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) March 31, 1999
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.)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets
On March 31, 1999, Waste Connections, Inc., a Delaware
corporation ("WCI"), acquired all of the outstanding capital
stock of each of Management Environmental National, Inc., a
Washington corporation ("MENI"), and RH Financial Corporation, a
Washington corporation ("RHFC").
MENI and RHFC are the sole partners of two limited
partnerships, one of which provides solid waste handling and
transportation services in the City of Vancouver and in Clark
County, Washington, and the other of which owns and operates the
Finley-Buttes Regional Landfill in Morrow County, Oregon. WCI
intends to continue these solid waste handling, transportation
and disposal businesses in southern Washington and northern
Oregon.
The purchase price consisted of approximately $67.1 million
in cash. The purchase price was determined based on the
consideration paid by WCI for similar acquisitions in the western
United States.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Businesses Acquired. The
financial statements of MENI and RHFC are not included in this
Form 8-K, but will be filed by amendment to this Form 8-K no later
than 60 days after April 15, 1999.
(b) Pro Forma Financial Information. Pro forma financial
information relating to MENI and RHFC is not included in this Form
8-K, but will be filed by amendment to this Form 8-K no later than
60 days after April 15, 1999.
(c) Exhibits.
10.1 Amended and Restated Stock Purchase Agreement
dated as of March 31, 1999, by and among
Waste Connections, Inc., Management
Environmental National, Inc., RH Financial
Corporation and The Shareholder listed on
Schedule A thereto
99.1 WCI's Press Release dated February 16, 1999
99.2 WCI's Press Release dated April 5, 1999
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: April 12, 1999 By /s/ Ronald J. Mittelstaedt
Ronald J. Mittelstaedt
President and
Chief Executive Officer
EXHIBIT INDEX
10.1 Amended and Restated Stock Purchase Agreement
dated as of March 31, 1999, by and among
Waste Connections, Inc., Management
Environmental National, Inc., RH Financial
Corporation and The Shareholder listed on
Schedule A thereto
99.1 WCI's Press Release dated February 16, 1999
99.2 WCI's Press Release dated April 5, 1999
EXHIBIT 10.1
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
Dated as of March 31, 1999, by and among
Waste Connections, Inc.,
Management Environmental National, Inc.,
RH Financial Corporation
and
The Shareholder listed on
Schedule A hereto
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT, dated as of
March 31, 1999, is entered into by and among Waste Connections,
Inc., a Delaware corporation ("WCI"), Management
Environmental National, Inc., a Washington corporation ("MENI"), RH Financial
Corporation, a Washington
corporation ("RHFC" and collectively with MENI,
the "Corporations" and individually
without designation a "Corporation"), and
the Shareholder listed on Schedule A hereto (the "Shareholder").
WHEREAS, MENI is the sole general partner and RHFC is the
sole limited partner of Columbia Resource Co., L.P., a Washington
limited partnership ("CRC") and Finley-Buttes
Limited Partnership, an Oregon limited partnership ("FBLP");
WHEREAS, FBLP owns and operates the Finley-Buttes Regional
Landfill (the "Landfill") located in Morrow
County, Oregon and engages in other related activities;
WHEREAS, CRC is engaged in the handling and transportation
of solid waste and other related activities in the City of
Vancouver and Clark County, Washington;
WHEREAS, FBLP owns all of the real estate used in connection
with the business and operation of the Landfill and CRC owns all
of the real estate used in connection with the business and
operation of the two transfer stations located in Vancouver,
Washington, and descriptions of such real estate are set forth on
Schedule 3.12(b);
WHEREAS, the Shareholder owns all of the issued and
outstanding capital stock of each of the Corporations (the
"Corporations' Stock"); and
WHEREAS, WCI wishes to acquire from the Shareholder all of
the Corporations' Stock.
WHEREAS, WCI, MENI, RHFC and the Shareholder entered into a
Stock Purchase Agreement dated as of February 12, 1999 ("Signing
Date"), and Amendment No. 1 thereto dated
as of March 31, 1999 (as amended, the "Stock Purchase Agreement "), and they
wish hereby to amend
and restate the Stock Purchase Agreement as herein provided.
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 that the Stock Purchase Agreement is
hereby amended and restated as herein provided and further agree
as follows:
1. PURCHASE OF CORPORATIONS' STOCK
1.1 Shares to be Purchased. At the Closing (as
defined in Section 2), the Shareholder shall sell and deliver to
WCI all of the issued and outstanding shares of the Corporations'
Stock, being the number of shares of the Corporations set forth
on Schedule 3.2 opposite the Shareholder's name. At the Closing,
WCI shall purchase the Corporations' Stock and in exchange
therefor shall deliver to the Shareholder at the Closing or
thereafter as provided by this Agreement the purchase price
described in Section 1.2 (the "Purchase Price").
1.2 Purchase Price. The Purchase Price is
Eighty-one Million Two Hundred Fifty Thousand dollars
($81,250,000) cash, (i) minus the Closing Date Debt (as defined
in Section 3.22(a)), (ii) minus the outstanding balance of CRC's
debt under that certain Loan Agreement dated December 1, 1991,
between Industrial Revenue Bond Public Corporation of Clark
County, Washington and CRC (the "Bond Debt"),
(iii) plus or minus, as the case may be, the amount by which the
Balance Sheet Date Current Assets (as defined in Section 3.22(b))
are greater or less than the Balance Sheet Date Current
Liabilities (as defined in Section 3.22(b)), (iv) plus or minus,
as the case may be, the amount of the Net Profit or Net Loss (as
hereinafter defined) of the Corporations for the period from the
Effective Date through the Closing Date, as reflected on Schedule
1.2, (v) plus the present value of CRC's pollution liability
self-insurance fund maintained under agreement with Clark County,
as determined by Perkins & Company, P.C. and reflected on
Schedule 1.2, and (vi) minus all bonuses accrued to employees of
CRC, FBLP or the Corporations prior to the Effective Date and
payable after the Effective Date, as set forth on Schedule 1.2.
As used herein, the term "Net Profit" or
"Net Loss" shall mean the net profit or net
loss of the Corporations calculated in substantially the same
manner that net profit and net loss were calculated for the
Corporations for the periods prior to the Effective Date, and
which net profits or losses shall be incurred in compliance with
Section 5 herein. The adjustment to the Purchase Price payable
on the Closing Date based on the Closing Date Debt, the Balance
Sheet Date Current Assets and the Balance Sheet Date Current
Liabilities shall be based on estimates of such amounts, but no
adjustment will be made on the Closing Date to reflect Net Profit
or Net Loss. Within 90 days after the Closing, WCI and the
Shareholders shall determine the actual Closing Date Debt,
Effective Date Current Assets, Effective Date Current
Liabilities, Net Profit or Net Loss. If the difference between
the actual amounts of such items and the estimated amounts
provided at the Closing, when combined with the Net Profit or the
Net Loss, as the case may be, results in an increase in the
amount that should have been paid at the Closing over the amount
that was so paid, WCI shall promptly pay such amount to the
Shareholder; if the result is a decrease in the amount that
should have been paid at the Closing from the amount that was so
paid, the Shareholder shall promptly pay such amount to WCI.
1.3 Allocation of the Purchase Price. Two
hundred thousand dollars ($200,000) of the Purchase Price shall
be allocated to the covenant not to compete as described in
Section 11.1(a) hereof, and the balance of the Purchase Price
shall be allocated to the Corporations' Stock.
1.4 Excluded Assets. The Assets of the
Corporations listed on Schedule 1.4 (the "Excluded Assets") shall be
distributed to the Shareholder
prior to the Closing, and WCI shall acquire no interest in or
claim to any of the Excluded Assets provided that, if the
Corporations are legally unable to distribute the real estate
described on Schedule 1.4 prior to the Closing Date, the
Corporations will, at the election of the Shareholder, either
agree to distribute such real estate to the Shareholder after the
Closing Date at such time as they are legally able to do so or
retain ownership of such real estate and agree to such recordable
restrictions on the use of such real estate as the Shareholder
shall request.
2. CLOSING TIME AND PLACE
2.1 Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated herein
(the "Closing") shall take place as promptly as
practicable (but in any event within five business days)
following the date on which the last of the conditions set forth
in Sections 6 and 7 is fulfilled or waived, or on such other date
as WCI and the Shareholder shall agree (the "Closing Date"). The Closing
shall take place at the Law
Offices of Shartsis, Friese & Ginsburg LLP, One Maritime Plaza,
Suite 1800, San Francisco, California 94111. At the Closing,
WCI, the Corporations and the Shareholder shall deliver to each
other the documents, instruments and other items described in
Section 8 of this Agreement. The Purchase Price shall be paid to
the Shareholder at Closing in cash by wire transfer. At the
election of WCI and the Shareholder, the Closing of this
transaction may take place through an exchange of consideration
and documents using overnight courier service or facsimile. For
financial reporting purposes, the Closing shall be deemed
effective as of March 1, 1999 (the "Effective Date").
2.2 Termination.
(a) If the Closing Date has not occurred by March
31, 1999, either WCI or the Corporations and the Shareholder may
terminate this Agreement by notice to the other parties on that
date or thereafter (the "Termination Date"), unless the Corporations have not
then obtained all of the
consents required by Section 6.7, in which event this Agreement
shall terminate 10 days after written notice from WCI to the
Shareholder or 10 days after the later of (i) if any such consent
is denied, the latest time for filing any appeal or further
appeal of such denial has lapsed; and (ii) if any such consent is
denied and such denial is appealed, the day the last appeal of
such denial has been dismissed, refused or decided adversely to
the Corporation seeking the appeal.
(b) The Corporations and the Shareholder shall
have the right to terminate this Agreement:
(i) Upon a breach of a representation or
warranty of WCI contained in this Agreement which has not been
cured in all material respects and which has had or is likely to
have a material adverse effect on the business or financial
condition of WCI and is incapable of being satisfied by the
Termination Date;
(ii) If one or more of the transactions
contemplated by this Agreement are enjoined by a final,
unappealable court order not entered at the request or with the
support of either Corporation and if the Corporation against
which such order is entered shall have used reasonable efforts to
prevent the entry of such order; or
(iii) If WCI (A) fails to perform in any
material respect any of its covenants in this Agreement and (B)
does not cure such default in all material respects within 30
days after written notice of such default specifying such default
in reasonable detail is given to WCI by the Corporations or the
Shareholder.
(c) WCI shall have the right to terminate this
Agreement:
(i) Upon a breach of a representation or
warranty of the Corporations or the Shareholder contained in this
Agreement which has not been cured in all material respects and
which has had or is likely to have a material adverse effect on
the business or financial condition of either of the Corporations
and is incapable of being satisfied by the Termination Date;
(ii) If the transactions contemplated by this
Agreement are enjoined by a final, unappealable court order not
entered at the request or with the support of WCI and if WCI
shall have used reasonable efforts to prevent the entry of such
order; or
(iii) If either of the Corporations or the
Shareholder (A) fails to perform in any material respect any of
its or his covenants in this Agreement and (B) does not cure such
default in all material respects within 30 days after written
notice of such default specifying such default in reasonable
detail is given to such person by WCI.
(d) WCI, the Corporations and the Shareholder shall
have the right to terminate the Agreement by mutual consent.
2.3 Notice and Effect of Termination. On
termination of this Agreement, the transactions contemplated
herein shall forthwith be abandoned and all continuing
obligations 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. Notwithstanding the foregoing, Sections 2.4, 3.33,
4.6, 9.5 and 12.8 and the confidentiality obligations set forth
in Sections 5.4 and 9.4 shall survive the termination of this
Agreement for any reason. If this Agreement has terminated due
to the breach of any party, such party shall remain liable for
any damages arising from such breach.
2.4 Exclusive Negotiations. Following execution
of this Agreement until the Closing Date or termination of this
Agreement pursuant to Section 2.2, the Corporations and the
Shareholder shall not, and the Shareholder shall not permit the
Corporations' officers, directors, employees or agents to, and
the Corporations will not permit CRC or FBLP's partners,
employees or agents to, initiate, negotiate or discuss with any
other person or entity the possible sale of all or substantially
all of the assets, business or stock of the Corporations, or to
effect the merger of the Corporations with any party other than
WCI or one of its Affiliates. The Shareholder hereby confirms
that no person or entity presently has or may acquire any rights
to purchase or otherwise acquire the assets or the stock of the
Corporations.
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATIONS AND
THE SHAREHOLDER
The Corporations and the Shareholder, jointly and severally,
represent and warrant that each of the following representations
and warranties is true as of the Signing Date and will be true as
of the Closing Date.
3.1 Organization, Standing and Qualification.
Each of the Corporations, CRC and FBLP is duly organized, validly
existing and in good standing under the laws of the State of
Oregon or Washington, as the case may be. Each of the
Corporations, CRC and FBLP has full corporate or other power and
authority to own and lease its properties and to carry on its
business as now conducted. Except as set forth on Schedule 3.1,
none of the Corporations, CRC or FBLP is required to be qualified
or licensed to conduct business as a foreign corporation in any
other jurisdiction.
3.2 Capitalization. Schedule 3.2 sets forth, as
of the Signing Date, the authorized and outstanding capital of
the Corporations, the names, addresses and social security
numbers or taxpayer identification numbers of the record and
beneficial owners thereof, the number of shares so owned, the
allocation of the cash, and wire transfer instructions for the
Shareholder relating to the bank account to which the Purchase
Price should be sent. All of the issued and outstanding shares
of the capital stock of the Corporations are owned of record and
beneficially by the Shareholder, as set forth in Schedule 3.2,
and are and as of the Closing Date will be free and clear of all
liens, security interests, encumbrances and claims of every kind
except as set forth in Schedule 3.2. Each share of the capital
stock of the Corporations is duly and validly authorized and
issued, fully paid and nonassessable, and was not issued in
violation of any preemptive rights of any past or present
shareholder of the Corporations. MENI is the sole general
partner and RHFC is the sole limited partner of CRC and FBLP. No
option, warrant, call, conversion right or commitment of any kind
(including any of the foregoing created in connection with any
indebtedness of the Corporations, CRC or FBLP) exists which
obligates the Corporations to issue any of its authorized but
unissued capital stock or other equity interest, which obligates
the Shareholder to transfer any Corporations' Stock to any
person, which obligates either CRC or FBLP to issue any
partnership interest to any person, or which obligates MENI or
RHFC to transfer any partnership in CRC or FBLP to any person
3.3 All Stock Being Acquired. The Corporations'
Stock being acquired by WCI hereunder constitutes all of the
outstanding capital stock of the Corporations.
3.4 Authority for Agreement. The Corporations
and the Shareholder have full right, power and authority to enter
into this Agreement and to perform their or his obligations
hereunder. The execution and delivery of this Agreement by the
Corporations and the consummation of the transactions
contemplated hereby by the Corporations have been duly authorized
by each of the Corporations' Board of Directors. This Agreement
has been duly and validly executed and delivered by the
Corporations and the Shareholder and, subject to the due
authorization, execution and delivery by WCI, constitutes the
legal, valid and binding obligation of the Corporations and the
Shareholder enforceable against the Corporations and the
Shareholder in accordance with its terms.
3.5 No Breach or Default. Except as disclosed
on Schedule 3.5, the execution and delivery by the Corporations
and the Shareholder of this Agreement, and the consummation by
the Shareholder of the transactions contemplated hereby, will
not:
(a) result in the breach of any of the terms or
conditions of, or constitute a default under, or allow for the
acceleration or termination of, or in any manner release any
party from any obligation under, any mortgage, lease, note, bond,
indenture, or material contract, agreement, license or other
instrument or obligation of any kind or nature to which any of
the Corporations, CRC, FBLP or the Shareholder is a party, or by
which the Corporations, CRC, FBLP or the Shareholder, or any of
their assets, is or may be bound or affected; or
(b) violate any law or any order, writ,
injunction or decree of any court, administrative agency or
governmental authority, or require the approval, consent or
permission of any governmental or regulatory authority; or
(c) violate the Articles of Incorporation or
Bylaws of either of the Corporations or the agreement of limited
partnership of either CRC or FBLP.
