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) November 17, 1999
WASTE CONNECTIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-23981
(Commission File Number)
94-3283464
(IRS Employer Identification No.)
620 Coolidge Drive, Suite 350, Folsom, California 95630-3155
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (916) 608-8200
2260 Douglas Boulevard, Suite 280, Roseville, California 95661
(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 November 17, 1999, Waste Connections, Inc., a Delaware
corporation ("WCI"), acquired all of the outstanding capital stock
of Denver Regional Landfill, Inc. ("DRL"), a Colorado corporation
wholly owned by Allied Waste Systems Holdings, Inc., a wholly owned
subsidiary of Allied Waste Industries, Inc. On the same date,
Waste Connections of Colorado, Inc. ("WCIC"), a Delaware
corporation that is a wholly owned subsidiary of WCI, acquired
certain assets from Allied Waste Transportation Inc. ("AWT"), which
is wholly owned by Allied Waste Industries, Inc.
DRL operates a solid waste landfill in Erie, Colorado and owns
certain real property in connection with that business. The
assets of AWT acquired by WCIC consist of real property in Colorado
and solid waste landfills, transfer stations and hauling operations
connected with that property (the "Business"). WCI intends to
continue these solid waste handling, transportation and disposal
businesses in Colorado.
The aggregate consideration consisted of approximately $23
million in cash. The consideration 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 DRL and the Business 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 December 2, 1999.
(b) Pro Forma Financial Information.
Pro forma financial information relating to DRL and the
Business 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 December 2,
1999.
Exhibits:
10.1 Stock Purchase Agreement dated as of October 15, 1999,
by and among Waste Connections, Inc., Allied Waste
Systems Holdings, Inc. and Allied Waste Industries,
Inc.
10.2 Asset Purchase Agreement dated as of October 15, 1999,
by and among Waste Connections of Colorado, Inc.,
Allied Waste Transportation, Inc., BFI Services Group,
Inc. and Allied Waste Industries, Inc.
10.3 Closing Agreement dated as of November 17, 1999, by and
among Waste Connections, Inc., Allied Waste Systems
Holdings, Inc., Allied Waste Industries, Inc. and Denver
Regional Landfill, Inc.
10.4 Agreement dated as of November 17, 1999, among Waste
Connections of Colorado, Inc., Allied Waste
Transportation, Inc., BFI Services Group, Inc. and
Allied Waste Industries, Inc.
99.1 Press release of WCI dated November 17, 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: November 24, 1999 By /s/ Steven F. Bouck
Steven F. Bouck
Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
10.1 Stock Purchase Agreement dated as of October 15, 1999, by
and among Waste Connections, Inc., Allied Waste Systems
Holdings, Inc. and Allied Waste Industries, Inc.
10.2 Asset Purchase Agreement dated as of October 15, 1999, by
and among Waste Connections of Colorado, Inc., Allied
Waste Transportation, Inc., BFI Services Group, Inc. and
Allied Waste Industries, Inc.
10.3 Closing Agreement dated as of November 17, 1999, by and
among Waste Connections, Inc., Allied Waste Systems
Holdings, Inc., Allied Waste Industries, Inc. and Denver
Regional Landfill, Inc.
10.4 Agreement dated as of November 17, 1999, among Waste
Connections of Colorado, Inc., Allied Waste
Transportation, Inc., BFI Services Group, Inc. and
Allied Waste Industries, Inc.
99.1 Press release of WCI dated November 17, 1999
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
Among
WASTE CONNECTIONS, INC.
(Buyer)
and
ALLIED WASTE SYSTEMS HOLDINGS, INC.
(Seller)
and
ALLIED WASTE INDUSTRIES, INC.
(Parent)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is executed and
delivered as of October 15, 1999, among WASTE CONNECTIONS, INC., a
Delaware corporation ("Buyer"); ALLIED WASTE SYSTEMS HOLDINGS,
INC., a Delaware corporation ("Seller"); and ALLIED WASTE
INDUSTRIES, INC., a Delaware corporation ("Parent").
WHEREAS, Seller is the sole shareholder of Denver
Regional Landfill, Inc., a Colorado corporation (the "Company");
and
WHEREAS, the Company operates a fully permitted landfill in Erie,
Colorado (the "Business"); and
WHEREAS, in connection with operating the Business the Company owns
the real property more fully set forth on Exhibit A attached hereto
and made a part hereof (together with the improvements and fixtures
thereon, the "Owned Land");
WHEREAS, also in connection with operating the Business, the
Company leases the real property more fully set forth on Exhibit B
attached hereto and made a part hereof (the "Leased Land", and with
the Owned Land, collectively, the "Land");
WHEREAS, Parent owns (directly or indirectly) all of the issued and
outstanding shares of the capital stock of the Seller;
WHEREAS, Parent is subject to that certain Final
Judgment, filed July 20, 1999 with the United States District Court
for the District of Columbia, Civil No. 1:99CV01962 (the "Final
Judgment"), pursuant to which Parent is required to divest certain
assets, including the Business;
WHEREAS, in accordance with the terms of the Final
Judgment, Buyer desires to purchase and acquire all of the issued
and outstanding shares of the Company, and Seller desires to sell
such shares of the Company to Buyer, all in accordance with the
terms and conditions set forth in this Agreement;
WHEREAS, Buyer is unwilling to enter into this Agreement without
the covenants and promises of Parent herein set forth;
WHEREAS, Parent desires that Buyer acquire all of the issued and
outstanding shares of the capital stock of the Company upon the
terms and subject to the conditions set forth in this Agreement
and, in order to induce Buyer to enter into this Agreement, is
willing to make the covenants and promises herein set forth;
WHEREAS, in connection with entering into this Agreement, Parent
and Buyer desire to enter into that certain Asset Purchase
Agreement among Buyer, Waste Connections of Colorado, Inc., a
Delaware corporation, Allied Waste Transportation, Inc., a Delaware
corporation, Inc., and Parent dated as of the date hereof (the
"Asset Purchase Agreement").
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and other good and valuable
consideration, received to the full satisfaction of each of them,
the parties hereby agree as follows:
ARTICLE 1. DELIVERY OF SHARES; ENDORSEMENT OF COMPANY STOCK
Section 1.1. Delivery of Shares. Upon the terms and subject to
the conditions set forth in this Agreement, Seller shall, at the
Closing (hereinafter defined), sell, assign, transfer and deliver
to Buyer certificates representing all of the issued and
outstanding shares of capital stock of the Company (the "Company
Stock"). Seller shall transfer the Company Stock to Buyer free and
clear of all liens, security interests, encumbrances, adverse
claims, pledges, charges, voting trusts, equities and other
restrictions on transfer of any nature whatsoever (collectively,
"Adverse Claims").
Section 1.2. Endorsement of the Company Stock. Seller shall
deliver at Closing the certificates representing the Company Stock,
duly endorsed in blank by or accompanied by stock powers duly
endorsed in blank and with all necessary transfer tax and other
revenue stamps, acquired at Seller's expense, affixed and canceled.
Seller, at its sole expense, agrees to cure (both before and after
Closing) any deficiencies with respect to the endorsement of the
certificates or other documents of conveyance with respect to the
Company Stock or with respect to the stock powers accompanying the
Company Stock.
Section 1.3. Description of Assets. Seller and Buyer acknowledge
that the following assets, properties and contractual rights of the
Company (hereinafter sometimes collectively called the "Assets"),
wherever located, are intended to continue to be owned by the
Company after the Closing, subject to the exclusions hereinafter
set forth:
(a) the Land (including all credits, buildings, fixtures,
personalty and improvements located thereon, easements, interests,
rights, tenements, hereditaments, and appurtenances held by the
Company that in any way benefit the Land or the improvements
thereon or related to the Business, all mineral, water, and
irrigation rights, and the Company's interests in any roadway
adjoining the Land and any rights or interests that may accrue to
the benefit of the Company or the Land as a result of the
abandonment thereof) or, if the Land is leased, all of the
Company's leasehold interest in and to the Leased Land;
(b) all permits, licenses, consents and approvals of every kind
necessary to operate the Business (the "Permits");
(c) all equipment used or for use in the Business and owned or
leased by the Company (the "Equipment"), including the equipment
listed on Schedule 1.3(c), attached hereto and made a part hereof;
(d) all of the motor vehicles used or for use in the Company's
operation of the Business and owned or leased by the Company, and
all attachments, accessories and materials handling equipment now
located in or on such motor vehicles, including all radios and the
radio base station, if any (the "Rolling Stock"), as the same are
more completely described by manufacturer, model number and model
year on Schedule 1.3(d), attached hereto and made a part hereof;
(e) all of the Company's manual and automated billing and
accounting systems and components thereof, including all computer
hardware, transferable software and transferable programs used or
for use in the Business;
(f) all of the Company's inventory of parts, tires and accessories
of every kind, nature, and description used or for use in the
Business (the "Inventory");
(g) all right, title and interest of the Company in and to all
trade secrets, proprietary rights, symbols, trademarks, service
marks, logos and trade names used in the Business and owned by the
Company (including the name "Denver Regional Landfill"), except
those symbols, trademarks, service marks, logos and trade names
that include the names of or otherwise identify Seller or Parent;
(h) all contractual rights of the Company with the Company's
customers (whether oral or in writing) relating to the Business
(the "Customer Contracts"), all commitments, lists, leases,
permits, licenses, consents, approvals, franchises and other
instruments relating to the Customer Contracts (the "Related
Approvals"), all collective bargaining agreements with any union
and all employment agreements entered into by the Company,
including those identified on Schedule 1.3(h) (which shall not
include any employee benefit plans) (the "Employee Contracts"). A
complete and accurate list of the Customer Contracts which account
for 5% or more of the Company's revenues, the Related Approvals,
and the Employee Contracts is set forth on Schedule 1.3(h),
attached hereto and made a part hereof;
(i) all right, title, and interest of the Company in and to the
telephone number(s) used in the operation of the Business;
(j) all of the Company's shop tools, nuts and bolts relating to
the Company's operation of the Business;
(k) all accounts receivable of the Company ("Accounts Receivable")
as of the close of business on the Closing Date (hereinafter
defined); and
(l) all of the goodwill of the Company.
Section 1.4. Excluded Assets. The parties agree that certain
assets (the "Excluded Assets") of the Company shall remain the
property of Seller or its affiliates and shall not be assets of the
Company as of the Closing. Such Excluded Assets are as follows:
(a) all cash on hand and on deposit of the Company, except as set
forth in Section 1.6 hereof; (b) all, if any, real property and all
buildings on and fixtures to all real property of the Company other
than set forth in Section 1.3(a); (c) all contracts and contract
rights and obligations of the Company (whether oral or in writing)
other than the Customer Contracts, the Related Approvals, the
Employee Contracts and the Permits and all commitments, lists,
leases, permits, licenses, consents, approvals, franchises and
other instruments not relating to the Customer Contracts, the
Related Approvals, the Employee Contracts, the Permits or the
Business; and (d) all motor vehicles of the Company which are not
Rolling Stock.
Section 1.5. Non-Assignment of Certain Customer Contracts.
Notwithstanding anything to the contrary in this Agreement, to the
extent that the sale of the Company Stock hereunder shall
constitute an indirect assignment of a Customer Contract or a Real
Estate Lease requiring the consent of any third party to a Customer
Contract or a Real Estate Lease, neither this Agreement nor any
action taken pursuant to its provisions shall constitute an
indirect assignment or an agreement to assign if such indirect
assignment or attempted assignment would constitute a breach
thereof or result in the loss or diminution thereof; provided,
however, that in each such case, Seller shall use reasonable
efforts to assist Buyer to obtain the consent of such other party
to such indirect assignment to Buyer. If such consent is not
obtained, however, Seller shall have no liability or obligation to
Buyer related thereto.
Section 1.6. Proration of Cash on Hand. The parties shall
prorate, as of the close of business on the Closing Date, all cash
on hand or on deposit with the Company consisting of sums paid to
the Company pursuant to the advance billing practice of the Company
or otherwise representing a prepayment to the Company of services
to be rendered after the Closing. Seller shall be entitled to all
such sums allocable to services performed on or before the close of
business on the Closing Date and Buyer shall be entitled to all
such sums allocable to services to be performed thereafter.
ARTICLE 2. PURCHASE PRICE
Section 2.1. Purchase Price. Subject to adjustment pursuant to
Section 2.2, at the Closing Buyer shall pay to Seller for the
Company Stock the aggregate sum of $4,000,000 (the "Purchase
Price").
Section 2.2. Purchase Price Adjustments.
(a) Debt Adjustment. The Purchase Price shall be reduced at
Closing by an amount equal to the Company Debt, if any, paid or
assumed by Buyer at Closing. This adjustment is referred to as the
"Debt Adjustment." "Company Debt" means indebtedness for borrowed
money having a maturity or due date in excess of one year,
including the current and long-term portions of bank debt,
mortgages, shareholder loans or notes payable, notes or loans
payable, and remaining payments on capitalized and non-capitalized
equipment leases.
(b) Working Capital Adjustment. The Company's ratio of current
assets to current liabilities (exclusive of current portions of
long-term debt) shall not be less than 1.0 to 1.0 as of the Closing
Date. The terms "Current Assets" and "Current Liabilities" shall
have the meanings assigned to them under generally accepted
accounting principles. If, as of the Closing Date, Current
Liabilities exceed Current Assets, the amount of such excess shall
be deducted from the cash portion of the Purchase Price. If, as of
the Closing Date, Current Assets exceed Current Liabilities, the
amount of such excess shall be added to the cash portion of the
Purchase Price. Any such adjustment is referred to as the "Working
Capital Adjustment" and is referred to collectively with the Debt
Adjustment as the "Purchase Price Adjustments." Within 60 days
after the Closing, Buyer shall deliver to Seller a statement
setting forth the amount of the proposed Working Capital
Adjustment. Subject to Section 2.2(c), if the Working Capital
Adjustment is a positive amount, Buyer shall promptly pay to Seller
such amount. Subject to Section 2.2(c), if the Working Capital
Adjustment is a negative amount, Seller shall promptly pay to Buyer
such amount.
(c) Disputes. If Seller disagrees with the proposed Working
Capital Adjustment, then the parties will have 45 days to resolve
the dispute between themselves. If the parties have not resolved
such dispute within such 45-day period, then Buyer and Seller shall
submit the dispute to arbitration in accordance with the fast track
procedures of the American Arbitration Association. Each of the
parties to this Agreement agrees to be bound by the decision
reached in such arbitration. All costs of the arbitration shall be
paid by the party determined by the arbitrator(s) to be the non-
prevailing party.
ARTICLE 3. CLOSING
Section 3.1. Time and Place of Closing. Unless otherwise agreed
to by the parties hereto, this transaction shall be closed within
five business days after the completion, satisfaction or waiver of
each of the conditions to closing set forth in Articles 8 and 9
(the "Closing"). The Closing shall take place at the offices of
Fennemore Craig, P.C., 3003 North Central Avenue, Suite 2600,
Phoenix, Arizona 85012. The date on which the Closing occurs shall
be referred to as the "Closing Date".
Section 3.2. Deliveries by Seller and Parent. At the Closing,
Seller and Parent shall deliver to Buyer, all duly executed:
(a) the Company Stock as required by Section 1.1 hereof;
(b) subject to Section 3.8, the Title Policy provided for in
Section 3.4;
(c) the Solid Waste Disposal Agreement in substantially the form
provided in Exhibit C;
(d) certified copies of resolutions of the shareholder(s) (if
required) and director(s) of Seller and Parent authorizing the
execution of this Agreement and the consummation of the
transactions contemplated herein;
(e) the written resignation of all officers and directors of the
Company;
(f) such other separate instruments of sale, assignment, or
transfer reasonably required by Buyer or the Title Company (as
defined in Section 3.4); and
(g) such other documents reasonably requested by Seller and
Parent.
Section 3.3. Deliveries by Buyer. At the Closing, Buyer shall
deliver to Seller, all duly and properly executed (where
applicable):
(a) the Purchase Price provided in Section 2.1, by wire transfer
of immediately available funds;
(b) a certified copy of resolutions of the director(s) and
shareholder(s) (if required) of Buyer authorizing the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein;
(c) the Solid Waste Disposal Agreement in substantially the form
provided in Exhibit C; and
(d) such other documents reasonably requested by Seller and
Parent.
Section 3.4. Title Policy. Seller shall furnish to Buyer one or
more extended coverage policies of title insurance from a title
company selected by Buyer and reasonably acceptable to Seller (the
"Title Company") in the amount to be agreed upon between Buyer and
Seller with each of the Title Company's standard printed exceptions
deleted and including such endorsements reasonably requested by
Buyer and that are available in the state where the Land is
located, insuring leasehold or fee simple title, whichever is
applicable, to the Land to be in the Company subject only to the
exceptions permitted by Section 3.5 hereof (the "Title Policy");
provided, however, that no Title Policy shall be required for any
Leased Land not used as a landfill or transfer station. Seller
shall deliver to Buyer a preliminary title commitment in respect of
the Land (including Leased Land used for purposes other than a
landfill or transfer station), together with copies of all
exception instruments referenced therein, and any unrecorded
leases, option agreements, contracts and any other items affecting
title which are in the possession of, or known to, Seller. Such
commitment and other documents shall be provided to Buyer within 30
days after the execution of this Agreement and at least 10 days
before the Closing so that the Title Policy can be issued
simultaneously with the Closing. Seller's obligations under this
Section are subject to Section 3.8.
Section 3.5. Permitted Encumbrances. The Title Policy shall
insure the Company's interest in the Land to be free and clear of
all encumbrances whatsoever except: (i) zoning ordinances and
regulations which do not, in Buyer's judgment, adversely affect the
Company's use of the Land for its current uses after Closing; (ii)
real estate taxes and assessments, both general and special, which
are a lien but are not yet due and payable at the Closing Date;
(iii) easements, encumbrances, covenants, conditions, reservations
and restrictions of record, if any, as have been approved in
writing by Buyer prior to the Closing Date; and (iv) in the case of
Leased Land, the Real Estate Lease. Seller on the one hand and
Buyer on the other hand shall split equally all of the costs
associated with the delivery of the Title Policy to Buyer.
Section 3.6. Termination of Non-Competition Agreement with Bob
Mager. On or after the Closing Date, Buyer or one of its
affiliates may hire Bob Mager ("Mager"), who is currently employed
by Parent or one of its affiliates. Parent, on behalf of itself
and its affiliates, agrees that Buyer may hire Mager and that
effective on such hire, the Non-Competition Agreement dated January
19, 1999 between Summit Waste and Mager shall terminate and be of
no further force or effect, including the provisions of Section 1
thereof.
Section 3.7. Prorations and Charges. The parties shall prorate
and apportion, on a calendar year basis, as of the close of
business on the Closing Date, the real estate taxes and
assessments, both general and special, for the Land, based upon the
last available tax duplicate. If the actual real estate taxes paid
by Buyer in respect of the period of the proration exceed the
credit given Buyer at closing for such taxes, Seller shall, upon
presentation of appropriate paid tax bills, reimburse Buyer for any
amounts incurred by Buyer for such taxes in excess of prorated
credit. In addition, Seller shall be charged the following closing
costs: (i) the state and local real estate transfer taxes and
conveyance fee; and (ii) the cost of discharging any and all
mortgages on the Owned Land.
Section 3.8. Post Closing Title Work. Notwithstanding
anything herein to the contrary, if as of the Closing Buyer has not
yet received (i) a Title Commitment and all Schedule B items and
other matters disclosed therein and/or (ii) had the time permitted
under Section 3.5 to review same and/or (iii) a landlord's consent
to an assignment of a Real Estate Lease, with respect to Leased
Land or (iv) a replatting of the Land if Seller is conveying less
than 100% of such land pursuant to this Agreement, Buyer shall have
the right to either (a) elect to close with respect to such Land;
provided Seller agrees in writing at the Closing to provide such
missing items promptly after the Closing, or (b) delay the Closing
with respect to such parcel of Land only and close with respect to
such Land when the missing items are obtained, with (1) Buyer and
Seller to execute an agreement at Closing regarding the payment of
the purchase price for such parcel(s); (2) the representations and
covenants of Seller with respect to the applicable Land continuing
until the extended closing date; and (3) Section 11.1 commencing as
of the extended Closing Date of the applicable Land.
ARTICLE 4. POST CLOSING COVENANTS
Section 4.1. Removal of Identification. Within six months after
Closing, Buyer shall remove from the Assets all visible names,
symbols, trade names, service marks and logos of Seller or Parent
other than the names specifically identified in Section 1.3(g), if
any.
Section 4.2. Further Assurance. From time to time on and after
the Closing and without further consideration, the parties hereto
shall each deliver or cause to be delivered to any other party at
such times and places as shall be reasonably requested, such
additional instruments as any of the others may reasonably request
for the purpose of carrying out this Agreement and the transaction
contemplated hereby. Parent, also without further consideration,
agrees to cooperate with Buyer and to use its reasonable efforts to
have the officers and employees of Seller cooperate on and after
the Closing Date in furnishing to Buyer information, evidence,
testimony, and other assistance in connection with obtaining all
necessary permits and approvals and in connection with any actions,
proceedings, arrangements or disputes of any nature with respect to
matters affecting the Company and pertaining to all periods prior
to the Closing Date.
Section 4.3. Transition. Neither Seller nor Parent will take any
action that is designed or intended to have the effect of
discouraging any customer or business associate of the Company from
maintaining the same business relationships with Buyer after the
Closing that it maintained with the Company before the Closing.
Seller and Parent will refer all customer inquiries relating to the
Business to Buyer from and after the Closing. Further, Seller and
Parent agree that for a period of 90 days following the Closing
Date, they will, without additional consideration, assist Buyer
with the orderly transition of the operations of the Business from
Seller to Buyer.
Section 4.4. Taxes.
