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) May 16, 2000
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
Not Applicable
(Former name or former address, if changed since last report.)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets
On May 16, 2000, Waste Connections, a Delaware corporation
("WCI"), acquired all of the outstanding stock of Waste
Connections of Kansas, Inc., a Delaware corporation. Waste
Connections of Kansas, Inc. was wholly owned by BFI Waste
Systems of North America, Inc. ("BFI"), which is a wholly owned
subsidiary of Allied Waste Industries, Inc. Also on May 16,
2000, Finney County Landfill, Inc., a Delaware corporation that
is a wholly owned subsidiary of WCI, acquired certain landfill
assets of BFI. The acquired businesses are referred to
collectively herein as the "Kansas Companies." The Kansas
Companies are engaged in solid waste and recyclables collection
and landfill operations in Kansas. WCI intends to continue to
operate the Kansas Companies.
The aggregate purchase price for the Kansas Companies was
approximately $68.4 million in cash. The purchase price was
determined based on the consideration paid by WCI for similar
acquisitions in the western United States. The acquisitions
were funded with borrowings under WCI's credit facility with
BankBoston, N.A.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Businesses Acquired. Pursuant
to Rule 3.05(b) of Regulation S-X, the financial statements of
the Kansas Companies are not required to be included in this
Form 8-K.
(b) Pro Forma Financial Information. Pursuant to Rule
3.05(b) of Regulation S-X, pro forma financial information
relating to the Kansas Companies is not required to be included
in this Form 8-K.
(c) Exhibits.
10.1 Stock Purchase Agreement dated April 17, 2000,
among Waste Connections, Inc., BFI Waste
Systems of North America, Inc., and Allied Waste
Industries, Inc.
10.2 Asset Purchase Agreement dated April 17, 2000,
among BFI Waste Systems of North America, Inc.,
Allied Waste Industries, Inc. and Finney County
Landfill, Inc
10.3 WCI's Press Release released May 16, 2000
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: May 26, 2000 By /s/ Ronald J. Mittelstaedt
Ronald J. Mittelstaedt
President and Chief Executive
Officer
EXHIBIT INDEX
10.1 Stock Purchase Agreement dated April 17, 2000,
among Waste Connections, Inc., BFI Waste
Systems of North America, Inc., and Allied Waste
Industries, Inc.
10.2 Asset Purchase Agreement dated April 17, 2000,
among BFI Waste Systems of North America, Inc.,
Allied Waste Industries, Inc. and Finney County
Landfill, Inc
10.3 WCI's Press Release released May 16, 2000
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
Among
WASTE CONNECTIONS, INC.
(Buyer)
and
BFI WASTE SYSTEMS OF NORTH AMERICA, INC.
(Seller)
and
ALLIED WASTE INDUSTRIES, INC.
(Parent)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is executed and
delivered as of April 17, 2000, among WASTE CONNECTIONS, INC., a
Delaware corporation ("Buyer"); BFI WASTE SYSTEMS OF NORTH
AMERICA, INC., a Delaware corporation ("Seller"); and ALLIED
WASTE INDUSTRIES, INC., a Delaware corporation ("Parent").
WHEREAS, Seller is the sole shareholder of Waste
Connections of Kansas, Inc., a Delaware corporation (the
"Company");
WHEREAS, the Company operates a fully-permitted hauling
operation in Wichita, Kansas (the "Business") and in connection
therewith owns a permit for an as yet unbuilt transfer station
to be located in Wichita, Kansas (the "Transfer Station
Permit");
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 "Land");
WHEREAS, Parent owns (directly or indirectly) all of the issued
and outstanding shares of the capital stock of Seller;
WHEREAS, 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; and
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;
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:
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);
(b) all permits, licenses, consents and approvals of every kind
necessary to operate the Business (the "Permits") and the
Transfer Station Permit, all of which are listed on Schedule
1.3(b);
(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, 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
requiring the consent of any third party to a Customer Contract,
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.
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 $61,404,000 (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, except that the
Company's Accounts Receivable shall not be included in "Current
Assets." 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.
(d) 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 the
Company's accounts receivable (the "Accounts Receivable") that
are less than 61 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). Within 30 days after the Closing Date, Seller shall
provide Buyer a true and complete list of all Accounts
Receivable, including an aging showing amounts due in 30 day
aging categories. Buyer shall pay Seller for the Accounts
Receivable within 15 days after receipt of such list.
