3 Authority for Agreement. Seller and each of the
Members have full right, power and authority to enter into this
Agreement and to perform its or his obligations hereunder. The
execution and delivery of this Agreement by Seller has been duly
authorized by Seller's managers and/or members. This Agreement has
been duly and validly executed and delivered by Seller and each of
the Members and, subject to the due authorization, execution and
delivery by WCI and Buyer, constitutes the legal, valid and binding
obligation of Seller and each of the Members, enforceable against
Seller and each of the Members in accordance with its terms.
3.4 No Breach or Default. Except as disclosed on
Schedule 3.4, the execution and delivery by Seller and each of the
Members of this Agreement, and the consummation by Seller and each
of the Members 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 Seller or
any of the Members is a party, or by which Seller or the Assets,
are 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;
(c) violate the Articles of Organization of Seller;
or
(c) violate any agreements to which any Member is
a party relating to the Assets and the Business.
3.5 Financial Statements. Seller has delivered to
Buyer, as Schedule 3.5, copies of the financial statements
("Financial Statements") for its three most recent fiscal years,
compiled by Hawkins, Cloward & Simister, LC, Certified Public
Accountants, and interim financial statements for the period ended
March 31, 1998 (the "Balance Sheet Date"). The Financial
Statements are true and correct and fairly present the financial
condition and results of operations of the Business for the
respective periods indicated. The Financial Statements for the
years ending 1995, 1996 and 1997 were prepared on the income tax
basis of accounting, which is a comprehensive basis of accounting
other than generally accepted accounting principles. Except as
disclosed on Schedules 3.5, 3.6, 3.19(a) or 3.19(b), Seller had, as
of the Balance Sheet Date, and will have, as of the Closing Date,
no liabilities of any nature, whether accrued, absolute, contingent
or otherwise, including, without limitation, tax liabilities due or
to become due.
3.6 Liabilities. Parts I, II, III and IV of Schedule
3.6, are accurate lists and descriptions of all liabilities of
Seller relating to the Business required to be described below in
the format set forth below.
(a) Part I of Schedule 3.6 lists, as of the Closing
Date, other than with respect to trade payables and as of the end
of the month prior to the Closing Date with respect to trade
payables, all indebtedness for money borrowed and all other fixed
and uncontested liabilities of any kind, character and description,
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, trade payables have been
incurred only in the ordinary course of business consistent with
comparable prior periods.
(b) Part II of Schedule 3.6 lists, as of the
Closing Date, all claims, suits and proceedings which are pending
against Seller relating to the Business and, to the knowledge of
Seller, all material contingent liabilities and all material
claims, suits and proceedings threatened or anticipated against
Seller relating to the Business. For each such liability, Part II
of Schedule 3.6 includes a summary description of such liability,
including, without limitation: (i) the name of each court, agency,
bureau, board or body before which any such claim, suit or
proceeding is pending, including, without limitation, those arising
under Environmental Laws (as defined in Section 3.20), those
relating to personal injury or property damage (including all
workers' compensation and occupational disease and injury claims,
suits and proceedings) and those citations arising under the
Federal Occupational Safety and Health Act or any comparable state
law, (ii) the date such claim, suit or proceeding was instituted,
(iii) the parties to such claim, suit or proceeding, (iv) a
description of the factual basis alleged to underlie such claim,
suit or proceeding, including the date or dates of all material
occurrences, and (v) the amount claimed and other relief sought.
(c) Part III of Schedule 3.6 lists, as of the
Closing Date and to the extent not otherwise included in Part I of
Schedule 3.6, all material liens, claims and encumbrances secured
by any of the Assets, 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 3.6 lists, as of the
Closing Date and to the extent not otherwise included in Part I or
Part III of Schedule 3.6, all real property and material personal
property leasehold interests to which Seller is a party as lessor
or lessee relating to the Business or affecting or relating to any
Facility Property (as described in Section 3.8).
3.7 Conduct of the Business. Except as set forth on
Schedule 3.7, since the Balance Sheet Date and prior to the
Closing:
(a) The Business has been conducted only in the
ordinary course of business consistent with past practices; and
(b) There has been no change in Seller's financial
condition, the Assets, liabilities (contingent or otherwise),
income or operations of Seller relating to the Business other than
changes in the ordinary course of business, none of which either
singly or in the aggregate has been materially adverse, or which
could have a material adverse effect on the financial condition,
Assets, liabilities (contingent or otherwise), income or operations
of the Business.
3.8 Permits and Licenses.
(a) Schedule 3.8(a) is a full and complete list,
and includes copies, of all material permits, licenses, franchises,
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
by Seller (collectively the "Governmental Permits") owned by,
issued to, held by or otherwise benefiting Seller as of the Closing
Date. The status of the Governmental Permits related to the
disposal areas owned or used by Seller, including, without
limitation, any conditions thereto and, if applicable, the
expiration dates thereof, are also described in Schedule 3.8(a).
Schedule 3.8(a) also sets forth the name of any governmental agency
from whom Seller or Buyer must obtain consent (the "Required
Governmental Consents") in order to effect a direct or indirect
transfer of the Governmental Permits required as a result of the
consummation of the transactions contemplated by this Agreement.
Except as set forth on Schedule 3.8(a), all of the Governmental
Permits enumerated and listed on Schedule 3.8(a) are and will be
adequate for the operation of the Business of Seller and of each
Facility Property as presently operated and are valid and in full
force and effect. All of said 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 Seller,
threatened which may result in the revocation, cancellation,
suspension or adverse modification of any of the same. Seller has
no knowledge of any reason why all such Governmental Permits and
agreements will not remain in effect after consummation of the
transactions contemplated hereby.