(a) Seller agrees that it shall be responsible, at its sole
expense, for the preparation of the Company's federal, state, local
and other income and franchise tax returns for the tax periods
beginning January 1, 1999 and ending on the Closing Date. Buyer
agrees to cooperate with Seller in the preparation of such returns.
Seller further agrees that it shall pay all taxes (including all
penalties and interest, if any) due for such tax period. Prior to
filing the returns provided for in this paragraph, Seller agrees to
allow Buyer 20 business days to review such returns.
(b) Seller agrees to make a timely Section 338(h)(10) election
pursuant to Regulation 1.338(h)(10)-1(d) jointly with Buyer with
respect to the acquisition of the Company Stock on Form 8023A and
in accordance with the instructions to such Form. Seller further
agrees to report on its tax return the deemed sale gain resulting
from such election in accordance with Section 338 and Regulation
1.338(h) (10)-1(e). Seller shall submit to Buyer for its review
and approval a proposed valuation of the Assets deemed to have been
sold at least 60 days prior to the due date for filing any tax
return reporting such deemed sale gain. The parties agree to
negotiate in good faith such valuation. Seller agrees to indemnify
Buyer against any additional taxes that are incurred by Buyer as a
result of the Section 338(h)(10) election.
Section 4.5. Bound by Final Judgment. Buyer
acknowledges receipt of a copy of the Final Judgment and agrees to
be bound by the provisions thereof as required by Section III(B) of
the Final Judgment.
Section 4.6 Agreement Not To Assert Challenges to
Rights. Seller and Parent agree that they will not, directly or
indirectly following the Closing, assert any challenges to any of
the Rights (as defined in Section 5.3) pertaining to the Assets.
Section 4.7 Reimbursement of Closure and Post-Closure
Costs.
(a) Parent and Seller, jointly and severally, shall be fully
liable for, and shall indemnify and hold the Company and Buyer
harmless from and against, all closure, post-closure and capping
costs (the "Closure Costs"), if any, necessary or required to
comply with all applicable environmental laws and regulations, and
all permit and land use conditions (including without limitation
general maintenance, monitoring, remediation and regulatory
compliance, installation, maintenance and operation of wells,
drainage facilities, gas, electrical and other systemic processes,
preparation of surveys and reports, addressing geological issues,
and responding to storm erosion and other conditions caused by
weather), with respect to the landfill sites described on Annex III
(the "Landfill Sites"), all of which were owned or operated by the
Company or another of Parent's Affiliates prior to the Closing
Date. For the period from the date of this Agreement through
December 31, 1999, and thereafter for each calendar quarter (each,
a "Compliance Period"), Seller shall notify the Company at least 10
days prior to commencement of such Compliance Period whether it
elects to pay Closure Costs expected to be incurred during such
Compliance Period (i) directly or (ii) through reimbursement of the
Company and Buyer. If Seller elects to pay such Closure Costs
directly, Buyer shall, or shall cause Company to, promptly send to
Seller invoices for all Closure Costs incurred during the
Compliance Period, and Seller or Parent shall promptly pay such
Closure Costs directly. If Seller fails to pay such costs when
due, the Company or Buyer may pay the same and be reimbursed by
Parent and Seller. If Seller elects to reimburse the Company or
Buyer for such costs, then, within 20 days after the end of each
Compliance Period, the Company or Buyer on its behalf shall submit
to Seller a detailed list of the Closure Costs paid or incurred by
the Company or Buyer during such Compliance Period, together with
such detailed receipts or other supporting materials as Seller
shall reasonably request. Within 30 days after receipt of such
list of Closure Costs, Seller or Parent shall reimburse the Company
or Buyer, as the case may be, for the full amount of such Closure
Costs plus interest at the rate of seven and one-half percent (7-
1/2%) per annum from the date the Company or Buyer paid such
Closure Costs through the date they are reimbursed by Seller. Any
amount not paid within 30 days after receipt of such list of
Closure Costs shall be subject to a late charge equal to the lower
of one and one-half percent (1-1/2%) per month or the maximum rate
permitted by applicable law. Buyer shall provide Seller periodic
reports of anticipated material expenditures, and Seller shall have
the right to inspect work giving rise to Closure Costs upon
reasonable notice during normal business hours. If Seller disputes
any of such Closure Costs, Seller or Parent shall nevertheless pay
the amount not in dispute within such 30-day period and the parties
shall attempt to resolve their differences with respect to the
amount in dispute. If they are unable to resolve their differences
within 60 days after Seller's receipt of such list of Closure
Costs, they shall submit the matter to binding arbitration in
accordance with Section 2.2(c).
(b) Parent and Seller shall execute and deliver to Buyer a
Guaranty in the form of Exhibit D hereto, securing their
obligations under Section 4.7(a) hereof until the Landfill Sites
have been closed and all Closure Costs required to be paid or
reimbursed to the Company or Buyer pursuant to Section 4.7(a) have
been paid or reimbursed.
Section 4.8 Termination of Non-competition Agreements.
Buyer and certain of its affiliates are parties to various non-
competition agreements and arrangements with Browning-Ferris
Industries, Inc. and/or its affiliates (collectively, "BFI") listed
on Annex IV. As additional consideration for Parent's and Sellers'
execution and delivery of this Agreement and the Agreements listed
on Annex II, Buyer hereby agrees, on behalf of it and its
affiliates, that, upon the Closing of this Agreement: (i) all non-
competition agreements and arrangements between Buyer and/or its
affiliates and BFI listed on Annex IV are terminated and are of no
further force or effect; and (ii) Buyer, on behalf of it and its
affiliates, forever waives, releases and discharges any and all
claims it has or may have against BFI under any such non-
competition agreement or arrangement, including all claims arising
after the date hereof through the Closing Date.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT.
Seller and Parent, jointly and severally, represent and warrant to
Buyer that, except as set forth in the schedules to Sections of
this Article 5 to be delivered by Seller and Parent to Buyer in
accordance with Section 9.8 (such schedules hereinafter
collectively referred to as the "Disclosure Schedules" and,
individually, as a "Disclosure Schedule"), the statements contained
in this Article 5: (i) are correct and complete as of the date of
this Agreement; (ii) except as set forth in the Disclosure
Schedules, will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted
for the date of this Agreement throughout this Section 5); and
(iii) shall survive the Closing in accordance with Section 11.1
hereof.
Wherever a representation or warranty herein is qualified as having
been made "to the best of Seller's and Parent's knowledge", such
phrase shall mean the knowledge of the officers, directors and
employees of the Company, Seller and Parent having significant
responsibility for the operation of the Business, without inquiry.
Section 5.1. Organization; Authority.
(a) Each of Seller and Parent is a corporation duly organized,
validly existing and in good standing under the laws of the state
of its incorporation and is duly authorized, and qualified and
licensed under all laws, regulations, ordinances and orders of
public authorities, to carry on its businesses in the places and in
the manner as presently conducted except for where failure to be so
authorized, qualified or licensed would not have a material adverse
affect on such corporation's business. Copies of Seller's
Certificate of Incorporation (certified by the Secretary of State
of Delaware) and Bylaws (certified by the Secretary of Seller) ,
each as amended, are attached hereto as Schedule 5.1.
(b) Seller and Parent each have the full legal right, power and
authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. On or before the
Closing, all corporate action of Seller and Parent necessary to
approve the sale of the Company Stock by Seller shall have been
taken, including director and shareholder approvals, if necessary.
This Agreement has been, or prior to the Closing Date will have
been, duly authorized, and has been duly executed by Parent and
Seller and is the binding and valid obligation of Parent and
Seller, enforceable against each of them in accordance with its
terms.
(c) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the state of its
incorporation and is duly authorized, and qualified and licensed
under all laws, regulations, ordinances and orders of public
authorities to carry on its businesses in the places and in the
manner as presently conducted except for where failure to be so
authorized, qualified or licensed would not have a material adverse
affect on the Company's Business. Copies of the Company's Articles
or Certificate of Incorporation (certified by the appropriate
governmental authority) and Bylaws (certified by the Secretary of
the Company), each as amended, are attached hereto as Schedule 5.1.
Section 5.2. Stock Ownership; Capitalization. The
authorized equity securities of the Company and the number of
shares of the Company which are issued and outstanding are as set
forth on Annex I. Seller is and will be on the Closing Date the
sole record and beneficial owner and holder of the Company Stock,
free and clear of all Adverse Claims. No legend or other reference
to any purported encumbrance appears upon any certificate
representing the Company Stock. All of the shares of the Company
Stock have been duly authorized and validly issued and are fully
paid and nonassessable, were offered, issued, sold and delivered by
the Company in compliance with all state and federal laws
concerning the issuance of securities and none of such shares were
issued pursuant to awards, grants or bonuses nor in violation of
the preemptive rights of any past or present stockholder. The
stock transfer records provided by Parent and Seller to Buyer
correctly set forth all issuances, acquisitions and retirements of
the Company Stock since the inception of the Company. The Company
has never acquired any treasury stock. No subscriptions, options,
warrants, puts, calls, conversion rights or other commitments of
any kind exist which obligate the Company to issue any of its
authorized but unissued capital stock or otherwise relate to the
sale or transfer by the Company of any securities of the Company
(whether debt or equity). In addition, the Company has no
obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its equity securities or any interests
therein or to pay any dividend or make any distribution in respect
thereof. The Company has not agreed to register any securities
under the Securities Act of 1933, as amended (the "Act"), or under
any state securities law.
Section 5.3 Permits; Proprietary Rights; Environmental
Documents. Attached as Schedule 5.3 is, to the best of Seller's
and Parent's knowledge, a complete and accurate list as of the date
hereof of all Permits, permit applications, titles (excluding motor
vehicle titles and current registrations identified on Schedule
1.3(d)), fuel permits, licenses, franchises, certificates,
trademarks, trade names, service marks, patents, patent
applications and copyrights owned or held by the Company related to
the Assets (collectively, the "Rights"), none of which Rights, to
the best of Seller's and Parent's knowledge, infringe on the rights
of others and all of which, to the best of Seller's and Parent's
knowledge, are now valid, in good standing and in full force and
effect. Except as set forth on Schedule 5.3, there are no material
defects in any Rights and such Rights are adequate for the
Company's operation of the Business as presently constituted.
Section 5.4 Personal Property.
(a) Listed on Schedule 1.3(c) hereto is a complete and
accurate list of all Equipment. As of the Closing Date, each piece
of Equipment will be operational and in a condition that is at
least equal to the condition of such equipment as of the date of
this Agreement.
(b) Listed on Schedule 1.3(d) hereto is a complete and
accurate list of all Rolling Stock. As of the Closing Date, each
motor vehicle, attachment, accessory and piece of materials
handling equipment comprising the Rolling Stock will be operational
and in a condition that is at least equal to the condition of such
equipment as of the date of this Agreement.
(c) All of the Assets are either owned by the Company or leased
under an agreement indicated on Schedule 5.4(c). All leases set
forth on Schedule 5.4(c) are in full force and effect and
constitute valid and binding agreements of the parties (and their
successors) thereto in accordance with their respective terms. No
default by the Company or, to the best of Seller's and Parent's
knowledge, any other party to any of such leases exists or would
exist except for the passage of time or delivery of a notice or
both.
(d) At the Closing and upon Buyer's purchase of the Company Stock
hereunder, subject to the provisions of Section 4.5 and except as
disclosed on Schedule 5.4(d), the Company shall have good and
marketable title to the Assets, free and clear of all debts (except
operating lease payments pursuant to operating leases identified on
Schedule 5.4(d)), liens, encumbrances, security interests, equities
or restrictions whatsoever. The Assets constitute all of the
assets owned by the Company used in the Business and, to the best
of Seller's and Parent's knowledge, include all of the permits,
licenses, franchises, consents and other approvals necessary to
operate the Business prior to Closing. The foregoing
notwithstanding, no representation is made as to the effect of this
transaction on any Permit, some of which may be nontransferable or
require consent to the indirect transfer contemplated by this
transaction.
Section 5.5 Title to Real Property.
(a) The Company has good fee simple marketable title to
the Land, subject only to the matters permitted under Article 3
hereof and marketable title to the Leased Land. Except as set
forth on Schedule 5.5(a), to the best of Seller's and Parent's
knowledge:
(i) At all times during the operation of the
Business, the Land has been licensed, permitted and authorized for
the operation of the Business under all Applicable Laws (as defined
in Section 5.9) relating to the protection of the environment, the
Land and the conduct of the Business thereon (including all zoning
restrictions and land use requirements) and Seller has not received
any notice of any violation of any Applicable Law.
(ii) The Land is usable for its current uses, and,
assuming any necessary regulatory approvals are obtained, the Land
can be used by the Company after the Closing for its current uses
in the manner currently operated by the Company, without violating
any Applicable Law or private restriction, and such uses are legal
conforming uses. There are no proceedings or amendments pending
and brought by, or threatened by, any third party which would
result in a change in the allowable uses of the Land or which would
modify the right of the Company to use the Land for its current
uses after the Closing Date.
(iii) The Company, Parent and Seller have made
available to Buyer all engineering, geologic and other similar
reports, documentation, plats and maps relating to the Land in the
possession or control of the Company, Parent or Seller and all
plans and specifications, as-builts, contracts and warranties in
connection with the improvements thereon.
(iv) The Company, Parent and Seller have delivered
to Buyer all existing leases, occupancy agreements or licenses or
similar agreements and any amendment thereto in connection with the
Land (collectively "Real Estate Leases"). Neither the Company,
Parent nor Seller is in default under any Real Estate Lease.
(v) Except in connection with Leased Land, no party
except the Company has a present or future right to possession of
all or any part of the Land.
(vi) There are no pending or threatened condemnation
or eminent domain proceedings affecting all or any part of the
Land.
(vii) There are no pending or threatened special
assessments affecting the Land, or any contemplated improvements
affecting the Land that may result in special assessments affecting
the Land.
(viii) Neither the Company, Parent nor Seller has
knowledge of any fact or condition which will result in the
termination of any currently existing access to or from the Land
and any public rights of ways and roads.
(ix) No written or oral commitments have been made
to any governmental authority, utility company, or any other
organization, group, or individual, relating to the Land which
would impose an obligation upon the Company or its successors or
assigns to make any contribution or dedications of money or Land or
to construct, install, or maintain any improvements of a public or
private nature on or off the Land.
(x) All utilities serving the Land are supplied
directly to the Land by public utilities through public or private
easements benefiting the Land and are adequate to service the
normal operations of the Land and the operations of the Business.
(xi) The Company, Parent and Seller have not failed
to disclose to Buyer any material adverse fact or condition
regarding the Land.
(xii) There are no unrecorded contracts, leases,
easements or other agreements, or claims of any third party,
affecting the use, title, occupancy or development of the Land, and
no person, firm or entity has any right of first refusal, option or
the right to acquire all or any part of the Land.
(xiii) Seller is not a "foreign person" as the
term is defined in Section 1445 of the Code and any applicable
regulations promulgated thereunder.
(xiv) Seller shall not cause or permit, nor
shall it permit the Company to cause or permit, any lien,
encumbrance, covenant, condition, restriction, assessment,
easement, right of way, obligation, encroachment or liability
("Title Defect") whatsoever to be placed of record, affecting the
title insurance to be given Buyer pursuant to this Agreement or
otherwise exist, from the date of this Agreement to the Closing or
issuance of the Title Policy if as of the Closing the Title Policy
is not issued, excepting, however, the matters permitted under
Article 3 above. If any Title Defect is so placed or recorded or
otherwise exists contrary to the provisions hereof, the effect of
which can be removed and/or eliminated by the payment of money,
Seller shall immediately cause sufficient monies to be deposited
with Buyer so as to enable Buyer to cause such Title Defect to be
eliminated and/or removed of record.
(b) The Company has provided to the government agencies
requiring the same, all reports, notices, filings and other
disclosures required by Applicable Laws and all such reports,
notices, filings and other documents were complete and accurate in
all material respects at the time provided to such government
agencies.
Section 5.6 Contracts. Listed on Schedule 1.3(h) hereto is a
complete and accurate list of the Customer Contracts, Related
Approvals and Employee Contracts as of the date hereof, true and
complete copies of which have been made available to Buyer. To the
best of Seller's and Parent's knowledge, none of the Customer
Contracts, Related Approvals or Employee Contracts listed on
Schedule 1.3(h) has been modified, altered, terminated or otherwise
amended in writing. To the best of Seller's and Parent's
knowledge, all Customer Contracts and Employee Contracts are in
full force and effect and are valid, binding and enforceable
against the respective parties thereto in accordance with their
respective provisions and the Company is not in default in, nor has
there occurred an event or condition (other than Seller's execution
and delivery of or performance under this Agreement) which with the
passage of time or the giving of notice (or both) would constitute
a default, with regard to the payment or performance of any
obligation under any Customer Contract or Employee Contract.
Neither Parent, the Company nor Seller has received any notice that
any person intends or desires to modify, waive, amend, rescind,
release, cancel or terminate any Customer Contract or Employee
Contract. The foregoing notwithstanding, no representation is made
as to the effect of the transactions contemplated by this Agreement
on any Customer Contract or Employee Contract, some of which may
require the consent of the other party thereto to the transactions
contemplated by this Agreement.
Section 5.7 Insurance Policies. Attached as Schedule 5.7 is a
complete and accurate list as of the date hereof of all insurance
policies carried by the Company and an accurate list of all
insurance loss runs and workers' compensation claims in the
Company's possession for the past three policy years. All
insurance policies are in full force and effect and shall remain in
full force and effect through the Closing Date. The Company's
insurance has never been canceled and the Company has not been
denied coverage within the last three years.
Section 5.8 Employees and Employee Benefits.
(a) Attached as Schedule 5.8(a) is a complete and
accurate list of all employees of the Company employed in
connection with the Business and their rate of compensation as of
the date hereof (including a breakdown of the portion thereof
attributable to salary, bonus and other compensation,
respectively). Except as set forth on Schedule 5.8, each employee
of the Company is an employee at will. Buyer shall be obligated to
hire, or cause the Company to retain, all current employees of the
Business as of the Closing.
(b) Except as disclosed in Schedule 5.8(b), the Company has never
established or promised to establish any Plan (as defined below)
for the benefit of its employees. With respect to Plans disclosed
in Schedule 5.8(b), the Company will make available to Buyer
correct and complete copies of each such Plan and each material
document prepared in connection with each such Plan. Except as set
forth in Schedule 5.8(b), (i) none of such Plans is a multi-
employer plan within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); (ii) none of such Plans
promises or provides retiree medical or life insurance benefits to
any person; (iii) none of such Plans promises or provides severance
benefits or benefits contingent upon a change in ownership or
control, within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"); (iv) none of such Plans is
or is required to be qualified under Section 401(a) of the Code;
(v) none of such Plans is subject to Title IV of ERISA; and (vi)
the Company has not incurred any liability under, and has complied
in all respects with, the Worker Adjustment Retraining Notification
Act of 1988, as amended, and no fact or event exists that could
give rise to liability under such act. For purposes of this
Agreement, "Plan" means: (i) any employee benefit plan (within the
meaning of Section 3(3) of ERISA) and all bonus, stock option,
stock purchase, restricted stock, incentive, deferred compensation,
retiree medical, dental or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all
employment, termination, severance or other contracts or
agreements, formal or informal, legally binding or not, with
respect to which the Company is a party, with respect to which the
Company has or could have any obligation (whether primary or
secondary) or which are maintained, contributed to or sponsored by
the Company or any member of its controlled group of organizations
within the meaning of Section 414 of the Code for the benefit of
any current or former employee, officer or director of the Company;
and (ii) each employee benefit plan for which the Company could
incur liability under Section 4069 of ERISA in the event such plan
were terminated, or under Section 4212(c) of ERISA, or in respect
of which the Company remains secondarily liable under Section 4204
of ERISA.
Section 5.9 Compliance with Law; No Conflicts.
(a) To the best of Seller's and Parent's knowledge, the Company
has in the past complied in all material respects with, and as of
the date hereof is in material compliance with, all federal, state
and local statutes, laws, rules, regulations, orders, permits
(including zoning restrictions and land use requirements) and
licenses and all administrative and judicial judgments, rulings,
decisions and orders applicable to the Company or the Business
(collectively, the "Applicable Laws"). Neither Seller, the Company
nor Parent has received any notice that the Company is under
investigation or other form of review relating to the Business with
respect to any Applicable Law; and
(b) To the best of Seller's and Parent's knowledge, the execution,
delivery and performance of this Agreement, the consummation of any
transactions herein referred to or contemplated hereby and the
fulfillment of the terms hereof and thereof will not:
(i) conflict with, or result in a breach or violation of the
Certificate of Incorporation or Bylaws of the Company;
(ii) conflict with, or result in a material breach under any
document, agreement or other instrument to which the Company,
Seller or Parent is a party, or result in the creation or
imposition of any lien, charge or encumbrance on any properties of
the Company, Seller or Parent pursuant to: (A) any law or
regulation to which the Company, Seller or Parent, or any of their
respective properties are subject, or (B) any judgment, order or
decree to which the Company, Seller or Parent is bound or any of
their respective property is subject;
(iii) result in termination or any impairment of any
material permit, license, franchise, contractual right or other
authorization of the Company; or
(iv) except with respect to the Final Judgment, and any
consents or filings required under any Permit or Customer Contract,
require notice to, or the consent or approval of, any governmental
authority or agency or other third party in order to remain in full
force and effect.
Section 5.10 Taxes. The Company has filed, or will file, in a
timely manner all requisite federal, state, local and other tax
returns due for all fiscal periods ended on or before the date
hereof and as of the Closing shall have filed in a timely manner
all such returns due for all periods ended on or before the Closing
Date. No federal, state, local or other tax returns or reports
filed by the Company (whether filed prior to, on or after the date
hereof) with respect to the Company will result in any taxes,
assessments, fees or other governmental charges upon the Assets or
Buyer, whether as a transferee of the Assets or otherwise. All
federal, state and local taxes due and payable by the Company have
been paid, including all federal, state and local income, sales,
use, franchise, excise and property taxes. There are no agreements
to extend the statutory period for the assessment of any taxes,
examinations in progress or claims against the Company for federal,
state, local and other taxes (including penalties and interest) for
any period or periods prior to and including the date hereof (and
as of the Closing Date) and no notice of any claim, whether pending
or threatened, for taxes has been received.