3.6 Subsidiaries. Schedule 3.6 lists as of the
Signing Date any and all subsidiaries of the Corporations and any
securities of any other corporation or any securities or other
interest in any other business entity (other than CRC or FBLP)
owned by the Corporations or any of the Corporations'
subsidiaries.
3.7 Financial Statements. The Corporations have
delivered to WCI, as Schedule 3.7, copies of financial statements
("Financial Statements") for each
of the Corporations', CRC's and FBLP's three most recent fiscal
years ending December 31, 1998 (the "Balance Sheet Date"). Such Financial
Statements for CRC and
FBLP are presented on both an individual and combined basis.
Such Financial Statements for the Corporations have been
internally prepared. Such Financial Statements of CRC and FBLP
for the fiscal years ending December 31, 1996 and 1997 have been
audited by Perkins & Company, P.C.. The Financial Statements for
the three most recent fiscal years present fairly, in all
material respects, the financial positions of the respective
Corporations and CRC and FBLP as of the end of such fiscal years
and the results of their operations and their cash flows for the
years then ended, and in the case of CRC and FBLP, conform with
generally accepted accounting principles except, in the case of
the unaudited Financial Statements for the fiscal year ending
December 31, 1998, for the lack of explanatory footnote
disclosures. Such footnote disclosures, if included with the
unaudited Financial Statements, would be substantially similar in
description and content to the footnote disclosure in the audited
Financial Statements for the year ended December 31, 1997.
Except to the extent reflected or reserved against in any of the
Corporations', CRC's or FBLP's balance sheets as of the Balance
Sheet Date, or as disclosed on Schedule 3.7 or Schedule 3.8, none
of the Corporations, CRC or FBLP had as of the Balance Sheet
Date, nor will any of the Corporations, CRC or FBLP have as of
the Closing Date, any liabilities of any nature, whether accrued,
absolute, contingent or otherwise, including, without limitation,
tax liabilities due or to become due, other than liabilities
incurred in the ordinary course of business since the Balance
Sheet Date.
3.8 Liabilities. Parts I, II, III and IV of
Schedule 3.8 are accurate lists and descriptions of all
liabilities of the Corporations, CRC and FBLP required to be
described below in the format set forth below.
(a) Part I of Schedule 3.8 lists, as of the
Signing Date, other than with respect to trade payables and as of
the end of the month prior to the 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 (excluding all real and personal property leasehold
interests included in Part IV of Schedule 3.8), whether reflected
or not reflected on the Financial Statements and whether accrued
or absolute, and states as to each such liability the amount of
such liability and to whom payable. From the end of the month
prior to the Closing Date through the Closing Date, trade
payables have been incurred only in the ordinary course of
business consistent with comparable prior periods.
(b) Part II of Schedule 3.8 lists, as of the
Signing Date, all claims, suits and proceedings which are pending
against any of the Corporations, CRC or FBLP and, to the
knowledge of the Corporations and the Shareholder, all contingent
liabilities and all claims, suits and proceedings threatened or
anticipated against any of the Corporations, CRC or FBLP. Part
II of Schedule 3.8 includes a summary description of each such
liability, including, without limitation, (A) the name of each
court, agency, bureau, board or body before which any such claim,
suit or proceeding is pending, (B) the date such claim, suit or
proceeding was instituted, (C) the parties to such claim, suit or
proceeding, (D) a brief description of the factual basis alleged
to underlie such claim, suit or proceeding, including the date or
dates of all material occurrences, and (E) the amount claimed and
other relief sought, together with copies of all material
documents, reports and other records relating thereto to the
extent that they are in the Corporations' or the Shareholder's
possession or control.
(c) Part III of Schedule 3.8 lists, as of the
Signing Date and to the extent not otherwise included in Part I
of Schedule 3.8, all liens, claims and encumbrances secured by or
otherwise affecting any asset of any of the Corporations, CRC or
FBLP (including any Facility Property, as hereafter defined),
including a description of the nature of such lien, claim or
encumbrance, the amount secured if it secures a liability, the
nature of the obligation secured, and the party holding such
lien, claim or encumbrance.
(d) Part IV of Schedule 3.8 lists, as of the
Signing Date and to the extent not otherwise included in Part I
or Part III of Schedule 3.8, all real and personal property
leasehold interests to which any of the Corporations, CRC or FBLP
is a party as lessor or lessee or, to the knowledge of the
Corporations or the Shareholder, affecting or relating to any
Facility Property, and includes a description of the nature and
principal terms of such leasehold interest, including, without
limitation, the identity of the other party thereto, the term of
such leasehold interest (including renewal options), the base
rent and any additional rent owing thereunder (including any
adjustments thereto), security deposits, rights of first offer or
first refusal, purchase options, and restrictions on transfer.
Except as described on the applicable part of
Schedule 3.8, the Corporations, CRC, FBLP and the Shareholder
have not made any payment or committed to make any payment since
the Balance Sheet Date on or with respect to any of the
liabilities or obligations listed on Schedule 3.8 except, in the
case of liabilities and obligations listed on Parts I, III and IV
of Schedule 3.8, periodic payments required to be made under the
terms of the agreements or instruments governing such obligations
or liabilities or made in the ordinary course of business.
3.9 Accurate and Complete Records. The
corporate minute books, stock ledgers, books, ledgers, financial
records and other records of the Corporations, CRC and FBLP:
(a) have been made available to WCI and its
agents at the Corporations' offices or at the offices of the
Corporations' attorneys;
(b) have been, in all material respects,
maintained in accordance with all applicable laws, rules and
regulations; and
(c) are accurate and complete, reflect all
material corporate transactions required to be authorized by each
of the Corporation's Board of Directors and/or shareholder of the
Corporations, whether on behalf of the Corporations, CRC or FBLP,
or any other appropriate person or entity, and do not contain or
reflect any material discrepancies.
3.10 Permits and Licenses.
(a) Schedule 3.10(a) is a full and complete list,
and includes copies, of all material permits, licenses,
franchises, and service agreements pursuant to which CRC or FBLP
are authorized to collect and haul industrial, commercial and
residential solid waste (the "Collection Franchises"), and of all other
material permits,
licenses, titles (including motor vehicle titles and current
registrations), fuel permits, zoning and land use approvals and
authorizations, including, without limitation, any conditional or
special use approvals or zoning variances, occupancy permits, and
any other similar documents constituting a material authorization
or entitlement or otherwise material to the operation of the
business of each of the Corporations, CRC and FBLP (collectively
the "Governmental Permits") owned
by, issued to, held by or otherwise benefiting the Corporations,
CRC, FBLP or the Shareholder as of the Closing Date. The status
of the Governmental Permits related to the disposal areas owned
or used by CRC or FBLP, including, without limitation, any
conditions thereto and, if applicable, the expiration dates
thereof, are also described in Schedule 3.10(a).
Schedule 3.10(a) also sets forth the name of any governmental
agency or other third party from whom the Shareholder, CRC, FBLP
and the Corporations or WCI must obtain consent (the "Required
Governmental Consents")
in order to effect a direct or indirect transfer of the
Collection Franchises or other Governmental Permits required as a
result of the consummation of the transactions contemplated by
this Agreement. Except for any filings by the Corporations
required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act"), no declaration, filing or
registration with, or notice to, or authorization, consent or
approval or permit of, any governmental or regulatory body or
authority is, to the knowledge of the Corporations and the
Shareholder, necessary for the execution and delivery of this
Agreement by the Corporations or the consummation by the
Corporations of the transactions contemplated hereby. Except as
set forth on Schedule 3.10(a), all of the Collection Franchises
and other Governmental Permits enumerated and listed on
Schedule 3.10(a) are, to the knowledge of the Corporations and
the Shareholder, adequate for the operation of the business of
each of the Corporations, CRC and FBLP and of each Facility
Property as presently operated and are valid and in full force
and effect. All of said Collection Franchises and other
Governmental Permits and agreements have been duly obtained and
are in full force and effect, and there are no proceedings
pending or, to the knowledge of the Corporations or the
Shareholder, threatened which may result in the revocation,
cancellation, suspension or adverse modification of any of the
same. Neither the Corporations nor the Shareholder has any
knowledge of any reason why all such Governmental Permits and
agreements will not remain in effect for the period or term
stated therein, subject to WCI's full compliance therewith, after
consummation of the transactions contemplated hereby.
(b) The Corporation, CRC and FBLP have made
available to WCI and its agents and representatives (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, to the knowledge of the Corporations and
the
Shareholder, (A) are material to the operation of the business of
each of the Corporations, CRC and FBLP, or (B) relate to the
discharge or release of materials into the environment and/or the
handling or transportation of waste materials or hazardous or
toxic substances or otherwise relate to the protection of the
public health or the environment, or (C) were filed with or
submitted to appropriate governmental agencies during the past 24
months by the Corporations, CRC, FBLP or the Shareholder or their
or his agents with respect to the business of the Corporations,
CRC and FBLP, and (ii) all material notifications from such
governmental agencies to the Corporations, CRC, FBLP, the
Shareholder or their agents in response to or relating to any of
such Records, Notifications and Reports.
(c) Schedule 3.10(c) lists each facility owned,
leased, operated or otherwise used by the Corporations, CRC and
FBLP, the ownership, lease, operation or use of which is being
transferred to, assumed by or otherwise acquired directly or
indirectly by WCI pursuant to this Agreement (each, a "Facility" and
collectively, the "Facilities"). Except as otherwise disclosed on
Schedule 3.10(c):
(i) Each Facility owned by the Corporations,
CRC, FBLP or owned by the Shareholder or an Affiliate (as
hereinafter defined) of the Shareholder and leased to the
Corporations, CRC or FBLP is, to the knowledge of the
Corporations and the Shareholder, fully licensed, permitted and
authorized to carry on its current business under all applicable
federal, state and local statutes, orders, approvals, zoning or
land use requirements, rules and regulations, and, none of such
Facilities or the current use thereof constitutes a non-
conforming use or is otherwise subject to any restrictions
regarding the operation, renovation or reconstruction thereof.
To the knowledge of the Corporations and the Shareholder, no
Facility that is leased by the Corporations, CRC or FBLP from a
non-Affiliate or the current use thereof constitutes a material
non-conforming use or is otherwise subject to any material
restrictions regarding the operation, renovation or
reconstruction thereof.
(ii) To the knowledge of the Corporations and
the Shareholder, there are no circumstances, conditions or
reasons that 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 the Corporations,
CRC, FBLP or the Shareholder or an Affiliate of the Shareholder
and leased to the Corporations, CRC or FBLP, and to the knowledge
of the Corporations and the Shareholder there are no
circumstances, conditions or reasons which are likely to be the
basis for revocation or suspension of any site assessment,
permits, licenses, consents, authorizations, zoning or land use
permits, variances or approvals relating to any Facility leased
by the Corporations, CRC or FBLP from a third party who is not an
Affiliate (as hereinafter defined) of the Shareholder.
3.11 Certain Receivables. Schedule 3.11 is an
accurate list as of the Signing Date of the accounts and notes
receivable of the Corporations, CRC and FBLP from and advances to
employees, former employees, officers, directors, the Shareholder
and Affiliates of the foregoing which have not been repaid. For
purposes of this Agreement, the term "Affiliate" means, with respect to any
person, any person that directly
or indirectly through one or more intermediaries controls or has
an ownership interest in, or is controlled or owned in whole or
in part by, or is under common control or ownership in whole or
in part with such person, in the case of WCI, the Corporations,
CRC and FBLP includes directors, officers and partners, 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.
3.12 Fixed Assets and Real Property.
(a) Schedule 3.12(a) lists substantially all the
fixed assets (other than real estate) of the Corporations, CRC
and FBLP, including, without limitation, identification of each
vehicle by description and serial number, identification of
machinery, equipment and general descriptions of parts, supplies
and inventory. Except as described on Schedule 3.12(a), all
containers, vehicles, machinery and equipment necessary for the
operation of the businesses of the Corporation, CRC and FBLP are
in operable condition, and all of the motor vehicles and other
rolling stock of the Corporations, CRC and FBLP are in compliance
with all applicable laws, rules and regulations. All such
containers, vehicles, machinery and equipment are substantially
free of known defects that would cause them to fail. All leases
of fixed assets are in full force and effect and binding upon the
parties thereto; neither the Corporations nor, to the knowledge
of the Corporations or the Shareholder, any other party to such
leases is in breach of any of the material provisions thereof.
(b) Each parcel of real property leased, owned,
being purchased, operated, or otherwise used by the Corporations,
CRC or FBLP as of the Closing Date (the "Facility Property"), including the
street address and, in
the case of Facility Property owned or being purchased, the legal
description thereof, is listed on Schedule 3.12(b), and attached
to said Schedule 3.12(b), are copies of all leases, deeds,
outstanding mortgages, other encumbrances and any existing title
insurance policies or lawyer's title opinions relating to each
Facility Property, as well as a current commitment for title
insurance issued by a title insurance company satisfactory to WCI
with respect to each Facility Property owned or being purchased
by the Corporations, CRC or FBLP, together with copies of all of
the title exceptions referred to in each such commitment. All
leases listed on Schedule 3.12(b) are in full force and effect
and binding on the parties thereto; none of the Corporations, CRC
or FBLP nor any other party to any such lease is in breach of any
of the material provisions thereof; to the knowledge of the
Corporations and the Shareholder, the landlord's interest in each
such lease has not been assigned to any third party nor has any
such interest been mortgaged, pledged or hypothecated; and the
Corporations, CRC or FBLP have not assigned any such lease or
sublet all or any part of the Facility Property which is the
subject of any such lease. Except as described on
Schedule 3.12(b), there are no material physical or mechanical
defects in any Facility located on any Facility Property and each
such Facility is in good condition and repair.
(c) The Corporations, CRC and FBLP have good,
valid and marketable title to all properties and assets, real,
personal, and mixed, tangible and intangible, actually used or
necessary for the conduct of its business, free of any
encumbrance or charge of any kind except: (i) liens for current
taxes not yet due; (ii) minor imperfections of title and
encumbrances, if any, that are not substantial in amount, do not
materially reduce the value or impair the use of the property
subject thereto, do not materially impair the value of the
Corporations, CRC or FBLP, and have arisen only in the ordinary
course of business and consistent with past practice; and
(iii) the liens identified on Parts I and III of Schedule 3.8
(collectively, the "Permitted Liens"),
provided that insofar as this representation and warranty relates
to title to any Facility Property owned by a Corporation, CRC or
FBLP for which title insurance is obtained as contemplated by
Section 6.9, such representation and warranty shall be limited to
the knowledge of the Corporation and the Shareholder. Except as
described on Schedule 3.12(b), there are no leases, occupancy
agreements, options, rights of first refusal or any other
agreements or arrangements, either oral or written, that create
or confer in any person or entity the right to acquire, occupy or
possess, now or in the future, any Facility, any Facility
Property owned or being purchased, or any portion thereof, or
create in or confer on any person or entity any right, title or
interest therein or in any portion thereof.
3.13 Related Party Transactions. Neither the
Shareholder nor the Shareholder's Affiliates has entered into any
transaction with or is a party to any agreement, lease or other
instrument, or as of the date of this Agreement is indebted to or
is owed money by, any of the Corporations, CRC or FBLP not
disclosed on the Financial Statements. Except as disclosed in
the Financial Statements, neither the Shareholder nor the
Shareholder's Affiliates owns any direct or indirect interest of
any kind in, or controls or is a director, officer, employee,
shareholder or partner of, or consultant or lender to or borrower
from or has the right to participate in the profits of, any
Person which is a competitor, supplier, customer, landlord,
tenant, creditor or debtor of the Corporations, CRC or FBLP.
3.14 Contracts and Agreements; Adverse Restrictions TC
.