(b) As part of Schedule 3.8(a), Seller has
delivered to Buyer: (i) all records, notifications, reports, permit
and license applications, engineering and geologic studies, and
environmental impact reports, tests or assessments (collectively,
"Records, Notifications and Reports") that (A) are material to the
operation of the Business, 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 five years by Seller or their
agents, and (ii) all material notifications from such governmental
agencies to Seller or their agents in response to or relating to
any of such Records, Notifications and Reports.
(c) Schedule 3.8(c) lists, as of the Closing Date,
each facility leased, operated or otherwise used by Seller for
the Business, the lease, operation or use of which is being
transferred to, assumed by or otherwise acquired directly or
indirectly by Buyer pursuant to this Agreement (each, a
"Facility" and collectively, the "Facilities"). Except as
otherwise disclosed on Schedule 3.8(c):
(1) Each Facility 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 no
Facility is a non-conforming use or otherwise subject to any
restrictions regarding reconstruction.
(2) All activities and operations at each
Facility are being and have been conducted in compliance in all
material respects with the requirements, criteria, standards and
conditions set forth in all applicable federal, state and local
statutes, orders, approvals, permits, zoning or land use
requirements and restrictions, variances, licenses, rules and
regulations.
(3) Each Facility is located on real property
owned or leased by Seller (each a "Facility Property"). The
Facility Properties leased by Seller consist only of one parcel
where the Business offices are located and two parcels where
Seller's trucks and equipment are stored.
(4) To Seller's knowledge, 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 Seller, any of the Members or any Affiliate (as
hereinafter defined) of any of the Members and leased to Seller to
be used in the Business after the Closing, and to the knowledge of
Seller there are no circumstances, conditions or reasons which are
likely to be the basis for revocation or suspension of any site
assessments, permits, licenses, consents, authorizations, zoning or
land use permits, variances or approvals relating to any such
Facility.
(d) Seller does not currently own, operate or
control, and has never in the past owned, operated or controlled,
any landfill or treatment, storage or disposal facility.
3.9 Intentionally Omitted.
3.10 Fixed Assets.
(a) Schedule 3.10(a) lists, as of the Closing Date,
substantially all the fixed assets (other than real estate) of
Seller used in the Business, 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
3.10(a), all of Seller's containers, vehicles, machinery and
equipment necessary for the operation of the Business are in good
working order and condition, normal wear and tear excepted, and all
of the motor vehicles and other rolling stock of Seller are in
material compliance with all applicable laws, rules and
regulations. All such vehicles, machinery and equipment are
substantially fit for the purposes for which they are utilized and
are free from defects which could cause them to fail. All leases
of fixed assets are in full force and effect and binding upon the
parties thereto; neither Seller nor any other party to such leases
is in breach of any of the material provisions thereof.
(b) Seller has good, valid and marketable title to
all personal properties and assets, tangible and intangible,
actually used or necessary for the conduct of the Business, free of
any encumbrance or charge of any kind except: (i) liens for current
taxes not yet due; and (ii) minor imperfections of title and
encumbrances, if any, that are not substantial in amount, do not
materially detract from the value of the property subject thereto,
do not materially impair the value of the Business or the Assets,
and have arisen only in the ordinary course of business and
consistent with past practice. There are and as of the Closing
Date will be 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 Assets, 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.
3.11 Acquisition/Disposal of Assets. Except as indicated
on Schedule 3.11, since the Balance Sheet Date, Seller has not
acquired or sold or otherwise disposed of any properties or assets
which, singly or in the aggregate, have a value in excess of
$5,000, or which are material to the operation of the Business as
presently conducted.
3.12 Contracts and Agreements; Adverse Restrictions;
Judgments, Orders, Etc.
(a) Schedule 3.12(a) lists, as of the Closing Date,
and includes copies of, all insurance policies, material contracts
and agreements relating to the Business to which Seller is a party
or by which any of the Assets 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) (the "Assumed Contracts").
Except as disclosed on Schedule 3.12(a), all such contracts and
agreements included in Schedule 3.12(a) are and on the Closing Date
shall be in full force and effect and binding upon the parties
thereto. Except as described or cross referenced on
Schedule 3.12(a), neither Seller nor, to Seller's or any of the
Members' 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 Seller or any of the Members of a default thereunder, or
exercised any options thereunder.
(b) Except as set forth on Schedule 3.12(b), there
is no outstanding judgment, order, writ, injunction or decree
against Seller, the result of which could materially adversely
affect Seller, the Business or any of the Assets, nor has Seller
been notified that any such judgment, order, writ, injunction or
decree has been requested.
3.13 Personnel. Schedule 3.13 is a complete list, as of
the Closing Date,of all employees (by type or classification) of
Seller relating to the Business and their respective rates of
compensation, including (i) the portions thereof attributable to
bonuses, (ii) any other salary, bonus, equity participation, or
other compensation arrangement made with or promised to any of
them, and (iii) copies of all employment agreements with employees.
Schedule 3.13 also lists the driver's license number for each
driver of motor vehicles used in the Business.