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". Notwithstanding the date the Closing occurs, the
transactions contemplated hereby shall be effective for
accounting purposes on the earlier of the Closing Date or, if
the Closing Date is May 31, 2000 or earlier, May 1, 2000.
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,
accompanied by stock powers duly executed in blank;
(b) certified copies of resolutions of the shareholder(s) (if
required) and director(s) of Seller authorizing the execution of
this Agreement and the consummation of the transactions
contemplated herein;
(c) the written resignation of all officers and directors of
the Company;
(d) the National Account Subcontract Agreements referenced in
Section 4.9;
(e) the Noncompetition Agreement attached as Exhibit B the
("Noncompetition Agreement"); and
(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 Buyer or the
Title Company (as defined in Section 3.4).
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 National Account Subcontract Agreements referenced in
Section 4.9;
(d) the Noncompetition Agreement; and
(d) such other documents reasonably requested by Seller and
Parent.
Section 3.4. Title Policy. Buyer shall obtain 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 fee simple title to
the Land to be in the Company subject only to the exceptions
permitted by Section 3.5 hereof (the "Title Policy"). Buyer
shall obtain a preliminary title commitment in respect of the
Land, 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 obtained by 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.
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; and (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. Seller and Buyer shall split equally all of the costs
associated with the delivery of the Title Policy to Buyer.
Section 3.6. 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 Land.
Section 3.7. 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 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, or otherwise
obscure, 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 the
Company 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 the Company 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. Upon request by Buyer, 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). Upon request by Buyer, Seller shall submit
to Buyer for its review and approval a proposed valuation of the
Assets deemed to have been sold within 30 days after such
request. The parties agree to negotiate in good faith such
valuation.
Section 4.5. Computer Support. Seller agrees to
provide to the Company, without additional consideration, access
to and support for a period of 90 days after the Closing with
respect to Seller's customer management system and route
management system. Such support shall enable the Company to
operate such systems after the Closing in a manner consistent
with the operations before the Closing.
Section 4.6. Permit Assignment. Seller and Buyer
shall cooperate in good faith and shall use their reasonable
good faith efforts after the Closing to obtain the approval of
the assignment or deemed assignment of the Permits and the
Transfer Station Permit; provided, however, that Seller shall
have no liability or obligation to Buyer if such approval is not
obtained. In such approval of the assignment or deemed
assignment of the Transfer Station Permit is not obtained and
the Transfer Station Permit therefore remains held by Seller,
Seller agrees not to use such permit to construct a transfer
station and agrees not to sell such permit to any third party.
Section 4.7 Financial Assurances. Buyer agrees to
assume at the Closing the Company'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 and to
use reasonable efforts to complete such substitution within 90
days following the Closing.
Section 4.8 Vehicle Registration. Buyer agrees to
pay, or reimburse Seller for, all costs and expenses associated
with (a) re-registering vehicle titles in the name of the
Company and (b) transferring or issuing permits to the Company.
Section 4.9 National Accounts and Subcontracting.
Seller has certain national accounts in the area served by the
Business that cannot be transferred and that must be serviced by
Seller. Seller may, however, subcontract its performance
obligations under such national accounts. A list of such
national accounts is attached as Exhibit C. With respect to the
national accounts listed on Exhibit C, Seller and the Company
shall enter into a National Account Subcontract Agreement in
substantially the form of Exhibit D.
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 its business.
(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.
Section 5.2. Stock Ownership; Capitalization. The
Company has 10,000 shares of common stock authorized and 1,000
shares issued and outstanding. There are no other authorized
equity securities of the Company. 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, 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 the distribution
of Assets from Seller to the Company or the effect of the
transactions contemplated by this Agreement on any Permit, some
of which may be nontransferable or require consent to such
distribution or the indirect transfer contemplated by this
Agreement.
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. 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 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) No party except the Company has a present or
future right to possession of all or any part of the Land.
(v) There are no pending or threatened
condemnation or eminent domain proceedings affecting all or any
part of the Land.
(vi) 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.
(vii) 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.
(viii) 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.
(ix) 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.
(x) The Company, Parent and Seller have not
failed to disclose to Buyer any material adverse fact or
condition regarding the Land.
(xi) 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.
(xii) Seller is not a "foreign person" as the
term is defined in Section 1445 of the Code and any applicable
regulations promulgated thereunder.