(a) Schedule 3.14(a) lists, as of the Signing
Date, and includes copies of, all material contracts and
agreements (other than leases and documents included with
Schedule 3.12(b)) to which any of the Corporations, CRC or FBLP
is a party or by which it or any of its property is bound
(including, but not limited to, joint venture or partnership
agreements, contracts with any labor organizations, promissory
notes, loan agreements, bonds, mortgages, deeds of trust, liens,
pledges, conditional sales contracts or other security
agreements). Except as disclosed on Schedule 3.14(a), all such
contracts and agreements included in Schedule 3.14(a) are in full
force and effect and binding upon the parties thereto. Except as
described or cross referenced on Schedule 3.14(a), none of the
Corporations, CRC or FBLP nor, to the Corporations' or any
Shareholder's knowledge, any other parties to such contracts and
agreements is in breach thereof, and none of the parties has
threatened to breach any of the material provisions thereof or
notified the Corporations, CRC, FBLP or the Shareholder of a
default thereunder, or exercised any options thereunder.
(b) Except as set forth on Schedule 3.14(b),
there is no outstanding judgment, order, writ, injunction or
decree against the Corporations, CRC or FBLP, the result of which
could materially adversely affect the Corporations, CRC or FBLP
or any of their businesses or any of the Corporate Properties,
nor has any of the Corporations, CRC or FBLP been notified that
any such judgment, order, writ, injunction or decree has been
requested.
3.15 Insurance. Schedule 3.15 is a complete list
and includes copies, as of the Signing Date, of all insurance
policies in effect on the Signing Date or, with respect to
"occurrence" policies that were in effect,
carried by the Corporations, CRC or FBLP in respect of the
Corporate Properties or any other property used by the
Corporations, CRC or FBLP specifying, for each policy, the name
of the insurer, the type of risks insured, the deductible and
limits of coverage, and the annual premium therefor. During the
last five years, there has been no lapse in any material
insurance coverage of the Corporations, CRC or FBLP. For each
insurer providing coverage for any of the contingent or other
liabilities listed on Schedule 3.8, except to the extent
otherwise set forth in Part II of Schedule 3.8, each such
insurer, if required, has been properly and timely notified of
such liability, no reservation of rights letters have been
received by the Corporations, CRC or FBLP and the insurer has
assumed defense of each suit or legal proceeding. All such
proceedings are fully covered by insurance, subject to normal
deductibles.
3.16 Personnel. Schedule 3.16 is a complete
list, as of the Signing Date, of all officers, directors and
employees (by type or classification) of the Corporations, CRC
and FBLP and their respective rates of compensation, including
(i) the portions thereof attributable to bonuses, (ii) any other
salary, bonus, stock option, equity participation, or other
compensation arrangement made with or promised to any of them,
and (iii) copies of all employment agreements with non-union
officers, directors and employees. Schedule 3.16 also lists the
driver's license number for each driver of the motor vehicles of
the Corporations, CRC and FBLP.
3.17 Benefit Plans and Union Contracts.
(a) Schedule 3.17(a) is a complete list as of the
Signing Date, and includes complete copies (or, in the case of
oral arrangements, descriptions), of all employee benefit plans
and agreements (written or oral) currently maintained or
contributed to by the Corporations, CRC and FBLP, including
employment agreements and any other agreements containing
"golden parachute" provisions,
retirement plans, welfare benefit plans and deferred compensation
agreements, together with copies of such plans, agreements and
any trusts related thereto, and classifications of employees
covered thereby as of the Signing Date. Except for the employee
benefit plans described on Schedule 3.17(a), the Corporations
have no other pension, retirement, welfare, profit sharing,
deferred compensation, stock option, employee stock purchase or
other employee benefit plans or arrangements with any party.
Except as disclosed on Schedule 3.17(a), all employee benefit
plans listed on Schedule 3.17(a) are fully funded and in
substantial compliance with all applicable federal, state and
local statutes, ordinances and regulations. All such plans that
are intended to qualify under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"),
have been determined by the Internal Revenue Service to be so
qualified, and copies of such determination letters are included
as part of Schedule 3.17(a). Except as disclosed on
Schedule 3.17(a), all reports and other documents required to be
filed with any governmental agency or distributed to plan
participants or beneficiaries (including, but not limited to,
actuarial reports, audits or tax returns) have been timely filed
or distributed, and copies thereof are included as part of
Schedule 3.17(a). All employee benefit plans listed on such
Schedule have been operated in accordance with the terms and
provisions of the plan documents and all related documents and
policies. Neither the Corporations, CRC or FBLP has incurred any
liability for excise tax or penalty due to the Internal Revenue
Service or U.S. Department of Labor nor any liability to the
Pension Benefit Guaranty Corporation for any employee benefit
plan, and none of the Corporations, CRC or FBLP, nor a party-in-
interest or disqualified person, has engaged in any transaction
or other activity which would give rise to such liability. None
of the Corporations, CRC or FBLP have participated in or made
contributions to any "multi-employer plan" as defined in the Employee
Retirement Income Security
Act of 1974 ("ERISA"), nor would the
Corporations, CRC or FBLP or any Affiliate be subject to any
withdrawal liability with respect to such a plan if any such
employer withdrew from such a plan immediately prior to the
Closing Date. No employee pension benefit plan is under funded
on a termination basis as of the date of this Agreement.
(b) There are now no union contracts or
agreements between any of the Corporations, CRC or FBLP and any
collective bargaining group, nor have there ever been any such
contracts in effect. The Corporations, CRC and FBLP are in
compliance in all material respects with all applicable federal
and state laws respecting employment and employment practices,
terms and conditions of employment, wages and hours, and
nondiscrimination in employment, and is not engaged in any unfair
labor practice. There is no charge pending or, to the
Corporations' or any Shareholder's knowledge, threatened, against
the Corporations, CRC or FBLP before any court or agency and
alleging unlawful discrimination in employment practices and
there is no charge of or proceeding with regard to any unfair
labor practice against it pending before the National Labor
Relations Board. There is no labor strike, dispute, slow down or
stoppage as of the Closing Date, existing or threatened against
the Corporations, CRC or FBLP; no union organizational activity
exists respecting employees of the Corporations, CRC or FBLP, and
Schedule 3.17(b) contains a list of all arbitration or grievance
proceedings that have occurred since the Balance Sheet Date. No
one has petitioned within the last five years, and no one is now
petitioning, for union representation of any employees of the
Corporations, CRC or FBLP. None of the Corporations, CRC or FBLP
have experienced any labor strike, slow-down, work stoppage,
labor difficulty or other job action during the last five years.
(c) No payment made to any employee, officer,
director or independent contractor of the Corporations, CRC or
FBLP (the "Recipient") pursuant to any
employment contract, severance agreement or other arrangement
(the "Golden Parachute Payment") will be nondeductible by any of the
Corporations, CRC or
FBLP because of the application of Sections 280G and 4999 of the
Code to the Golden Parachute Payment, nor will the Corporations
be required to compensate any Recipient because of the imposition
of an excise tax (including any interest or penalties related
thereto) on the Recipient by reason of Sections 280G and 4999 of
the Code.
3.18 Taxes.
(a) The Corporations, CRC and FBLP have timely
filed or will timely file all requisite federal, state, local and
other tax and information returns due for all fiscal periods
ended on or before the Closing Date. All such returns are
accurate and complete. Except as set forth on Schedule 3.18(a),
there are no open years (other than those within the statute of
limitations), examinations in progress, extensions of any statute
of limitations or claims against any of the Corporations, CRC or
FBLP 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 the
Corporations, CRC and FBLP for each of their last three fiscal
years are attached as part of Schedule 3.18(a). Copies of all
other federal, state, local and other tax and information returns
for all prior years of existence have been made available to WCI
and are among the records of the Corporations, CRC and FBLP that
will accrue to WCI at the Closing. None of the Corporations, CRC
or FBLP has been contacted by any federal, state or local taxing
authority regarding a prospective examination.
(b) Except as set forth on Schedule 3.18(b)
(which schedule also includes the amount due with respect to the
Corporations, CRC and FBLP) the Corporations, CRC and FBLP have
duly paid all taxes and other related charges required to be paid
prior to the date of this Agreement. The reserves for taxes
contained in the Financial Statements are adequate to cover any
tax liability as of the Signing Date.
(c) The Corporations, CRC and FBLP have 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 the Corporations, CRC and FBLP for all periods for
which returns are due, and the amounts shown on all such returns
to be due and payable have been paid in full.
3.19 Copies Complete; Required Consents. Except
as disclosed on Schedule 3.19, the certified copies of the
Articles of Incorporation and Bylaws of the Corporations, and the
agreements of limited partnership of CRC and FBLP, in each case
as amended to the Signing Date, and the copies of all leases,
instruments, agreements, licenses, permits, certificates or other
documents that have been delivered to WCI in connection with the
transactions contemplated hereby are complete and accurate as of
the Signing Date and are true and correct copies of the originals
thereof. Except as specifically disclosed on Schedule 3.19, the
rights and benefits of the Corporations, CRC and FBLP will not be
adversely affected by the transactions contemplated hereby, and
the execution of this Agreement and the performance of the
obligations hereunder will not violate or result in a breach or
constitute a default under any of the terms or provisions
thereof. None of such leases, instruments, agreements, licenses,
permits, site assessments, certificates or other documents
requires notice to, or consent or approval of, any governmental
agency or other third party to any of the transactions
contemplated hereby, except the Required Governmental Consents,
such consents and approvals as are listed on Schedule 3.19, all
of which have been given or obtained.
3.20 Customers, Billings, Current Receipts and
Receivables. Schedule 3.20 is a current, accurate and
complete list of, and includes:
(a) the customers that CRC and FBLP serve on an
ongoing basis, including name, location and current billing rate,
as of the Closing Date;
(b) an accurate and complete aging of all
accounts and notes receivable from customers as of the last day
of the month preceding the month in which such Schedule is
delivered, showing amounts due in 30-day aging categories.
Except to the extent of the allowance for bad debts reflected on
the Financial Statements or otherwise disclosed on Schedules 3.11
and 3.20, , CRC's and FBLP's accounts and notes receivable are
collectible in the amounts shown on Schedules 3.11 and 3.20; and
(c) the average monthly revenues of CRC and FBLP
derived from billings to its customers for each of the twelve
months preceding the Closing Date. Except as set forth on
Schedule 3.20, neither the Corporations nor any Shareholder has
any knowledge of any reason why any of such average monthly
revenues after the Closing Date should not continue at
approximately the same rate as before the Closing Date.
3.21 No Change With Respect to the Corporations.
Except as set forth on Schedule 3.21, since the Balance Sheet
Date, the business of each of the Corporations, CRC and FBLP have
been conducted only in the ordinary course and there has been no
change in the condition (financial or otherwise) of the assets,
liabilities or operations of the Corporations, CRC or FBLP other
than changes in the ordinary course of business, none of which
either singly or in the aggregate has been materially adverse.
Specifically, and without limiting the generality of the
foregoing, except as set forth on Schedule 3.21, with respect to
the Corporations, CRC and FBLP, since the Balance Sheet Date,
there has not been:
(a) any material change any of their financial
condition, assets, liabilities (contingent or otherwise), income,
operations or business which would have a material adverse effect
on the financial condition, assets, liabilities (contingent or
otherwise), income, operations or business, taken as a whole;
(b) any material damage, destruction or loss
(whether or not covered by insurance) adversely affecting any
material portion of any of their properties or business;
(c) any change in or agreement to change
(i) either of the Corporations' shareholders, (ii) ownership of
either of the Corporations' authorized capital or outstanding
securities, (iii) either of the Corporations' securities, or (iv)
the identity or interest of any of the general or limited
partners of CRC or FBLP.
(d) any declaration or payment of, or any
agreement to declare or pay, any dividend or distribution in
respect of either of the Corporations' capital stock or any
direct or indirect redemption, purchase or other acquisition of
any of a Corporation's capital stock;
(e) any increase or bonus or promised increase or
bonus in the compensation payable or to become payable, in excess
of usual and customary practices, to any of their directors,
officers, partners, employees or agents, or any accrual or
arrangement for or payment of any bonus or other special
compensation to any employee or any severance or termination pay
paid to any of their present or former officers or other key
employees;
(f) any labor dispute or any other event or
condition of any character with respect to any of their
employees, materially adversely affecting any of their business
or future prospects;
(g) any sale or transfer, or any agreement to
sell or transfer, any of their material assets, property or
rights to any other person, including, without limitation, the
Shareholder and the Shareholder's Affiliates, other than in the
ordinary course of business;
(h) any cancellation, or agreement to cancel, any
material indebtedness or other material obligation owing to any
of them, including, without limitation, any indebtedness or
obligation of the Shareholder or any Affiliate thereof;
(i) any plan, agreement or arrangement granting
any preferential rights to purchase or acquire any interest in
any of their assets, property or rights or requiring consent of
any party to the transfer and assignment of any such assets,
property or rights;
(j) any purchase or acquisition of, or any
agreement, plan or arrangement to purchase or acquire, any of
their property, rights or assets outside the ordinary course of
business;
(k) any waiver of any of their material rights or
claims;
(l) any new or any amendment or termination of
any existing material contract, agreement, license, permit or
other right to which any of them is a party; or
(m) any other material transaction outside the
ordinary course of business.
3.22 Closing Date Debt; Effective Date Current Assets and
Effective Date Current Liabilities.
(a) When delivered at the Closing,
Schedule 3.22(a) will list (i) the amount of the aggregate debt
(excluding trade payables and the Bond Debt) of the Corporations,
CRC and FBLP outstanding on the Closing Date required to be
repaid by WCI or the Corporations, CRC or FBLP at or immediately
after the Closing Date and all prepayment penalties incurred or
to be incurred by WCI or the Corporations, CRC or FBLP in
connection with the repayment of any such debt, (ii) the amount
of the aggregate debt (excluding trade payables and the Bond
Debt) of the Corporations, CRC and FBLP outstanding on the
Closing Date which will remain outstanding obligations after the
Closing Date, and all prepayment penalties applicable to such
debt if repaid prior to maturity, including in each case all
interest accrued through and including the Closing Date,
(iii) the aggregate amount of the present value as of the Closing
Date, discounted at the lease rate factor, if known, inherent in
the lease or, if the lease rate factor is not known, at the rate
charged to the Corporations, CRC or FBLP by a third party lender
in connection with its most recent borrowing to finance
equipment, of all lease obligations of the Corporations, CRC or
FBLP that are not capitalized lease obligations, and (iv) the
aggregate amount of the present value as of the Closing Date of
all capitalized lease obligations (determined in accordance with
generally accepted accounting principles) of the Corporations,
CRC and FBLP (the "Closing Date Debt"). When delivered at the Closing,
Schedule 3.22(a) will
separately list the aggregate principal amount and all accrued
but unpaid interest on the Bond Debt. Schedule 3.22(a) will
include wire transfer instructions for creditors whose Closing
Date Debt WCI has designated for payment, and attached to
Schedule 3.22(a) are pay-off letters or instructions from such
creditors in the form provided by WCI's bank or acceptable to
WCI.
(b) Schedule 3.22(b) is an estimate as of the
Signing Date of the amount of the aggregate current liabilities
(including any reserve for unpaid taxes and any accrued vacation
benefits and excluding the current portion of long-term debt to
the extent such current portion is included in Closing Date Debt)
and trade payables of each of CRC and FBLP as of the Balance
Sheet Date (the "Balance Sheet Date Current Liabilities") and the amount of
the aggregate cash and other current assets of each of CRC and
FBLP as of the Balance Sheet Date, including prepaid expenses the
benefit of which survives the Closing Date and the accounts
receivable of each of CRC and FBLP earned prior to the Balance
Sheet Date, and collectible (less an allowance for doubtful
accounts) on or after the Balance Sheet Date (the "Balance Sheet
Date Current Assets").