3.14 Benefit Plans and Union Contracts.
(a) Schedule 3.14(a) is a complete list as of the
Closing Date, and includes complete copies, of all employee benefit
plans and agreements currently maintained or contributed to by
Seller relating to the Business, 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 Closing Date. Except for the employee benefit
plans described on Schedule 3.14(a), Seller has no other pension,
profit sharing, deferred compensation, or other employee benefit
plans or arrangements with any party. Except as disclosed on
Schedule 3.14(a), all employee benefit plans listed on Schedule
3.14(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 3.14(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 3.14(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. Seller has not 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,
nor have Seller, nor party-in-interest or disqualified person,
engaged in any transaction or other activity which would give rise
to such liability. Seller has not participated in or made
contributions to any "multi-employer plan" as defined in the
Employee Retirement Income Security Act of 1974 ("ERISA"), nor
would Seller 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 Closing Date. No employee pension benefit
plan is under funded on a termination basis as of the date of this
Agreement.
(b) Schedule 3.14(b) is a complete list, as of the
Closing Date, and includes complete copies of all union contracts
and agreements between Seller and any collective bargaining group
relating to the Business. In the operation of the Business, Seller
has complied 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 are not engaged in any unfair
labor practice. There is no charge pending nor, to Seller's or the
Members' knowledge, is there any charge threatened against Seller
relating to the Business before any court or agency and alleging
unlawful discrimination in employment practices. There is no
charge of or proceeding with regard to any unfair labor practice
relating to the Business that is pending before the National Labor
Relations Board. There is no labor strike, dispute, slow down or
stoppage as of the Closing Date, existing or threatened against
Seller relating to the Business; no union organizational activity
exists respecting employees of Seller relating to the Business not
currently subject to a collective bargaining agreement; except as
set forth on Schedule 3.14(b), the Business has not experienced any
work stoppage or material labor difficulty; the union contracts or
other agreements delivered as part of Schedule 3.14(b) constitute
all agreements with the unions or other collective bargaining
groups relating to the Business, and there are no other
arrangements or established practices relating to the employees
covered by any collective bargaining agreement; and Schedule
3.14(b) contains as of the Closing Date a list of all arbitration
or grievance proceedings relating to the Business 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 Seller relating to the
Business. Seller has not experienced any labor strike, slow-down,
work stoppage, or other job action during the last five years
relating to the Business.
3.15 Taxes.
(a) Seller has timely filed 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
3.15, there are no open years, examinations in progress, extensions
of any statute of limitations or claims against Seller relating to
federal, state, local or other taxes (including penalties and
interest) for any period or periods prior to and including the
Closing 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 Seller for the last
three fiscal years are attached as part of Schedule 3.15. Seller
has not been contacted by any federal, state or local taxing
authority regarding a prospective examination.
(b) Except as set forth on Schedule 3.15 (which
schedule also includes the amount due) Seller has duly paid all
taxes and other related charges required to be paid prior to the
Closing Date. The reserves for taxes contained in the Financial
Statements are adequate to cover the tax liability of Seller as of
the Closing Date.
(c) Seller has withheld all required amounts from
their 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 Seller 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.
3.16 Copies Complete; Consents and Approvals. Except as
disclosed on Schedule 3.16, the copies of all leases, instruments,
agreements, licenses, permits, certificates or other documents that
have been delivered to Buyer in connection with the transactions
contemplated hereby are complete and accurate as of the Closing
Date and are true and correct copies of the originals thereof.
None of such leases, instruments, agreements, licenses, permits,
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 such consents and
approvals as are listed on Schedule 3.16, all of which will have
been obtained prior to the Closing Date.
3.17 Customers, Billings, Current Receipts and
Receivables. Schedule 3.17 is a current, accurate and complete
list of, and includes:
(a) the customers of the Business that Seller
serves on an ongoing basis, including name, location and current
billing rate, as of the Closing Date; and
(b) an accurate and complete aging of all accounts
and notes receivable from customers as of the last day of the month
preceding the Closing Date, 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
Schedule 3.17, Seller's accounts and notes receivable are
collectible in the amounts shown on Schedule 3.17.
Since the Balance Sheet Date, Seller has not lost any customers and
no customers have threatened or otherwise informed Seller that they
intend to discontinue doing business with Seller. Seller has no
knowledge of any intention of any of such customers that operates
a coal mine to terminate or reduce the scope of its operations at
the locations served by the Business, and none of such customers
has indicated to Seller that it is considering terminating or
reducing the scope of any of its operations at any of such
locations.
3.18 Brokers; Finders. No person has acted directly or
indirectly as a broker, finder or financial advisor for Seller or
the Members 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 Seller or the Members.
3.19 Closing Date Debt; Closing Date Current Assets and
Closing Date Current Liabilities.
(a) At the Closing, Seller shall prepare and
deliver to Buyer Schedule 3.19, which shall set forth the amount of
(i) the aggregate debt (excluding trade payables) of Seller
outstanding on the Closing Date relating to the Business, which
debt will be repaid at or immediately after the Closing Date,
including in each case all interest accrued through and including
the Closing Date and all prepayment penalties to be incurred in
connection with the repayment of any such debt required to be
repaid, plus (ii) the present value of all capitalized lease
obligations (determined in accordance with generally accepted
accounting principles) included in the Assumed Contracts or
encumbering the Assets and (iii) the present value, 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 Seller by a
third party lender in connection with its most recent borrowing to
finance equipment, of all lease obligations that are not
capitalized lease obligations included in the Assumed Contracts or
encumbering the Assets (the "Closing Date Debt").
(b) Schedule 3.19(b) sets forth the amount of the
aggregate current liabilities (excluding accrued but unpaid
liabilities for taxes and the current portion of long term debt to
the extent such current portion is included in the Closing Date
Debt) and trade payables of Seller relating to the Business as of
the Closing Date (the "Closing Date Current Liabilities") and the
amount of the aggregate current assets of the Seller relating to
the Business as of the Closing Date and the accounts receivable of
the Seller relating to the Business earned prior to the Closing
Date and collectible (less an allowance for doubtful accounts) on
or after the Closing Date (the "Closing Date Current Assets").