Section 5.11 Litigation. Except as set forth on Schedule 5.11,
there is no claim, litigation, action, suit or proceeding, formal
arbitration, informal arbitration or mediation, administrative,
judicial or otherwise, pending or, to the best of Seller's and
Parent's knowledge, threatened, against the Company, Seller or
Parent relating to the Company, the Company Stock or the Assets, at
law or in equity, before any federal, state or local court or
regulatory agency, or other governmental or private authority; no
notice of any of the above has been received by the Company, Seller
or Parent; and, to the best of Seller's and Parent's knowledge, no
facts or circumstances exist which would give rise to any of the
foregoing. Also listed on Schedule 5.11 are all instances where
the Company, Seller or Parent is the plaintiff, or complaining or
moving party in any way related to the Company, the Company Stock
or the Assets.
Section 5.12 Absence of Price Renegotiation Contracts. The
Company is not now a party to any governmental contracts which are
subject to price redetermination or renegotiation.
Section 5.13 Conduct of the Company's Business. Since January 1,
1999, except as disclosed on Schedule 5.13, there has not been any:
(a) change in the authorized capital or equity ownership of the
Company;
(b) work interruption, labor grievance or unfair labor practice
claim filed relating to the Company;
(c) sale or transfer of, or any agreement to sell or transfer, any
of the Assets or any plan, agreement or arrangement granting any
preferential right to purchase or acquire any interest in any of
the Assets, or requiring consent of any party to the transfer and
assignment of any of the Assets;
(d) waiver of any material rights or claims of the Company related
to the Assets;
(e) material breach, amendment or termination of any Customer
Contract;
(f) transaction by the Company outside the ordinary course of its
business;
(g) amendment to the Articles or Certificate of Incorporation or
Bylaws of the Company;
(h) any other material occurrence, event, incident, action or
failure to act outside the ordinary course of business of the
Company; or
(i) any action by the Company, Seller, Parent, or any employee,
officer or agent of the Company, Seller or Parent committing to do
any of the foregoing.
Section 5.14 Hazardous Materials; Disposal Sites. Except as set
forth on Schedule 5.14, to the best of Seller's and Parent's
knowledge, the Company has never owned, leased, had an interest in,
generated, transported, stored, handled, recycled, reclaimed,
disposed of, or contracted for the disposal of, hazardous
materials, hazardous wastes, hazardous substances, toxic wastes or
substances, infectious or medical waste, radioactive waste or
sewage sludges as those terms are defined by the Resource
Conservation and Recovery Act of 1976; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"); the Atomic Energy Act of 1954; the Toxic Substances
Control Act; the Occupational Health and Safety Act; any comparable
or similar state statute; any other Applicable Law or the rules and
regulations promulgated under any of the foregoing, as each of the
foregoing may have been from time to time amended (collectively,
"Hazardous Materials"). To the best of Seller's and Parent's
knowledge, there have been no spills, leaks, deposits or other
releases into the environment or onto or under the Land of any
Hazardous Materials. No liens with respect to environmental
liability have been imposed against the Company or any of the
Assets under CERCLA, any comparable state statute or other
Applicable Law, and no facts or circumstances exist which would
give rise to the same. Further, to the best of Seller's and
Parent's knowledge, no portion of the Land is listed on the CERCLA
list or the National Priorities List of Hazardous Waste Sites or
any similar list maintained by any state and neither the Company,
Seller nor Parent is listed as a potentially responsible party with
respect to the Assets or as a result of the operation of the
Business or the Assets under CERCLA, any comparable state statute
or other Applicable Law, and neither the Company, Seller nor Parent
has received a notice of such listing, and to the best of Seller's
and Parent's knowledge, no facts or circumstances exist which would
give rise to any of the foregoing.
Included on Schedule 5.14 is, to the best of Seller's and Parent's
knowledge, a complete list of the names and addresses of all
disposal sites, other than the Business, at any time now or in the
past utilized by the Company, none of which sites is listed on the
CERCLA list or the National Priorities List of hazardous waste
sites or any comparable state list. No notice of any of the above
has been received by Seller or Parent, and to the best of Seller's
and Parent's knowledge, no facts or circumstances exist which would
give rise to any of the foregoing.
Section 5.15 Underground Storage Tanks. To the best of Seller's
and Parent's knowledge, except as set forth on Schedule 5.15, no
underground storage tanks containing petroleum products or wastes
or other Hazardous Materials regulated by 40 CFR 280 or other
Applicable Laws are currently or have been located on any Land. As
to each such underground storage tank ("UST") identified on
Schedule 5.15, Parent and Seller have provided to Buyer, on
Schedule 5.15:
(a) the location of the UST, information and material,
including any available drawings and photographs, showing the
location, and whether the Company currently owns or leases the
property on which the UST is located (and if the Company does not
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
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 best of Seller's and Parent'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 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 5.15, the Company
has complied with Applicable Laws regarding the installation, use,
testing, monitoring, operation and closure of each UST described on
Schedule 5.15.
Section 5.16 Financial Statements; Books and Records.
(a) The books of account and other financial records of
the Company: (i) have been maintained, and reflect all items of
income and expense and all assets and liabilities required to be
reflected therein, in accordance with good business and accounting
practices; and (ii) are in all material respects complete and
correct, and do not contain or reflect any material inaccuracies or
discrepancies.
(b) There are no liabilities of the Company, other than
liabilities (i) reflected or reserved against on Company's books of
account and other financial records, or (ii) such other liabilities
that do not and could not result in, individually or in the
aggregate, a material adverse effect.
Section 5.17 Corrupt Practices. Neither the Company, Seller
nor Parent has ever made, offered or agreed to offer anything of
value to any employees of any customers of the Company for the
purpose of attracting business to the Company or to any foreign or
domestic governmental official, political party or candidate for
government office or any of its employees or representatives, nor
have they otherwise taken any action which would cause it to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended.
Section 5.18 Representation Concerning Totality of Assets.
The Company owns, leases or has the legal right to use all the
properties and assets, including the Land, the Permits, the
Customer Contracts and the Equipment, used or intended to be used
in the conduct of the Business, and, with respect to contract
rights, the Company is a party to and enjoys the benefit of all
contracts, agreements and other arrangements used or intended to be
used by the Company in or relating to the conduct of the Business.
Except as disclosed in the Disclosure Schedules, the Company has
good and marketable title to, or, in the case of leased or
subleased properties or assets, valid and subsisting leasehold
interests in all such assets and properties, free and clear of all
Adverse Claims except those that do not affect the use or value of
such assets and properties, and such assets and properties
constitute all the properties, assets and rights forming a part of,
used, held or intended to be used in, and necessary in the conduct
of, the Business. If additional assets or rights forming a part
of, used, held or intended to be used in, and necessary in the
conduct of, the Business are identified post-Closing as not having
been adequately included in the assets obtained by Buyer by virtue
of the purchase of the Company Stock, Seller shall promptly
transfer and assign to Buyer such assets or rights as part of the
purchase price and without additional consideration. Any real
property assets so identified shall be transferred and assigned in
accordance with the provisions of Article 3 hereof.
Section 5.19 Complete Disclosure. To the best of Seller's
and Parent's knowledge, this Agreement and the schedules hereto and
all other documents and written information furnished to Buyer and
its representatives pursuant hereto or pursuant to the negotiation
of this transaction or the investigations of Buyer or its employees
or representatives, taken as a whole, do not and will not include
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading. If
Parent or Seller becomes aware of any fact or circumstance which
would change a representation or warranty of Seller or Parent in
this Agreement or any other statement made or document provided to
Buyer, the party with such knowledge shall promptly give notice of
such fact or circumstance to Buyer. None of (i) such notification,
(ii) any pre-closing investigation by Buyer of the Company, the
Assets or the Business, or (iii) the closing contemplated by this
Agreement, shall relieve Parent or Seller of their obligations
under this Agreement, including the representations and warranties
made in this Article 5.
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants that the statements contained in this
Article 6: (i) are correct and complete as of the date of this
Agreement; (ii) will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article
6); and (iii) shall survive the Closing in accordance with Section
11.1.
Section 6.1 Corporate Organization. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws
of the state of its incorporation. Buyer is duly authorized,
qualified and licensed under all applicable laws, regulations and
ordinances of public authorities to carry on its businesses in the
places and in the manner as now conducted except for where the
failure to be so authorized, qualified or licensed would not have a
material adverse affect on such businesses.
Section 6.2 Authority. The officers of Buyer executing this
Agreement have the corporate authority to enter into and bind Buyer
to the terms of this Agreement. On or before the Closing, all
corporate action by Buyer necessary to approve this Agreement and
the transactions contemplated hereby, including both shareholder
and director approvals (if required) shall have been taken.
Section 6.3 No Conflicts. The execution, delivery and
performance of this Agreement, the consummation of any transactions
herein referred to or contemplated hereby and the fulfillment of
the terms hereof and thereof will not:
(a) conflict with, or result in a breach or violation of the
Articles of Incorporation or Bylaws of Buyer;
(b) conflict with, or result in a material breach under any
document, agreement or other instrument to which Buyer is a party,
or result in the creation or imposition of any lien, charge or
encumbrance on any properties of Buyer pursuant to: (A) any law or
regulation to which Buyer or any of its property is subject, or (B)
any judgment, order or decree to which Buyer is bound or any of its
property is subject; or
(c) except with respect to the Final Judgment and any consents or
filings required under any Permit or Customer Contract, require the
consent of, or the filing with any governmental authority or agency
or any other third party in order to remain in full force and
effect.
Section 6.4 Binding Agreement. This Agreement is the binding
and valid obligation of Buyer, enforceable against it in accordance
with its terms.
ARTICLE 7 COVENANTS OF PARENT AND SELLER PRIOR TO CLOSING
Section 7.1 Access to Land and Records. Between the date of
this Agreement and the Closing Date, Seller will cause the Company
to afford to or obtain for the officers and authorized
representatives of Buyer access to all of the Land (including for
the purpose of performing all testing, inspections and other
procedures considered desirable by Buyer), sites, books and records
of the Company, at all reasonable times and upon reasonable notice
and will furnish Buyer with such additional financial and operating
data and other information as to the Assets and the assumed
obligations set forth in Section 10.2 hereof as Buyer may from time
to time reasonably request. Seller will cooperate with Buyer, its
representatives, engineers, auditors and counsel in the preparation
of any documents or other material which may be required in
connection with any documents or materials required by any
governmental agency. Buyer will cause all information obtained in
connection with the negotiation of this Agreement to be treated as
confidential in accordance with the provisions of Article 13
hereof.
Section 7.2 Activities of Seller Prior to Closing. With respect
to the Company and the Assets, between the date of this Agreement
and the Closing Date, Seller will cause the Company to:
(a) maintain the Assets in as good working order and condition as
at present, ordinary wear and tear excepted;
(b) perform all of its obligations under the Permits, Customer
Contracts, Related Approvals and Employee Contracts;
(c) keep in full force and effect present insurance policies,
bonds, letters of credit or other insurance coverage with reputable
insurers and issuers;
(d) use reasonable efforts to maintain its relationships with
suppliers, customers, consultants, independent contractors and
others having business relations with the Company;
(e) maintain material compliance with all Applicable Laws;
(f) maintain and perform present debt and lease instruments in
accordance with their terms and not enter into new or amended debt
or lease instruments related to the Assets, without the prior
written consent of Buyer; and
(g) provide all reasonable assistance to Buyer to provide for an
orderly transfer of the Company from Seller to Buyer.
Section 7.3 Prohibited Activities Prior to Closing. Between the
date of this Agreement and the Closing Date, Seller will not, and
will cause the Company not to, without the prior written consent of
Buyer:
(a) change the authorized capital, admit new shareholders or
permit the withdrawal of existing shareholders of the Company, or
grant any options, warrants, puts, calls, conversion rights or
commitments relating to the Company's equity interests of any kind;
(b) incur or agree to incur any liability or make any capital
expenditures related to the Assets in excess of an aggregate of
$150,000;
(c) enter into any new mortgage, pledge or other lien or
encumbrance upon any Asset;
(d) breach, amend or terminate, any Customer Contract or Related
Approvals in any material manner;
(e) enter into any transaction outside the ordinary course of the
business of the Company or otherwise prohibited hereunder;
(f) allow any other action or omission, or series of actions or
omissions, by Seller or Parent that would cause a representation
and warranty of Seller and Parent made in Section 5.13 of this
Agreement to be untrue on the Closing Date; or
(g) grant any compensation increases other than in the
ordinary course of business consistent with past practice.
Section 7.4 Contact with Government Officials. Seller and
Parent shall each use their best efforts to cooperate with Buyer in
making contact with the appropriate governmental agencies and
officials having information about or jurisdiction over the
Company, Seller, the Parent or the Land, Assets or obligations or
rights of the Company, including environmental and land use
agencies and officials, in order to assist Buyer in completing its
regulatory evaluation of the Company and its obligations and
arranging for the transfer of, or obtaining any consent required
for the transfer of, any Rights or Permits.
Section 7.5 Public Announcements. Between the date of
this Agreement and the Closing Date, Buyer and Seller will prepare
a mutually acceptable written announcement concerning this
transaction. Except with respect to the Final Judgment or as may
otherwise be required by law or the requirements of the New York
Stock Exchange, the Nasdaq Stock Market or the Securities and
Exchange Commission, neither Buyer nor Seller shall make any
additional public announcements without the prior consent of the
other party.
ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT
AND SELLER
The obligations of Parent and Seller hereunder are subject to the
completion, satisfaction, or at their option, waiver, on or prior
to the Closing Date, of the following conditions.
Section 8.1 Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement shall be
accurate on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as
of such date; and each and all of the terms, covenants and
conditions of this Agreement to be complied with and performed by
Buyer on or before the Closing Date shall have been duly complied
with and performed.
Section 8.2 Consents. All necessary notices to, consents of and
filings with any governmental authority or agency or other third
party relating to the consummation of the Closing or the other
transactions contemplated herein to be made or obtained by Buyer
shall have been obtained and made.
Section 8.3 Corporate Approval. The boards of directors of
Seller and Parent shall have approved the transactions contemplated
by this Agreement.
Section 8.4 No Adverse Proceeding. No action or proceeding
before a court or any other governmental agency or body shall have
been instituted or threatened to restrain or prohibit any of the
transactions contemplated by this Agreement.
Section 8.5 Simultaneous Closings. The consummation of the
transactions identified on Annex II shall occur simultaneously with
the Closing.
Section 8.6. Final Judgment. There shall have been
received all consents and approvals with respect to the
transactions contemplated by this Agreement as required by the
Final Judgment.
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the completion,
satisfaction or, at its option, waiver, on or prior to the Closing
Date, of the following conditions.
Section 9.1 Representations and Warranties. The representations
and warranties of Seller and Parent contained in this Agreement
shall be accurate on and as of the Closing Date with the same
effect as though such representations and warranties had been made
on and as of such date, and a certificate to the foregoing effect,
or setting forth any discrepancies in such representations and
warranties which have arisen since the date of this Agreement,
dated the Closing Date and signed by Seller and Parent shall have
been delivered to Buyer. The foregoing notwithstanding, Seller and
Parent agree that no limitation of any representation or warranty
shall restrict Buyer's right to terminate this Agreement if any
such representation or warranty as set forth in Article 5 is
inaccurate as of the Closing Date.
Section 9.2 Covenants. Each and all of the terms, covenants and
conditions of this Agreement to be complied with and performed by
Seller and Parent on or before the Closing Date shall have been
duly complied with and performed.
Section 9.3 No Adverse Proceeding. No action or proceeding
before a court or any other governmental agency or body shall have
been instituted or threatened to restrain or prohibit any of the
transactions contemplated by this Agreement, and no governmental
agency or body shall have taken any other action or made any
request of Buyer as a result of which the management of Buyer deems
it inadvisable to proceed with the transactions hereunder.
Section 9.4 Corporate Approval. The board of directors of Buyer
shall have approved the transactions contemplated by this
Agreement.
Section 9.5 No Adverse Change. No material and adverse change
in the results of operations, financial condition or business of
the Company shall have occurred since January 1, 1999.
Section 9.6 Simultaneous Closings. The consummation of the
transactions identified on Annex II shall occur simultaneously with
the Closing.
Section 9.7 Consents. All necessary notices to, consents of and
filings with any governmental authority or agency relating to the
consummation of the transactions contemplated herein to be made or
obtained by Seller or Parent shall have been obtained and made by
Seller or Parent, and Buyer shall have determined, in its sole
discretion, that Buyer has obtained all of the consents it deems
necessary under any Customer Contract requiring consent to
assignment by virtue of the transaction contemplated hereunder.
Section 9.8. Delivery of Disclosure Schedules.
(a) Seller shall have delivered to Buyer complete and
final Disclosure Schedules at least seven business days prior to
the scheduled date for Closing and such Disclosure Schedules must
have been determined by Buyer to be reasonably acceptable to it.
(b) In the event that Seller is unable to deliver
complete and final Disclosure Schedules to Buyer by such time,
Seller shall nevertheless deliver to Buyer such complete and final
Disclosure Schedules as promptly as practicable thereafter and
prior to Closing. The parties further agree that should Buyer
object to any item or items on such Disclosure Schedules, Buyer and
Seller shall negotiate in good faith and shall take such actions as
are reasonably necessary to resolve the matters relating to such
objection prior to Closing (it being understood that no Closing
shall take place until the parties mutually resolve such matters in
dispute).
Section 9.9 Good Standing Certificates. Parent shall have
delivered to Buyer a certificate, dated as of a date no earlier
than 10 days prior to the Closing Date, duly issued by the
appropriate governmental authority or authorities showing that the
Company is in good standing in its state of incorporation.
Section 9.10 Updated Agreements. Parent shall have delivered to
Buyer a schedule (Schedule 9.10) dated as of the Closing Date,
listing all agreements entered into by the Company relative to the
Business or the Assets since the date of Schedule 1.3(h), which new
agreements must be determined by Buyer to be acceptable, in its
sole discretion.
Section 9.11 Transferability of Permits. Buyer shall have
determined, in its sole discretion and after consultation with
Seller and Parent, that as a result of this transaction all of the
Permits required for the operation of the Business have been
transferred to Buyer, or can be so transferred without public
hearing or other regulatory re-approval process.
Section 9.12 [Intentionally Omitted]
Section 9.13 Title Policy. Subject to Section 3.8, the Title
Company shall have issued the preliminary title commitment and
shall have agreed to issue the Title Policy in each case in
accordance with Article 3 and otherwise acceptable to Buyer.
Section 9.14 Due Diligence Review. Buyer must have
received results satisfactory to it, in its sole discretion, from a
financial, operational, title and environmental review of the
Company.
Section 9.15 General. All actions taken by Parent and
Seller in connection with the consummation of the transactions
contemplated hereby and all certificates, opinions and other
documents required to effect the transactions contemplated hereby
will be reasonably satisfactory in form and substance to Buyer.
Section 9.16. Final Judgment. There shall have been
received all consents and approvals with respect to the
transactions contemplated by this Agreement as required by the
Final Judgment.
Section 9.17. Completion of Audit. Buyer's independent
auditors, Ernst & Young LLP, shall have completed their audit of
the books and records of the Company to the reasonable satisfaction
of Buyer within 30 days after the date of this Agreement.
ARTICLE 10 EMPLOYEES
Section 10.1. Employees. The following shall apply with respect
to non-union employees of the Company hired by Buyer within 30 days
following the Closing Date or retained by the Company as of the
Closing ("Hired Employees"):
(a) Buyer shall waive, or cause to be waived, (A) all waiting
periods for a Hired Employee to become eligible for participation
in all of the benefit plans generally available for the employees
of Buyer or its affiliates, except that Buyer may require
compliance with applicable waiting periods for participation in
401(k) plans, pension plans and long-term disability plans, and (B)
limitations respecting "pre-existing conditions" in the applicable
medical insurance plan or plans, except for any condition of a
Hired Employee which was not covered under Seller's medical
insurance plan during such employee's employment with Seller.
(b) Buyer shall count each Hired Employee's years of continuous
service with Seller or its affiliates for purposes of determining
vacation benefits under Buyer's vacation plan; however, the Hired
Employee shall not be entitled to use any vacation accumulated
during employment with Seller and its affiliates.
(c) If Buyer terminates a Hired Employee without cause within 60
days after the Closing Date, Buyer shall pay such Hired Employee
severance equal to two (2) weeks current base pay for every one
year of such employee's continuous service with Seller or its
affiliates.
(d) With respect to Hired Employees, the parties agree that no
COBRA qualifying event will have occurred, and therefore that no
COBRA notices will be given by Seller or Buyer. If Buyer cannot
bring Hired Employees into its medical insurance plan on the
Closing Date, then Seller shall continue to provide such coverage
for the Hired Employees until the date they are so brought into
Buyer's plan, and Buyer shall promptly reimburse Seller on demand
for the costs of such coverage.
ARTICLE 11 INDEMNIFICATION
Section 11.1 Survival of Representations, Warranties and
Covenants. All of the representations, warranties and covenants of
any party hereto contained in this Agreement and the liabilities
and obligations of the parties with respect thereto shall survive
the Closing hereunder for two years after the Closing Date;
provided, however, that the representations and warranties in
Sections 5.5, 5.14 and 5.15 shall survive for a period of three
years, the representations and warranties in Sections 5.1, 5.2,
5.10, 6.1 and 6.2 shall survive until the expiration of the
applicable statute of limitations period, and the covenants set
forth in Sections 4.7, 4.8 and 11.2(c) shall survive indefinitely.