3.23 Bank Accounts.
(a) Schedule 3.23(a) is a complete and accurate
list, as of the Signing Date, of:
(i) the name of each bank in which the
Corporations, CRC and FBLP have accounts or safe deposit boxes;
(ii) the name(s) in which the accounts or
boxes are held;
(iii) the type of account; and
(iv) the name of each person authorized to
draw thereon or have access thereto.
(b) Schedule 3.23(b) is a complete and accurate
list, as of the Signing Date, of:
(i) each credit card or other charge account
issued to each of the Corporations, CRC and FBLP; and
(ii) the name of each person to whom such
credit cards or other charge accounts have been issued.
3.24 Compliance With Laws. Except as disclosed
on Schedule 3.24, the Corporations, CRC and FBLP have, to the
knowledge of the Corporations and the Shareholder, complied with,
and are presently in compliance with, federal, state and local
laws, ordinances, codes, rules, regulations, Governmental
Permits, orders, judgments, awards, decrees, consent judgments,
consent orders and requirements applicable to it (collectively
"Laws"), including, but not limited to, the
Americans with Disabilities Act, the Federal Occupational Safety
and Health Act, and Laws relating to the public health, safety or
protection of the environment (collectively, "Environmental
Laws"). Except as disclosed on
Schedule 3.24, to the knowledge of the Corporations and the
Shareholder, there has been no assertion by any party that any of
the Corporations, CRC or FBLP is in violation of any Laws.
Specifically and without limiting the generality of the
foregoing, except as disclosed on Schedule 3.24:
(a) Except as permitted under applicable laws and
regulations, including, without limitation, the federal Resource
Conservation Recovery Act, 42 USC Section 6901 et seq. ("RCRA"), none of the
Corporations, CRC or FBLP has accepted,
processed, handled, transferred, generated, treated, stored or
disposed of any Hazardous Material (as defined in Section 3.24(e)
below) nor has any of them accepted, processed, handled,
transferred, generated, treated, stored or disposed of asbestos,
medical waste, radioactive waste or municipal waste, except in
compliance with Environmental Laws. Notwithstanding the
foregoing, the Shareholder shall not be liable for any
indemnification claim pursuant to Section 10.1 for breach of the
representation set forth in this Section 3.24(a) to the extent
the Corporations, CRC or FBLP accepted, processed, handled,
transferred, treated, stored or disposed of Hazardous Material,
asbestos, medical waste, radioactive waste or municipal waste
without their knowledge based on misrepresentations or omissions
by third parties to the Corporations, CRC or FBLP as to the
content of waste accepted, processed, handled, transferred,
treated, stored or disposed of.
(b) During the Corporations', CRC's or FBLP's
ownership or leasing of the Facility Property owned or leased by
it and, to the knowledge of the Corporations and the Shareholder,
prior to such ownership or 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. Notwithstanding
the foregoing, the Shareholder shall not be liable for any
indemnification claim pursuant to Section 10.1 for breach of the
representation set forth in this Section 3.24(b) to the extent
the Corporations, CRC or FBLP disposed of such Hazardous Material
at any Facility Property without their knowledge based on
misrepresentations or omissions by third parties to the
Corporations, CRC or FBLP as to the content of waste accepted for
disposal.
(c) During the Corporations', CRC's or FBLP's
ownership or leasing of the Facility Property owned or leased by
it and, to the knowledge of the Corporations and the Shareholder,
prior to such ownership or leasing of such Facility Property, no
Facility Property has ever been subject to or received any notice
of any private, administrative or judicial action, or notice of
any intended private, administrative or judicial action relating
to the presence or alleged presence of Hazardous Material in,
under, upon or emanating from any Facility Property or any real
property now or previously owned or leased by any of the
Corporations, CRC or FBLP. There are no pending and, to the
Corporations' and Shareholder's knowledge, no threatened actions
or proceedings from any governmental agency or any other entity
involving remediation of any condition of the Facility Property,
including, without limitation, petroleum contamination, pursuant
to Environmental Laws.
(d) Except as allowed under Environmental Laws,
the Corporations, CRC and FBLP have 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" means the substances
(i) defined as "Hazardous Waste" in 40
CFR 261, and substances defined in any comparable Washington or
Oregon statute or regulation; (ii) any substance the presence of
which requires remediation pursuant to any Environmental Laws;
and (iii) any substance required to be disposed of in a manner
expressly prescribed by Environmental Laws.
3.25 Powers of Attorney. None of the
Corporations, CRC or FBLP has granted any power of attorney
(except routine powers of attorney relating to representation
before governmental agencies) or entered into any agency or
similar agreement whereby a third party may bind or commit any of
the Corporations, CRC or FBLP in any manner.
3.26 Underground Storage Tanks. Except as set
forth on Schedule 3.26, no underground storage tanks containing
petroleum products or wastes or other hazardous substances
regulated by 40 CFR 280 or Environmental Laws are currently or
have been located on any Facility Property. Except as set forth
on Schedule 3.26, none of the Corporations, CRC or FBLP have
owned or leased any real property not included in the Facility
Property having any underground storage tanks containing
petroleum products or wastes or other hazardous substances
regulated by 40 CFR 280. As to each such underground storage
tank ("UST") identified on Schedule 3.26, the
Corporations have provided to WCI, on Schedule 3.26:
(a) the location of the UST, information and
material, including any available drawings and photographs,
showing the location, and whether any of the Corporations, CRC or
FBLP currently owns or leases the property on which the UST is
located (and if none of the Corporations, CRC or FBLP currently
own or lease such property, the dates on which it did and the
current owner or lessee of such property);
(b) the date of installation and specific use or
uses of the UST;
(c) copies of tank and piping tightness tests and
cathodic protection tests and similar studies or reports for each
UST;
(d) a copy of each notice to or from a
governmental body or agency relating to the UST;
(e) other material records with regard to the
UST, including, without limitation, repair records, financial
assurance compliance records and records of ownership; and
(f) to the extent not otherwise set forth
pursuant to the above, a summary description of instances, past
or present, in which, to the Corporations', or the Shareholder's
knowledge, the UST failed to meet applicable standards and
regulations for tightness or otherwise and the extent of such
failure, and any other operational or environmental problems with
regard to the UST, including, without limitation, spills,
including spills in connection with delivery of materials to the
UST, releases from the UST and soil contamination.
Except to the extent set forth on Schedule 3.26, the
Corporations, CRC and FBLP have complied with Environmental Laws
regarding the installation, use, testing, monitoring, operation
and closure of each UST described on Schedule 3.26.
3.27 Patents, Trademarks, Trade Names, etc.
Schedule 3.27 lists all patents, tradenames, fictitious business
names, trademarks, service marks, and copyrights owned by the
Corporations, CRC or FBLP or which any of them is licensed to use
(other than licenses to use software for personal computer
operating systems that were provided when the computer was
purchased and licenses to use software for personal computers
that are granted to retail purchasers of such software). No
patents, trade secrets, know-how, intellectual property,
trademarks, trade names, assumed names, copyrights, or
designations used by the Corporations, CRC or FBLP in any of
their businesses infringe on any patents, trademarks, or
copyrights, or any other rights of any person. Neither the
Corporations nor the Shareholder knows or has any reason to
believe that there are any claims of third parties to the use of
any such names or any similar name, or knows of or has any reason
to believe that there exists any basis for any such claim or
claims.
3.28 Assets, etc., Necessary to Business. Each
of the Corporations, CRC and FBLP owns or leases all properties
and assets, real, personal, and mixed, tangible and intangible,
and, except as disclosed on Schedules 3.5, 3.10(a), 3.10(c),
3.14(a) and 3.19, is a party to all Collection Franchises and
Governmental Permits and other agreements necessary to permit it
to carry on its business as presently conducted. All of said
Collection Franchises and Governmental Permits and agreements
have been duly obtained and, except as disclosed on Schedules
3.5, 3.8-Part II, 3.10(a), 3.10(c) 3.14(a) and 3.19, are in full
force and effect and there are no proceedings pending or
threatened which may result in the revocation, cancellation,
suspension or adverse modification of any of the same. Neither
the Corporations nor the Shareholder has any knowledge of any
reason why all such Collection Franchises and Governmental
Permits and agreements will not remain in effect in accordance
with their terms after consummation of the transactions
contemplated hereby.
3.29 Condemnation. No Facility Property owned or
leased by any of the Corporations, CRC or FBLP are the subject
of, or would be affected by, any pending condemnation or eminent
domain proceedings, and, to the knowledge of the Corporations and
the Shareholder, no such proceedings are threatened.
3.30 Suppliers and Customers. To the knowledge
of the Corporations and the Shareholder, the relations between
CRC and FBLP and each of their customers are good. Neither the
Corporations nor the Shareholder has knowledge of any fact (other
than general economic and industry conditions) which indicates
that any of the suppliers supplying products, components,
materials or providing use of, or access to, landfills or
disposal sites to CRC or FBLP intends to cease providing such
items to either of them, nor do either of the Corporations or the
Shareholder has knowledge of any fact (other than general
economic and industry conditions) which indicates that any of the
customers of CRC or FBLP intends to terminate, limit or reduce
its business relations with CRC or FBLP.
3.31 Absence of Certain Business Practices. None
of the Corporations, CRC, FBLP, or the Shareholder has directly
or indirectly within the past five years given or agreed to give
any gift or similar benefit to any customer, supplier,
governmental employee or other person who is or may be in a
position to help or hinder the business of CRC or FBLP in
connection with any actual or proposed transaction which
(a) might subject the Corporation, CRC or FBLP 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 Corporations, CRC or FBLP, or (c) if not
continued in the future, might adversely affect the financial
condition, business or operations of the Corporations, CRC or
FBLP or which might subject the Corporations, CRC or FBLP to suit
or penalty in any private or governmental litigation or
proceeding.
3.32 No Misleading Statements. The
representations and warranties of the Corporations and the
Shareholder contained in this Agreement, the Exhibits and
Schedules hereto and all other documents and information
furnished to WCI and its representatives pursuant hereto are
complete and accurate in all material respects and do not include
any untrue statement of a material fact or omit to state any
material fact necessary to make the statements made not
misleading.
3.33 Brokers; Finders. No person has acted
directly or indirectly as a broker, finder or financial advisor
for either of the Corporations or the Shareholder in connection
with the transactions contemplated by this Agreement and no
person is entitled to any broker's, finder's, financial advisory
or similar fee or payment in respect thereof based in any way on
any agreement, arrangement or understanding made by or on behalf
of either of the Corporations or the Shareholder.
3.34 S Corporation Matters. Each of the
Corporations has elected to be treated as an S Corporation within
the meaning of the Code for the years listed on Schedule 3.34.
4. REPRESENTATIONS AND WARRANTIES OF WCI
WCI represents and warrants to the Shareholder that each of
the following representations and warranties is true as of the
Closing Date:
4.1 Existence and Good Standing. WCI is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. WCI has full corporate
power and authority to own and lease its properties and to carry
on its business as now conducted. WCI is not required to be
qualified or licensed to conduct business as a foreign
corporation in any jurisdiction where the failure to be so
qualified would have a material adverse effect on its financial
condition.
4.2 No Contractual Restrictions. No provisions
exist in any article, document or instrument to which WCI is a
party or by which it is bound which would be violated by
consummation of the transactions contemplated by this Agreement.
4.3 Authorization of Agreement. This Agreement
has been duly authorized, executed and delivered by WCI and,
subject to the due authorization, execution and delivery by the
Corporations and the Shareholder, constitutes a legal, valid and
binding obligation of WCI. WCI has full corporate power, legal
right and corporate authority to enter into and perform its
obligations under this Agreement and to carry on its business as
presently conducted. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby and the fulfillment of and compliance with the terms and
conditions hereof do not and will not, after the giving of
notice, or the lapse of time or otherwise: (a) violate any
provisions of any judicial or administrative order, award,
judgment or decree applicable to WCI; (b) conflict with any of
the provisions of the Amended and Restated Certificate of
Incorporation or Amended and Restated Bylaws of WCI; or
(c) conflict with, result in a breach of or constitute a default
under any material agreement or instrument to which WCI is a
party or by which it is bound.
4.4 Governmental Authorities; Consents. Except
for any filings by WCI required by the HSR Act and any required
filings with applicable state regulatory authorities, WCI is not
required to submit any notice, report or other filing with any
governmental authority in connection with the execution or
delivery by it of this Agreement or the consummation of the
transactions contemplated hereby, and no consent, approval or
authorization of any governmental or regulatory authority or any
other party or person is required to be obtained by WCI in
connection with its execution, delivery and performance of this
Agreement or the transactions contemplated hereby, except such as
shall have been obtained by the Closing Date.
4.5 No Misleading Statements. The
representations and warranties of WCI contained in this
Agreement, the Exhibits and Schedules hereto and all other
documents and information furnished to the Shareholder pursuant
hereto are accurate and complete in all material respects, and do
not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made not
misleading.
4.6 Brokers; Finders. No person has acted
directly or indirectly as a broker, finder or financial advisor
for WCI in connection with the transactions contemplated by this
Agreement and no person is entitled to any broker's, finder's,
financial advisory or similar fee or payment in respect thereof
based in any way on any agreement, arrangement or understanding
made by or on behalf of WCI.
5. COVENANTS FROM SIGNING TO CLOSING DATE
5.1 Operations. Between the Signing Date and
the Closing Date, the Corporations will, and will cause CRC and
FBLP to, and the Shareholder will cause the Corporations to:
(a) carry on each respective business in
substantially the same manner as heretofore and not introduce any
material new method, or discontinue any existing material method,
of operation or accounting;
(b) maintain their properties and facilities,
including those held under leases, in as good working order and
condition as at present, ordinary wear and tear excepted;
(c) perform all material obligations under
agreements relating to or affecting their assets, properties,
business operations and rights;
(d) keep in full force and effect present
insurance policies or other comparable insurance coverage;
(e) use reasonable efforts to maintain and
preserve each of their business organizations intact, retain
present employees and maintain relationships with suppliers,
customers and others having business relations with any of them
on a basis consistent with past practice;
(f) file on a timely basis all notices, reports
or other filings required to be filed with or reported to any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or any instrumentality of any
of the foregoing wherever located with respect to each of their
continuing operations;
(g) maintain compliance with all Collection
Franchises and Governmental Permits and all laws, rules,
regulations and consent orders consistent with past practice;
(h) file on a timely basis all complete and
correct applications or other documents necessary to maintain,
renew or extend any permit, license, variance or any other
approval required by any governmental authority necessary and/or
required for the continuing operation of each of their business
operations, whether or not such approval would expire before or
after the Closing; and
(i) advise WCI promptly in writing of any
material change in any document, Schedule, Exhibit, or other
information delivered pursuant to this Agreement.
5.2 No Change. Between the Signing Date and the
Closing Date, the Corporations will not, and will not permit CRC
and FBLP to, and the Shareholder will not permit the Corporations
to, take any action described below without the prior written
consent of WCI:
(a) make any change in the Articles of
Incorporation or Bylaws of either of the Corporations or the
agreement of limited partnership of either CRC or FBLP;
(b) authorize, issue, transfer, pledge,
distribute or sell any of the Corporations' Stock or any other
securities of the Corporations;
(c) except as set forth on Schedule 1.4 with
respect to Excluded Assets, declare or pay any dividend or make
any distribution in respect of the capital stock of the
Corporations whether now or hereafter outstanding, or purchase,
redeem or otherwise acquire or retire for value any shares of the
capital stock or the Corporations;
(d) enter into any contract or commitment or
incur or agree to incur any liability other than in the ordinary
course of business other than the transactions contemplated by
this Agreement or make any single capital expenditure in excess
of $10,000 or in excess of $25,000 in the aggregate during any
consecutive thirty (30) day period without regard to whether such
capital expenditure is in the ordinary course of business;
(e) except as set forth on Schedules 3.16 and
3.21, change or promise to change the compensation payable or to
become payable to any director, officer, employee or agent, or
make or promise to make any bonus payment to any such person;
(f) create, assume or otherwise permit the
imposition of any mortgage, pledge or other lien or encumbrance
upon or grant any option or right of first refusal with respect
to any assets or properties whether now owned or hereafter
acquired;
(g) except as set forth on Schedule 1.4 with
respect to Excluded Assets, sell, assign, lease or otherwise
transfer or dispose of any property or equipment other than in
the ordinary course of business;
(h) merge or consolidate or agree to merge or
consolidate with or into any firm, corporation or other entity;
(i) waive any material rights or claims;
(j) amend, terminate or enter into any material
agreement or any site assessment, permit, license or other right,
without the prior written consent of WCI other than in the
ordinary course of business;
(k) enter into any other transaction outside the
ordinary course of business or prohibited hereunder; or
(l) take any action or suffer or permit any event
to occur that would cause any representation or warranty of the
Corporations or the Shareholder to become untrue as of the
Closing Date.