3.20 Compliance With Laws. Except as disclosed on
Schedule 3.20, Seller has materially complied with, and Seller is
presently in material 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 Seller relating to the
Business (collectively "Laws"), including, but not limited to, Laws
relating to the public health, safety or protection of the
environment (collectively, "Environmental Laws"). Except as
disclosed on Schedule 3.20, there has been no assertion by any
party that Seller is in material violation of any Laws.
Specifically and without limiting the generality of the foregoing,
except as disclosed on Schedule 3.20:
(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"), the
Business has not accepted, processed, handled, transferred,
generated, treated, stored or disposed of any Hazardous Material
(as defined in Section 3.20(e) below) nor has it 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 Seller's leasing of the Facility
Property leased by Seller and prior to Seller's leasing of such
Facility Property, no Hazardous Material, other than that allowed
under Environmental Laws, including, without limitation, RCRA, has
been disposed of, or otherwise released on any Facility Property.
(c) During Seller's leasing of the Facility
Property leased by Seller and prior to Seller's leasing of such
Facility Property, no Facility Property has ever been subject to
nor has Seller 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 Facility Property. There are no pending and no threatened
actions or proceedings from any governmental agency or any other
entity involving remediation of any condition of any Facility
Property, including, without limitation, petroleum contamination,
pursuant to Environmental Laws.
(d) Except as allowed under Environmental Laws, the
Business has not 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"
shall mean (i) any substances defined as "Hazardous Waste" in 40
CFR 261, and in any corresponding Utah statute or regulation; and
(ii) any substance the presence of which requires remediation
pursuant to any Environmental Laws.
3.21 Patents, Trademarks, Trade Names, etc. Schedule
3.21 lists all patents, trade names, fictitious business names,
trademarks, service marks, and copyrights owned by Seller or which
they are licensed to use in connection with the Business (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 Seller in the Business
infringe on any patents, trademarks, or copyrights, or any other
rights of any person. Neither Seller nor any of the Members 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.
3.22 Assets, etc., Necessary to the Business. Seller
owns or leases all properties and assets, real, personal, and
mixed, tangible and intangible, and, except as disclosed on
Schedules 3.4, 3.8(a), 3.12(a) and 3.16, are a party to all
Governmental Permits and other agreements necessary to permit
Seller to carry on the Business as presently conducted.
3.23 Suppliers and Customers. Seller has no 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 Seller intends to cease providing such items
to Seller, nor does Seller have knowledge of any fact (other than
general economic and industry conditions) which gives Seller reason
to believe that any of the customers of the Business intends to
terminate, limit or reduce its business relations with Seller
relating to the Business.
3.24 Absence of Certain Business Practices. Neither
Seller nor any of the Members 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 in
connection with any actual or proposed transaction which (a) might
subject Seller 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 the Business, or (c) if not
continued in the future, might adversely affect the financial
condition, business or operations of the Business or which might
subject Buyer to suit or penalty in any private or governmental
litigation or proceeding.
3.25 Disclosure Schedules. Any matter disclosed by
Seller 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.
3.26 No Misleading Statements. The representations and
warranties of Seller and the Members contained in this Agreement,
the Exhibits and Schedules hereto and all other documents and
information furnished to Buyer and their 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 and
to be made not misleading.
3.27 Accurate and Complete Records. The books, ledgers,
financial records and other records of Seller relating to the
Business:
(a) have been made available to Buyer and its
agents at Seller's offices or at the offices of Buyer's attorneys
or Seller's attorneys;
(b) have been, in all material respects, maintained
in accordance with all applicable laws, rules and regulations; and
(c) are accurate and complete in all material
respects, and reflect all material transactions.
3.28 Intentionally Omitted.
3.29 Investment Representations. Seller, and each of the
Members (should any of the WCI Stock be distributed by Seller to
the Members), further represent that:
(a) Seller and each of the Members are "accredited
investors" as defined in Rule 501(a) under the Securities Act of
1933, as amended (the "Act"). Seller and each of the Members have
such knowledge and experience in financial matters, either alone or
with their professional advisors, that they are capable of
evaluating the merits and risks of the investment in the WCI Stock.
(b) Seller's principal place of business is located
in the State of Utah and each of the Member's principal residence
is located in the State of Utah.
(c) Seller and each of the Members have had access
to such information relating to WCI as they feel is reasonably
necessary to make an informed investment decision with respect to
the WCI Stock, including, without limitation, WCI's Prospectus
dated May 21, 1998. Seller and each of the Members understand that
the WCI Stock is not covered by the Prospectus, but rather that
such Prospectus has been given to Seller and each of the Members to
provide them information about WCI.
(d) Seller and each of the Members have had the
opportunity to ask questions and receive answers concerning the
terms and conditions of the transactions contemplated by this
Agreement and to obtain additional information that WCI possesses
or can obtain without unreasonable effort or expense that is
necessary to verify the accuracy of the information provided.
(e) Seller and each of the Members are acquiring
the WCI Stock pursuant to this Agreement for its own account, not
as a nominee or agent. No one else has any interest, beneficial or
otherwise, in any of the WCI Stock.