(xiii) 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. 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 distribution of Assets from Seller to the Company or 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 such distribution of
Assets or 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. 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 as required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "Hart-Scott-
Rodino Act") and except with respect to 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 for the formation of the Company, the
distribution of the Assets from Seller to the Company, and as
otherwise 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, neither the Company nor the Seller (with respect to
the Business) has ever 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 (collectively,
"Environmental Laws"); 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 at any time now or in the past utilized by
the Company or the Seller with respect to the Business, 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 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.
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 Liabilities.
(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, (ii) liabilities
related to closure, capping and post-closure costs for the
Landfill, and (iii) 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
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:
(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 as required under the Hart-Scott-Rodino Act and
except with respect to 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, Permit,
Related Approvals, or Employee Contracts 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 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, including consents
under the Hart-Scott-Rodino Act or the expiration or termination
of the required waiting period;
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.
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,
2000.
Section 9.6 [Intentionally Omitted]
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, including consents under the Hart-
Scott-Rodino Act or the expiration or termination of the
required waiting period, 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 sale of the Company Stock
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 Transferability of Permits. Buyer shall have
determined, in its sole discretion and after consultation with
Seller and Parent, that as a result of the sale of the Company
Stock 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 9.10 Title Policy. Subject to Section 3.7, 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 9.11 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 9.12 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 9.13. 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.
Section 9.14 Financing. Buyer shall have received
the financing, on terms satisfactory to Buyer, necessary for
Buyer to consummate the transactions contemplated by this
Agreement.
Section 9.15 Asset Purchase Agreement. The
transactions contemplated by the Asset Purchase Agreement (the
"Asset Purchase Agreement") of even date herewith among Finney
County Landfill, Inc., a Delaware corporation, BFI Waste Systems
of North America, Inc., a Delaware corporation, and Allied Waste
Industries, Inc., a Delaware corporation, shall be consummated
concurrently with the transactions contemplated by 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 and the representations and warranties in
Sections 5.1, 5.2, 5.10, 6.1, 6.2 and 11.2(c) shall survive
until the expiration of the applicable statute of limitations
period.
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) any Losses arising from violations of any
Environmental Laws by Seller or its predecessors with respect to
the Land or from the Land being named as a "Superfund" site
under Environmental Laws; 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, together with the indemnification
obligations under the Asset Purchase Agreement, exceeds an
aggregate amount of $500,000, at which time the indemnification
obligations shall be effective as to all amounts, including the
initial $500,000. Further, the indemnification obligations set
forth in this Article 11, together with the indemnification
obligations under the Asset Purchase Agreement, shall be limited
to an aggregate amount not to exceed $20,000,000.
Notwithstanding the foregoing, the $500,000 and $20,000,000
shall not apply to the 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 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.
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 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 Seller and Parent, 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 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 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 Buyer, unless such information becomes known
to the public generally through no fault of Buyer and 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 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.
620 Coolidge Drive, Suite 350
Folsom, CA 95630-3155
ATTN: Ronald J. Mittelstaedt
Fax: (916) 351-5607
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 Industries, 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 Kansas, without giving effect to any choice or conflict
of law provision or rule (whether of the State of Kansas or any
other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Kansas.
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:
BFI WASTE SYSTEMS OF NORTH AMERICA, INC.
By: __________________________
Its: __________________________
PARENT:
ALLIED WASTE INDUSTRIES, INC.
By: __________________________
Its: __________________________
LIST OF SCHEDULES
Exhibit A - Legal Description of the Land
Exhibit B - Noncompetition Agreement
Exhibit C - National Accounts
Exhibit D - National Account Subcontract Agreement
Schedule 1.3(b) - Permits
Schedule 1.3(c) - Equipment
Schedule 1.3(d) - Rolling Stock
Schedule 1.3(h) - Customer Contracts, Related Approvals
and Employee Contracts
Schedule 5.3 - Permits; Proprietary Rights
Schedule 5.4(c) - Personal Property Leases
Schedule 5.4(d) - Debts and Encumbrances on Assets
Schedule 5.5(a) - Real Property Disclosure
Schedule 5.7 - Insurance Policies
Schedule 5.8(a) - Employees; Exceptions to "at will"
Employment
Schedule 5.8(b) - Employee Benefit Plans
Schedule 5.11 - Litigation
Schedule 5.13 - Conduct of the Company's Business Since
January 1, 1999
Schedule 5.14 - Environmental
Schedule 5.15 - Underground Storage Tanks
EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
Among
FINNEY COUNTY LANDFILL, INC.