5.3 Obtain Consents. Promptly after the Signing
Date, the Corporations, CRC and FBLP will, and the Shareholder
shall cause them to, make all filings and take all steps
reasonably necessary to obtain all consents and approvals, if
any, of each other party whose consent or approval is necessary
to permit the consummation of the transactions contemplated in
this Agreement pursuant to, or required to prevent the breach of
or permit the assignment of, any material Collection Franchises,
Governmental Permits, or Required Governmental Consents (the
"Necessary Consents"), and shall
take all steps necessary to obtain all other non-material
approvals and non-material consents required to be obtained by
them or the Shareholder to consummate the transactions
contemplated by this Agreement.
5.4 Access; Confidential Information. Between
the Signing Date and the Closing Date, the Shareholder and the
Corporations will, and the Shareholder will cause the
Corporations to, afford to the officers and authorized
representatives of WCI, including, without limitation, its
engineers, counsel, independent auditors and investment bankers,
reasonable access to the Facilities, plants, Facility Property
and other properties, books and records of the Corporations, CRC
and FBLP, and will furnish WCI with such additional financial and
operating data and other information as to the business and
properties of the Corporations, CRC and FBLP as WCI may from time
to time reasonably request. The Shareholder will and will cause
the Corporations to cooperate with WCI, its representatives and
counsel in the preparation of any documents or other material
which may be required by any governmental agency. The
Shareholder and the Corporations shall provide to WCI such
information and materials regarding each of the Corporations',
CRC's and FBLP's business as WCI may reasonably request. WCI
will cause all information obtained from the Shareholder, the
Corporations, CRC and FBLP, in connection with WCI's due
diligence review and the negotiation and performance of this
Agreement to be treated as confidential (except such information
which is in the public domain or which WCI may be required to
disclose to any governmental agency, or pursuant to any court or
regulatory agency order) and will not use, and will not knowingly
permit others to use, any such confidential information in a
manner detrimental to the Corporations, CRC, FBLP or the
Shareholder. Each party hereto shall not disclose to any third
person other than their accountants, bankers or legal counsel any
of the terms or provisions of this Agreement prior to or after
the Closing Date without prior written consent of WCI.
5.5 Control of the Corporations' Operations.
Nothing contained in this Agreement shall give to WCI, directly
or indirectly, rights to control or direct any Corporation's
operations prior to the Closing Date. Prior to the Closing Date,
each Corporation shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of
its operations.
5.6 Acquisition Transactions. From the Signing
Date to the Closing Date, or earlier termination of this
Agreement, no Corporation nor the Shareholder shall initiate,
solicit, negotiate, encourage or provide information to
facilitate, and each of the Corporations and the Shareholder
shall not, and shall use its or his reasonable efforts to cause
any officer, director or employee of each Corporation, or any
attorney, accountant, investment banker, financial advisor or
other agent retained by it or him not to, initiate, solicit,
negotiate, encourage or provide information to facilitate, any
proposal or offer to acquire all or any substantial part of the
business or properties of any Corporation or any capital stock
(including without limitation the Corporations' Stock) of any
Corporation, whether by merger, purchase of assets or otherwise,
whether for cash, securities or any other consideration or
combination thereof (any such transactions being referred to
herein as an "Acquisition Transaction"). Each Corporation and the
Shareholder shall
immediately notify WCI after receipt of any proposal for an
Acquisition Transaction, indication of interest or request for
information relating to any Corporation in connection with an
Acquisition Transaction or for access to the properties, books or
records of any Corporation by any person or entity that informs
the Board of Directors of any Corporation that it is considering
making, or has made, a proposal for an Acquisition Transaction.
Such notice to WCI shall be made orally and in writing.
6. CONDITIONS PRECEDENT TO OBLIGATION OF WCI TO CLOSE TC
The obligations of WCI under this Agreement are subject to
the satisfaction, at or before Closing, of all of the following
conditions precedent, unless waived in writing by WCI:
6.1 Representations and Warranties. All
representations and warranties of the Corporations and the
Shareholder contained in this Agreement or in any Exhibit,
Schedule, certificate or document delivered by the Corporations
or the Shareholder under this Agreement shall be true, correct
and complete on and as of the date when made in all material
respects, and (except to the extent that such representations and
warranties speak of an earlier date) shall be deemed to be made
again on the Closing Date, and shall then be true, correct and
complete in all material respects as of the Closing Date.
6.2 Conditions. The Corporations and the
Shareholder shall have performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by them on or before
the Closing Date.
6.3 No Material Adverse Change. Since the
Signing Date, there shall not have been any material adverse
change in the condition (financial or otherwise) of the business,
properties or assets of the Corporations, CRC or FBLP.
6.4 Certificates. The President of each of the
Corporations shall have delivered to WCI a certificate, dated as
of the Closing Date, in form and substance satisfactory to WCI
and the Shareholder, certifying to the fulfillment of the
conditions set forth in Sections 6.1, 6.2 and 6.3, and the
Shareholder shall have delivered to WCI a certificate dated as of
the Closing Date, in form and substance satisfactory to WCI and
the Shareholder, certifying to the fulfillment of the conditions
set forth in Section 6.1, 6.2 and 6.3 applicable to the
Shareholder.
6.5 No Litigation. None of the transactions
contemplated hereby shall have been enjoined by any court or by
any federal or state governmental branch, agency, commission or
regulatory authority and no suit or other proceeding challenging
the transactions contemplated hereby shall have been threatened
or instituted and no investigative or other demand shall have
been made by any federal or state governmental branch, agency,
commission or regulatory authority.
6.6 Other Deliveries. The Shareholder shall
have delivered the items which he is required to deliver under
Section 8 of this Agreement.
6.7 Necessary Consents. All Necessary Consents
shall have been obtained.
6.8 HSR Waiting Period. The waiting period
applicable to the consummation of this transaction under the HSR
Act shall have expired or been terminated.
6.9 Title Insurance. The Corporations shall
obtain, at WCI's cost and expense, an ALTA Owner's Standard
Policy of title insurance for each Facility Property owned by any
of the Corporations, CRC or FBLP insuring fee simple title to
such Facility Property in one of the Corporations, subject only
to current real property taxes and assessments, standard printed
conditions and exceptions, and such title exceptions as shall
have been accepted in writing by WCI, containing such
endorsements as WCI may reasonably require.
7. CONDITIONS PRECEDENT TO OBLIGATION OF THE SHAREHOLDER
AND THE CORPORATION TO CLOSE
The obligations of the Corporations and Shareholder under
this Agreement are subject to the satisfaction, at or before
Closing, of all of the following conditions precedent, unless
waived in writing by the Shareholder:
7.1 Representations and Warranties. All
representations and warranties of WCI contained in this Agreement
or in any statement, Exhibit, Schedule, certificate or document
delivered by WCI under this Agreement shall be true, correct and
complete on and as of the date when made in all material
respects, and (except to the extent that such representations and
warranties speak of an earlier date) shall be deemed to be made
again on the Closing Date, and shall then be true, correct and
complete in all material respects as of the Closing Date.
7.2 Conditions. WCI shall have performed,
satisfied and complied with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied
or complied with by it on or before the Closing Date.
7.3 Certificate. WCI shall have delivered to
the Shareholder a certificate, dated as of the Closing Date, in
form and substance satisfactory to the Shareholder, certifying to
the fulfillment of the conditions set forth in Sections 8.1 and
8.2.
7.4 No Litigation. None of the transactions
contemplated hereby shall have been enjoined by any court or by
any federal or state governmental branch, agency, commission or
regulatory authority and no suit or other proceeding challenging
the transactions contemplated hereby shall have been threatened
or instituted and no investigative or other demand shall have
been made by any federal or state governmental branch, agency,
commission or regulatory authority.
7.5 Other Deliveries. WCI shall have delivered
the items which it is required to deliver under Section 8 of this
Agreement.
7.6 Necessary Consents . All Necessary Consents
shall have been obtained.
7.7 HSR Waiting Period. The waiting period
applicable to the consummation of this transaction under the HSR
Act shall have expired or been terminated
8. CLOSING DELIVERIES
At the Closing, the respective parties shall make the
deliveries indicated:
8.1 WCI Deliveries.
(a) WCI shall deliver the Purchase Price required
to be delivered on the Closing Date pursuant to Section 1.2(a).
(b) WCI shall execute and deliver to the
Shareholder the certificate set forth in Section 7.3.
8.2 Shareholder Deliveries.
(a) The Shareholder shall deliver to WCI the
certificates representing the outstanding Corporations' Stock
free and clear of all liens, security interests, claims and
encumbrances, accompanied by stock powers duly executed in blank.
(b) The Shareholder shall deliver evidence
reasonably satisfactory to WCI that all required third-party
consents to the transactions contemplated hereby, including
without limitation all Required Governmental Consents, were
obtained and the Shareholder shall deliver an estoppel
certificate from the landlords under all real estate leases to
which the Corporations, CRC or FBLP is a party confirming the
terms thereof and the rental amount owing thereunder, certifying
that such lease is in full force and effect, that the lessee is
not in default under any of the terms or conditions thereof, that
there have been no amendments or modifications to any such lease
(or specifying the same), and otherwise containing such
statements and certifications as WCI may require.
(c) The Shareholder shall deliver Schedule
3.22(a) to this Agreement.
(d) The Corporations shall deliver to WCI
evidence satisfactory to WCI showing that all written employment
contracts and all oral employment contracts other than those that
are terminable "at will" without payment of
severance (other than normal severance benefits approved by WCI)
or other benefits with non-union employees of the Corporations,
CRC and FBLP (including, without limitation, stock options or
other rights to obtain equity in the Corporations, CRC and FBLP)
have been terminated, effective on or before the Closing Date.
(e) The Shareholder shall cause each officer and
director of each of the Corporations to deliver a resignation as
an officer and/or director of that Corporations together with a
general release releasing the Corporations from all obligations
under any indemnification agreements, the charter documents of
the Corporations, or otherwise, arising out of or relating to
this Agreement or the consummation of the transactions
contemplated thereby, other than obligations arising after the
Closing Date under this Agreement.
(f) The Corporations and the Shareholder shall
execute and deliver to WCI the certificates set forth in
Section 6.4.
(g) FBLP shall execute and deliver to WCI a
Transportation Agreement (the "Transportation Agreement") with Tidewater
Barge Lines, Inc.
("Tidewater") substantially in the form of
Exhibit 8.2(g).
(h) At the Closing, the Shareholder shall deliver
to WCI an opinion of counsel for the Shareholder, the
Corporations, CRC and FBLP dated as of the Closing Date, covering
in substance the matters described in Exhibit 8.2(h).
(i) At the Closing, the Shareholder shall deliver
to WCI, the Corporations, CRC and/or FBLP such releases,
assignments, conveyances and other instruments executed by
Tidewater as WCI shall reasonably request pursuant to which
Tidewater will acknowledge and confirm that to the extent it
previously had an interest in any contracts, assets, operations
and lines of business of the Corporations, CRC or FBLP, as of the
Closing Date it no longer has such interest.
9. ADDITIONAL COVENANTS OF WCI, THE CORPORATION AND THE
SHAREHOLDER
9.1 No Delay. The Corporations, the Shareholder
and WCI covenant and agree from and after the date hereof not to
hinder in any way or unreasonably delay the Closing Date and to
use their respective reasonable efforts to obtain Necessary
Consents and otherwise to cause the Closing Date to occur as soon
as reasonably practicable after the date of this Agreement,
provided, however, that in using its reasonable efforts WCI shall
not be required to take any action or to agree to any condition,
including without limitation any condition imposed by any
government authority with respect to the transfer of any
Governmental Permit, that, in WCI's reasonable judgment, imposes
a materially adverse financial burden or operating condition on
WCI.
9.2 Release of Guaranties. WCI shall use
reasonable efforts to obtain the termination and release promptly
after the Closing Date of the personal guaranties of the
Shareholder and Tidewater listed on Schedule 9.2, all of which
relate to indebtedness of the Corporations, CRC or FBLP included
in the Financial Statements as of the Balance Sheet Date or WCI
shall indemnify the Shareholder and Tidewater and hold them
harmless from and against all losses, expenses or claims by third
parties to enforce or collect indebtedness owed by the
Corporations, CRC or FBLP as of the Closing Date which is
personally guaranteed by the Shareholder or Tidewater pursuant to
such guaranties. The Shareholder and Tidewater may notify the
obligees under such guaranties that they have terminated their
obligations under such guaranties. The Shareholder shall, and
shall use reasonable efforts to cause Tidewater to, cooperate
with WCI in obtaining such releases.
9.3 Release of Security Interests. On or after
the Closing Date, the Shareholder and his respective Affiliates
shall cause those security interests in the assets of the
Corporations, CRC or FBLP that have been created in favor of
financial institutions or other lenders to secure indebtedness
(other than indebtedness of the Corporations, CRC or FBLP) of the
Shareholder or his respective Affiliates to be released in a
manner reasonably satisfactory to WCI, and shall cause all
guaranties by the Corporations, CRC and FBLP relating to the
indebtedness of the Shareholder to be released to the reasonable
satisfaction of WCI.
9.4 Confidentiality. Neither the Corporations
nor the Shareholder shall, nor shall they permit CRC or FBLP to,
disclose or make any public announcements of the transactions
contemplated by this Agreement, except as required by the HSR
Act, without the prior written consent of WCI, unless required to
make such disclosure or announcement by law, in which event the
party making the disclosure or announcement shall notify WCI at
least 24 hours before such disclosure or announcement is expected
to be made.
9.5 Brokers and Finders Fees. Each party shall
pay and be responsible for any broker's, finder's or financial
advisory fee incurred by such party in connection with the
transactions contemplated by this Agreement.
9.6 Taxes. WCI shall reasonably cooperate, at
the expense of the Shareholder, with the Shareholder with respect
to any matters involving the Shareholder arising out of the
Shareholder's ownership of the Corporations and the Corporations'
interest in CRC and FBLP prior to the Closing, including matters
relating to tax returns and refunds and any tax audits, appeals,
claims or litigation with respect to such tax returns or the
preparation of such tax returns. In connection therewith, WCI
shall make available to the Shareholder such files, documents,
books and records of the Corporations, CRC and FBLP for
inspection and copying as may be reasonably requested by the
Shareholder and shall cooperate with the Shareholder with respect
to retaining information and documents that relate to such
matters.
9.7 Short Year Tax Returns. After the Closing
Date, the Shareholder shall prepare at his sole cost and expense,
all short year federal, state, county, local and foreign tax
returns required by law for the period beginning with the first
day of the Corporations' fiscal year in which the Closing occurs
and ending with the Closing Date. Each such return shall be
prepared in a financially responsible and conservative manner
substantially in the manner and in accordance with elections used
in prior periods by the Corporations and shall be delivered to
WCI together with all necessary supporting schedules within the
earlier of 120 days following the Closing Date or 60 days before
the date such returns are due for its approval (but such approval
shall not relieve the Shareholder of his responsibility for the
taxes assessed under these returns). The Shareholder shall be
responsible for the payment of all taxes shown to be due or that
may come to be due on such returns or otherwise relating to the
period prior to the Closing Date in excess of the amount of any
reserve for taxes included in Effective Date Current Liabilities
and shall be responsible for all taxes incurred on the Net
Profits. At the time of the delivery of the returns, the
Shareholder shall contemporaneously deliver to WCI checks payable
to the respective taxing authorities in amounts equal to the
amount due. WCI shall sign tax returns and cause such returns to
be timely filed with the appropriate authorities. The
Shareholder shall be entitled to receive all refunds shown on
said returns or attributable to prior periods and any such
refunds received by the Corporations or WCI shall be remitted to
the Shareholder at the Shareholder's request. WCI shall cause
the Corporation, CRC and/or FBLP to file amended returns and
refund requests for periods prior to the Closing Date as
reasonably requested by the Shareholder.