Section 11.2 Indemnification by Parent and Seller. Seller and
Parent agree that they will each, jointly and severally, indemnify,
defend (as to third party claims only), protect and hold harmless
Buyer, its officers, shareholders, directors, divisions,
subdivisions, affiliates, subsidiaries, parents, agents, members,
managers, employees, successors and assigns (the "Buyer Indemnified
Parties") at all times from and after the date of this Agreement
from and against all liabilities, claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, penalties, losses,
costs and expenses whatsoever whether equitable or legal, matured
or contingent, known or unknown, foreseen or unforeseen, ordinary
or extraordinary, patent or latent (collectively, "Losses")
incurred by the Buyer Indemnified Parties as a result of or
incident to: (a) any breach of, misrepresentation in, untruth in or
inaccuracy in the representations and warranties by Seller or
Parent (including those relating to the Company's environmental
compliance), set forth herein or in the Schedules, Exhibits or
certificates attached hereto or delivered pursuant hereto; (b)
nonfulfillment or nonperformance of any agreement, covenant or
condition on the part of Parent or Seller made in this Agreement;
(c) the Company's ownership or operation of any landfill prior to
the Closing Date; or (d) any claim by a third party that, if true,
would mean that a condition for indemnification set forth in
subsections (a) and (b) of this Section 11.2 had been satisfied.
Section 11.3 Indemnification by Buyer. Buyer agrees that it will
indemnify, defend (as to third party claims only), protect and hold
harmless Seller and Parent, and their respective officers,
shareholders, directors, divisions, subdivisions, affiliates,
subsidiaries, parents, agents, members, managers, employees,
successors and assigns (the "Seller Indemnified Parties") at all
times from and after the Closing Date from and against all Losses
incurred by any of the Seller Indemnified Parties as a result of or
incident to: (a) any breach of, misrepresentation in, untruth in or
inaccuracy in the representations and warranties set forth herein,
or in the Schedules or certificates attached hereto or delivered
pursuant hereto by Buyer; (b) nonfulfillment or nonperformance of
any agreement, covenant or condition on the part of Buyer made in
this Agreement; and (iii) any claim by a third party that, if true,
would mean that a condition for indemnification set forth in
subsections (a) or (b) of this Section 11.3 had been satisfied.
Section 11.4 Limitation on Liability. The indemnification
obligations set forth in this Article 11 shall apply only if a
Closing occurs and then only after the aggregate amount of such
obligations exceeds $250,000, when combined with the
indemnification obligations in the agreements listed on Annex II,
at which time the indemnification obligations shall be effective as
to all amounts, including the initial $250,000. Further, the
indemnification obligations set forth in this Article 11 shall be
limited to an aggregate amount not to exceed $10,000,000 when
combined with the indemnification obligations in the agreements
listed on Annex II. Notwithstanding the foregoing, the $250,000
and $10,000,000 shall not apply to the indemnification obligations
on account of a breach of the covenants set forth in Section 4.7,
4.8, 4.9 or 11.2(c).
Section 11.5 Procedure for Indemnification with Respect to Third
Party Claims.
(a) If any third party shall notify a party to this Agreement (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") that may give rise to a claim for indemnification against
any other party to this Agreement (the "Indemnifying Party") or if
any party who may make a claim for indemnification under this
Agreement otherwise becomes aware of any matter that may give rise
to such a claim or wishes to make such a claim (whether or not
related to a Third Party Claim), then the Indemnified Party shall
promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified
Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party is thereby prejudiced.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against a Third Party Claim with counsel of its
choice satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within
a reasonable time after the Indemnified Party has given notice of
the Third Party Claim that the Indemnifying Party will indemnify
the Indemnified Party from and against the entirety of any adverse
consequences (which will include all losses, claims, liens, and
attorneys' fees and related expenses) the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (iii) the Third
Party Claim involves only monetary damages and does not seek an
injunction or equitable relief or involve the possibility of
criminal penalties, (iv) settlement of, or adverse judgment with
respect to the Third Party Claim is not, in the good faith judgment
of the Indemnified Party, likely to establish a precedential custom
or practice adverse to the continuing business interests of the
Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 11.5(b) above, (i)
the Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Third Party
Claim, (ii) the Indemnified Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying
Party (which will not be unreasonably withheld) and (iii) the
Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (which
will not be unreasonably withheld).
(d) In the event or to the extent that any of the conditions set
forth in Section 11.5(b) above is or becomes unsatisfied, however,
(i) the Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with respect to,
the Third Party Claim and any matter it may deem appropriate in its
sole discretion and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection
therewith (but will keep the Indemnifying Party reasonably informed
regarding the progress and anticipated cost thereof), (ii) the
Indemnifying Party will reimburse the Indemnified Party promptly
and periodically for the cost of defending against the Third Party
Claim (including attorneys' fees and expenses), (iii) the
Indemnifying Party will remain responsible for any adverse
consequences the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this Section
11, and (iv) the Indemnifying Party shall be deemed to have waived
any claim that its indemnification obligation should be reduced
because of the manner in which the counsel for the Indemnified
Party handled the Third Party Claim.
ARTICLE 12 TERMINATION OF AGREEMENT
Section 12.1 Termination by Buyer. Buyer, by notice in the
manner hereinafter provided on or before the Closing Date, may
terminate this Agreement in the event of a breach by Parent or
Seller of any representation or warranty of Parent or Seller herein
or in the observance or in the due and timely performance of any of
the agreements or conditions contained herein on their part to be
performed, and such breach shall not have been cured on or before
the Closing Date.
Section 12.2 Termination by Seller. Seller may, by notice in the
manner hereinafter provided on or before the Closing Date,
terminate this Agreement in the event of a breach by Buyer of any
representation or warranty of Buyer herein or in the observance or
in the due and timely performance of any of the covenants,
agreements or conditions contained herein on its part to be
performed, and such breach shall not have been cured on or before
the Closing Date.
Section 12.3. Termination due to Final Judgment. This
Agreement will terminate automatically if the United States objects
pursuant to and in the manner contemplated by Section VI of the
Final Judgment.
ARTICLE 13 NONDISCLOSURE OF CONFIDENTIAL INFORMATION
Section 13.1 Nondisclosure by Seller and Parent. Seller and
Parent recognize and acknowledge that they had in the past,
currently have, and in the future may possibly have, access to
certain confidential information of Buyer, such as lists of
customers, operational policies, and pricing and cost policies that
are valuable, special and unique assets of Buyer and its
businesses. Seller and Parent each agree that they will not,
except as may be required by law or valid legal process, disclose
such confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever,
except to authorized representatives of Seller and Parent, unless
such information becomes known to the public generally through no
fault of Seller or Parent. In the event of a breach or threatened
breach by Seller or Parent of the provisions of this Section, Buyer
shall be entitled to an injunction restraining such party from
disclosing, in whole or in part, such confidential information.
Nothing herein shall be construed as prohibiting Buyer from
pursuing any other available remedy for such breach or threatened
breach, including the recovery of damages. The provisions of this
Section shall apply at all times prior to the Closing Date and for
a period of one year following the termination of this Agreement
without a Closing having occurred.
Section 13.2 Nondisclosure by Buyer. Buyer recognizes and
acknowledges that it has in the past, currently has, and prior to
the Closing Date, will have access to certain confidential
information of the Company, such as lists of customers, operational
policies, and pricing and cost policies that are valuable, special
and unique assets of the Company. Buyer agrees that it will not,
except as may be required by law or valid legal process, disclose
such confidential information to any person, firm, corporation,
association, or other entity for any purpose or reason whatsoever,
prior to the Closing Date except to authorized representatives of
Buyer, unless such information becomes known to the public
generally through no fault of Buyer. In the event of a breach or
threatened breach by Buyer of the provisions of this Section,
Seller shall be entitled to an injunction restraining such party
from disclosing, in whole or in part, such confidential
information. Nothing contained herein shall be construed as
prohibiting Seller from pursuing any other available remedy for
such breach or threatened breach, including the recovery of
damages. The provisions of this Section shall apply at all times
prior to the Closing Date and for a period of one year following
the termination of this Agreement without a Closing having
occurred.
ARTICLE 14 GENERAL
Section 14.1 Assignment; Binding Effect; Amendment. This
Agreement and the rights of the parties hereunder may not be
assigned (except by operation of law) and shall be binding upon and
shall inure to the benefit of the parties hereto, and the
successors of Buyer, Seller and Parent. This Agreement, upon
execution and delivery, constitutes a valid and binding agreement
of the parties hereto enforceable in accordance with its terms and
may be modified or amended only by a written instrument executed by
all parties hereto.
Section 14.2 Entire Agreement. This Agreement is the final,
complete and exclusive statement and expression of the agreement
among the parties hereto with relation to the subject matter of
this Agreement, it being understood that there are no oral
representations, understandings or agreements covering the same
subject matter as this Agreement. This Agreement supersedes, and
cannot be varied, contradicted or supplemented by evidence of any
prior or contemporaneous discussions, correspondence, or oral or
written agreements of any kind.
Section 14.3 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute but
one and the same instrument.
Section 14.4 No Brokers. Seller and Parent represent and warrant
to Buyer and Buyer represents to Seller and Parent that the
warranting party has had no dealings with any broker or agent so as
to entitle such broker or agent to a commission or fee in
connection with the within transaction. If for any reason a
commission or fee shall become due, the party dealing with such
agent or broker shall pay such commission or fee and agrees to
indemnify and save harmless each of the other parties from all
claims for such commission or fee and from all attorneys, fees,
litigation costs and other expenses relating to such claim.
Section 14.5 Expenses of Transaction. Whether or not the
transactions herein contemplated shall be consummated: (i) Buyer
will pay the fees, expenses and disbursements of Buyer and its
agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any
amendments hereto and all other costs and expenses incurred in the
performance and compliance with all conditions to be performed by
Buyer under this Agreement; and (ii) Seller will pay the fees,
expenses and disbursements of the Company, Seller and Parent and
their respective agents, representatives, accountants and counsel
incurred in connection with the subject matter of this Agreement
and any amendments hereto and all other costs and expenses incurred
in the performance and compliance with all conditions to be
performed by Parent and Seller under this Agreement. All such
fees, expenses and disbursements of Parent and Seller shall be paid
by Seller prior to the Closing so that the Assets will not be
charged with or diminished by any such fee, cost or expense.
Parent and Seller represent and warrant to Buyer that Parent and
Seller have relied on their own advisors for all legal, accounting,
tax or other advice whatsoever with respect to this Agreement and
the transactions contemplated hereby.
Section 14.6 Notices. All notices or other communications
required or permitted hereunder shall be in writing and may be
given by depositing the same in United States mail, addressed to
the party to be notified, postage prepaid and registered or
certified with return receipt requested, by overnight courier or by
delivering the same in person to such party.
(a) If to Buyer, addressed to it at:
Waste Connections, Inc.
2260 Douglas Boulevard, Suite 280
Roseville, CA 95661
ATTN: 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, CA 94111
Fax: (415) 421-2922
(b) If to Seller, addressed to it at:
Allied Waste North America, Inc.
15880 N. Greenway-Hayden Loop, Suite 100
Scottsdale, AZ 85260
ATTN: Rick Wojahn
with a copy to:
Allied Waste Industries, Inc.
15880 N. Greenway-Hayden Loop, Suite 100
Scottsdale, AZ 85260
ATTN: Steve Helm, General Counsel
and a copy to:
W. T. Eggleston, Jr., Esq.
Fennemore Craig, P.C.
3003 North Central Avenue, Suite 2600
Phoenix, AZ 85012
Notice shall be deemed given and effective the day personally
delivered, the day after being sent by overnight courier, subject
to signature verification, and three business days after the
deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when
actually received, if earlier. Any party may change the address
for notice by notifying the other parties of such change in
accordance with this Section. Notwithstanding the foregoing,
notices and other communications regarding title matters shall be
provided only to: (a) if to Seller, addressed to Ginger Perry,
Esq., Fennemore Craig, P.C., 3003 N. Central Avenue, Suite 2600,
Phoenix, Arizona 85012; and (b) if to Buyer, addressed to
Winnifred C. Ward, Shartsis, Friese & Ginsburg LLP, One Maritime
Plaza, 18th Floor, San Francisco, CA 94111.
Section 14.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of
Colorado, without giving effect to any choice or conflict of law
provision or rule (whether of the State of Colorado or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Colorado.
Section 14.8 No Waiver. No delay of or omission in the exercise
of any right, power or remedy accruing to any party as a result of
any breach or default by any other party under this Agreement shall
impair any such right, power or remedy, nor shall it be construed
as a waiver of or acquiescence in any such breach or default, or of
or in any similar breach or default occurring later; nor shall any
waiver of any single breach or default be deemed a waiver of any
other breach of default occurring before or after that waiver.
Section 14.9 Time of the Essence. Time is of the essence of this
Agreement.
Section 14.10 Captions. The headings of this Agreement are
inserted for convenience only, shall not constitute a part of this
Agreement or be used to construe or interpret any provision hereof.
Section 14.11 Severability. In case any provision of this
Agreement shall not in any way be affected or impaired thereby.
Section 14.12 Construction. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the
parties and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state,
local or foreign statute shall be deemed to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise. The word "including" means including, without
limitation. The parties intend that representations, warranties
and covenants contained herein shall have independent significance.
If any party has breached any representation, warranty or covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject
matter (regardless of the relative levels of specificity) that the
party has not breached shall not detract from or mitigate the fact
the party is in breach of the first representation, warranty or
covenant.
Section 14.13 Standstill Agreement. Unless and until this
Agreement is terminated pursuant to Article 12 hereof without the
Closing having taken place, Seller will not directly or indirectly
solicit offers for the Assets or the Company Stock or for a merger
or consolidation involving the Company, or respond to inquiries
from, share information with, negotiate with or in any way
facilitate inquiries or offers from, third parties who express or
who have heretofore expressed an interest in acquiring the Company
by merger, consolidation or other combination or acquiring any of
the Assets of the Company; nor will Parent permit Seller or the
Company to do any of the foregoing, unless the Board of Directors
of the affected party shall have concluded in good faith, after
consultation with its legal counsel, that doing any of the
foregoing is required in order to comply with its fiduciary duties
to the stockholders of the affected party under applicable law.
[Signatures appear on next page]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
BUYER:
WASTE CONNECTIONS, INC.
By: _______________________
Its: _______________________
SELLER:
ALLIED WASTE SYSTEMS HOLDINGS, INC.
By: _______________________
Its: _______________________
PARENT:
ALLIED WASTE INDUSTRIES, INC.
By: _______________________
Its: _______________________
EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
Among
WASTE CONNECTIONS OF COLORADO, INC.
(Buyer)
and
ALLIED WASTE TRANSPORTATION, INC.
BFI SERVICES GROUP, INC.
(Collectively, Seller)
and
ALLIED WASTE INDUSTRIES, INC.
(Parent)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is
executed and delivered as of October 15, 1999, among Waste
Connections of Colorado, Inc., a Delaware corporation ("Buyer");
Allied Waste Transportation, Inc., a Delaware corporation, and BFI
Services Group, Inc. (collectively, "Seller"); and Allied Waste
Industries, Inc., a Delaware corporation ("Parent").
WHEREAS, Seller owns or leases real property located in
Colorado and more fully described in Section 1.1(a) and on Exhibit
A attached hereto and made a part hereof (the "Land"), and Seller
operates thereon fully permitted transfer station and/or hauling
operations (the "Business");
WHEREAS, Parent is subject to that certain Final
Judgment, filed July 20, 1999 with the United States District Court
for the District of Columbia, Civil No. 1:99CV01962 (the "Final
Judgment"), pursuant to which Parent is required to divest certain
assets, including the assets comprising the Business;
WHEREAS, in accordance with the terms of the Final
Judgment, Buyer desires to purchase and acquire certain assets,
properties and contractual rights of Seller used in connection with
the Business, and Seller desires to sell such assets, properties
and contractual rights to Buyer, all in accordance with the terms
and conditions set forth in this Agreement;
WHEREAS, Parent owns (directly or indirectly) all of the
issued and outstanding shares of the capital stock of Seller;
WHEREAS, Buyer is unwilling to enter into this Agreement
without the covenants and promises of Parent set forth herein;
WHEREAS, Parent desires that Seller sell such assets,
properties and contractual rights to Buyer upon the terms and
subject to the conditions set forth in this Agreement and, in order
to induce Buyer to enter into this Agreement, is willing to make
the covenants and promises set forth herein;
WHEREAS, in connection with entering into this Agreement
the parties or their affiliates desire to enter into that certain
Stock Purchase Agreement among Waste Connections, Inc., a Delaware
corporation and the parent of Buyer ("WCI Parent"), Allied Waste
Systems Holdings, Inc., a Delaware corporation, and Parent dated as
of the date hereof (the "Stock Purchase Agreement");
WHEREAS, WCI Parent owns (directly or indirectly) all of
the issued and outstanding shares of the capital stock of Buyer;
and
WHEREAS, Seller and Parent are unwilling to enter into
this Agreement without the guaranty by WCI Parent of the
obligations of Seller under this Agreement.
NOW, THEREFORE, in consideration of the mutual promises
and covenants herein contained and other good and valuable
consideration, received to the full satisfaction of each of them,
the parties hereby agree as follows:
ARTICLE 1. DESCRIPTION OF ASSETS
Section 1.1. Description of Assets. Upon the terms and
subject to the conditions set forth in this Agreement, Seller will,
on the Closing Date, grant, convey, sell, transfer and assign to
Buyer the following assets, properties and contractual rights of
Seller, wherever located, subject to the exclusions set forth in
Section 1.2:
(a) the Land (including all credits, buildings,
fixtures, personalty and improvements located thereon, easements,
interests, rights, tenements, hereditaments, and appurtenances held
by Seller that in any way benefit the Land or the improvements
thereon or related to the Business, all mineral, water, and
irrigation rights, and Seller's interests in any roadway adjoining
the Land and any rights or interests that may accrue to the benefit
of Seller or the Land as a result of the abandonment thereof or, if
the Land is leased, all of Seller's leasehold interest in and to
the Land and improvements thereon that are the subject of the Real
Estate Leases (as defined in Paragraph 5.5(a)(iv)) (the "Leased
Land");
(b) all permits, licenses, consents and approvals of
every kind necessary and appropriate to operate the Business (the
"Permits");
(c) all equipment used or for use in the Business and
owned or leased by Seller (the "Equipment") including the equipment
listed on Schedule 1.1(c), attached hereto and made a part hereof;
(d) all of the motor vehicles used or for use in the
Business and owned or leased by Seller, and all attachments,
accessories and materials handling equipment now located in or on
such motor vehicles, including all radios and the radio base
station, if any (the "Rolling Stock"), as the same are more
completely described by manufacturer, model number and model year
on Schedule 1.1(d), attached hereto and made a part hereof;
(e) all of Seller's manual and automated billing systems
and components thereof, including all computer hardware,
transferable software and transferable programs used or for use in
the Business;
(f) all of Seller's inventory of parts, tires and
accessories of every kind, nature, and description used or for use
in the Business (the "Inventory");
(g) all of Seller's right, title and interest in and to
all trade secrets, proprietary rights, symbols, trademarks, service
marks, logos and trade names used in the Business and owned by
Seller, Parent or any affiliate thereof (including the name "Jordan
Road Transfer Station"), except those symbols, trademarks, service
marks, logos and trade names that include the names of or otherwise
identify Seller or Parent or any affiliate thereof;
(h) all contractual rights of Seller with Seller's
customers (whether oral or in writing) relating to the operation of
the Business (the "Customer Contracts"), all commitments, lists,
leases, permits, licenses, consents, approvals, franchises and
other instruments relating to the Customer Contracts (the "Related
Approvals"), and all employment contracts and collective bargaining
agreements with any union (but excluding employee benefit plans)
(the "Employee Contracts"), a complete and accurate list of the
Customer Contracts which account for 5% or more of Seller's
revenues from the operation of their respective Businesses, the
Related Approvals and the Employee Contracts is set forth on
Schedule 1.1(h), attached hereto and made a part hereof;
(i) all right, title, and interest of Seller in and to
the telephone number(s) used in the operation of the Business;
(j) all of Seller's shop tools, nuts and bolts relating
to the Business;
(k) all accounts receivable of Seller related to the
Business ("Accounts Receivable") as of the close of business on the
date of Closing (hereinafter defined); and
(l) all of the goodwill of the Business.
All of the foregoing assets, properties and contractual rights are
hereinafter sometimes collectively called the "Assets."
Section 1.2. Excluded Assets. The parties agree that
certain assets of Seller shall remain the property of Seller or its
affiliates and shall not be sold to Buyer as of the Closing (the
"Excluded Assets"). Such Excluded Assets are as follows: (a) all
cash on hand, cash reserves and cash on deposit of Seller, except
as set forth in Section 1.4 hereof; (b) all, if any, real property
and all buildings on and fixtures to all real property of Seller
other than set forth in Section 1.1(a); (c) all contracts and
contract rights and obligations of Seller (whether oral or in
writing), other than the Customer Contracts, the Related Approvals,
the Employee Contracts, and the Permits; (d) all motor vehicles of
Seller which are not Rolling Stock; and (e) all other assets of
Seller that do not relate to the Business.
Section 1.3. Non-Assignment of Certain Customer
Contracts and Permits. Notwithstanding anything to the contrary in
this Agreement, to the extent that the assignment hereunder of any
Customer Contract or Permit shall require the consent of any third
party, neither this Agreement nor any action taken pursuant to its
provisions shall constitute an assignment or an agreement to assign
if such assignment or attempted assignment would constitute a
breach thereof or result in the loss or diminution thereof;
provided, however, that in each such case, Seller and Buyer shall
each use best efforts to obtain the consent of such other party to
such assignment to the Buyer.