(f) Seller and each of the Members are able to bear
the economic risk of such an investment in the WCI Stock, are aware
that they must be prepared to hold such WCI Stock for an indefinite
period and are aware that the shares of the WCI Stock have not been
registered under the Act, or registered or qualified under the
California Corporate Securities Law of 1968, as amended, or any
other securities law, on the ground, among others, that no
unregistered distribution or public offering of the WCI Stock is to
be effected and that the shares of the WCI Stock are being issued
by WCI without any public offering within the meaning of
section 4(2) of the Act.
(g) Without in any way limiting the representations
herein, Seller and each of the Members further agree that they
shall not encumber, pledge, hypothecate, sell, transfer, assign or
otherwise dispose of, or receive any consideration for, any shares
of the WCI Stock or any interest in them, unless and until prior to
any proposed encumbrance, pledge, hypothecation, sale, transfer,
assignment or other disposition, (i) a registration statement on
Form S-1 or S-3 (or any other form appropriate for the purpose or
replacing such form) under the Act with respect to the shares
proposed to be transferred or otherwise disposed of shall be then
effective (ii)(a) he shall have furnished WCI with a detailed
statement of the circumstances of the proposed disposition, and
(b) he or she shall have furnished WCI with an opinion of counsel
or no-action letter issued by the Staff of the Securities and
Exchange Commission ("SEC") (obtained at Seller's and each of the
Member's expense) in form and substance satisfactory to WCI to the
effect that such disposition will not require registration of any
such WCI Stock under the Act or qualification of any such shares
under any other securities law; or (iii) Rule 144 is available with
respect to such transaction; provided, however, that nothing in
this paragraph (g) shall prevent Seller or the Members from
pledging shares of the WCI Stock to a broker in a margin
transaction if such broker agrees to adhere to the restrictions on
the transfer of shares of WCI Stock set forth in this Agreement.
(h) Seller and each of the Members understand and
agree that each certificate or other instrument representing the
WCI Stock will bear a legend on the face thereof (or on the reverse
thereof with a reference to such legend on the face thereof) which
legend restricts the sale, transfer or other disposition of the WCI
Stock otherwise than in accordance with Section 3.29(g) of this
Agreement provided, however, that WCI shall, on the request of
Seller or one of the Members, cause such legends to be removed from
the certificates or other instrument evidencing the WCI Stock if
Seller or such Member has held such WCI Stock for the period
contemplated by Rule 144(k) under the Act and if Seller or such
Member is not then and has not been during the three months
preceding such request an affiliate of WCI (as defined in Rule 144
under the Act).
(i) Seller and each of the Members understand and
agree that the WCI Stock will be "restricted securities" as that
term is defined in Rule 144 under the Act and, accordingly, that
the WCI Stock must be held indefinitely unless subsequently
registered under the Act or an exemption from such registration is
available.
(j) Seller and each of the Members hereby agree
that, during the period of duration specified by WCI and an
underwriter of the WCI Stock or other securities of WCI, following
the effective date of a registration statement filed under the Act
for the first public offering of WCI's Common Stock, it shall not,
to the extent requested by WCI and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase
or otherwise transfer or dispose of (other than to donees who agree
to be similarly bound) any securities of WCI held by it at any time
during such period except the WCI Stock included in such
registration; provided, however, that:
(k) all officers and directors of WCI, enter into
similar agreements; and
(l) such market stand-off time period shall not
exceed 180 days.
In order to enforce the foregoing covenant, WCI may
impose stop-transfer instructions with respect to the WCI Stock
until the end of such period.
4. REPRESENTATIONS AND WARRANTIES OF WCI AND BUYER
WCI and Buyer, jointly and severally, represent and warrant to
Seller and each Member that each of the following representations
and warranties is true as of the Closing Date, and agree that such
representations and warranties shall survive the Closing:
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. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware, and is qualified to transact business as a
foreign corporation in the State of Utah.
4.2 Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by WCI and Buyer, and,
subject to the due authorization, execution and delivery by Seller
and each of the Members, constitutes a legal, valid and binding
obligation of WCI and Buyer. Each of WCI and Buyer has full
corporate power, legal right and corporate authority to enter into
and perform its obligations under this Agreement and to carry on
the 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 Buyer or WCI: (b) conflict with any of the
provisions of the Certificate of Incorporation or Bylaws of Buyer
or WCI; or (c) conflict with, result in a breach of or constitute
a default under any material agreement or instrument to which Buyer
or WCI is a party or by which either is bound.
4.3 Prospectus. The information contained in WCI's
Prospectus, dated May 21, 1998, is materially complete and accurate
in all respects as of this date.
4.4 No Misleading Statements. The representations and
warranties of WCI and Buyer contained in this Agreement, the
Exhibits and Schedules hereto and all other documents and
information furnished to Seller and the Members pursuant hereto are
materially complete and accurate, and do not include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements made and to be made not misleading
as of the Closing Date.
5. CLOSING DELIVERIES
At the Closing or at the time otherwise indicated, the
respective parties shall make the deliveries indicated:
5.1 WCI's and Buyer's Deliveries.
(a) WCI shall deliver the Purchase Price required
to be delivered on the Closing Date pursuant to Section 1.5;
provided, however, that stock certificates representing shares of
WCI Stock shall be delivered by WCI to Seller within two (2) to
three (3) days after the Closing Date.
(b) Buyer shall execute and deliver to each of Brad
Kitchen, Heath Johnston and Craig Lewis an Employment Agreement
substantially in the form of Exhibit 5.1(b) (the "Employment
Agreements");
(c) WCI shall execute and deliver to Seller a
Second Amended and Restated Investor's Rights Agreement
("Investor's Rights Agreement") in substantially the form of
Exhibit 5.1(c).