9.8 General Release by the Shareholder.
Effective as of the Closing Date, the Shareholder hereby fully
releases and discharges each of the Corporations, CRC and FBLP
and their directors, officers, partners, agents and employees
from all rights, claims and actions, known or unknown, of any
kind whatsoever, which the Shareholder now has or may hereafter
have against the Corporations, CRC and FBLP and their directors,
officers, partners, agents and employees, arising out of or
relating to events arising prior to or on the Closing Date,
except (a) as may be described in written contracts disclosed in
Schedule 9.8 and expressly described and specifically excepted
from this release in Schedule 9.8, (b) compensation as an
employee of the Corporations for current periods expressly
described and excepted from such release on Schedule 9.8, (c) for
the obligations of the Corporations arising after the Closing
Date under this Agreement and (d) any right of indemnification,
contribution or other recourse against the Corporations, CRC and
FBLP which he now has or may hereafter have against the
Corporations, CRC and FBLP provided that the Shareholder shall
not be entitled to indemnification, contribution or other
recovery with respect to any Claim (as hereinafter defined) based
on breach of the representations, warranties or covenants made in
this Agreement, but only to the extent the Shareholder is liable
to any WCI Indemnitee with respect to such breach (or would be so
liable but for any of the limitations set forth in Section 10.2).
Notwithstanding the foregoing, this release shall not be deemed a
release of any rights that the Shareholder may have against any
insurance carrier of the Corporations, CRC or FBLP.
9.9 Certain Tax Matters. The Shareholder
acknowledges that WCI may make an election under
Section 338(h)(10) of the Code with respect to one or both of the
Corporations, and that after the Closing Date the Corporations
may cause either CRC or FBLP to make an election under Section
754 of the Code. The Shareholder agrees that WCI, in its
discretion, may make such elections; provided, however, that such
election shall be made no later than the due date for such
election. If such election is made by WCI:
(a) WCI shall be authorized to complete Form
8023;
(b) The Shareholder shall sign such completed
Form 8023 at WCI's request;
(c) WCI and the Shareholder shall agree upon the
allocation of the Purchase Price among the assets (including
intangible assets) of the Corporation; and
(d) WCI shall indemnify the Shareholder with
respect to all federal, state, county and local taxes required to
be paid by him in connection with such election by increasing the
Purchase Price by the amount of such taxes plus any amount
necessary to pay taxes on the increased amount so that after such
payment the effects of such election by WCI will be effectively
"tax neutral" to the Shareholder.
9.10 Agreement to Cooperate.
(a) Subject to the terms and conditions herein
provided and subject to the fiduciary duties of the respective
boards of directors of the Corporations and WCI, each of the
parties hereto shall use all reasonable efforts to take, or cause
to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement, including using its reasonable
efforts to obtain all necessary or appropriate waivers, consents
or approvals of third parties required in order to preserve
material contractual relationships of WCI, the Corporations, CRC
and FBLP, all necessary or appropriate waivers, consents and
approvals to effect all necessary registrations, filings and
submissions and to lift any injunctive or other legal bar to this
transaction (and, in such case, to proceed with the transaction
as expeditiously as possible).
(b) Without limitation of the foregoing, if
required by applicable law, each of WCI and the Corporations
undertakes and agrees to file as soon as practicable, and in any
event prior to 15 days after the Signing Date, a Notification and
Report Form under the HSR Act with the Federal Trade Commission
("FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division"). Each of WCI and the
Corporations shall (i)
respond as promptly as practicable to any inquiries received from
the FTC or the Antitrust Division for additional information or
documentation and to all inquiries and requests received from any
State Attorney General or other governmental authority in
connection with antitrust matters and (ii) not extend any waiting
period under the HSR Act or enter into any agreement with the FTC
or the Antitrust Division not to consummate the transactions
contemplated by this Agreement, except with the prior consent of
the other parties hereto. Each party shall promptly notify the
other party of any communication to that party from the FTC, the
Antitrust Division, any State Attorney General or any other
governmental entity and permit the other party to review in
advance any proposed communication to any of the foregoing.
(c) In the event any litigation is commenced by any
person or entity relating to the transactions contemplated by
this Agreement, WCI shall have the right, at its own expense, to
participate therein, and the Corporations will not settle any
such litigation without the consent of WCI, which consent will
not be unreasonably withheld.
9.11 Notification of Certain Matters. Each of
the Corporations, WCI and the Shareholder agrees to give prompt
notice to each other of, and to use commercially reasonable
efforts to remedy, (i) the occurrence or failure to occur of any
event which occurrence or failure to occur would be likely to
cause any of its representations or warranties in this Agreement
to be untrue or inaccurate in any material respect at the Closing
Date and (ii) any material failure on its or his part to comply
with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it or him hereunder; provided,
however, that the delivery of any notice pursuant to this Section
9.11 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
9.12 Employees. After the Closing Date, WCI
shall cause CRC's and FBLP's main office employees (all of whom
are listed on Schedule 9.12(a) (the "Office Employees")) and facility
employees (all of whom are
listed on Schedule 9.12(b) (the "Facility Employees")) to either continue to
be employed by
CRC or FBLP in his or her current position or to be offered a
similar position with a WCI Affiliate located in Clark County at
his or her current compensation for a period of two years after
the Closing Date for each Office Employee and one year after the
Closing Date for each Facility Employee. In the event an Office
Employee or Facility Employee is terminated by WCI without cause
(as hereinafter defined), WCI will continue to pay such
employee's compensation and will reimburse his or her costs under
COBRA for the remainder of the applicable employment term (the
second anniversary of the Closing Date in the case of Office
Employees and the first anniversary of the Closing Date in the
case of Facility Employees), provided that any Office Employee or
Facility Employee whose employment by CRC or FBLP is terminated
without cause and who declines an offer for a similar position at
a WCI Affiliate located in Clark County shall not be entitled to
such compensation and reimbursement of COBRA benefits. "Cause " means
insobriety on the job, conviction of a
misdemeanor involving moral turpitude or a felony, illegal
business practices in connection with WCI's or its Affiliate's
business, misappropriation of WCI's or its Affiliate's assets,
excessive absence of the employee from his or her duties during
usual working hours for reasons other than vacation, disability
or sickness, any material breach by the employee of any material
condition of employment or failure of the employee to perform
competently and efficiently his or her duties, as determined by
WCI in its reasonable discretion.
9.13 NonCompetition Agreement. WCI acknowledges
the existence of that certain Noncompetition Agreement dated as
of December 31, 1997, by and between CRC and USA Waste Services,
Inc. and agrees to indemnify the Shareholder and hold him
harmless against any and all claims, liabilities, damages and
expenses suffered or incurred by him, directly or indirectly, in
connection with any breach by WCI or its Affiliate of such
agreement occurring after the Closing Date.
10. INDEMNIFICATION
10.1 Indemnity by the Shareholder. The
Shareholder, subject to the limitations set forth in
Section 10.2, covenants and agrees that he will indemnify and
hold harmless WCI, the Corporations and their respective
directors, officers and agents and their respective successors
and assigns (collectively the "WCI Indemnitees"), from and after the date of
this Agreement and
until the expiration of the applicable period described in
Section 10.2(e), against any and all losses, damages,
assessments, fines, penalties, adjustments, liabilities, claims,
deficiencies, costs, expenses (including specifically, but
without limitation, reasonable attorneys' fees and expenses of
investigation), expenditures, including, without limitation, any
"Environmental Site Losses"
(as such term is hereinafter defined) identified by a WCI
Indemnitee in a Claims Notice (as defined in Section 10.3(a)), or
asserted by a WCI Indemnitee in litigation commenced against the
Shareholder provided that in either case any such Claims Notice
shall be given or the litigation commenced prior to the
expiration of the applicable period described in Section 10.2(e)
(irrespective of the date of discovery), with respect to each of
the following contingencies (all, the "10.1 Indemnity Events"):
(a) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of the
Shareholder or the Corporations pursuant to the terms of this
Agreement or any misrepresentation in or omission from any
Exhibit, Schedule, list, certificate, or other instrument
furnished or to be furnished to WCI pursuant to the terms of this
Agreement, regardless of whether, in the case of a breach of a
representation or a warranty, WCI relied on the truth of such
representation or warranty or had any knowledge of any breach
thereof.
(b) Any Environmental Site Losses in excess of
the amount of liability with respect thereto, if any, set forth
on Part II of Schedule 3.8 arising from the design, development,
construction, installation or operation of any "Environmental
Site" (as hereinafter defined) during
any period on or prior to the Closing Date but only to the extent
the Environmental Site Loss resulted from a failure to comply
with applicable laws, rules, regulations, ordinances, building
codes, permits, licenses, franchises, municipal service
contracts, judgments, orders, injunctions or decrees. 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 a Corporation, CRC or FBLP or by any
predecessor thereof on or prior to the Closing Date. As used in
this Agreement, "Environmental Site Losses" shall mean any and all losses,
damages
(including exemplary damages and penalties), liabilities, claims,
deficiencies, costs, expenses, and expenditures (including,
without limitation, expenses in connection with site evaluations,
risk assessments and feasibility studies) arising out of or
required by an interim or final judicial or administrative
decree, judgment, injunction, mandate, interim or final permit
condition or restriction, cease and desist order, abatement
order, compliance order, consent order, clean-up order,
exhumation order, reclamation order or any other remedial action
that is required to be undertaken under federal, state or local
law in respect of operating activities on or affecting any
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 for
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
Environmental Site resulting from activities thereat on or prior
to the Closing Date, 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
"Environmental Site Losses"
shall not include any losses or deficiencies relating to the
inefficiency or lack of optimal use, design or function of any
Environmental Site. The term "Release" as used
herein means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the ambient environment. Notwithstanding anything
in this paragraph to the contrary, it is specifically understood
and agreed that a Release composed solely of Hazardous Substances
contained in waste lawfully disposed of in a landfill during the
time a Corporation, CRC or FBLP owned and/or operated such
landfill does not constitute an Environmental Site Loss.
(c) All matters on Schedule 3.8, Part II, or
required to be described on Schedule 3.8, Part II, of which the
Corporations or the Shareholder has knowledge on the Closing Date
and which are not so described.
(d) All actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including
specifically, but without limitation, reasonable attorneys' fees
and expenses of investigation) incident to any of the foregoing.
10.2 Limitations on the Shareholder's Indemnities TC
.
(a) The obligations of the Shareholder to
indemnify the WCI Indemnitees as provided in Section 10.1 shall
be equal to the amount by which the cumulative amount of all such
liabilities, claims, damages deficiencies, actions, suits,
proceedings, demands, assessments, adjustments, costs and
expenses, expenditures and Environmental Site Losses with respect
to any or all 10.1 Indemnity Events exceed two hundred fifty
thousand dollars ($250,000) (the "General Deductible Amount"); provided, that
the amount of
any obligation of indemnity arising pursuant to Section 10.1(a)
with respect to any representation, warranty or covenant
contained in Sections 3.1 through 3.5; 3.12(c), 3.18, 3.22, 9.7
and 9.10 hereof and pursuant to Section 10.1(c) shall not be
subject to the General Deductible Amount.
(b) The maximum amount which WCI can recover as a
result of one or more 10.1 Indemnity Events pursuant to the
provisions hereof for Claims shall not exceed:
(i) Sixty percent (60%) of the Purchase
Price (as adjusted pursuant to Section 1.2) if the Claims Notice
for the 10.1 Indemnity Event is delivered to the Shareholder
during the time period from the Closing Date to and including the
first anniversary of the Closing Date;
(ii) Forty-five percent (45%) of the Purchase
Price (as adjusted pursuant to Section 1.2) if the Claims Notice
for the 10.1 Indemnity Event is delivered to the Shareholder
during the time period from the first anniversary of the Closing
Date to and including the second anniversary of the Closing Date;
and
(iii) Thirty percent (30%) of the Purchase
Price (as adjusted pursuant to Section 1.2) if the Claims Notice
for the 10.1 Indemnity Event is delivered to the Shareholder
during the time period from the second anniversary of the Closing
Date to and including the third anniversary of the Closing Date.
(c) Except to the extent the same shall directly
result in a material increase in insurance premiums on a
prospective basis, the Shareholder shall not be required to
indemnify any WCI Indemnitee for any Claim to the extent that
such Claim has been reimbursed or is reimbursable through
insurance proceeds received or receivable by the WCI Indemnitee.
Notwithstanding the foregoing, the WCI Indemnitee shall not be
obligated to pursue reimbursement of any Claim through insurance
proceeds but rather may be indemnified by the Shareholder and may
allow the Shareholder to pursue such insurance proceeds directly,
in which event the WCI Indemnitee shall reasonably cooperate with
the Shareholder in connection therewith. In the event the WCI
Indemnitee obtains insurance proceeds but the amount of such
insurance does not cover the full amount of the Claim, or in the
event the Claim shall directly result in an increase in insurance
premiums on a prospective basis, the Shareholder shall remain
liable for the difference in the insurance proceeds and the
amount of the Claim, or in the case of an increase in insurance
premiums, the amount of such increase directly attributable to
the Claim, subject to the other limitations set forth herein. At
the request of Shareholder, WCI will maintain or obtain liability
insurance to cover losses of the type described in
Section 10.1(b) to the extent available for the period set forth
in Section 10.2(e). Shareholder shall promptly pay or reimburse
WCI for the cost of such insurance upon presentation of
satisfactory evidence of the cost thereof.
(d) The indemnification provisions of this
Section 10 shall be the exclusive remedy for any Claim for
monetary damages arising under this Agreement or from the
transactions contemplated hereby or otherwise, including claims
under statute or common law, except for Fraud (as defined below),
provided that nothing in this Section 10 shall be deemed to be
the exclusive remedy or shall limit the remedies of any party
with respect to the breach or nonfulfillment by any party of any
obligation or covenant in this Agreement or any of the agreements
contemplated hereby or entered into pursuant hereto required to
be satisfied or fulfilled after the Closing Date. In addition,
the parties shall be entitled to pursue any claims for non-
monetary relief to which they may be entitled at law or in
equity. For the purposes of this Section 10, "Fraud" shall mean criminal
activity, fraud, fraudulent inducement,
intentional misrepresentation or concealment.
(e) The obligations of the Shareholder under
Section 10.1 shall expire, unless a Claims Notice is given or
litigation is commenced on or prior to the third anniversary of
the Closing Date or, with respect to Claims based on Section
3.18, 90 days after the expiration of the applicable statute of
limitations.
10.3 Notice of Indemnity Claim.
(a) In the event that any claim ("Claim") is hereafter asserted against or
arises with respect
to any WCI Indemnitee as to which such Indemnitee may be entitled
to indemnification hereunder, the WCI Indemnitee shall notify the
Shareholder (the "Indemnifying Party") in writing thereof (the "Claims
Notice") within 60 days after (i) receipt of written notice of
commencement of any third party litigation against such WCI
Indemnitee, (ii) receipt by such WCI Indemnitee of written notice
of any third party claim pursuant to an invoice, notice of claim
or assessment, against such WCI Indemnitee, or (iii) such WCI
Indemnitee becomes aware of the existence of any other event in
respect of which indemnification may be sought from the
Indemnifying Party (including, without limitation, any inaccuracy
of any representation or warranty or breach of any covenant).