Section 1.4. Proration of Cash on Hand. The parties
shall prorate, as of the close of business on the Closing Date, all
cash on hand or on deposit with Seller consisting of sums paid to
Seller pursuant to the advance billing practice of Seller or
otherwise representing a prepayment to Seller of services to be
rendered after the Closing. Each Seller shall be entitled to all
such sums allocable to services performed on or before the close of
business on the Closing Date and the Buyer shall be entitled to all
such sums allocable to services to be performed thereafter.
ARTICLE 2. PURCHASE PRICE
Section 2.1. Purchase Price. Subject to adjustment
pursuant to the remainder of this Article 2, at the Closing Buyer
shall pay to Seller for the Assets the aggregate sum of $18,000,000
(the "Purchase Price").
Section 2.2. Purchase Price Adjustment for Accounts
Receivable. In addition to the sums payable pursuant to Section
2.1, Buyer shall pay to Seller on a dollar-for-dollar basis a sum
equal to the amount of Seller's accounts receivable (the "Accounts
Receivable") that are less than 60 days old; $.50 on the dollar for
all of the Accounts Receivable that are between 61 and 90 days old
and zero for any Accounts Receivable that are more than 90 days old
as of the Closing Date (with the age to be determined as of the
last day of the month preceding the month in which the Closing Date
occurs). Attached hereto as Schedule 2.2 is a true and complete
list of all Accounts Receivable including an aging of all accounts
and notes receivable showing amounts due in 30 day aging
categories.
ARTICLE 3. CLOSING
Section 3.1. Time and Place of Closing. Unless
otherwise agreed to by the parties hereto, this transaction shall
be closed within five business days after the completion,
satisfaction or waiver of each of the conditions to closing set
forth in Articles 8 and 9 (the "Closing"). The Closing shall take
place at the offices of Fennemore Craig, P.C., 3003 N. Central
Avenue, Suite 2600, Phoenix, Arizona 85012. The date on which the
Closing occurs shall be referred to as the "Closing Date."
Section 3.2. Deliveries by Seller and Parent. At the
Closing, Seller and Parent shall deliver to Buyer, all duly
executed:
(a) subject to Section 3.8, a special warranty deed (the
"Deed") conveying to Buyer good and marketable fee simple title to
each piece of Land subject only to the Permitted Encumbrances
(hereinafter defined) or, if Leased Land, an assignment of all of
Seller's rights, title and interest under the Real Estate Leases
for the Land upon the same terms and conditions without any changes
thereto, containing the consent of the landlord if required, and
appropriate estoppel language if possible (the "Assignment,
Assumption and Consent to Leased Land");
(b) subject to Section 3.8, the Title Policy provided
for below;
(c) subject to Section 3.8, the Survey provided for
below;
(d) a General Conveyance, Assignment and Bill of Sale in
form and substance reasonably satisfactory to Buyer and Seller,
conveying, selling, transferring and assigning to Buyer all of the
Assets (other than the Land and Leased Land) (the "Bill of Sale");
(e) a sworn affidavit stating, under penalty of perjury,
that Seller is not a "foreign person" as defined under the Internal
Revenue Code of 1986, as amended ("Code"), or other appropriate
evidence that Buyer is not required to withhold taxes under Section
1445(a) of the Code;
(f) certified copies of resolutions of the board of
directors of Seller and Parent authorizing the execution of this
Agreement and the consummation of the transactions contemplated
herein, along with an incumbency certificate of Seller;
(g) evidence of the payment in full of all debts,
judgments, liens, financing statements or deeds of trust, and
releases and satisfactions thereof encumbering the Assets,
excluding any obligations under any operating leases for any of the
Assets;
(h) the Solid Waste Disposal Agreement in substantially
the form provided in Exhibit C; and
(i) such other separate documents or instruments of
sale, assignment, or transfer reasonably required by Buyer or the
Title Company (as defined in Section 3.4) to consummate the
transactions contemplated by this Agreement.
Section 3.3. Deliveries by Buyer. At the Closing, Buyer
shall deliver to Seller all duly and properly executed (where
applicable):
(a) the purchase price provided in Section 2.1 by wire
transfer of immediately available funds;
(b) the guaranty of WCI Parent in the form of Exhibit B
(the "Guaranty");
(c) certified copies of resolutions of the board of
directors of Buyer authorizing the execution and delivery of this
Agreement and the consummation of the transactions contemplated
herein, along with an incumbency certificate of Buyer;
(d) certified copies of resolutions of the board of
directors of WCI Parent authorizing the execution and delivery of
the Guaranty and the consummation of the transactions contemplated
therein, along with an incumbency certificate of WCI Parent;
(e) Assignment, Assumption and Consent to Leased Land;
(f) the Solid Waste Disposal Agreement in substantially
the form provided in Exhibit C; and
(g) such other separate instruments of sale, assignment,
or transfer reasonably required by Seller to consummate the
transactions contemplated by this Agreement.
Section 3.4. Title Policy. Seller shall furnish to
Buyer one or more extended coverage policies of title insurance
from a title company selected by Buyer and reasonably acceptable to
Seller (the "Title Company") in the amount to be agreed upon
between Buyer and Seller with each of the Title Company's standard
printed exceptions deleted and including such endorsements
reasonably requested by Buyer and that are available in the state
where the Land is located, insuring leasehold or fee simple title,
whichever is applicable, to the Land to be in Buyer subject only to
the exceptions permitted by Section 3.5 hereof (the "Title
Policy"); provided, however, that no Title Policy shall be required
for any Leased Land not used as a landfill or transfer station.
Seller shall deliver to Buyer a preliminary title commitment in
respect of the Land (including Leased Land used for purposes other
than a landfill or transfer station), together with copies of all
exception instruments referenced therein, and any unrecorded
leases, option agreements, contracts and any other items affecting
title which are in the possession of, or known to, Seller. Such
commitment and other documents shall be provided to Buyer within 30
days after the execution of this Agreement and at least 10 days
before the Closing so that the Title Policy can be issued
simultaneously with the Closing. Seller's obligations under this
Section are subject to Section 3.8.
Section 3.5. Permitted Encumbrances. The Title Policy shall
insure Buyer's interest in the Land to be free and clear of all
encumbrances whatsoever except: (i) zoning ordinances and
regulations which do not, in Buyer's judgment, adversely affect
Buyer's use of the Land for its current uses after Closing; (ii)
real estate taxes and assessments, both general and special, which
are a lien but are not yet due and payable at the Closing Date;
(iii) easements, encumbrances, covenants, conditions, reservations
and restrictions of record, if any, as have been approved in
writing by Buyer prior to the Closing Date; and (iv) in the case of
Leased Land, the Real Estate Leases. Seller and Buyer shall split
equally all of the costs associated with the delivery of the Title
Policy to Buyer.
Section 3.6. Survey. Seller shall obtain for Buyer's
use and for the use of the Title Company in connection with the
issuance of the Title Policy, a current and complete survey of the
Land (the "Survey"); provided, however, that no survey shall be
required for any Leased Land not used as a landfill or transfer
station. The Survey shall be made on the ground by a competent
registered surveyor and shall show: (a) the exact boundary lines
of the Land; (b) the location thereon of all, if any, buildings,
improvements, roads, and easements now existing; (c) the number of
acres in the Land; (d) the location of any buildings, fences or
other improvements which encroach on the Land; (e) the location of
any improvements on the Land which encroach on any neighboring
property; (f) all building lines established in respect of the
Land; and (g) all public access to the Land, and representing that
the boundaries of the Land are contiguous with the boundaries of
all adjoining parcels and complying with the additional ALTA
requirements set forth on Annex II attached hereto and made a part
hereof. Within 30 days after the execution of this Agreement and
at least 10 days before the Closing, a copy of the Survey complying
with the above requirements shall be delivered to Buyer and the
Title Company, together with certification to each entity by the
surveyor, and also together with such additional supporting reports
and other certificates as the Title Company may require to enable
the Title Company to delete its standard survey exceptions from the
Title Policy. Seller and Buyer shall split equally all of the
costs of the Survey. Seller's obligations under this Section are
subject to Section 3.8.
Section 3.7. Prorations and Charges. The parties shall
prorate and apportion, on a calendar year basis, as of the close of
business on the Closing Date, the real estate taxes and
assessments, both general and special, for the Land, based upon the
last available tax statement. If the actual real estate taxes paid
by Buyer in respect of the period of the proration exceed the
credit given Buyer at closing for such taxes, Seller shall, upon
presentation of appropriate paid tax bills, reimburse Buyer for any
amounts incurred by Buyer for such taxes in excess of prorated
credit. In addition, Seller shall be charged the following closing
costs: (i) the state and local real estate transfer and similar
taxes and conveyance fees; and (ii) the cost of discharging any and
all financial encumbrances, including all deeds of trusts,
mortgages and mechanics and materialmen's liens on the Land. With
respect to Leased Land, the parties shall prorate rent, insurance
costs, real estate taxes, operating costs (e.g., CAMs) and any
other amounts due under the applicable Real Estate Lease. If the
prorata amounts are not known as of the Closing Date, adjustments
shall be made post closing at such time as they are known to the
parties.
Section 3.8. Post Closing Title and Survey Work.
Notwithstanding anything herein to the contrary, if as of the
Closing Buyer has not yet received (i) a Title Commitment and all
Schedule B items and other matters disclosed therein and/or (ii)
had the time permitted under Section 3.5 to review same and/or
(iii) received a Survey (if applicable) in form acceptable to Buyer
with respect to any parcel of Land or (iv) a landlord's consent to
an assignment of a Real Estate Lease, with respect to Leased Land
or (v) a replatting of the Land if Seller is conveying less than
100% of such land pursuant to this Agreement, Buyer shall have the
right to either (a) elect to close with respect to such Land;
provided Seller agrees in writing at the Closing to provide such
missing items promptly after the Closing, or (b) delay the Closing
with respect to such parcel of Land only and close with respect to
such Land when the missing items are obtained, with (1) Buyer and
Seller to execute an agreement at Closing regarding the payment of
the purchase price for such parcel(s); (2) the representations and
covenants of Seller with respect to the applicable Land continuing
until the extended closing date; and (3) Section 11.1 commencing as
of the extended Closing Date of the applicable Land.
ARTICLE 4. POST CLOSING COVENANTS
Section 4.1. Removal of Identification. Within six
months after the Closing, Buyer shall remove from the Assets all
visible names, symbols, trade names, service marks and logos of
Seller or Parent other than the names specifically identified in
Section 1.1(g), if any.
Section 4.2. Further Assurances. From time to time on
and after the Closing and without further consideration except as
provided herein, the parties hereto shall each deliver or cause to
be delivered to any other party at such times and places as shall
be reasonably requested, such additional instruments as any of the
others may reasonably request for the purpose of carrying out this
Agreement and the transaction contemplated hereby. Parent, also
without further consideration, agrees to cooperate with Buyer and
to use its reasonable best efforts to have the officers and
employees of Seller cooperate on and after the Closing Date in
furnishing to Buyer information, evidence, testimony, and other
assistance in connection with obtaining all necessary permits and
approvals and in connection with any actions, proceedings,
arrangements or disputes of any nature with respect to matters
pertaining to all periods prior to the Closing Date.
Section 4.3. Transition. Neither Seller nor Parent will
take any action that is designed or intended to have the effect of
discouraging any customer or business associate of Seller from
maintaining the same business relationships with Buyer after the
Closing that it maintained with Seller before the Closing. Seller
and Parent will refer all customer inquiries relating to the
Business to Buyer from and after the Closing. Further, Seller and
Parent agree that for a period of 90 days following the Closing
Date, they will, without additional consideration, assist Buyer
with the orderly transition of the operations of the Business from
Seller to Buyer.
Section 4.4. Bound by Final Judgment. Buyer
acknowledges receipt of a copy of the Final Judgment and agrees to
be bound by the provisions thereof as required by Section III(B) of
the Final Judgment.
Section 4.5. Agreement Not To Assert Challenges to
Rights. Seller and Parent agree that they will not, directly or
indirectly following the Closing, assert any challenges to any of
the Rights (as defined in Section 5.3) pertaining to the Assets.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
OF SELLER AND PARENT.
Seller and Parent, jointly and severally, represent and
warrant to Buyer that, except as set forth in the schedules to the
subsections of this Section 5 delivered by Seller and Parent to
Buyer in accordance with Section 9.8 hereof (such schedules
hereinafter collectively referred to as the "Disclosure Schedules"
and, individually, as a "Disclosure Schedule"), the statements
contained in this Section 5: (i) are correct and complete as of
the date of this Agreement; (ii) will be correct and complete as of
the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout
this Section 5); and (iii) shall survive the Closing in accordance
with Section 11.1 hereof.
Wherever a representation or warranty herein is qualified
as having been made "to the best of Seller's or Parent's
knowledge," such phrase shall mean the knowledge of the officers,
directors and management employees of the Seller and Parent having
significant responsibility for the management and/or operation of
the Assets, without inquiry.
Section 5.1. Organization; Authority.
(a) Each of Seller and Parent is a corporation duly
organized, validly existing and in good standing under the laws of
the state of its incorporation and is duly authorized, and
qualified and licensed under all laws, regulations, ordinances and
orders of public authorities, to carry on its business in the
places and in the manner as presently conducted except for where
failure to be so authorized, qualified or licensed would not have a
material adverse affect on its business. Copies of Seller's and
Parent's Certificate of Incorporation (certified by the Secretary
of State of the state of incorporation) and Bylaws (certified by
the Secretary of Seller or Parent), each as amended, are attached
hereto as Schedule 5.1.
(b) The respective boards of directors, and in the case
of Seller the stockholders, of each of Seller and Parent have, or
prior to the Closing Date will have, duly authorized the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by the Seller or Parent. Each of Seller
and Parent has the full legal right, power and authority to enter
into this Agreement and to consummate the transactions contemplated
by this Agreement.
Section 5.2. Stock Ownership; Binding Effect. All of
the issued and outstanding shares of the capital stock of Seller
are owned, directly or indirectly, of record and beneficially by
Parent. This Agreement has been, or prior to the Closing Date will
have been, duly authorized, and has been duly executed and
delivered by each of Seller and Parent and is the valid and binding
obligation of each of Seller and Parent, enforceable against it in
accordance with its terms.
Section 5.3. Permits; Proprietary Rights; Environmental
Documents. Attached as Schedule 5.3 is, to the best of Seller's
and Parent's knowledge, a complete and accurate list as of the date
hereof of all Permits, permit applications, titles (including motor
vehicle titles and current registrations), fuel permits, licenses,
franchises, certificates, trademarks, trade names, service marks,
patents, patent applications and copyrights owned or held by Seller
or Parent related to the Assets (collectively, the "Rights"), none
of which Rights, to the best of Seller's and Parent's knowledge,
infringe on the rights of others and all of which, to the best of
Seller's and Parent's knowledge, are now valid, in good standing
and in full force and effect. Except as set forth on Schedule 5.3,
there are no material defects in any Rights and such Rights are
adequate for the operation of the Business as presently
constituted.
Section 5.4. Personal Property.
(a) Listed on Schedule 1.1(c) hereto is a complete and
accurate list of all Equipment. As of the Closing Date, each piece
of Equipment will be operational and in a condition that is at
least equal to the condition of such equipment as of the date of
this Agreement.
(b) Listed on Schedule 1.1(d) hereto is a complete and
accurate list of all Rolling Stock. As of the Closing Date, each
motor vehicle, attachment, accessory and piece of materials
handling equipment comprising the Rolling Stock will be operational
and in a condition that is at least equal to the condition of such
equipment as of the date of this Agreement.
(c) All of the Assets are either owned by Seller or
leased under an agreement indicated on Schedule 5.4(c). All leases
set forth on Schedule 5.4(c) are in full force and effect and
constitute valid and binding agreements of the parties (and their
successors) thereto in accordance with their respective terms. No
default by Seller or, to the best of Seller's and Parent's
knowledge, any other party to any of such leases exists or would
exist except for the passage of time or delivery of a notice or
both.
(d) At the Closing, Seller shall have good and
marketable title to the Assets, free and clear of all debts (except
operating lease payments for non-heavy equipment only and
closure/post-closure liabilities), and all liens, security
interests, encumbrances, adverse claims, pledges, equities and
other restrictions whatsoever (collectively, "Encumbrances"), and,
by virtue of the grant, conveyance, sale, transfer, and assignment
of the Assets hereunder, Buyer shall receive good and marketable
title to the Assets, free and clear of all debts (except operating
lease payments for non-heavy equipment only and closure/post-
closure liabilities) and Encumbrances. The Assets constitute all
of the assets owned by Seller and used in the Business and, to the
best of Seller's and Parent's knowledge, include all of the
Permits, licenses, franchises, consents and other approvals
necessary to operate the Business prior to Closing. The foregoing
notwithstanding, no representation is made as to the effect of this
transaction on any Permit, some of which may be nontransferable or
require consent to the transfer contemplated by this transaction.
Section 5.5. Title to Real Property.
(a) Seller has good fee simple marketable title to the
Land being sold or transferred by it, subject only to the matters
permitted under Article 3 hereof and marketable title to the Leased
Land. Except as set forth on Schedule 5.5(a), to the best of
Seller's and Parent's knowledge:
(i) At all times during the operation of the
Business, the Land has been licensed, permitted and authorized for
the operation of the Business under all Applicable Laws (as defined
in Section 5.9) relating to the protection of the environment, the
Land and the conduct of the Business thereon (including all zoning
restrictions and land use requirements) and neither Seller nor
Parent has received any notice of any violation of any Applicable
Law.
(ii) The Land is usable for its current uses, and,
assuming any necessary regulatory approvals are obtained, the Land
can be used by Buyer after the Closing for its current uses in the
manner currently operated by Seller, without violating any
Applicable Law or private restriction, and such uses are legal
conforming uses. There are no proceedings or amendments pending
and brought by, or threatened by, any third party which would
result in a change in the allowable uses of the Land or which would
modify the right of Seller to use the Land for its current uses
after the Closing Date.
(iii) Parent and Seller have made available to
Buyer all engineering, geologic and other similar reports,
documentation, plats and maps relating to the Land in the
possession or control of Parent or Seller and all plans and
specifications, as-builts, contracts and warranties in connection
with the improvements thereon.
(iv) Parent and Seller have delivered to Buyer all
existing leases, occupancy agreements or licenses or similar
agreements and any amendment thereto in connection with the Land
(collectively "Real Estate Leases"). Neither Parent nor Seller is
in default under any Real Estate Lease.
(v) Except in connection with Leased Land, no party
except Seller has a present or future right to possession of all or
any part of the Land.
(vi) There are no pending or threatened condemnation
or eminent domain proceedings affecting all or any part of the
Land.
(vii) There are no pending or threatened special
assessments affecting the Land, or any contemplated improvements
affecting the Land that may result in special assessments affecting
the Land.
(viii) Neither Seller nor Parent has knowledge of
any fact or condition which will result in the termination of any
currently existing access to or from the Land and any public rights
of ways and roads.
(ix) No written or oral commitments have been made
to any governmental authority, utility company, or any other
organization, group, or individual, relating to the Land which
would impose an obligation upon Buyer or their successors or
assigns to make any contribution or dedications of money or Land or
to construct, install, or maintain any improvements of a public or
private nature on or off the Land.
(x) All utilities serving the Land are supplied
directly to the Land by public utilities through public or private
easements benefiting the Land and are adequate to service the
normal operations of the Land and the operations of the Business.
(xi) Neither Seller nor Parent has failed to
disclose to Buyer any material adverse fact or condition regarding
the Land.
(xii) There are no unrecorded contracts, leases,
easements or other agreements, or claims of any third party,
affecting the use, title, occupancy or development of the Land, and
no person, firm or entity has any right of first refusal, option or
the right to acquire all or any part of the Land.
(xiii) Seller is not a "foreign person" as the
term is defined in Section 1445 of the Code and any applicable
regulations promulgated thereunder.
(xiv) Seller shall not cause or permit any lien,
encumbrance, covenant, condition, restriction, assessment,
easement, right of way, obligation, encroachment or liability
("Title Defect") whatsoever to be placed of record, affecting the
title insurance to be given Buyer pursuant to this Agreement or
otherwise exist, from the date of this Agreement to the Closing or
issuance of the Title Policy if as of the Closing the Title Policy
is not issued, excepting, however, the matters permitted under
Article 3 above. If any Title Defect is so placed or recorded or
otherwise exists contrary to the provisions hereof, the effect of
which can be removed and/or eliminated by the payment of money,
Seller shall immediately cause sufficient monies to be deposited
with Buyer so as to enable Buyer to cause such Title Defect to be
eliminated and/or removed of record.
(b) Seller has provided to the government agencies
requiring the same, all reports, notices, filings and other
disclosures required by Applicable Laws and all such reports,
notices, filings and other documents were complete and accurate in
all material respects at the time provided to such government
agencies.
Section 5.6. Contracts. Listed on Schedule 1.1(h)
hereto is a complete and accurate list of the Customer Contracts,
Related Approvals and Employee Contracts as of the date hereof,
true and complete copies of which have been made available to
Buyer. To the best of Seller's and Parent's knowledge, none of the
Customer Contracts, Related Approvals or Employee Contracts listed
on Schedule 1.1(h) has been modified, altered, terminated or
otherwise amended in writing. To the best of Seller's and Parent's
knowledge, all Customer Contracts and Employee Contracts are in
full force and effect and are valid, binding and enforceable
against the respective parties thereto in accordance with their
respective provisions and Seller is not in default in, nor has
there occurred an event or condition (other than Seller's execution
and delivery of or performance under this Agreement) which with the
passage of time or the giving of notice (or both) would constitute
a default, with regard to the payment or performance of any
obligation under any Customer Contract or Employee Contract.
Neither Parent nor Seller has received any notice that any person
intends or desires to modify, waive, amend, rescind, release,
cancel or terminate any Customer Contract or Employee Contract.