(d) WCI shall execute and deliver the Notes to each
of Brad Kitchen, Heath Johnston and Craig Lewis.
(e) WCI and Buyer shall execute and deliver to
Seller counterparts of the Bill of Sale (as defined in Section
5.2(a)) and the Assignment (as defined in Section 5.2(b)).
(f) WCI shall payoff the Closing Date Debt as
provided in Section 1.5.
5.2 Seller's Deliveries.
(a) Seller shall deliver to Buyer (and/or its
designee) an executed bill of sale (the "Bill of Sale") and other
instruments of transfer and conveyance for the full and complete
transfer, conveyance, assignment and delivery to Buyer on the
Closing Date of all of Seller's right, title and interest in and to
all of the Assets, accompanied by all third party consents required
with respect thereto, including, without limitation, written
evidence of the release of the liens and encumbrances with respect
to the Assets;
(b) Seller shall deliver to Buyer an executed
assignment or transfer of the Assumed Contracts and Governmental
Permits (the "Assignment") accompanied by all third party consents
required with respect thereto;
(c) Seller shall deliver to Buyer (and/or its
designee) all motor vehicle registrations and ownership documents
for the motor vehicles being acquired by Seller;
(d) Seller shall deliver to Buyer Uniform
Commercial Code financing statement searches from the State of
Utah, dated within 15 days prior to the Closing Date, with an
unofficial update on the Closing Date obtained from Information
America or another reporting service, showing that there are no
security interests, judgments, taxes, other liens or encumbrances
outstanding against the Assets except as disclosed on Schedule 3.6.
(e) Seller shall deliver to Buyer an opinion of
counsel for Seller, dated as of the Closing Date, in substantially
the form attached hereto as Exhibit 5.2(e).
(f) Seller shall execute and deliver such other
documents and instruments as are reasonably requested by WCI or
Buyer in order to consummate the transactions contemplated by this
Agreement.
(g) Seller shall deliver to Buyer evidence
satisfactory to Buyer 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 Buyer) or other benefits with
non-union employees of Seller (including, without limitation,
rights to obtain equity in the Business or Assets) have been
terminated, effective on or before the Closing Date.
(h) Seller shall deliver to Buyer counterparts of
the Employment Agreements.
(i) Seller shall deliver to Buyer counterparts of
the Investor's Rights Agreement.
6. INDEMNIFICATION
6.1 Indemnity by Seller, the Members. Subject to
Section 6.2, Seller and the Members covenant and agree that they
will, jointly and severally, indemnify and hold harmless WCI and
Buyer and their respective directors, officers and agents and their
respective successors and assigns (collectively the "Indemnitees"),
from and after the date of this Agreement, 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 Indemnitee with respect to
each of the following contingencies until the expiration of the
applicable statute of limitations (all, the "Indemnity Events"):
(a) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of Seller
or the Members 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 or Buyer pursuant to the terms of this Agreement, regardless of
whether, in the case of a breach of a representation or a warranty,
WCI or Buyer 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 "Environmental Site" as hereinafter defined, or
the installation or operation of an Underground Storage Tank
("UST") during any period on or prior to the Closing Date. 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 Seller or the
Members or by any predecessor thereof on or prior to the Closing
Date and used in the Business, provided however, as to activities
of such predecessors, only to the extent that Seller or the Members
had knowledge of such activities. 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.
(c) All actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including
specifically, but without limitation, reasonable attorneys' fees
and expenses of investigation) incident to any of the foregoing.
6.2 Limitations on Seller's and the Members'
Indemnities. The maximum amount which the Indemnitees can recover
as a result of one or more Indemnity Events pursuant to the
provisions hereof for Claims shall not in the aggregate exceed the
Purchase Price.
6.3 Notice of Indemnity Claim.
(a) In the event that any claim ("Claim") is
hereafter asserted against or arises with respect to any Indemnitee
as to which such Indemnitee may be entitled to indemnification
hereunder, Indemnitee shall notify Seller and the Members
(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
Indemnitee, (ii) receipt by such Indemnitee of written notice of
any third party claim pursuant to an invoice, notice of claim or
assessment, against such Indemnitee, or (iii) such 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 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 6.2 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 Indemnitee with
respect to such action. Indemnitee may participate, at WCI's
Indemnitee's own expense, in the defense of any Claim assumed by
the Indemnifying Party. Without the written approval of
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.
(c) If, within 30 days of the Indemnifying Party's
receipt of a Claims Notice, the Indemnifying Party shall not have
provided the written agreement required by Section 6.3(b) and
elected to defend the Claims, 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 30 days reimburse
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 6.3
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 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 Indemnitee, or the Indemnifying Party shall
determine that such counsel has a conflict of interest in
representing both the Indemnitee and the Indemnifying Party in the
same action or proceeding and the Indemnitee and the Indemnifying
Party do not waive such conflict to the satisfaction of such
counsel.
6.4 Survival of Representations, Warranties and
Agreements. The representations and warranties of the parties
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") and the liability of the party
making such Representations and Warranties for breaches thereof
shall survive the consummation of the transactions contemplated
hereby. The parties hereto in executing and delivering and in
carrying out the provisions of this Agreement are relying solely on
the representations, warranties, Schedules, Exhibits, agreements
and covenants contained in this Agreement, or in any writing or
document delivered pursuant to the provisions of this Agreement,
and not upon any representation, warranty, agreement, promise or
information, written or oral, made by any persons other than as
specifically set forth herein or therein.