(Buyer)
and
BFI WASTE SYSTEMS OF NORTH AMERICA, INC.
(Seller)
and
ALLIED WASTE INDUSTRIES, INC.
(Parent)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is
executed and delivered as of April 17, 2000, among Finney County
Landfill, Inc., a Delaware corporation ("Buyer"); BFI Waste
Systems of North America, Inc., a Delaware corporation
("Seller"); and Allied Waste Industries, Inc., a Delaware
corporation ("Parent").
WHEREAS, Seller owns real property located Garden
City, Kansas, which is more fully described in Section 1.1(a)
and on Exhibit A attached hereto and made a part hereof
(collectively, the "Land"), and Seller operates thereon a fully-
permitted landfill known as the Finney County Landfill,
including a certain closed portion of such landfill
(collectively, the "Business");
WHEREAS, 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, Waste Connections, Inc., a Delaware
corporation and the parent of Buyer ("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;
(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);
(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);
(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 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"), all of which are set forth on Schedule 1.1(h);
(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);
(l) to the extent transferable, all indemnification
rights from the county and local municipalities with respect to
the landfill, if any, including those arising under Section 6 of
that certain Landfill Purchase Agreement entered into as of
April 3, 2000 between Seller and the County of Finney, Kansas
(the "Old Landfill Purchase Agreement");
(m) to the extent transferable, the Marion County
option evidenced by the option agreement set forth on Schedule
1.1(m); 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 shall use reasonable efforts to assist Buyer to obtain
the consent of such other party to such assignment to 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. 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 as consideration for the Assets
$7,000,000 in immediately available funds (the "Purchase
Price").
Section 2.2. Accounts Payable Adjustment. Within 60
days after the Closing, Buyer and Seller shall mutually conduct
a reconciliation of all monies paid by Buyer for the obligations
of Seller incurred by Seller before the Closing and relating to
periods prior to the Closing. Seller shall promptly pay to
Buyer the amount, if any, determined to be due to Buyer as a
result of the reconciliation.
Section 2.3. 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 the
Accounts Receivable that are less than 61 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). Within 30 days after the
Closing Date, Seller shall provide Buyer a true and complete
list of all Accounts Receivable, including an aging showing
amounts due in 30 day aging categories. Buyer shall pay Seller
for the Accounts Receivable within 15 days after receipt of such
list.
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." Notwithstanding the date the Closing occurs, the
transactions contemplated hereby shall be effective for
accounting purposes on the earlier of the Closing Date or, if
the Closing Date is May 31, 2000 or earlier, May 1, 2000.
Section 3.2. Deliveries by Seller and Parent. At the
Closing, Seller and Parent shall deliver to Buyer, all duly
executed:
(a) a special warranty deed (the "Deed") conveying to
Buyer good and marketable fee simple title to the Land subject
only to the Permitted Encumbrances (hereinafter defined);
(b) 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) (the "Bill of Sale");
(c) 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;
(d) certified copies of resolutions of the board of
directors of Seller authorizing the execution of this Agreement
and the consummation of the transactions contemplated herein;
(e) 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;
(f) an operating agreement between Seller and Buyer
in the form of Exhibit B (the "Operating Agreement");
(g) an unwind agreement between Seller and Buyer in
the form of Exhibit C (the "Unwind Agreement");
(h) a noncompetition agreement between Seller and
Buyer in the form of Exhibit D (the "Noncompetition Agreement");
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
E (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;
(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;
(e) Assignment, Assumption and Consent to Leased
Land;
(f) the Operating Agreement;
(g) the Unwind Agreement;
(h) the Noncompetition Agreement;
(i) 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. Buyer shall obtain 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"). Buyer shall obtain a preliminary
title commitment in respect of the Land, 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 obtained
by 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.
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; and (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. Seller and Buyer shall split equally all of the
costs associated with the delivery of the Title Policy to Buyer.
Section 3.6. 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 Land.
Section 3.7. 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 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, or otherwise
obscure, 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. Computer Support. Seller agrees to
provide to the Company, without additional consideration, access
to and support for a period of 90 days after the Closing with
respect to Seller's customer management system and route
management system. Such support shall enable the Company to
operate such systems after the Closing in a manner consistent
with the operations before the Closing.
Section 4.5. Permit Assignment. Seller and Buyer
shall cooperate in good faith and shall use their reasonable
good faith efforts after the Closing to obtain the approval of
the assignment or deemed assignment of the Permits.