The Claims Notice shall describe the Claim and the specific facts
and circumstances in reasonable detail, and shall indicate the
amount, if known, or an estimate, if possible, of the losses that
have been or may be incurred or suffered by the WCI Indemnitee.
(b) The Indemnifying Party may elect to defend
any Claim for money damages where the cumulative total of all
Claims (including such Claims) do not exceed the limit set forth
in Section 10.2 at the time the Claim is made, by the
Indemnifying Party's own counsel; provided, however, the
Indemnifying Party may assume and undertake the defense of such a
third party Claim only upon written agreement by the Indemnifying
Party that the Indemnifying Party is obligated to fully indemnify
the WCI Indemnitee with respect to such action. The WCI
Indemnitee may participate, at the WCI Indemnitee's own expense,
in the defense of any Claim assumed by the Indemnifying Party.
Without the written approval of the WCI Indemnitee, which
approval shall not be unreasonably withheld, the Indemnifying
Party shall not agree to any compromise of a Claim defended by
the Indemnifying Party.
(c) If, within twenty (20) days of the
Indemnifying Party's receipt of a Claims Notice, the Indemnifying
Party shall not have provided the written agreement required by
Section 10.3(b) and elected to defend the Claim, the WCI
Indemnitee shall have the right to assume control of the defense
and/or compromise of such Claim, and the costs and expenses of
such defense, including reasonable attorneys' fees, shall be
added to the Claim. The Indemnifying Party shall promptly, and
in any event within ten (10) days after demand therefor,
reimburse the WCI Indemnitee for the costs of defending the
Claim, including attorneys' fees and expenses.
(d) The party assuming the defense of any Claim
shall keep the other party reasonably informed at all times of
the progress and development of its or their defense of and
compromise efforts with respect to such Claim and shall furnish
the other party with copies of all relevant pleadings,
correspondence and other papers. In addition, the parties to
this Agreement shall cooperate with each other and make available
to each other and their representatives all available relevant
records or other materials required by them for their use in
defending, compromising or contesting any Claim. The failure to
timely deliver a Claims Notice or otherwise notify the
Indemnifying Party of the commencement of such actions in
accordance with this Section 10.3 shall not relieve the
Indemnifying Party from the obligation to indemnify hereunder but
only to the extent that the Indemnifying Party establishes by
competent evidence that it has been prejudiced thereby.
(e) In the event both the WCI Indemnitee and the
Indemnifying Party are named as defendants in an action or
proceeding initiated by a third party, they shall both be
represented by the same counsel (on whom they shall agree),
unless such counsel the WCI Indemnitee, or the Indemnifying Party
shall determine that such counsel has a conflict of interest in
representing both the WCI Indemnitee and the Indemnifying Party
in the same action or proceeding and the WCI Indemnitee and the
Indemnifying Party do not waive such conflict to the satisfaction
of such counsel.
10.4 Liability for Breaches of Representations and
Warranties. The liability of a party making the
representations and warranties contained in this Agreement and in
any certificate, Exhibit or Schedule delivered pursuant hereto,
or in any other writing delivered pursuant to the provisions of
this Agreement (the "Representations and Warranties") for a breach thereof
shall
survive the consummation of the transactions contemplated hereby
until the later of the expiration of the period set forth in
Section 10.2(e), or the final resolution of all Claims for which
a Claims Notice is given prior to the expiration of the
obligations of the Indemnifying Party under Section 10.2(e) but
only as to the representations and warranties relevant to such
Claims.
10.5 No Exhaustion of Remedies; Subrogation; Right of
Set Off. The Shareholder waives any right to require any
WCI Indemnitee to (i) proceed against the Corporations;
(ii) proceed against any other person; or (iii) pursue any other
remedy whatsoever in the power of any WCI Indemnitee. WCI may,
but shall not be obligated to, set off against any and all
payments due the Shareholder any amount to which any WCI
Indemnitee is entitled to be indemnified hereunder with respect
to any 10.1 Indemnity Event. Such right of set off shall be
separate and apart from any and all other rights and remedies
that the Indemnities may have against the Shareholder or his
successors. To the extent of any payment made by Shareholder to
any WCI Indemnitee on account of any Claim pursuant to this
Section 10, the Shareholder shall be subrogated to all of the
rights of recovery of such WCI Indemnitee, and such WCI
Indemnitee shall, at the expense of the Shareholder, execute all
documents reasonably required and shall do all things reasonably
necessary to secure such rights and to enable the Shareholder
effectively to bring suit to enforce such rights.
11. OTHER POST-CLOSING COVENANTS OF THE SHAREHOLDER AND
WCI
11.1 Restrictive Covenants. As to the
Corporations, the Shareholder and his Affiliates acknowledge that
(i) WCI, as the purchaser of the Corporations' Stock, is and will
be engaged in the same business as CRC and FBLP (the "Business "); (ii) the
Shareholder and his Affiliates are
intimately familiar with the Business; (iii) the Business is
currently conducted in the States of Oregon and Washington and
WCI intends to continue the Business in Oregon and Washington and
intends, by acquisition or otherwise, to expand the Business into
other geographic areas of Oregon and Washington where it is not
presently conducted; (iv) the Shareholder and his Affiliates have
had access to trade secrets of, and confidential information
concerning, the Business; (v) the agreements and covenants
contained in this Section 11.1 are essential to protect the
Business and the goodwill being acquired; and (vi) the
Shareholder and his Affiliates have the means to support
themselves and their dependents other than by engaging in a
business substantially similar to the Business and the provisions
of this Section 8 will not impair such ability. The Shareholder
covenants and agrees as set forth in (a), (b) and (c) below with
respect to WCI, CRC and FBLP:
(a) Non-Compete. For a period commencing on the
Closing Date and terminating ten (10) years thereafter (the
"Restricted Period"), neither the
Shareholder nor any of his Affiliates shall, anywhere within the
State of Washington or Oregon, or in any county in Washington or
Oregon where CRC, FBLP or WCI or one of its subsidiaries owns or
operates the Business or a business similar to the Business (the
"Restricted Area"), directly or
indirectly, acting individually or as the owner, shareholder,
partner, or employee of any entity other than WCI or one of its
subsidiaries, (i) engage in the operation of a solid waste
collection, transportation, disposal, tire processing and/or
composting business, transfer facility, recycling facility,
materials recovery facility or solid waste landfill, except that
the Shareholder may engage in any such capacity in the operation
of a tire processing business using a method not used by CRC or
FBLP if the Shareholder does not solicit any tire processing
customers of either CRC or FBLP in violation of clause (ii);
(ii) enter the employ of, or render any personal services to or
for the benefit of, or assist in or facilitate the solicitation
of customers for, or receive remuneration in the form of salary,
commissions or otherwise from, any business engaged in such
activities; (iii) as owner or lessor of real estate or personal
property, rent to or lease any facility, equipment or other
assets to any business engaged in the same business as CRC or
FBLP; (iv) receive or purchase a financial interest in, make a
loan to, or make a gift in support of, any such business in any
capacity, including, without limitation, as a sole proprietor,
partner, shareholder, officer, director, principal, agent,
trustee or lender; provided, however, that [x] the Shareholder
may own, directly or indirectly, solely as an investment,
securities of any business traded on any national securities
exchange or NASDAQ, if the Shareholder is not a controlling
person of, or a member of a group which controls, such business
and further provided that the Shareholder does not, in the
aggregate, directly or indirectly, own 2% or more of any class of
securities of such business; [y] to the extent Tidewater is
engaged in such activities on or after the Closing Date,
Shareholder shall not be deemed to be in breach of this
Section 11.1(a) so long as his ownership of equity securities of
Tidewater does not exceed the amount owned on the Closing Date
and so long as Shareholder does not participate in such
activities on behalf of Tidewater; and [z] the Shareholder may
engage in any of the above activities as a direct or indirect
majority shareholder of Tidewater insofar as they relate to the
transportation of solid waste by Tidewater.
(b) Confidential Information. During the
Restricted Period and thereafter, the Shareholder and his
Affiliates shall keep secret and retain in strictest confidence,
and shall not use for the benefit of themselves or others, all
data and information relating to the Business ("Confidential
Information"), including
without limitation, know-how, trade secrets, customer lists,
supplier lists, details of contracts, pricing policies,
operational methods, marketing plans or strategies, bidding
information, practices, policies or procedures, product
development techniques or plans, and technical processes;
provided, however, that the term "Confidential Information" shall not include
information that
(i) is or becomes generally available to the public other than as
a result of disclosure by the Shareholder or (ii) is general
knowledge in the solid waste handling and landfill business and
not specifically related to the Business. Notwithstanding the
foregoing, Shareholder may disclose and discuss confidential
information with his legal and tax advisors, and as is required
in connection with any legal proceedings, and the Shareholder
shall give WCI prior written notice of such disclosure at least
forty-eight (48) hours before such disclosure is made, if
possible.
(c) Property of the Business. All memoranda,
notes, lists, records and other documents or papers (and all
copies thereof) relating to the Business, including such items
stored in computer memories, on microfiche or by any other means,
made or compiled by or on behalf of the Shareholder, the
Corporations, CRC or FBLP, or made available to them relating to
the Business, but excluding any materials (other than the minute
books of the Corporations) maintained by any attorneys for the
Corporations or the Shareholder prior to the Closing, are and
shall be the property of WCI and have been delivered or will be
delivered or made available to WCI at the Closing. Neither
Shareholder nor counsel to Shareholder or the Corporations shall
have any obligation to furnish materials excluded under the
foregoing to WCI. All material that has been delivered or will
be delivered to WCI under the foregoing provisions will be made
available to the Shareholder upon reasonable request in
connection with tax or other legal compliance matters or in
connection any dispute under this Agreement.
(d) Non-Solicitation. Without the consent of
WCI, which may be granted or withheld by WCI in its discretion,
the Shareholder and his Affiliates shall not solicit any
employees of the Corporations, CRC or FBLP to leave the employ of
the Corporations, CRC or FBLP and join the Shareholder or any
Affiliate in any business endeavor owned or pursued by the
Shareholder.
(e) No Disparagement. From and after the Closing
Date, the Shareholder shall not, in any way or to any person or
entity or governmental or regulatory body or agency, denigrate or
derogate WCI or any of its subsidiaries, or any officer, director
or employee, or any product or service or procedure of any such
company whether or not such denigrating or derogatory statements
shall be true and are based on acts or omissions which are
learned by the Shareholder from and after the date hereof or on
acts or omissions which occur from and after the date hereof, or
otherwise. A statement shall be deemed denigrating or derogatory
to any person or entity if it adversely affects the regard or
esteem in which such person or entity is held by investors,
lenders or licensing, rating, or regulatory entities. Without
limiting the generality of the foregoing, the Shareholder shall
not, directly or indirectly in any way in respect of any such
company or any such directors or officers, communicate with, or
take any action which is adverse to the position of any such
company with any person, entity or governmental or regulatory
body or agency who or which has dealings or prospective dealings
with any such company or jurisdiction or prospective jurisdiction
over any such company. This paragraph does not apply to the
extent that testimony is required by legal process, provided that
WCI has received not less than five days' prior written notice of
such proposed testimony, nor does it apply to any statements made
in connection with any judicial proceeding, arbitration or
mediation to which WCI or one of its Affiliates and the
Shareholder or one of his Affiliates (including Tidewater) are
parties seeking to resolve any dispute relating to the
interpretation or enforcement of this Agreement or the
Transportation Agreement.
11.2 Rights and Remedies Upon Breach. If the
Shareholder or any Affiliate breaches, or threatens to commit a
breach of, any of the provisions of Section 11.1 herein (the
"Restrictive Covenants"), WCI
shall have the following rights and remedies, each of which
rights and remedies shall be independent of the others and
severally enforceable, and each of which is in addition to, and
not in lieu of, any other rights and remedies available to WCI at
law or in equity:
(a) Specific Performance. The right and remedy
to have the Restrictive Covenants specifically enforced by any
court of competent jurisdiction, it being agreed that any breach
or threatened breach of the Restrictive Covenants would cause
irreparable injury to WCI and that money damages would not
provide an adequate remedy to WCI. Accordingly, in addition to
any other rights or remedies, WCI shall be entitled to injunctive
relief to enforce the terms of the Restrictive Covenants and to
restrain the Shareholder from any violation thereof.
(b) Accounting. The right and remedy to require
the Shareholder to account for and pay over to WCI all
compensation, profits, monies, accruals, increments or other
benefits derived or received by the Shareholder as the result of
any transactions constituting a breach of the Restrictive
Covenants.
(c) Severability of Covenants. The Shareholder
acknowledges and agrees that the Restrictive Covenants are
reasonable and valid in geographical and temporal scope and in
all other respects. If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants shall
not thereby be affected and shall be given full effect, without
regard to the invalid portions.
(d) Blue-Penciling. If any court determines that
any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographic scope of such
provision, such court shall reduce the duration or scope of such
provision, as the case may be, to the extent necessary to render
it enforceable and, in its reduced form, such provision shall
then be enforced.
(e) Enforceability in Jurisdiction. WCI and the
Shareholder intend to and hereby confer jurisdiction to enforce
the Restrictive Covenants upon the courts of any jurisdiction
within the geographic scope of the Restrictive Covenants. If the
courts of any one or more of such jurisdictions hold the
Restrictive Covenants unenforceable by reason of the breadth of
such scope or otherwise, it is the intention of WCI and the
Shareholder that such determination not bar or in any way affect
WCI's right to the relief provided above in the courts of any
other jurisdiction within the geographic scope of the Restrictive
Covenants as to breaches of such covenants in such other
respective jurisdictions, such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and
independent covenants.
12. GENERAL
12.1 Additional Conveyances. Following the
Closing, the Shareholder and WCI shall each deliver or cause to
be delivered at such times and places as shall be reasonably
agreed upon such additional instruments as WCI or the Shareholder
may reasonably request for the purpose of carrying out this
Agreement. The Shareholder will cooperate with WCI and/or the
Corporations on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in
connection with any actions, proceedings or disputes of any
nature with respect to matters pertaining to all periods prior to
the date of this Agreement.
12.2 Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, the
successors or assigns of WCI and the heirs, legal representatives
or assigns of the Shareholder; provided, however, that any such
assignment shall be subject to the terms of this Agreement and
shall not relieve the assignor of its or his responsibilities
under this Agreement.
12.3 Public Announcements. Except as required by
law, no party shall make any public announcement or filing with
respect to the transactions provided for herein prior to the
Closing Date without the prior consent of the other parties
hereto. The Shareholder, the Corporations, CRC and FBLP
acknowledge that WCI will issue a press release following
execution and delivery of this Agreement. WCI will deliver a
copy of the press release to the Shareholder prior to its
release. WCI agrees that prior to the Closing Date, it will not
file a post-effective amendment to its registration statement on
Form S-4 filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, to include the financial
statements of the Corporations, CRC or FBLP without Shareholder's
consent.
12.4 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.
12.5 Notices. All notices, requests, demands and
other communications hereunder shall be deemed to have been duly
given if in writing and either delivered personally, sent by
facsimile transmission or by air courier service, or mailed by
postage prepaid registered or certified U.S. mail, return receipt
requested, to the addresses designated below or such other
addresses as may be designated in writing by notice given
hereunder, and shall be effective upon personal delivery or
facsimile transmission thereof or upon delivery by registered or
certified U.S. mail or one business day following deposit with an
air courier service:
If to the Shareholder:
at his respective address set
forth on Schedule 3.2
With a copy to:
Henry C. Breithaupt, Esq.
Stoel Rives LLP
900 S.W. Fifth Avenue, Suite
2600
Portland, OR 97204-1268
Fax: (503) 220-2480
If to WCI:
Waste Connections, Inc.
2260 Douglas Boulevard, Suite
280
Roseville, California 95661
Attention: Ronald J.
Mittelstaedt
Fax: (916) 772-2920
With a copy to:
Robert D. Evans, Esq.