6.5 No Exhaustion of Remedies or Subrogation; Right of
Set Off. Seller and the Members waive any right to require any
Indemnitee to (i) proceed against any other person or (iii) pursue
any other remedy whatsoever in the power of any Indemnitee. Buyer
may, but shall not be obligated to, set off against any and all
payments due Seller under this Agreement or any other agreement
between the parties, any amount to which WCI, Buyer or any other
Indemnitee is entitled to be indemnified hereunder with respect to
any 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 Seller and the Members or their
successors.
7. OTHER POST-CLOSING COVENANTS OF SELLER, THE Members, WCI
AND BUYER
7.1 Restrictive Covenants. Seller, the Members, the
Members' and Affiliates acknowledge that (i) WCI and Buyer, as the
purchasers of the Assets (including the goodwill of the Business),
are and will be engaged in the same business as the Business; (ii)
Seller, the Members, the their Affiliates are intimately familiar
with the Business; (iii) the Business is currently conducted in the
State of Utah and WCI and Buyer, directly and indirectly through
their Affiliates, currently conduct business in Utah and intend, by
acquisition or otherwise, to expand the Business into other
geographic areas of Utah where it is not presently conducted; (iv)
Seller, the Members, and their Affiliates have had access to trade
secrets of, and confidential information concerning, the Business;
(v) the agreements and covenants contained in this Section 7.1 are
essential to protect the Business and the goodwill being acquired;
and (vi) Seller, the Members, and their 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 7 will not impair such ability. Seller
and the Members covenant and agree as set forth in (a), (b) and (c)
below with respect to the Business:
(a) Non-Compete. For a period commencing on the
Closing Date and terminating five years thereafter (the "Restricted
Period"), Seller, the Members, and their Affiliates shall not,
anywhere in the city of Orem, Utah and Carbon, Davis, Duchesne,
Juab, Millaro, Morgan, Salt Lake, Sanpete, Summit, Tooele, Utah
Wasatch and Weber Counties, Utah, directly or indirectly, acting
individually or as the owners, shareholders, partners, or employees
of any entity, (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; or (iii) 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 any of Seller or the Members may own, directly or indirectly,
solely as an investment, securities of any business traded on any
national securities exchange or NASDAQ, provided none of Seller or
the Members is a controlling person of, or member of a group which
controls, such business and further provided that Seller and
Members do not, in the aggregate, directly or indirectly, own 2% or
more of any class of securities of such business.
(b) Confidential Information. During the
Restricted Period and thereafter, Seller, the Members and their
Affiliates shall keep secret and retain in strictest confidence,
and shall not use for the benefit of themselves or others, all data
and information relating to the Business ("Confidential
Information"), including without limitation, the existence of and
terms of this Agreement, know-how, trade secrets, customer lists,
supplier lists, details of contracts, pricing policies, operational
methods, marketing plans or strategies, bidding practices and
policies, 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 Seller or any of the Members, or (ii) is general
knowledge in the solid waste handling and landfill business and not
specifically related to the Business.
(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 Seller or made available to Seller
relating to the Business (other than those relating to the Excluded
Assets and the Excluded Liabilities), but excluding any materials
maintained by any attorneys for Seller prior to the Closing, are
and shall be the property of WCI or Buyer and have been delivered
or will be delivered or made available to WCI or Buyer at the
Closing.
(d) Non-Solicitation. Without the consent of WCI,
which may be granted or withheld by WCI in its discretion, Seller,
the Members and their Affiliates shall not, during the Restricted
Period, solicit any employees of WCI, Buyer or their Affiliates to
leave the employ of WCI, Buyer or their Affiliates and join Seller,
any of Members or Affiliate in any business endeavor owned or
pursued by any of them.
(e) No Disparagement. From and after the Closing
Date, none of Seller nor the Members shall, in any way to any
customer or employee of the Business or Buyer, denigrate or
derogate WCI, Buyer or any of their 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 Seller or the Members 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 if it adversely affects the regard or
esteem in which such person or entity is held by such person.
Without limiting the generality of the foregoing, none of Seller
nor the Members shall, 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 customer or employee of the Business or
Buyer. 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, or such lesser actual notice as Seller or any Member or
Shareholder shall have.
7.2 Rights and Remedies Upon Breach. If Seller, the
Members or any Affiliate breaches, or threatens to commit a breach
of, any of the provisions of Section 7.1(a), (b) or (d) herein (the
"Restrictive Covenants"), WCI and Buyer 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 Buyer at law or in equity:
(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 Buyer and that money damages would
not provide an adequate remedy to Buyer. Accordingly, in addition
to any other rights or remedies, WCI and Buyer shall be entitled to
injunctive relief to enforce the terms of the Restrictive Covenants
and to restrain Seller and the Members from any violation thereof.
(b) Accounting. The right and remedy to require
Seller and the Members to account for and pay over to WCI or Buyer
all compensation, profits, monies, accruals, increments or other
benefits derived or received by Seller or the Members as the result
of any transactions constituting a breach of the Restrictive
Covenants.
(c) Severability of Covenants. Seller and Members
acknowledge and agree 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, Buyer,
Seller and Members 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,
Buyer, Seller and Members that such determination not bar or in any
way affect Buyer'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.
7.3 Facility. If either WCI or Buyer decides to build
or lease a facility in Orem, Utah, in which to operate its solid
waste transportation and collection business, the Members will be
given the opportunity to provide such facility at fair market
value.
7.4 Containers. Seller shall have the exclusive right
of first refusal to select a vendor of its choice on all containers
purchased by WCI in Utah, Idaho and Western Colorado.