Accordingly, Seller and Buyer shall enter into the Operating
Agreement.
Section 4.6. Reimbursement of Closure and Post-Closure
Costs.
(a) Old Landfill. As part of the transactions
contemplated by this Agreement, Seller is transferring to Buyer
an old landfill site previously acquired by Buyer from the
County of Finney, Kansas (the "County") pursuant to the Old
Landfill Purchase Agreement. The property described in the Old
Landfill Purchase Agreement is hereinafter referred to as the
"Old Landfill." Seller is also transferring to Buyer, to the
extent transferable, all indemnification rights from the County
with respect to the Old Landfill arising under the Old Landfill
Purchase Agreement or otherwise (the "Old Landfill
Indemnification Rights"). The Old Landfill is now undergoing
closing and capping. Accordingly, the parties are making the
agreements in this Section 4.6 with respect to, among other
things, the Closure/Post-Closure Costs (as defined below) with
respect to the Old Landfill.
(b) Buyer's Responsibilities. Buyer shall be
responsible for performing all closure, capping and post-closure
activities 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) (the "Closure/Post-
Closure Activities"), with respect to all of the Land being sold
to Buyer pursuant to this Agreement, including the Old Landfill.
Buyer shall be liable for, and shall indemnify and hold Parent
and Seller harmless from and against, all of the costs incurred
by Buyer in connection with the Closure/Post-Closure Activities
(the "Closure/Post-Closure Costs") with respect to the Land
other than the Old Landfill. Further, Buyer shall use its
commercially reasonable efforts to enforce the Old Landfill
Indemnification Rights against the County so as to minimize
Seller's and Parent's obligations pursuant to Section 4.6(c).
Any amounts recovered by Buyer from the County pursuant to the
Old Landfill Indemnification Rights shall be credited against
Seller's and Parent's obligations pursuant to Section 4.6(c) or,
if Seller or Parent already has paid such obligations, shall be
promptly paid over by Buyer to Seller or Parent.
(c) Seller's and Parent's Responsibilities. Seller
and Parent shall be jointly and severally liable for, and shall
indemnify and hold Buyer harmless from and against, the
Closure/Post-Closure Costs incurred by Buyer with respect to the
Old Landfill. For the period from the date of the Closing
through September 30, 2000, and thereafter for each calendar
quarter (each, a "Compliance Period"), Seller shall notify Buyer
at least 10 days prior to commencement of such Compliance Period
whether it elects to pay the Closure/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 Buyer. If Seller elects to pay such costs
directly, Buyer shall promptly send to Seller invoices for all
such costs incurred during the Compliance Period, and Seller
shall promptly pay such costs directly. If Seller fails to pay
such costs when due, Buyer may pay the same and be reimbursed by
Parent and Seller. If Seller elects to reimburse Buyer for such
costs, then, within 20 days after the end of each Compliance
Period, Buyer shall submit to Seller a detailed list of the
costs paid or incurred by 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 Buyer for the full amount of such costs plus interest
at the rate of eight and one-half percent (8.5%) per annum from
the date Buyer paid such costs through the date they are
reimbursed by Seller or Parent. 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 and Parent shall have the
right to inspect work giving rise to costs upon reasonable
notice during normal business hours.
(d) Disputes. If Seller or Parent disputes any of
the costs to be paid or reimbursed to Buyer pursuant to Section
4.6(c), 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 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 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.
(b) The respective boards of directors 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 that are personal property, 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, subject only to the matters permitted under Article 3
hereof.
(b) There are no lease or occupancy agreements
affecting the Land, and there are no leasing brokerage
agreements or property management agreements affecting the Land
that will survive the Closing.
(c) Except as set forth on Schedule 5.5(c), 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) No party except Seller has a present or
future right to possession of all or any part of the Land.
(v) There are no pending or threatened
condemnation or eminent domain proceedings affecting all or any
part of the Land.
(vi) 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.
(vii) No fact or condition exists which will
result in the termination of any currently existing access to or
from the Land and any public rights of ways and roads.
(viii) 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 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.
(ix) 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.
(x) Neither Seller nor Parent has failed to
disclose to Buyer any material adverse fact or condition
regarding the Land.
(xi) 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.
(xii) Seller is not a "foreign person" as the
term is defined in Section 1445 of the Code and any applicable
regulations promulgated thereunder.