There is no contract, agreement or other arrangement granting any
person any preferential right to purchase any of the Assets. The
foregoing notwithstanding, no representation is made as to the
effect of this transaction on any Customer Contract or Employee
Contract, some of which may require the consent of the other party
thereto to the transfer contemplated by this transaction.
Section 5.7. Insurance Policies. Attached as Schedule
5.7 is a complete and accurate list as of the date hereof of all
insurance policies carried by Seller and Parent with respect to the
Business or the Assets and an accurate list of all insurance loss
runs and workers' compensation claims related to the Business and
the Assets for the past three policy years. All insurance policies
are in full force and effect and shall remain in full force and
effect through the Closing Date. Neither Seller's nor Parent's
insurance with respect to the Business or the Assets has ever been
canceled and neither Seller nor Parent has been denied coverage
with respect to the Business or the Assets within the last three
years.
Section 5.8. Employees; Compensation. Attached as
Schedule 5.8 is a complete and accurate list of all employees of
Seller and their rate of compensation as of the date hereof
(including a breakdown of the portion thereof attributable to
salary, bonus and other compensation, respectively). Except as set
forth on Schedule 5.8, each employee of Seller is an employee at
will. Buyer shall be obligated to hire all current employees of
the Business listed on Schedule 5.8 as of the Closing.
Section 5.9. Compliance with Law; No Conflicts.
(a) To the best of Seller's and Parent's knowledge,
Seller has in the past complied in all material respects with, and
are now in material compliance with, all federal, state and local
statutes, laws, rules, regulations, orders, permits (including
zoning restrictions and land use requirements) and licenses and all
administrative and judicial judgments, rulings, decisions and
orders applicable to Seller, the Assets or the Business
(collectively, the "Applicable Laws"). Neither Seller nor Parent
now is or ever has been involved in any litigation or
administrative proceeding relating to the Assets or the Business
seeking to impose fines, penalties or other liabilities or seeking
injunctive relief for violation of any Applicable Laws relating to
the environment. Neither Seller nor Parent has received any notice
that Seller is under investigation or other form of review relating
to the Assets or the Business with respect to any Applicable Law.
(b) To the best of Seller's and Parent's knowledge, the execution,
delivery and performance of this Agreement, the consummation of any
transactions herein referred to or contemplated hereby and the
fulfillment of the terms hereof and thereof will not:
(i) conflict with, or result in a breach or
violation of the Certificate of Incorporation or Bylaws of Seller;
(ii) conflict with, or result in a material breach
under any document, agreement or other instrument to which Seller
or Parent is a party, or result in the creation or imposition of
any lien, charge or encumbrance on any properties of Seller or
Parent pursuant to: (A) any law or regulation to which Seller or
Parent, or any of their respective properties are subject, or (B)
any judgment, order or decree to which Seller or Parent is bound or
any of their respective properties are subject; or
(iii) except with respect to the Final Judgment
and any consents or filings required under any Permit or Customer
Contract, require notice to, or the consent or approval of, any
governmental authority or agency or other third party in order to
remain in full force and effect.
Section 5.10. Taxes. Except as set forth on Schedule
5.10, (i) Seller has filed, or will file, in a timely manner all
requisite federal, state, local and other tax returns due for all
fiscal periods ended on or before the date hereof and as of the
Closing shall have filed in a timely manner all such returns due
for all periods ended on or before the Closing Date, except to the
extent that such returns are not yet due as of such date; (ii) no
federal, state, local or other tax returns or reports filed by
Seller (whether filed prior to, on or after the date hereof) with
respect to Seller will result in any taxes, assessments, fees or
other governmental charges upon the Assets or Buyer, whether as a
transferee of the Assets or otherwise; (iii) all federal, state and
local taxes due and payable with respect to the Assets have been
paid, including all federal, state and local income, sales, use,
franchise, excise and property taxes; (iv) there are no agreements
to extend the statutory period for the assessment of any taxes,
examinations in progress or claims against Seller for federal,
state, local and other taxes (including penalties and interest) for
any period or periods prior to and including the date hereof (and
as of the Closing Date) and no notice of any claim, whether pending
or threatened, for taxes has been received; and (v) there are no
liens for taxes on any Assets.
Section 5.11. Litigation. Except as set forth on
Schedule 5.11, there is no claim, litigation, action, suit or
proceeding, formal arbitration, informal arbitration or mediation,
administrative, judicial or otherwise, pending or, to the best of
Seller's and Parent's knowledge, threatened, against Seller or
Parent relating to the Assets, at law or in equity, before any
federal, state or local court or regulatory agency, or other
governmental or private authority or that could interfere with the
consummation of the transaction contemplated by this Agreement; no
notice of any of the above has been received by Seller or Parent;
and, to the best of Seller's and Parent's knowledge, no facts or
circumstances exist which would give rise to any of the foregoing.
Listed on Schedule 5.11 are all instances where Seller or Parent is
the plaintiff, or complaining or moving party in any way related to
the Assets.
Section 5.12. Absence of Price Renegotiation Contracts.
Seller is not now a party to any governmental contracts related to
the Assets which are subject to price redetermination or
renegotiation.
Section 5.13. Conduct of Seller's Business Since January
1, 1999. Since January 1, 1999, except as disclosed on Schedule
5.13, there has not been any:
(a) change in the authorized capital or equity ownership
of Seller;
(b) work interruption, labor grievance or unfair labor
practice claim filed with respect to the Business;
(c) sale or transfer of, or any agreement to sell or
transfer, any of the Assets or any plan, agreement or arrangement
granting any preferential right to purchase or acquire any interest
in any of the Assets, or requiring consent of any party to the
transfer and assignment of any of the Assets;
(d) waiver of any material rights or claims of Seller
related to the Assets;
(e) material breach, amendment or termination of any
Customer Contract;
(f) transaction by Seller outside the ordinary course of
its business with respect to the Assets or the Business;
(g) amendment to the Certificate of Incorporation or
Bylaws of Seller;
(h) any other material occurrence, event, incident,
action or failure to act outside the ordinary course of business of
Seller with respect to the Assets or the Business; or
(i) any action by Seller, Parent, or any employee,
officer or agent of Seller or Parent committing to do any of the
foregoing.
Section 5.14. Hazardous Materials; Disposal Sites.
Except as set forth on Schedule 5.14, to the best of Seller's and
Parent's knowledge, Seller has not owned, leased, had an interest
in, generated, transported, stored, handled, recycled, reclaimed,
disposed of, or contracted for the disposal of, hazardous
materials, hazardous wastes, hazardous substances, toxic wastes or
substances, infectious or medical waste, radioactive waste or
sewage sludges as those terms are defined by the Resource
Conservation and Recovery Act of 1976; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"); the Atomic Energy Act of 1954; the Toxic Substances
Control Act; the Occupational Health and Safety Act; any comparable
or similar state statute; any other Applicable Law or the rules and
regulations promulgated under any of the foregoing, as each of the
foregoing may have been from time to time amended (collectively,
"Hazardous Materials"). To the best of Seller's and Parent's
knowledge, there have been no spills, leaks, deposits or other
releases into the environment or onto or under the Land of any
Hazardous Materials. No liens or claims with respect to
environmental liability have been imposed against Seller or any of
the Assets under CERCLA, any comparable state statute or other
Applicable Law, and no facts or circumstances exist which would
give rise to the same. Further, to the best of Seller's and
Parent's knowledge, no portion of the Land is listed on the CERCLA
list or the National Priorities List of Hazardous Waste Sites or
any similar list maintained by any state and neither Seller nor
Parent is listed as or has been notified that it is a potentially
responsible party with respect to the Assets or as a result of the
operation of the Assets under CERCLA, any comparable state statute
or other Applicable Law, and neither Seller nor Parent has received
a notice of such listing.
Included on Schedule 5.14 is, to the best of Seller's and
Parent's knowledge, a complete list of the names and addresses of
all disposal sites at any time now or in the past utilized by
Seller or any predecessors of Seller with respect to the Business
or the Assets, none of which sites is listed on the CERCLA list or
the National Priorities List of hazardous waste sites or any
comparable state list.
Section 5.15. Underground Storage Tanks. To the best of
Seller's and Parent's knowledge, except as set forth on Schedule
5.15, no underground storage tanks containing petroleum products or
wastes or other Hazardous Materials regulated by 40 CFR 280 or
other Applicable Laws are currently or have been located on any
Land. As to each such underground storage tank ("UST") identified
on Schedule 5.15, Parent and Seller have provided to Buyer, on
Schedule 5.15:
(a) the location of the UST, information and material,
including any available drawings and photographs, showing the
location, and whether Seller currently owns or leases the property
on which the UST is located (and if Seller does not 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 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 best of Seller's and Parent'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 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 5.15, Seller has
complied with Applicable Laws regarding the installation, use,
testing, monitoring, operation and closure of each UST described on
Schedule 5.15.
Section 5.16. Corrupt Practices. Neither Seller nor
Parent, nor to the best of Seller's and Parent's knowledge, any of
their respective officers, directors, employees or agents, has ever
made, offered or agreed to offer anything of value to any employees
of any customers of Seller for the purpose of attracting business
to Seller or to any foreign or domestic governmental official,
political party or candidate for government office or any of their
employees or representatives, nor have they otherwise taken any
action which would cause it to be in violation of the Foreign
Corrupt Practices Act of 1977, as amended.
Section 5.17. Complete Disclosure. To the best of
Seller's and Parent's knowledge, this Agreement and the schedules
hereto and all other documents and written information furnished to
Buyer and its representatives pursuant hereto or pursuant to the
negotiation of this transaction or the investigations by Buyer or
its employees or representatives, taken as a whole, do not and will
not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not
misleading. If Parent or Seller becomes aware of any fact or
circumstance which would change a representation or warranty of
Seller or Parent in this Agreement or any other statement made or
document provided to Buyer, the party with such knowledge shall
promptly give notice of such fact or circumstance to Buyer. None
of (a) such notification, (b) any pre-closing investigation by
Buyer of Seller, the Assets or the Business, or (c) the Closing
contemplated by this Agreement, shall relieve Parent or Seller of
its obligations under this Agreement, including the representations
and warranties made in this Article 5.
Section 5.18. Representation Concerning Totality of Assets.
Seller owns, leases or has the legal right to use all of the
properties and assets, including the Land, the Permits, the
Customer Contracts, the Rolling Stock and the Equipment, used or
intended to be used in the conduct of the Business, and, with
respect to contract rights, Seller is a party to and enjoys the
benefit of all contracts, agreements and other arrangements used or
intended to be used by Seller in or relating to the conduct of the
Business. Seller has good and marketable title to the Assets to be
transferred by it, or, in the case of leased or subleased Assets,
valid and subsisting leasehold interests in all such Assets, free
and clear of all Encumbrances except those that do not affect the
use or value of such Assets, and such Assets constitute all the
properties, assets and rights forming a part of, used, held or
intended to be used in, and necessary in the conduct of, the
Business. If additional assets or rights forming a part of, used,
held or intended to be used in, and necessary in the conduct of,
the Business, other than Excluded Assets, are identified post-
Closing as not having been adequately transferred to Buyer, Seller
shall promptly transfer and assign to Buyer such assets or rights
as part of the Purchase Price and without additional consideration.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants that the statements
contained in this Section 6: (i) are correct and complete as of
the date of this Agreement; (ii) will be correct and complete as of
the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout
this Section 6); and (iii) shall survive the Closing in accordance
with Section 11.1.
Section 6.1. Organization. Each of Buyer and WCIC
Parent is duly organized, validly existing and in good standing
under the laws of the state of its incorporation. Each of Buyer
and WCIC Parent is duly authorized, qualified and licensed under
all applicable laws, regulations and ordinances of public
authorities to carry on its businesses in the places and in the
manner as now conducted except for where the failure to be so
authorized, qualified or licensed would not have a material adverse
affect on such businesses.
Section 6.2. Authority; Binding Effect.
(a) The board of directors of Buyer has, or prior to the
Closing Date will have, duly authorized the execution and delivery
of this Agreement and the consummation of the transactions
contemplated by Buyer. Buyer has the full legal right, power and
authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement.
(b) This Agreement has been, or prior to the Closing
Date will have been, duly authorized, and has been duly executed
and delivered by Buyer and is the valid and binding obligation of
Buyer, enforceable against it in accordance with its terms.
(c) The board of directors of WCIC Parent prior to the
Closing Date will have duly authorized the execution and delivery
of the Guaranty and the consummation of the transactions
contemplated thereby by WCIC Parent. WCIC has the full legal
right, power and authority to enter into the Guaranty and to
consummate the transactions contemplated thereby.
(d) The Guaranty has been, or prior to the Closing Date
will have been, duly authorized, and will have been duly executed
and delivered by WCIC Parent and will be the valid and binding
obligation of WCIC Parent, enforceable against it in accordance
with its terms.
Section 6.3. No Conflicts. The execution, delivery and
performance of this Agreement, the consummation of any transactions
herein referred to or contemplated hereby and the fulfillment of
the terms hereof and thereof will not: (a) conflict with, or
result in a breach or violation of the Certificate of Incorporation
or Bylaws of Buyer; (b) conflict with, or result in a material
breach under any document, agreement or other instrument to which
Buyer is a party, or result in the creation or imposition of any
lien, charge or encumbrance on any properties of Buyer pursuant to:
(i) any law or regulation to which Buyer or any of its property is
subject, or (ii) any judgment, order or decree to which Buyer is
bound or any of its property is subject; or (c) except with respect
to the Final Judgment, require the consent of, or the filing with
any governmental authority or agency or any other third party in
order to remain in full force and effect.
ARTICLE 7. COVENANTS PRIOR TO CLOSING
Section 7.1. Access to Land and Records. Between the
date of this Agreement and the Closing Date, Parent will cause
Seller to afford to or obtain for the officers and authorized
representatives of Buyer access to all of the Land (including for
the purpose of performing all testing, inspections and other
procedures considered desirable by Buyer), sites, books and records
of Seller, at all reasonable times and upon reasonable notice and
will furnish Buyer with such additional financial and operating
data and other information as to the Assets as Buyer may from time
to time reasonably request. Seller will cooperate with Buyer, its
representatives, engineers, auditors and counsel in the preparation
of any documents or other material which may be required in
connection with any documents or materials required by any
governmental agency. Buyer will cause all information obtained in
connection with the negotiation of this Agreement to be treated as
confidential in accordance with the provisions of Article 13
hereof.
Section 7.2. Activities of Seller Prior to Closing.
Between the date of this Agreement and the Closing Date, Seller
will and Parent will cause Seller to:
(a) maintain the Assets in as good working order and
condition as at present, ordinary wear and tear excepted;
(b) perform all of its obligations under the Real Estate
Leases, Permits, Customer Contracts, Related Approvals and Employee
Contracts;
(c) keep in full force and effect present insurance
policies, bonds, letters of credit or other insurance coverage with
reputable insurers and issuers;
(d) use reasonable efforts to maintain its relationships
with suppliers, customers, consultants, employees, independent
contractors and others having business relations with Seller;
(e) maintain material compliance with all Applicable
Laws;
(f) maintain and perform present debt and lease
instruments in accordance with their terms and not enter into new
or amended debt or lease instruments related to the Assets, without
the prior written consent of Buyer; and
(g) provide all reasonable assistance to Buyer to
provide for an orderly transfer of the Assets from it to Buyer.
Section 7.3. Prohibited Activities Prior to Closing.
Between the date of this Agreement and the Closing Date, Seller
will not, and Parent will cause Seller not to, without the prior
written consent of Buyer:
(a) change the authorized capital, admit new
shareholders or permit the withdrawal of existing shareholders of
Seller, or grant any options, warrants, puts, calls, conversion
rights or commitments relating to Seller's equity interests of any
kind;
(b) incur or agree to incur any liability or make any
capital expenditures related to the Assets in excess of an
aggregate of $150,000;
(c) enter into any new mortgage, pledge or other lien or
encumbrance upon any Asset;
(d) breach, amend or terminate any Real Estate Lease,
Permit, Customer Contract, Related Approval or Employee Contract in
any material manner;
(e) enter into any transaction outside the ordinary
course of the business of Seller or otherwise prohibited hereunder;
(f) allow any other action or omission, or series of
actions or omissions, by Seller or Parent that would cause a
representation and warranty of Seller and Parent made in Section
5.13 of this Agreement to be untrue on the Closing Date; or
(g) grant any compensation increases other than in the
ordinary course of business, consistent with past practice.
Section 7.4. Contact with Government Officials. Seller
and Parent shall each use their best efforts to cooperate with
Buyer in making contact with the appropriate governmental agencies
and officials having information about or jurisdiction over Seller,
the Parent or the Land, assets or obligations or rights of Seller,
including environmental and land use agencies and officials, in
order to assist Buyer in completing their regulatory evaluation of
Seller and its obligations and arranging for the transfer of, or
obtaining any consent required for the transfer of, any Rights or
Permits.
Section 7.5. Public Announcements. Between the date of
this Agreement and the Closing Date, Buyer, Parent and Seller will
prepare a mutually acceptable written announcement concerning this
transaction. Except in connection with the Final Judgment or as
may otherwise be required by law or the requirements of the New
York Stock Exchange, the Nasdaq Stock Market or the Securities and
Exchange Commission, neither Buyer, Parent nor Seller shall make
any additional public announcements without the prior consent of
the other party.
ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT
AND SELLER
The obligations of Parent and Seller hereunder are
subject to the completion, satisfaction, or at their option,
waiver, on or prior to the Closing Date, of the following
conditions.
Section 8.1. Representations and Warranties. The
representations and warranties of Buyer contained in this Agreement
shall be accurate on and as of the Closing Date with the same
effect as though such representations and warranties had been made
on and as of such date; and each and all of the terms, covenants
and conditions of this Agreement to be complied with and performed
by Buyer on or before the Closing Date shall have been duly
complied with and performed.
Section 8.2. Consents. All necessary notices to,
consents of and filings with any governmental authority or agency
or other third party relating to the consummation of the Closing or
the other transactions contemplated herein to be made or obtained
by Buyer shall have been obtained and made.
Section 8.3. Corporate Approval. The board of directors
and stockholders of Seller and the board of directors of Parent
shall have approved the transactions contemplated by this
Agreement.
Section 8.4. No Adverse Proceeding. No action or
proceeding before a court or any other governmental agency or body
shall have been instituted or threatened to restrain or prohibit
any of the transactions contemplated by this Agreement.
Section 8.5. Simultaneous Closings. The consummation of
the transactions identified on Annex I shall occur simultaneously
with the Closing.
Section 8.6. Final Judgment. There shall have been
received all consents and approvals with respect to the
transactions contemplated by this Agreement as required by the
Final Judgment.
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the
completion, satisfaction or, at its option, waiver, on or prior to
the Closing Date, of the following conditions.
Section 9.1. Representations and Warranties. The
representations and warranties of Seller and Parent contained in
this Agreement shall be accurate on and as of the Closing Date with
the same effect as though such representations and warranties had
been made on and as of such date, and a certificate to the
foregoing effect, or setting forth any discrepancies in such
representations and warranties which have arisen since the date of
this Agreement, dated the Closing Date and signed by Seller and
Parent shall have been delivered to Buyer. The foregoing
notwithstanding, Seller and Parent agree that no limitation of any
representation or warranty shall restrict Buyer's right to
terminate this Agreement if any such representation or warranty as
set forth in Article 5 is inaccurate as of the Closing Date.
Section 9.2. Covenants. Each and all of the terms,
covenants and conditions of this Agreement to be complied with and
performed by Seller and Parent on or before the Closing Date shall
have been duly complied with and performed.
Section 9.3. Corporate Approval. The board of directors
of Buyer shall have approved the transactions contemplated by this
Agreement.
Section 9.4. No Adverse Proceeding. No action or
proceeding before a court or any other governmental agency or body
shall have been instituted or threatened to restrain or prohibit
any of the transactions contemplated by this Agreement, and no
governmental agency or body shall have taken any other action or
made any request of Buyer as a result of which the management of
Buyer deems it inadvisable to proceed with the transactions
hereunder.
Section 9.5. Simultaneous Closings. The consummation of
the transactions identified on Annex I shall occur simultaneously
with the Closing.
Section 9.6. No Adverse Change. No material and adverse
change in the results of operations or financial condition of the
Business shall have occurred since January 1, 1999.
Section 9.7. Consents. All necessary notices to,
consents of and filings with any governmental authority or agency
relating to the consummation of the transactions contemplated
herein to be made or obtained by Seller or Parent shall have been
obtained and made by Seller or Parent, and Buyer shall have
determined, in its sole discretion, that Buyer has obtained all of
the consents they deem necessary under any material Customer
Contract requiring consent to assignment by virtue of the
transaction contemplated hereunder.
Section 9.8. Delivery of Disclosure Schedules.
(a) Seller shall have delivered to Buyer complete and
final Disclosure Schedules at least seven business days prior to
the scheduled date for Closing and such Disclosure Schedules must
have been determined by Buyer to be reasonably acceptable to it.
(b) In the event that Seller is unable to deliver
complete and final Disclosure Schedules to Buyer by such time,
Seller shall nevertheless deliver to Buyer such complete and final
Disclosure Schedules as promptly as practicable thereafter and
prior to Closing. The parties further agree that should Buyer
object to any item or items on such Disclosure Schedules, Buyer and
Seller shall negotiate in good faith and shall take such actions as
are reasonably necessary to resolve the matters relating to such
objection prior to Closing (it being understood that no Closing
shall take place until the parties mutually resolve such matters in
dispute).
Section 9.9. Updated Agreements. Parent shall have
delivered to Buyer a schedule (Schedule 9.9) dated the Closing
Date, listing all agreements entered into by Seller relative to the
Business or the Assets since the date of Schedule 5.6, which new
agreements must be determined by Buyer to be reasonably acceptable
to them.