8. TERMINATION OF AGREEMENT
8.1 Termination by Buyer; by Seller. This Agreement may
be terminated at any time prior to the Closing Date:
(a) by Buyer, by written notice to Seller if the
representations and warranties of Seller shall not have been true
and correct in all respects as of the date when made; or
(b) by Seller by written notice to WCI if the
representations and warranties of Buyer shall not have been true
and correct in all respects as of the date when made.
8.2 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.
8.3 Exclusive Negotiations. Following execution of this
Agreement, Seller and Members shall not, and Seller shall not
permit its 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 or the Business with any party
other than Buyer. Seller and Members hereby confirm that no person
or entity presently has or may acquire any rights to purchase or
otherwise acquire the Assets or the Business.
9. GENERAL
9.1 Additional Conveyances. Following the Closing,
Seller and Buyer shall each deliver or cause to be delivered at
such times and places as shall be reasonably agreed upon such
additional instruments as Buyer or Seller may reasonably request
for the purpose of carrying out this Agreement. Seller will
cooperate with WCI and Buyer 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.
9.2 Assignment. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, the
successors or assigns of WCI, Buyer and Seller and the heirs, legal
representatives or assigns of the Members; 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. Buyer may assign some or all of its rights
hereunder to another Affiliate of WCI.
9.3 Public Announcements. Except as required by law,
Seller shall not make any public announcement or filing with
respect to the transactions provided for herein without the prior
written consent of WCI.
9.4 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.
9.5 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 pre-
paid 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 Seller: Brad Kitchen
Contractor's Waste Removal
122 South Mountain Way Drive
Orem, UT 84058
With a copy to: William Gray, Esq.
Parsons, Behle & Latimer
One Utah Center
201 S. Main Street, Suite 1800
Salt Lake City, Utah 84145
If to Buyer: Waste Connections, Inc.
2260 Douglas Boulevard, Suite 280
Roseville, California 95661
Attention: Ronald J. Mittelstaedt
With a copy to: Robert D. Evans, Esq.
Shartsis, Friese & Ginsburg LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
9.6 Attorneys' Fees. In the event of any dispute or
controversy between WCI or Buyer on the one hand and Seller or
Members 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. Such award shall include post-judgment attorney's fees and
costs.
9.7 Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Utah
without regard to its conflict of laws provisions.
9.8 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.
9.9 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.
9.10 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.
9.11 Number and Gender of Words. Whenever the singular
number is used herein, the same shall include the plural where
appropriate, and shall apply to all of such number, and to each of
them, jointly and severally, and words of any gender shall include
each other gender where appropriate.
9.12 Entire Agreement. This Agreement (including the
Schedules and Exhibits hereto) and the other documents delivered
pursuant hereto constitute the entire Agreement and understanding
between Seller, the Members, WCI and Buyer 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 Seller, the Members, WCI and Buyer
acting through their officers, thereunto duly authorized.
9.13 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.
9.14 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 or Utah. 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.
9.15 Affiliate. 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 is controlled by, or is under common control with such person,
and in the case of Seller includes directors and officers, in the
case of individuals includes the individual's spouse, father,
mother, grandfather, grandmother, brothers, sisters, children and
grandchildren, and in the case of a trust includes the grantors,
trustees and beneficiaries of the trust.
9.16 Knowledge. Wherever reference is made in this
Agreement to the "knowledge" of Seller or the Members, such term
means the actual knowledge of Seller, the Members or any director,
officer or management employee of Seller whose duties relate to the
Business, or any knowledge which should have been obtained by
Seller, the Members or such employee upon reasonable inquiry by a
reasonable business person.
9.17 EBITDA Ratio. For purposes of this Agreement,
"EBITDA Ratio" means the ratio of EBITDA to the purchase price paid
by WCI for another company as described in Section 1.9(b).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Asset Purchase Agreement by persons thereunto duly authorized as of
the date first above written.
SELLER: Contractor's Waste Removal, L.C.
By:
Name: Brad Kitchen
Title: Manager
THE MEMBERS: Brad Kitchen
Heath Johnston
R. Scott McQuarrie
WCI: Waste Connections, Inc.
By:
Ronald J. Mittelstaedt
President, Chief Executive
Officer and Chairman
BUYER: Waste Connections of Utah, Inc.
By: Ronald J. Mittelstaedt
President
<PAGE>
Exhibit 99.1
Waste Connections, Inc. Announces
Acquisition of Contractor's Waste
For Immediate Release
Roseville, California
Waste Connections, Inc. (NASDAQ:WCNX) announces today that it has
closed the acquisition of the assets of Contractor's Waste Removal,
LC in Orem, Utah, representing a new market entry.
Waste Connections, Inc. is a regional, integrated, solid waste
services company that provides solid waste collection, transfer,
disposal and recycling services in secondary markets of the Western
U.S. The company serves more than 139,000 commercial, industrial
and residential customers. Waste Connections, Inc. was founded in
September 1997 and is headquartered in Roseville, California.
This press release contains forward-looking statements that involve
risks and uncertainties. Among the important factors that could
cause actual results to differ materially from those indicated by
such forward-looking statements are the Company's limited operating
history, ability to manage growth, the ability to identify, acquire
and integrate acquisition targets, the potential inability to
finance the Company's growth, dependence on management, and the
other risk factors detailed from time to time in the Company's
periodic reports and registration statements filed with the
Securities and Exchange Commission.
6/9/98
CONTACT:
Waste Connections, Inc. (916) 772-2221
Steven F. Bouck
Chief Financial Officer