Shartsis, Friese & Ginsburg LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
Fax: (415) 421-2922
12.6 Attorneys' Fees. In the event of any
dispute or controversy between WCI on the one hand and the
Corporations or the Shareholder on the other hand relating to the
interpretation of this Agreement or to the transactions
contemplated hereby, the prevailing party shall be entitled to
recover from the other party reasonable attorneys' fees and
expenses incurred by the prevailing party, as awarded by the
court. Such award shall include post-judgment attorney's fees
and costs.
12.7 Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Washington without regard to its conflict of laws
provisions.
12.8 Payment of Fees and Expenses. Whether or
not the transactions herein contemplated shall be consummated,
each party hereto will pay its own fees, expenses and
disbursements incurred in connection herewith and all other costs
and expenses incurred in the performance and compliance with all
conditions to be performed hereunder (including, in the case of
the Shareholder, any such fees, expenses and disbursements paid
or accrued by, or charged to, the Corporations), provided that
WCI shall pay all filing fees under the HSR Act.
12.9 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.
12.10 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.
12.11 Number and Gender of Words; Corporations.
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.
12.12 Entire Agreement. This Agreement (including
the Schedules and Exhibits hereto) and the other documents
delivered pursuant hereto constitute the entire Agreement and
understanding between the Corporations, the Shareholder and WCI
and supersedes any prior agreement and understanding relating to
the subject matter of this Agreement. This Agreement may be
modified or amended only by a written instrument executed by the
Corporations, the Shareholder and WCI acting through its
officers, thereunto duly authorized by its Board of Directors.
12.13 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.
12.14 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 Washington or California. Unless
expressly stated otherwise, cross-references herein refer to
provisions within this Agreement and are not references to the
overall transaction or to any other document. Wherever reference
is made in this Agreement to the "knowledge"
of the Shareholder, such term means the actual knowledge of the
Shareholder or any knowledge which should have been obtained by
the Shareholder upon reasonable inquiry by a reasonable business
person. In the case of a Shareholder that is a trust, the term
"knowledge" means the actual knowledge of the
trustee or trustees of the trust or any knowledge which should
have been obtained by the trustee or trustees upon reasonable
inquiry by a reasonable business person. Wherever reference is
made in this Agreement to the "knowledge" of
the Corporations, such term means the actual knowledge of any
management employee, officer or director of the Corporations or
any knowledge which should have been obtained by any such person
upon reasonable inquiry by a reasonable business person.
12.15 Disclosure Schedules. The language in all
parts of this Agreement must be Any matter disclosed on any
Schedule to this Agreement shall be deemed to have been disclosed
on every other Schedule that refers to such Schedule by cross
reference so long as the nature of the matter disclosed is
obvious from a fair reading of the Schedule on which the matter
is disclosed.
13. GLOSSARY
The definitions of the terms used below can be found at the
Section indicated:
Term Section
Acquisition Transaction Section 5.6
Affiliate Section 3.11
Antitrust Division Section 9.10(b)
at will Section 8.2(d)
Balance Sheet Date Section 3.7
Bond Debt Section 1.2
business day Section 12.14
Business Section 11.1
Cause Section 9.12
Claim Section 10.3(a)
Claims Notice Section 10.3(a)
Closing Section 2.1
Closing Date Section 2.1
Closing Date Debt Section 3.22(a)
Code Section 3.17(a)
Collection Franchises Section 3.10(a)
Confidential Information Section 11.1(b)
Corporations Parties
Corporations' Stock Recitals
CRC Parties
day Section 12.14
Effective Date Section 2.1
Effective Date Current Assets Section 3.22(b)
Effective Date Current Liabilities Section 3.22(b)
Environmental Site Section 10.1(b)
Environmental Site Losses Section 10.1
Environmental Laws Section 3.24
ERISA Section 3.17(a)
Excluded Assets Section 1.4
Facility Section 3.10(c)
Facilities Section 3.10(c)
Facility Employees Section 9.12
Facility Property Section 3.12(b)
FBLP Recitals
Financial Statements Section 3.7
Fraud Section 10.2(d)
FTC Section 9.10(b)
General Deductible Amount Section 10.2(a)
golden parachute Section 3.17(a)
Golden Parachute Payment Section 3.17(c)
Governmental Permits Section 3.10(a)
Hazardous Material Section 3.24(e)
Hazardous Waste Section 3.24(e)
HSR Act Section 3.10(a)
Indemnifying Party Section 10.3(a)
Indemnity Events Section 10.1
knowledge Section 12.14
Landfill Recitals
Laws Section 3.24
MENI Recitals
multi-employer plan Section 3.17(a)
Necessary Consents Section 5.3
Net Loss Section 1.2
Net Profit Section 1.2
occurrence Section 3.15
Office Employees Section 9.12
Permitted Liens Section 3.12(c)
Purchase Price Section 1.1
RCRA Section 3.24(e)
Real Property Recitals
Recipient Section 3.17(c)
Records, Notifications and Reports Section 3.10(b)
Release Section 10.1(b)
Representations and Warranties Section 10.4
Required Governmental Consents Section 3.10(a)
Restricted Area Section 11.1(a)
Restricted Period Section 11.1(a)
Restrictive Covenants Section 11.2
RHFC Recitals
Shareholder Recitals
Signing Date Recitals
Termination Date Section 2.2(a)
Tidewater Section 8.2(g)
Transportation Agreement Section 8.2(g)
UST Section 3.26
WCI Parties
WCI Indemnitees Section 10.1
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by persons thereunto duly authorized as of the date
first above written.
WCI: WASTE CONNECTIONS, INC.
By:
Ronald J. Mittelstaedt
Chief Executive Officer &
President
THE CORPORATIONS: MANAGEMENT ENVIRONMENTAL
NATIONAL, INC.
By:
Wesley J. Hickey, President
RH FINANCIAL CORPORATION
By:
Wesley J. Hickey, President
THE SHAREHOLDER: (See Schedule A)
Schedule A to Amended and Restated
Stock Purchase Agreement
The undersigned Shareholder of Management Environmental
National, Inc. and R.H. Financial Corporation hereby agrees that
he is a party to the Amended and Restated Stock Purchase
Agreement dated as of March 31, 1999 among Waste Connections,
Inc., Management Environmental National, Inc., RH Financial
Corporation and the Shareholder listed on Schedule A hereto and
agrees that he is bound by all of the terms and provisions
thereof as though he had executed the signature page thereof, it
being understood that the Shareholder has executed this Schedule
A in lieu of the signature page at his request as a matter of
convenience and confidentiality. The undersigned Shareholder has
executed this Schedule A as of the date of the Stock Purchase
Agreement.
Wesley J. Hickey
RDE\5119\062\1038723.01
1. PURCHASE OF CORPORATIONS' STOCK 1
1.1 Shares to be Purchased 1
1.2 Purchase Price 2
1.3 Allocation of the Purchase Price 2
1.4 Excluded Assets 2
2. CLOSING TIME AND PLACE 3
2.2 Termination 3
2.3 Notice and Effect of Termination 4
2.4 Exclusive Negotiations 4
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATIONS AND
THE SHAREHOLDER 4
3.1 Organization, Standing and Qualification 4
3.2 Capitalization 5
3.3 All Stock Being Acquired 5
3.4 Authority for Agreement 5
3.5 No Breach or Default 5
3.6 Subsidiaries 6
3.7 Financial Statements 6
3.8 Liabilities 6
3.9 Accurate and Complete Records 7
3.10 Permits and Licenses 8
3.11 Certain Receivables 9
3.12 Fixed Assets and Real Property 10
3.13 Related Party Transactions 11
3.14 Contracts and Agreements; Adverse Restrictions 11
3.15 Insurance 11
3.16 Personnel 12
3.17 Benefit Plans and Union Contracts 12
3.18 Taxes 13
3.19 Copies Complete; Required Consents 14
3.20 Customers, Billings, Current Receipts and
Receivables 14
3.21 No Change With Respect to the Corporations 15
3.22 Closing Date Debt; Effective Date Current Assets
and Effective Date Current Liabilities 16
3.23 Bank Accounts 17
3.24 Compliance With Laws 17
3.25 Powers of Attorney 18
3.26 Underground Storage Tanks 19
3.27 Patents, Trademarks, Trade Names, etc 19
3.28 Assets, etc., Necessary to Business 20
3.29 Condemnation 20
3.30 Suppliers and Customers 20
3.31 Absence of Certain Business Practices 20
3.32 No Misleading Statements 20
3.33 Brokers; Finders 21
3.34 S Corporation Matters 21
4. REPRESENTATIONS AND WARRANTIES OF WCI 21
4.1 Existence and Good Standing 21
4.2 No Contractual Restrictions 21
4.3 Authorization of Agreement 21
4.4 Governmental Authorities; Consents 21
4.5 No Misleading Statements 22
4.6 Brokers; Finders 22
5. COVENANTS FROM SIGNING TO CLOSING DATE 22
5.1 Operations 22
5.2 No Change 23
5.3 Obtain Consents 24
5.4 Access; Confidential Information 24
5.5 Control of the Corporations' Operations 24
5.6 Acquisition Transactions 25
6. CONDITIONS PRECEDENT TO OBLIGATION OF WCI TO CLOSE 25
6.1 Representations and Warranties 25
6.2 Conditions 25
6.3 No Material Adverse Change 25
6.4 Certificates 25
6.5 No Litigation 26
6.6 Other Deliveries 26
6.7 Necessary Consents 26
6.8 HSR Waiting Period 26
6.9 Title Insurance 26
7. CONDITIONS PRECEDENT TO OBLIGATION OF THE SHAREHOLDER
AND THE CORPORATION TO CLOSE 26
7.1 Representations and Warranties 26
7.2 Conditions 26
7.3 Certificate 26
7.4 No Litigation 27
7.5 Other Deliveries 27
7.6 Necessary Consents 27
7.7 HSR Waiting Period 27
8. CLOSING DELIVERIES 27
8.1 WCI Deliveries 27
8.2 Shareholder Deliveries 27
9. ADDITIONAL COVENANTS OF WCI, THE CORPORATION AND THE
SHAREHOLDER 28
9.1 No Delay 28
9.2 Release of Guaranties 28
9.3 Release of Security Interests 29
9.4 Confidentiality 29
9.5 Brokers and Finders Fees 29
9.6 Taxes 29
9.7 Short Year Tax Returns 29
9.8 General Release by the Shareholder 30
9.9 Certain Tax Matters 30
9.10 Agreement to Cooperate 31
9.11 Notification of Certain Matters 31
9.12 Employees 32
9.13 NonCompetition Agreement 32
10. INDEMNIFICATION 32
10.1 Indemnity by the Shareholder 32
10.2 Limitations on the Shareholder's Indemnities 34
10.3 Notice of Indemnity Claim 35
10.4 Liability for Breaches of Representations and
Warranties 36
10.5 No Exhaustion of Remedies; Subrogation; Right of
Set Off 36
11. OTHER POST-CLOSING COVENANTS OF THE SHAREHOLDER AND WCI 37
11.1 Restrictive Covenants 37
11.2 Rights and Remedies Upon Breach 39
12. GENERAL 40
12.1 Additional Conveyances 40
12.2 Assignment 40
12.3 Public Announcements 40
12.4 Counterparts 40
12.5 Notices 41
12.6 Attorneys' Fees 41
12.7 Applicable Law 41
12.8 Payment of Fees and Expenses 41
12.9 Incorporation by Reference 42
12.10 Captions 42
12.11 Number and Gender of Words; Corporations 42
12.12 Entire Agreement 42
12.13 Waiver 42
12.14 Construction 42
12.15 Disclosure Schedules 42
13. GLOSSARY 43
EXHIBIT 99.1
Waste Connections, Inc. Announces Definitive Agreement with Major
Regional Landfill and Transfer Station Companies
Roseville, California
Waste Connections, Inc. (NASDAQ: WCNX) announces today that it
has signed a definitive agreement to acquire ownership of
Columbia Resource Co, L.P. and Finley Buttes L.P. Columbia
Resource Co. operates two transfer stations in Clark County
Washington. Finley Buttes is one of the largest regional
landfills in the Pacific Northwest with over 200 years of
capacity at current rates. Combined annual revenue of the two
operations is approximately $23 million.
The transaction is structured as an all cash for stock purchase,
however terms of the transaction are not being disclosed.
Closing is subject to clearance under the Hart Scott Rodino Act
by the Federal Trade Commission and the Department of Justice,
and other usual and customary closing conditions, including local
governmental approval.
Ron J. Mittelstaedt, President and CEO said: "CRC and Finley
Buttes represent highly strategic assets for Waste Connections.
With the addition of these companies, Waste Connections becomes
vertically integrated in its most important marketplace and can
immediately internalize over 600 tons per day. In addition, we
now have no exposure to changes in either the ownership of this
landfill or changes in the Washington regulatory structure. We
plan to integrate additional volumes into these facilities over
the next quarter. With the addition of a major regional disposal
facility, Waste Connections is now a significant fully integrated
presence in the Pacific Northwest."
"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 300,000 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.
2/16/99
CONTACT:
Waste Connections, Inc., (916) 772-2221
Steven F. Bouck
Chief Financial Officer
EXHIBIT 99.2
WASTE CONNECTIONS ANNOUNCES CLOSING OF $25 MILLION OF ACQUISITION
REVENUE AND EXPANSION OF CREDIT FACILITY TO $225 MILLION
ROSEVILLE, CA, April 5, 1999 - Waste Connections, Inc.
(NASDAQ:WCNX) announces today that it has closed on the
acquisitions of fourteen companies with annualized revenues of
approximately $25 million, including the previously pending
acquisition of Columbia Resource Corporation ("CRC") and Finley
Buttes Landfill. The transactions, with the exception of CRC and
Finley Buttes, consist of tuck-in acquisitions to the Company's
existing operations. They include three collection companies in
Utah with approximately $4.2 million in annual revenues, two
collection companies in Oregon with approximate annual revenues
of $600,000, four collection companies in Nebraska with
approximate annual revenues of $2.1 million, two collection
companies in Kansas with approximate annual revenues of $400,000
and two collection companies in South Dakota with approximate
annual revenues of $2.5 million. As previously announced, the
acquisition of CRC and the Finley Buttes regional landfill
vertically integrates the Company in its largest market of
Southern Washington.
In addition, Waste Connections is also announcing today that it
has closed a new $225 million, five year revolving credit
facility with a syndicate of ten banks, led by BankBoston N.A.
The new revolving credit facility modifies certain covenants and
provides more flexibility with respect to acquisitions.
Ronald J. Mittelstaedt, President and Chief Executive Officer of
Waste Connections, Inc. said, "The impact of CRC and Finely
Buttes to the development of the Company cannot be underestimated
- - - this was a very strategic acquisition for Waste Connections.
In addition, the other transactions represent what we consider to
be a normal profile for our Company: Small tuck-in acquisitions
in the secondary markets of the Western U.S with a high
percentage of exclusive revenues. These transactions bring the
Company's current annualized revenue to approximately $150
million. With the closing of this approximately $25 million in
acquisition revenues and the previously announced closing of the
Murrey's Companies on January 19th, 1999, the Company actually
closed approximately $60 million of revenue in the first quarter
of 1999. Our acquisition backlog continues to be brisk as we
move forward into the second quarter. We're extremely pleased
with the expansion of our credit facility as it allows us to
continue to pursue our acquisition based growth strategy."
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 315,000 commercial,
industrial and residential customers. Waste Connections, Inc.
was founded in September 1997 and is headquartered in Roseville,
California.
The matters discussed in this news release include certain
forward-looking statements that involve specific risks and
uncertainties, which could cause actual results to differ
materially from those forward-looking statements, including the
risks and uncertainties detailed in the Company's filings with
the Securities and Exchange Commission. The Company makes no
commitment to disclose any revisions to forward-looking
statements, or any facts, events or circumstances after the date
of this release that may bear upon forward-looking statements.
CONTACT:
Waste Connections, Inc. (916) 772-2221
Steven F. Bouck
Chief Financial Officer
CSR\5119\028\1039636.01
58