Section 9.10. Transferability of Permits. Buyer shall
have determined, in its sole discretion and after consultation with
Seller, that as a result of this transaction all of the Permits
required for the operation of the Business that are transferable
have been transferred to Buyer, or can be so transferred without
public hearing.
Section 9.11. Survey. Subject to Section 3.8, Seller
shall have delivered the Surveys to Buyer in form and substance
provided for in Article 3.
Section 9.12. Title Policy. Subject to Section 3.8, the
Title Company shall have issued the preliminary title commitments
and shall have agreed to issue the Title Policies in each case in
accordance with Article 3.
Section 9.13. Due Diligence Review. Buyer must have
received results satisfactory to it, in its sole discretion, from a
financial, operational, title and environmental review of Seller
and the Assets.
Section 9.14. Completion of Audit. WCI Parent's
independent auditors, Ernst & Young LLP, shall have completed their
audit of the books and records of Seller relating to the Business
operated by Seller with the Assets to the reasonable satisfaction
of WCI Parent within 30 days after the date of this Agreement.
Section 9.15. General. All actions taken by Parent and
Seller in connection with the consummation of the transactions
contemplated hereby and all certificates, opinions and other
documents required to effect the transactions contemplated hereby
will be reasonably satisfactory in form and substance to Buyer.
Section 9.14. Final Judgment. There shall have been
received all consents and approvals with respect to the
transactions contemplated by this Agreement as required by the
Final Judgment.
ARTICLE 10. LIABILITIES
Section 10.1. Non-Assumption of Liabilities. Except as
explicitly set forth in Section 10.2 below, Buyer shall not, by the
execution and performance of this Agreement or otherwise, assume,
become responsible for or incur any liability or obligation of any
nature of Seller or Parent relating to the Business or Assets,
whether legal or equitable, matured or contingent, known or
unknown, foreseen or unforeseen, ordinary or extraordinary, patent
or latent, arising out of occurrences prior to the Closing Date,
including any liability or obligation arising out of or relating
to: (a) any occurrence or circumstance (whether known or unknown)
which occurs or exists on or prior to the Closing Date and which
constitutes, or which by the lapse of time or giving notice (or
both) would constitute, a breach or default under any lease,
contract, or other instrument or agreement (whether written or
oral) other than the Permits and the Customer Contracts; (b) injury
to or death of any person or damage to or destruction of any
property occurring prior to the Closing Date, whether based on
negligence, breach of warranty, or any other theory; (c) violation
of the requirements of any governmental authority or of the rights
of any third person, including any requirements relating to the
reporting and payment of federal, state, local or other income,
sales, use, franchise, excise or property tax liabilities of Seller
or Parent relating to the Business or Assets; (d) the generation,
collection, transportation, storage or disposal by Seller of
Hazardous Materials; (e) any obligations of Seller arising prior to
the Closing Date under any agreement or arrangement between Seller
and the employees of Seller or any labor or collective bargaining
unit representing any such employees; (f) any employee benefit
plan, employee welfare benefit plan, employee pension benefit plan,
multi-employer plan or multiple-employer welfare arrangements (as
defined in Sections 3(3), (1), (2), (37) and (40), respectively, of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) which are currently maintained and/or sponsored by
Seller, or to which Seller currently contributes, or has an
obligation to contribute in the future (including employment
agreements and any other agreements containing "golden parachute"
provisions and deferred compensation agreements except for the
obligations under the Employee Contracts that arise after the
Closing Date); (g) any severance pay obligation of Seller or Parent
or any employee benefit plan (within the meaning of Section 3(3) of
ERISA) or any other fringe benefit program maintained or sponsored
by Seller or to which Seller contributes or any contributions,
benefits or liabilities therefor or any liability for the
withdrawal or partial withdrawal from or termination of any such
plan or program by Seller; (h) any obligations related to any of
the Excluded Assets; and (i) the debts of Seller or Parent not
specifically assumed by Buyer hereunder. Seller and Parent hereby
jointly and severally agree to indemnify Buyer, its successors and
assigns from and against all of the above liabilities and
obligations in accordance with Section 11.2 below.
Section 10.2. Assumption of Obligations.
(a) Buyer agrees to perform all of Seller's obligations
under the Customer Contracts, Related Approvals, Employee
Contracts, and Permits only to the extent such obligations first
mature and are required to be performed subsequent to the close of
business on the date of Closing.
(b) Buyer agrees to assume all of Seller's obligations
accruing after the Closing Date with respect to matters occurring
subsequent to the Closing Date under any Real Estate Lease assigned
at the Closing.
(c) Intentionally Omitted.
(d) Buyer agrees to assume at the Closing Seller's
liability under performance bonds with respect to the Assets, and
agrees to timely post substitute financial assurances as required
under environmental permits for environmental matters relating to
the Assets within 90 days following the Closing.
Section 10.3. Employees. The following shall apply with respect
to non-union employees of Seller hired by Buyer within 30 days
following the Closing Date ("Hired Employees"):
(a) Buyer shall waive, or cause to be waived, (A) all waiting
periods for a Hired Employee to become eligible for participation
in all of the benefit plans generally available for the employees
of Buyer or its affiliates, except that Buyer may require
compliance with applicable waiting periods for participation in
401(k) plans, pension plans and long-term disability plans, and (B)
limitations respecting "pre-existing conditions" in the applicable
medical insurance plan or plans, except for any condition of a
Hired Employee which was not covered under Seller's medical
insurance plan during such employee's employment with Seller.
(b) Buyer shall count each Hired Employee's years of continuous
service with Seller or its affiliates for purposes of determining
vacation benefits under Buyer's vacation plan; however, the Hired
Employee shall not be entitled to use any vacation accumulated
during employment with Seller and its affiliates.
(c) If Buyer terminates a Hired Employee without cause within 60
days after the Closing Date, Buyer shall pay such Hired Employee
severance equal to two (2) weeks current base pay for every one
year of such employee's continuous service with the Seller or its
affiliates.
(d) With respect to Hired Employees, the parties agree that no
COBRA qualifying event will have occurred, and therefore that no
COBRA notices will be given by Seller or Buyer. If Buyer cannot
bring Hired Employees into its medical insurance plan on the
Closing Date, then Seller shall continue to provide such coverage
for the Hired Employees until the date they are so brought into
Buyer's plan, and Buyer shall promptly reimburse Seller on demand
for the costs of such coverage.
ARTICLE 11. INDEMNIFICATION
Section 11.1. Survival of Representations, Warranties
and Covenants. All of the representations, warranties and
covenants of any party hereto contained in this Agreement and the
liabilities and obligations of the parties with respect thereto
shall survive the Closing hereunder for two years after the Closing
Date; provided, however, that (i) the representations and
warranties in Sections 5.5, 5.14 and 5.15 shall survive for a
period of three years, (ii) the representations and warranties in
Sections 5.1, 5.2, 5.10, 6.1 and 6.2 shall survive until the
expiration of the applicable statute of limitations period, and
(iii) the covenants in Sections 7.6, 10.1 and 10.2 shall survive
indefinitely.
Section 11.2. Indemnification by Parent and Seller. Seller
and Parent agree that they will each, jointly and severally,
indemnify, defend (as to third party claims only), protect and hold
harmless Buyer, its officers, shareholders, directors, divisions,
subdivisions, affiliates, subsidiaries, parents, agents, members,
managers, employees, successors and assigns (the "Buyer Indemnified
Parties") at all times from and after the date of this Agreement
from and against all liabilities, claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, penalties, losses,
costs and expenses whatsoever (including court costs, reasonable
attorneys' fees and expenses and expenses of investigation) whether
equitable or legal, matured or contingent, known or unknown,
foreseen or unforeseen, ordinary or extraordinary, patent or latent
(collectively, "Losses") incurred by the Buyer Indemnified Parties
as a result of or incident to: (a) any breach of, misrepresentation
in, untruth in or inaccuracy in the representations and warranties
by Seller or Parent (including those relating to Seller's
environmental compliance), set forth herein or in the Schedules,
Exhibits or certificates attached hereto or delivered pursuant
hereto; (b) nonfulfillment or nonperformance of any agreement,
covenant or condition on the part of Parent or Seller made in this
Agreement; (c) Seller's past ownership or operation of any
landfill; (d) the matters set forth in Section 10.1; or (e) any
claim by a third party that, if true, would mean that a condition
for indemnification set forth in subsections (a) through (d) of
this Section 11.2 had been satisfied.
Section 11.3. Indemnification by Buyer. Buyer agrees that it
will indemnify, defend (as to third party claims only), protect and
hold harmless Seller and Parent, and their respective officers,
shareholders, directors, divisions, subdivisions, affiliates,
subsidiaries, parents, agents, members, managers, employees,
successors and assigns (the "Seller Indemnified Parties") at all
times from and after the Closing Date from and against all Losses
incurred by any of the Seller Indemnified Parties as a result of or
incident to: (a) any breach of, misrepresentation in, untruth in or
inaccuracy in the representations and warranties set forth herein,
or in the Schedules or certificates attached hereto or delivered
pursuant hereto by Buyer; (b) nonfulfillment or nonperformance of
any agreement, covenant or condition on the part of Buyer made in
this Agreement (including the covenants set forth in Section 10.2);
and (c) any claim by a third party that, if true, would mean that a
condition for indemnification set forth in subsections (a) or (b)
of this Section 11.3 had been satisfied.
Section 11.4. Limitation on Liability. The
indemnification obligations set forth in this Article 11 shall
apply only if a Closing occurs, and then only after the aggregate
amount of such obligations exceed $250,000, when combined with the
amounts of the indemnification obligations in the agreements listed
on Annex I, at which time the indemnification obligations shall be
effective as to all amounts, including the initial $250,000.
Further, the indemnification obligations set forth in this Article
11 shall be limited to an aggregate amount not to exceed
$10,000,000, when combined with the amounts of the indemnification
obligations in the agreements listed on Annex I. Notwithstanding
the foregoing, the $250,000 and $10,000,000 shall not apply to the
indemnification obligations on account of a breach of the covenants
set forth in Section 7.6, 10.1 or 10.2 or to any indemnification
obligations pursuant to Section 11.2(c).
Section 11.5. Procedure for Indemnification with Respect
to Third Party Claims.
(a) If any third party shall notify a party to this
Agreement (the "Indemnified Party") with respect to any matter (a
"Third Party Claim") that may give rise to a claim for
indemnification against any other party to this Agreement (the
"Indemnifying Party") or if any party who may make a claim for
indemnification under this Agreement otherwise becomes aware of any
matter that may give rise to such a claim or wishes to make such a
claim (whether or not related to a Third Party Claim), then the
Indemnified Party shall promptly notify each Indemnifying Party
thereof in writing; provided, however, that no delay on the part of
the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party is thereby
prejudiced.
(b) Any Indemnifying Party will have the right to defend
the Indemnified Party against a Third Party Claim with counsel of
its choice satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within
a reasonable time after the Indemnified Party has given notice of
the Third Party Claim that the Indemnifying Party will indemnify
the Indemnified Party from and against the entirety of any adverse
consequences (which will include all losses, claims, liens, and
attorneys' fees and related expenses) the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Third Party Claim, (ii) the Indemnifying Party
provides the Indemnified Party with evidence acceptable to the
Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (iii) the Third
Party Claim involves only monetary damages and does not seek an
injunction or equitable relief or involve the possibility of
criminal penalties, (iv) settlement of, or adverse judgment with
respect to the Third Party Claim is not, in the good faith judgment
of the Indemnified Party, likely to establish a precedential custom
or practice adverse to the continuing business interests of the
Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 11.5(b)
above, (i) the Indemnified Party may retain separate co-counsel at
its sole cost and expense and participate in the defense of the
Third Party Claim, (ii) the Indemnified Party will not consent to
the entry of any judgment or enter into any settlement with respect
to the Third Party Claim without the prior written consent of the
Indemnifying Party (which will not be unreasonably withheld) and
(iii) the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified
Party (which will not be unreasonably withheld).
(d) In the event or to the extent that any of the
conditions set forth in Section 11.5(b) above is or becomes
unsatisfied, however, (i) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim and any matter it
may deem appropriate in its sole discretion and the Indemnified
Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith (but will keep the
Indemnifying Party reasonably informed regarding the progress and
anticipated cost thereof), (ii) the Indemnifying Party will
reimburse the Indemnified Party promptly and periodically for the
cost of defending against the Third Party Claim (including
attorneys' fees and expenses), (iii) the Indemnifying Party will
remain responsible for any adverse consequences the Indemnified
Party may suffer resulting from, arising out of, relating to, in
the nature of, or caused by the Third Party Claim to the fullest
extent provided in this Section 11, and (iv) the Indemnifying Party
shall be deemed to have waived any claim that its indemnification
obligation should be reduced because of the manner in which the
counsel for the Indemnified Party handled the Third Party Claim.
ARTICLE 12. TERMINATION OF AGREEMENT
Section 12.1. Termination by Buyer. Buyer, by notice in
the manner hereinafter provided on or before the Closing Date, may
terminate this Agreement with respect to the Business or the Assets
giving rise to the breach in the event of a material breach by
Parent or Seller of any representation or warranty by either of
them herein or in the observance or in the due and timely
performance of any of the agreements or conditions contained herein
on their part to be performed, and such breach shall not have been
cured, after written notice thereof, on or before the Closing Date
or, if longer, on or before 10 business days following the Closing
Date.
Section 12.2. Termination by Seller. Seller, by notice
in the manner hereinafter provided on or before the Closing Date,
may terminate this Agreement with respect to the Business or the
Assets giving rise to the breach in the event of a material breach
by Buyer of any representation or warranty by it herein or in the
observance or in the due and timely performance of any of the
covenants, agreements or conditions contained herein on their part
to be performed, and such breach shall not have been cured, after
written notice thereof, on or before the Closing Date or, if
longer, on or before 10 business days following the Closing Date.
Section 12.3. Termination due to Final Judgment. This
Agreement will terminate automatically if the United States objects
pursuant to and in the manner contemplated by Section VI of the
Final Judgment.
ARTICLE 13. NONDISCLOSURE; NONSOLICITATION
Section 13.1. Nondisclosure by Seller, Parent and their
Affiliates. Seller and Parent recognize and acknowledge that they
had in the past, currently have, and in the future may possibly
have, access to certain confidential information of Buyer, such as
lists of customers, operational policies, and pricing and cost
policies that are valuable, special and unique assets of Buyer and
their businesses. Seller and Parent each agree that they and their
affiliates will not, except as may be required by law or valid
legal process, disclose such confidential information to any
person, firm, corporation, association or other entity for any
purpose or reason whatsoever, except to authorized representatives
of Buyer, unless such information becomes known to the public
generally through no fault of Seller, Parent or any of their
affiliates. In the event of a breach or threatened breach by
Seller or Parent of the provisions of this Section, Buyer shall be
entitled to an injunction restraining such party from disclosing,
in whole or in part, such confidential information. Nothing herein
shall be construed as prohibiting Buyer from pursuing any other
available remedy for such breach or threatened breach, including
the recovery of damages. The provisions of this Section shall
apply at all times prior to the Closing Date and for a period of
one year following the termination of this Agreement without a
Closing having occurred.
Section 13.2. Nondisclosure by Buyer. Buyer recognizes
and acknowledges that it has in the past, currently has, and prior
to the Closing Date, will have access to certain confidential
information of Seller, such as lists of customers, operational
policies, and pricing and cost policies that are valuable, special
and unique assets of Seller. Buyer agrees that it and its
affiliates will not, except as may be required by law or valid
legal process, disclose such confidential information to any
person, firm, corporation, association, or other entity for any
purpose or reason whatsoever, prior to the Closing Date except to
authorized representatives of Seller, unless such information
becomes known to the public generally through no fault of Buyer or
its affiliates. In the event of a breach or threatened breach by
Buyer of the provisions of this Section, Seller shall be entitled
to an injunction restraining such party from disclosing, in whole
or in part, such confidential information. Nothing contained
herein shall be construed as prohibiting Seller from pursuing any
other available remedy for such breach or threatened breach,
including the recovery of damages. The provisions of this Section
shall apply at all times prior to the Closing Date and for a period
of one year following the termination of this Agreement without a
Closing having occurred.
ARTICLE 14. GENERAL
Section 14.1. Assignment; Binding Effect; Amendment.
This Agreement and the rights of the parties hereunder may not be
assigned (except by operation of law) and shall be binding upon and
shall inure to the benefit of the parties hereto, and the
successors of Buyer, Seller and Parent. This Agreement, upon
execution and delivery, constitutes a valid and binding agreement
of the parties hereto enforceable in accordance with its terms and
may be modified or amended only by a written instrument executed by
all parties hereto.
Section 14.2. Entire Agreement. This Agreement is the
final, complete and exclusive statement and expression of the
agreement among the parties hereto with relation to the subject
matter of this Agreement, it being understood that there are no
oral representations, understandings or agreements covering the
same subject matter as this Agreement. This Agreement supersedes,
and cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous discussions, correspondence, or oral
or written agreements of any kind.
Section 14.3. Counterparts. This Agreement may be
executed simultaneously in two or more counterparts, each of which
shall be deemed an original and all of which together shall
constitute but one and the same instrument.
Section 14.4. No Brokers. Seller and Parent represent
and warrant to Buyer and Buyer represents and warrants to Seller
and Parent that the warranting party has had no dealings with any
broker or agent so as to entitle such broker or agent to a
commission or fee in connection with the within transaction. If
for any reason a commission or fee shall become due, the party
dealing with such agent or broker shall pay such commission or fee
and agrees to indemnify and save harmless each of the other parties
from all claims for such commission or fee and from all attorneys'
fees, litigation costs and other expenses relating to such claim.
Section 14.5. Expenses of Transaction. Whether or not
the transactions herein contemplated shall be consummated: (i)
Buyer will pay the fees, expenses and disbursements of Buyer and
its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any
amendments hereto and all other costs and expenses incurred in the
performance and compliance with all conditions to be performed by
Buyer under this Agreement; and (ii) Seller will pay the fees,
expenses and disbursements of Seller and Parent and their
respective agents, representatives, accountants and counsel
incurred in connection with the subject matter of this Agreement
and any amendments hereto and all other costs and expenses incurred
in the performance and compliance with all conditions to be
performed by Parent and Seller under this Agreement. All such
fees, expenses and disbursements of Parent and Seller shall be paid
or provided for by Seller prior to the Closing so that the Assets
will not be charged with or diminished by any such fee, cost or
expense. Parent and Seller represent and warrant to Buyer that
Parent and Seller have relied on their own advisors for all legal,
accounting, tax or other advice whatsoever with respect to this
Agreement and the transactions contemplated hereby.
Section 14.6. Notices. All notices or other
communications required or permitted hereunder shall be in writing
and may be given by depositing the same in United States mail,
addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, by overnight
courier or by delivering the same in person to such party.
(a) If to Seller, addressed to Seller at:
Allied Waste Industries, Inc.
15880 N. Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
Attn: Rick Wojahn
with a copy to:
Allied Waste Industries, Inc.
15880 N. Greenway-Hayden Loop, Suite 100
Scottsdale, Arizona 85260
Attn: Steven M. Helm, Vice President - Legal
and a copy to:
Fennemore Craig, P.C.
3003 N. Central Avenue, Suite 2600
Phoenix, Arizona 85012
Attn: W. T. Eggleston, Jr., Esq.
(b) If to Buyer, addressed to Buyer at:
Waste Connections, Inc.
2260 Douglas Boulevard, Suite 280
Roseville, CA 95661
ATTN: 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, CA 94111
Fax: (415) 421-2922
Notice shall be deemed given and effective the day personally
delivered, the day after being sent by overnight courier, subject
to signature verification, and three business days after the
deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when
actually received, if earlier. Any party may change the address
for notice by notifying the other parties of such change in
accordance with this Section. Notwithstanding the foregoing,
notices and other communications regarding title and survey matters
shall be provided only to: (a) if to Seller, addressed to Ginger
Perry, Esq., Fennemore Craig, P.C., 3003 N. Central Avenue, Suite
2600, Phoenix, Arizona 85012; and (b) if to Buyer, addressed to
Winnifred C. Ward, Shartsis, Friese & Ginsburg LLP, One Maritime
Plaza, 18th Floor, San Francisco, CA 94111.
Section 14.7. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of
the State of Colorado, without giving effect to any choice or
conflict of law provision or rule (whether of the State of Colorado
or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Colorado.
Section 14.8. No Waiver. No delay of or omission in the
exercise of any right, power or remedy accruing to any party as a
result of any breach or default by any other party under this
Agreement shall impair any such right, power or remedy, nor shall
it be construed as a waiver of or acquiescence in any such breach
or default, or of or in any similar breach or default occurring
later; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach of default occurring before or
after that waiver.
Section 14.9. Time of the Essence. Time is of the
essence of this Agreement.
Section 14.10. Captions. The headings of this Agreement
are inserted for convenience only, shall not constitute a part of
this Agreement or be used to construe or interpret any provision
hereof.
Section 14.11. Severability. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, it
shall, to the extent possible, be modified in such manner as to be
valid, legal and enforceable but so as most nearly to retain the
intent of the parties. If such modification is not possible, such
provision shall be severed from this Agreement. In either case the
validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired
thereby.
Section 14.12. Construction. The parties have
participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local or foreign statute shall be
deemed to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word
"including" means including, without limitation. The parties
intend that representations, warranties and covenants contained
herein shall have independent significance. If any party has
breached any representation, warranty or covenant contained herein
in any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party
has not breached shall not detract from or mitigate the fact the
party is in breach of the first representation, warranty or
covenant.
Section 14.13. Standstill Agreement. Unless and until
this Agreement is terminated pursuant to Article 12 hereof without
the Closing having taken place, Seller will not directly or
indirectly solicit offers for the Assets or the Business or for a
merger or consolidation involving the Assets or the Business, or
respond to inquiries from, share information with, negotiate with
or in any way facilitate inquiries or offers from, third parties
who express or who have heretofore expressed an interest in
acquiring any of the Assets or the Business by merger,
consolidation or other combination, nor will Parent permit Seller
to do any of the foregoing, unless the Board of Directors of the
affected party shall have concluded in good faith, after
consultation with its legal counsel, that doing any of the
foregoing is required in order to comply with its fiduciary duties
to the stockholders of the affected party under applicable law.
[Signatures Appear on the Next Page]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
BUYER:
Waste Connections of Colorado, Inc.
By:
Its:
SELLER:
Allied Waste Transportation, Inc.
By:
Its:
BFI Services Group, Inc.
By:
Its:
PARENT:
Allied Waste Industries, Inc.
By:
Its:
EXHIBIT 10.3
CLOSING AGREEMENT
THIS CLOSING AGREEMENT (the "Agreement") is executed and delivered
as of November 17, 1999, among WASTE CONNECTIONS, INC., a Delaware
corporation ("Buyer"); ALLIED WASTE SYSTEMS HOLDINGS, INC., a
Delaware corporation ("Seller"); ALLIED WASTE INDUSTRIES, INC., a
Delaware corporation ("Parent"); and DENVER REGIONAL LANDFILL,
INC., a Colorado corporation (the "Company").
WHEREAS, Buyer, Seller and Parent have entered into a Stock
Purchase Agreement dated October 15, 1999 (the "Purchase
Agreement"), whereby Buyer will acquire from Seller the stock of
the Company;
WHEREAS, the Company is a party to a Landfill Gas Lease (the
"Gas Lease"), dated August 20, 1999, between the Company and NEO
Erie, LLC ("NEO"), a copy of which is attached hereto as Exhibit A;
WHEREAS, in connection with the Gas Lease, and pursuant to a
Site Lease (the "Site Lease"), dated August 20, 1999, between the
Company and MM Erie Power, LLC, an affiliate of NEO ("Erie"), a
copy of which is attached hereto as Exhibit B, the Company leases a
portion of its real property to Erie on which a landfill gas to
energy production plant has been or will be constructed;
WHEREAS, subject to the terms and conditions of this
Agreement, the parties desire to make certain agreements regarding
the assignment to Parent (or its assign) of certain rights of the
Company under the Gas Lease and the Site Lease (collectively, the
"Leases");
WHEREAS, the parties desire to enter into this Agreement
to induce each other to proceed with the Closing; and
WHEREAS, capitalized terms used but not otherwise defined
herein shall have the meanings assigned to them in the Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and other good and valuable
consideration, received to the full satisfaction of each of them,
the parties agree as follows:
1. Acknowledgment of Payment Under Gas Lease. The Company and
Buyer hereby acknowledge receipt of a copy of the Gas Lease, and
agree that, pursuant to Section 5.2(A) of the Gas Lease, the
purchase price of $1,200,000 paid by the Lessee under the Gas
Lease, as consideration for Lessee's purchase of the Company's
Collection System (as defined in the Gas Lease), was paid to Allied
Waste Systems Holdings, Inc., as the Company's designee for such
payment, and that neither the Company nor Buyer have any right,
title or interest in, or claim for, all or a portion of the
$1,200,000 payment.
2. Assignment of Assigned Rents Under Site Lease and Gas
Lease. The Company and Buyer hereby acknowledge receipt of a copy
of the Leases, and presently, absolutely and unconditionally grant,
transfer and assign (the "Assignment") to Parent, or its assigns, a
one half interest in all of the Company's and Buyer's right, title
and interest in and to all rents (including the Rent as defined in
Section 5.1 of the Gas Lease), additional rents, sums, charges,
income, revenues, royalties, reimbursements and profits
(collectively the "Assigned Rents") due and to become due or to
which they may now or hereafter become entitled, arising out of or
relating to the Leases, including the present right to collect the
Assigned Rents. The Assignment is not intended by the Company or
Buyer to be an assignment as security. The Company and Buyer
intend that the Assigned Rents be absolutely assigned as provided
in the Assignment and that they no longer be property of the
Company or Buyer.
3. Authorization to Tenants. The tenants under each of the
Leases are hereby irrevocably authorized and directed to recognize
the claims of Parent, or its assigns, hereunder without
investigating the reason for any action taken by Parent, or the
validity of Parent's rights in and to the Assigned Rents, by reason
of the Assignment. The Company and Buyer hereby irrevocably direct
and authorize each tenant or obligated party to pay to Parent, or
its assigns, all Assigned Rents due under the Leases. To the
extent such Assigned Rents are paid to Parent, or its assigns, the
Company and Buyer agree that the tenant or obligated party shall
have no further liability to Buyer, or its assigns, for the same.
4. No Liability for Parent. Parent and its assigns shall
not be obligated to perform or discharge nor do they hereby
undertake to perform or discharge any obligation, duty or liability
under the Gas Lease or the Site Lease, and the Assignment shall not
operate to place responsibility for the control, care, management
or repair of the Company's property upon Parent or its assigns, nor
for the carrying out of any of the terms and conditions of the Gas
Lease or the Site Lease. Further, this assignment shall not
operate to make Parent or its assigns responsible or liable for any
waste committed on the Company's property by Buyer, any of the
tenants or any other party, or for any dangerous or defective
condition of or on the Company's property, or for any negligence in
the management, upkeep, repair, operation, maintenance or control
of the Company's property resulting in property damage, loss,
injury or death to any tenant, licensee, occupant, employee or
stranger.
5. Buyer to Indemnify, Defend and Hold Parent Harmless.
Except for liability, loss or damage caused by Parent's willful
misconduct, Buyer and the Company, jointly and severally, shall
indemnify, defend and hold Parent and its assigns harmless of, for,
from and against any and all liabilities, claims, actions, causes
of action, losses or damages which Parent and its assigns do, may
or might incur under the Gas Lease and the Site Lease or under or
by reason of the Assignment and of and from any and all claims and
demands whatsoever which may be asserted against Parent or its
assigns by reason of any alleged obligations or undertakings on
Parent's or its assigns' part to perform or discharge any of the
terms, covenants or agreements contained in the Gas Lease or Site
Lease.
6. Remedies Not Exclusive. The Assignment shall in no way
operate to prevent the Parent or its assigns from pursuing any
right or remedy which they now have or hereafter may have under the
terms or conditions of the Purchase Agreement, or by law, or by
statute or in equity and all such rights and remedies shall be
cumulative.
7. Assignment of Leases. Certain office equipment (the
"Office Equipment") used by the Company is leased by Allied Waste
Systems, Inc., f/k/a Laidlaw Waste Systems, Inc. ("AWS") from third
parties. The Office Equipment is leased pursuant to the following
leases: Lease Agreement, dated April 12, 1996, between AT&T Credit
Corporation and Laidlaw Waste Systems, Inc.; and Business Product
Purchase Agreement dated May 1, 1996, between Laidlaw Waste
Systems, Inc. and AT&T. The Company is attempting to have the
leases assigned to the Company. Buyer agrees, and after the
Closing agrees to cause the Company, to assist Seller and Parent to
have the leases assigned to the Company. Buyer further agrees to,
from and after the Closing perform all the obligations of AWS under
the leases and indemnify, defend (as to third party claims only),
protect and hold harmless the Seller Indemnified Parties at all
times from and after the Closing from and against all Losses
incurred by the Seller Indemnified Parties as a result of or
incident to Buyer's or the Company's use or possession of the
Office Equipment. Such indemnification obligations shall survive
the Closing, shall not be subject to the limitations set forth in
Sections 11.1 and 11.4 of the Purchase Agreement, and shall be
subject to the procedures (if applicable) set forth in Section 11.5
of the Purchase Agreement.
8. Reimbursement of Closure and Post-Closure Costs. Section
4.7(a) of the Purchase Agreement is hereby amended to read in its
entirety as follows:
"(a) Parent and Seller, jointly and severally, shall be
fully liable for, and shall indemnify and hold the Company and
Buyer harmless from and against, all post-closure costs (the "Post-
Closure Costs"), if any, necessary or required to comply with all
applicable environmental laws and regulations, and all permit and
land use conditions (including without limitation general
maintenance, monitoring, remediation and regulatory compliance,
installation, maintenance and operation of wells, drainage
facilities, gas, electrical and other systemic processes,
preparation of surveys and reports, addressing geological issues,
and responding to storm erosion and other conditions caused by
weather), with respect to all portions of the landfill. In
addition, Parent and Seller, jointly and severally, shall be fully
liable for, and shall indemnify and hold the Company and Buyer
harmless from and against, all closure and capping costs (the
"Closure Costs"), if any, necessary or required for certified
closure and to comply with all applicable environmental laws and
regulations, and all permit and land use conditions (including
without limitation general maintenance, monitoring, remediation and
regulatory compliance, installation, maintenance and operation of
wells, drainage facilities, gas, electrical and other systemic
processes, preparation of surveys and reports, addressing
geological issues, and responding to storm erosion and other
conditions caused by weather), with respect to all those portions
of the landfill which are not used by the Company or Buyer (or
their successors) after the Closing Date, and, with respect to all
portions of the landfill which are used by Company or Buyer (or
their successors) after the Closing Date, in proportion to the
Parent and Seller's usage prior to the Closing Date.
The Company and Buyer, jointly and severally, shall be fully
liable for, and shall indemnify and hold Parent and Seller harmless
from and against, all Closure Costs, if any, necessary or required
to comply with all applicable environmental laws and regulations,
and all permit and land use conditions (including without
limitation general maintenance, monitoring, remediation and
regulatory compliance, installation, maintenance and operation of
wells, drainage facilities, gas, electrical and other systemic
processes, preparation of surveys and reports, addressing
geological issues, and responding to storm erosion and other
conditions caused by weather), with respect to all those portions
of the landfill which are used by the Company or Buyer (or their
successors) after the Closing Date, and, with respect to all
portions of the landfill which are used by Parent and Seller prior
to the Closing Date, in proportion to the Company and Buyer's (or
their successors') usage after the Closing Date.
For the period from the date of this Agreement through
December 31, 1999, and thereafter for each calendar quarter (each,
a "Compliance Period"), Seller shall notify the Company at least 10
days prior to commencement of such Compliance Period whether it
elects to pay Closure Costs and Post-Closure Costs for which it is
responsible that are expected to be incurred during such Compliance
Period (i) directly or (ii) through reimbursement of the Company
and Buyer. If Seller elects to pay such costs directly, Buyer
shall, or shall cause Company to, promptly send to Seller invoices
for all such costs incurred during the Compliance Period, and
Seller or Parent shall promptly pay such costs directly. If Seller
fails to pay such costs when due, the Company or Buyer may pay the
same and be reimbursed by Parent and Seller. If Seller elects to
reimburse the Company or Buyer for such costs, then, within 20 days
after the end of each Compliance Period, the Company or Buyer on
its behalf shall submit to Seller a detailed list of the costs paid
or incurred by the Company or Buyer during such Compliance Period,
together with such detailed receipts or other supporting materials
as Seller shall reasonably request. Within 30 days after receipt
of such list of costs, Seller or Parent shall reimburse the Company
or Buyer, as the case may be, for the full amount of such costs
plus interest at the rate of seven and one-half percent (7-1/2%)
per annum from the date the Company or Buyer paid such costs
through the date they are reimbursed by Seller. Any amount not
paid within 30 days after receipt of such list of costs shall be
subject to a late charge equal to the lower of one and one-half
percent (1-1/2%) per month or the maximum rate permitted by
applicable law. Buyer shall provide Seller periodic reports of
anticipated material expenditures, and Seller shall have the right
to inspect work giving rise to costs upon reasonable notice during
normal business hours. If Seller disputes any of such costs,
Seller or Parent shall nevertheless pay the amount not in dispute
within such 30-day period and the parties shall attempt to resolve
their differences with respect to the amount in dispute. If they
are unable to resolve their differences within 60 days after
Seller's receipt of such list of costs, they shall submit the
matter to binding arbitration in accordance with Section 2.2(c)."
9. Stock Certificates. Buyer agrees to waive the
requirement (and the corresponding condition to the Closing) that
Sellers deliver at Closing the certificates representing the
Company Stock. Sellers shall deliver such certificates within a
reasonable period of time after the Closing.
10. Good Standing Certificates. Buyer agrees to waive the
requirement (and the corresponding condition to the Closing) that
the good standing certificate to be delivered by Sellers at Closing
be dated within 10 days of the Closing.
11. Purchase Agreement. Except as modified in this
Agreement, all other provisions of the Purchase Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
BUYER:
WASTE CONNECTIONS, INC.
By: ______________________
Its: ______________________
COMPANY:
DENVER REGIONAL LANDFILL, INC.
By: ______________________
Its: ______________________
SELLER:
ALLIED WASTE SYSTEMS HOLDINGS, INC.
By: ______________________
Its: ______________________
PARENT:
ALLIED WASTE INDUSTRIES, INC.
By: ______________________
Its: ______________________
EXHIBIT 10.4
AGREEMENT
THIS AGREEMENT (the "Agreement") is executed and delivered as of
November 17, 1999, among Waste Connections of Colorado, Inc., a
Delaware corporation ("Buyer"); Allied Waste Transportation, Inc.,
a Delaware corporation, and BFI Services Group, Inc. (collectively,
"Seller"); and Allied Waste Industries, Inc., a Delaware
corporation ("Parent").
WHEREAS, Buyer, Seller and Parent have entered into an Asset
Purchase Agreement dated October 15, 1999 (the "Purchase
Agreement"), whereby Buyer will acquire from Seller certain assets
of the Seller;
WHEREAS, the parties desire to amend the requirements of the
Purchase Agreement with respect to certain duties of the Seller;
WHEREAS, the parties desire to enter into this Agreement to
induce each other to proceed with the Closing; and
WHEREAS, capitalized terms used but not otherwise defined
herein shall have the meanings assigned to them in the Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and other good and valuable
consideration, received to the full satisfaction of each of them,
the parties agree as follows:
1. All sections of the Purchase Agreement that require
Seller to prepare or deliver a Title Policy, Survey or Deed are
hereby deleted from the Purchase Agreement and any representations
relating thereto are modified to refer only to the Leased Land.
2. The Purchase Price is hereby increased to $19,000,000.
3. Within a reasonable period after the Closing (which
period shall not exceed 90 days) (the "Post-Closing Period"),
Parent (or its affiliates) shall enter into a disposal agreement
(the "New Disposal Agreement") with Buyer (or its affiliates)
pursuant to which Parent (or its affiliates) will cause
approximately 85,000 tons per year of waste to be disposed of at
the Finley Buttes Landfill owned by an affiliate of Buyer for a
period of three years from the date the New Disposal Agreement is
entered into at a rate of $18.00 per ton. The New Disposal
Agreement shall be on substantially the same terms as the Existing
Disposal Agreement (as defined below), but with such changes
therein as are appropriate, and shall be negotiated in good faith
by the parties during the Post-Closing Period. At such time as the
parties enter into the New Disposal Agreement, the Solid Waste
Disposal Agreement attached to the Agreement as Exhibit C (the
"Existing Disposal Agreement") shall be amended as follows:
(a) Section 3.1 of the Existing Disposal Agreement shall
be amended to read in its entirety as follows:
"3.1 Commencing on the first day of the month after the
Effective Date, Allied (directly or through an affiliate) may
deliver to the Disposal Sites solid waste (to be delivered in each
Annual Period in approximately even amounts) at the rates provided
in Section 4. The WCI Affiliates agree to accept Acceptable Waste
delivered to them pursuant to this Agreement. Allied and its
affiliates shall be entitled to determine whether waste on any
particular day is delivered to the Landfill, the Transfer Station
or another Disposal Site and, subject to this Section 3.1 and
Section 3.2, shall be entitled to determine how to allocate the
amount of Acceptable Waste among such Disposal Sites."
(b) Section 3.3 of the Existing Disposal Agreement shall
be deleted and replaced with the following:
"3.3 In addition to delivering waste to the Disposal Sites,
for a period of three years after the Effective Date (the
"Transloading Period), Allied (directly or through an affiliate)
may Transload waste at the Transfer Stations in volumes not to
exceed 450 Tons per day at the rates provided in Section 4. During
the Transloading Period, the WCI Affiliates agree to Transload for
Allied and its affiliates at the Transfer Station all Acceptable
Waste Allied and its affiliates bring to the Transfer Station.
"Transloading" shall mean the WCI Affiliates receiving Acceptable
Waste delivered by Allied or its affiliates to the Transfer
Station, allowing Allied or its affiliates to dump such waste in
the Transfer Station, and the WCI Affiliates then loading such
waste into another container or trailer to be supplied by Allied or
its affiliates. Allied and its affiliates will be responsible for
all transportation and disposal costs in connection with all waste
they deliver for Transloading. The WCI Affiliates will be
responsible for paying for and making, or causing to be made, and
maintaining, or causing to be maintained, all capital improvements
necessary to permit Allied and its affiliates to Transload at the
Transfer Station pursuant to this Section 3.3."
(c) Section 4.1 of the Existing Disposal Agreement shall
be amended to read in its entirety as follows:
"4.1 Basic Disposal Price. The basic disposal price,
also known as the "tipping fee", paid by Allied for Acceptable
Waste (the "Basic Disposal Price") is: (a) for delivery to the
Landfill, $9.50 per Ton, (b) for delivery to the Transfer Station,
$19.50 per Ton on quantities in excess of those set forth in
Section 3.3 or otherwise delivered for disposal by the WCI
Affiliates, (c) for any other Disposal Site, as mutually agreed,
and (d) for Transloading services pursuant to Section 3.3, $4.50
per Ton, which amount shall be reviewed on a cost basis within 90
days after this Agreement is entered into."
(d) Section 4.3 of the Existing Disposal Agreement shall
be deleted in its entirety.
4. The parties waive all requirements (and the corresponding
conditions to the Closing) that items be delivered a particular
amount of time before the Closing. Such items include the
Disclosure Schedules.
5. Buyer agrees to waive the requirement (and the
corresponding condition to the Closing) that Buyer provide a
certified copy of BFI Services Group, Inc.'s Articles of
Incorporation and Bylaws in Schedule 5.1 of the Disclosure
Schedules. Seller agrees to provide a copy of the Articles of
Incorporation and Bylaws as promptly as possible, but in no event
later than 30 days after the Closing.
6. Buyer agrees to waive the requirement (and the
corresponding condition to the Closing) in Sections 5.4(d) and 5.18
that the Assets be free and clear of all Encumbrances. Seller
agrees to remove any such Encumbrances as promptly as possible, but
in no event later than 30 days after the Closing. Seller and
Parent agree that they will each, jointly and severally, indemnify,
defend (as to third party claims only), protect and hold harmless
the Buyer Indemnified Parties at all times from and after the
Closing from and against all Losses incurred by the Buyer
Indemnified Parties as a result of or incident to any such
Encumbrances on the Assets. Such indemnification obligations shall
survive the Closing, shall not be subject to the limitations set
forth in Sections 11.1 and 11.4 of the Purchase Agreement, and
shall be subject to the procedures (if applicable) set forth in
Section 11.5 of the Purchase Agreement.
7. Buyer agrees to waive the requirement that Seller provide
copies of current registrations for the Rolling Stock in Schedule
5.3 of the Disclosure Schedules.
8. Buyer agrees to waive the requirement that Seller provide
a list of all Accounts Receivable in Schedule 2.2 of the Disclosure
Schedules. Seller agrees to provide to Buyer a list of all
Accounts Receivable showing amounts due in 30 day aging categories
within 30 days after the Closing Date.
9. Except as modified in this Agreement, all other
provisions of the Purchase Agreement shall remain in full force and
effect. Sections 2 and 3 of this Agreement shall be of no force
and effect until the New Disposal Agreement is executed.
[SIGNATURES ARE ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
BUYER:
Waste Connections of Colorado, Inc.
By: _______________________
Its: _______________________
SELLER:
Allied Waste Transportation, Inc.
By: _______________________
Its: _______________________
BFI Services Group, Inc.
By: _______________________
Its: _______________________
PARENT:
ALLIED WASTE INDUSTRIES, INC.
By: _______________________
Its: _______________________
Exhibit 99.1
WASTE CONNECTIONS COMPLETES ACQUISITION OF ALLIED WASTE
INDUSTRIES, INC.'S DENVER COLLECTION AND DISPOSAL OPERATIONS
FOLSOM, CA, November 17, 1999 - Waste Connections, Inc. (NASDAQ:
WCNX) today announced it has closed a transaction with Allied Waste
Industries, Inc. to purchase certain assets in the Denver area
which were mandated to be divested by the Department of Justice as
part of Allied's acquisition of Browning Ferris Industries, Inc.
These assets include the Denver Regional Landfill, the Jordan Road
transfer station and approximately 20 commercial collection routes.
The assets have total annual revenues of approximately $11 million
and EBITDA of approximately $4 million. The purchase price was
approximately $22 million in cash.
Ronald J. Mittelstaedt, Chairman and Chief Executive Officer, said,
"We are extremely excited about this transaction. Denver is a
rapidly growing market that we expect will generate substantial
internal growth. Consistent with our philosophy of entering into
competitive markets with an integrated platform and a strong market
position, Waste Connections has acquired a fully integrated
operation at an attractive valuation. With the closing of this
transaction, Waste Connections will be the third largest
participant in the greater Denver marketplace. As part of the
transaction, we have also held in-depth discussions regarding
assets in other markets. These represent substantial opportunities
for Waste Connections to acquire attractive operations in our
typical secondary markets if we can reach agreement on all of the
terms and conditions of these transactions."
Waste Connections, Inc. is a regional, integrated, solid waste
services company that provides solid waste collection, transfer,
disposal and recycling services in secondary markets in the Western
U.S. The Company serves more than 475,000 commercial, industrial,
and residential customers. Waste Connections, Inc. was founded in
September 1997 and is headquartered in Folsom, 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) 608-8200
Steven F. Bouck
Chief Financial Officer
CSR\5119\028\1074663.01