(d) 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, or otherwise
exist, from the date of this Agreement to the Closing,
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.
(e) 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) 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. 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. 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 who work in 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 such
employee 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 is 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 approval under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended ("Hart-Scott-Rodino Act"), if applicable, and except for
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, 2000. Since January 1, 2000, except as disclosed on
Schedule 5.13, there has not been any:
(a) work interruption, labor grievance or unfair
labor practice claim filed with respect to the Business;
(b) 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, other than in the ordinary course of business;
(c) waiver of any material rights or claims of Seller
related to the Assets;
(d) material breach, amendment or termination of any
Customer Contract;
(e) transaction by Seller outside the ordinary course
of its business with respect to the Assets or the Business;
(f) 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
(g) 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, with respect to the Business or the
Assets, 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 the Business 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. With respect to the
Business, 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 WCI
Parent is duly organized, validly existing and in good standing
under the laws of the state of its incorporation. Each of Buyer
and WCI 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 WCI 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 WCI Parent. WCI 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 WCI Parent and will be the valid and
binding obligation of WCI 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
approval under the Hart-Scott-Rodino Act, if applicable, 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 Montana
Real Estate Lease, 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) incur or agree to incur any liability or make any
capital expenditures related to the Assets in excess of an
aggregate of $150,000;
(b) enter into any new mortgage, pledge or other lien
or encumbrance upon any Asset;
(c) breach, amend or terminate any Customer Contract,
Related Approval or Employee Contract in any material manner;
(d) enter into any transaction outside the ordinary
course of the business of Seller or otherwise prohibited
hereunder;
(e) 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
(f) 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 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,
including consents under the Hart-Scott-Rodino Act or the
expiration or termination of the required waiting period.
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 Closing. Simultaneously
with the Closing of the transactions contemplated by this
Agreement, the transactions contemplated by that certain Stock
Purchase Agreement (the "Stock Purchase Agreement") between
Waste Connections, Inc., a Delaware corporation, BFI Waste
Systems of North America, Inc., a Delaware corporation, and
Allied Waste Industries, Inc., a Delaware corporation, shall
also close.
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. [Intentionally Omitted]
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,
2000.
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, including
consents under the Hart-Scott-Rodino Act or the expiration or
termination of the required waiting period, and Buyer shall have
determined, in its sole discretion, that Buyer has obtained all
of the consents it deems 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. 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 9.10. 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 9.11. 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 9.12. Financing. Buyer shall have received
the financing, on terms satisfactory to Buyer, necessary for
Buyer to consummate the transactions contemplated by this
Agreement.
Section 9.13. 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. Simultaneous Closing. Simultaneously
with the Closing of the transactions contemplated by this
Agreement, the transactions contemplated by the Stock Purchase
Agreement shall also close.
ARTICLE 10. LIABILITIES
Section 10.1. Non-Assumption of Liabilities. Except
as explicitly set forth in this Agreement, 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); (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, including without limitation any liability arising in
connection with or incident to Seller's extension of the statute
of limitations for federal income taxes as disclosed in Schedule
5.10 of the Agreement; (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 at the Closing Seller's
liability under performance bonds with respect to the Assets,
and agrees to use reasonable efforts 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(c), 5.5(d), 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 representations,
warranties and covenants in Sections 4.6, 5.5(a), 5.5(b), 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
ownership or operation of the landfill prior to the Closing Date
(provided, however, that except as specifically provided
elsewhere in this Agreement, Parent and Seller shall have no
obligation to indemnify the Buyer Indemnified Parties with
respect to any closure, capping and post-closure costs at the
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, together with the
indemnification obligations under the Stock Purchase Agreement,
exceeds an aggregate amount of $500,000, at which time the
indemnification obligations shall be effective as to all
amounts, including the initial $500,000. Further, the
indemnification obligations set forth in this Article 11,
together with the indemnification obligations under the Stock
Purchase Agreement, shall be limited to an aggregate amount not
to exceed $20,000,000. Notwithstanding the foregoing, the
$500,000 and $20,000,000 shall not apply to the indemnification
obligations on account of a breach of the covenants set forth in
Section 10.1 or 10.2 or to any indemnification obligations
pursuant to Section 4.6 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 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.
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.
ARTICLE 13. NONDISCLOSURE
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.
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.
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 or Parent, addressed to it 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.
620 Coolidge Drive, Suite 350
Folsom, CA 95630-3155
Attn: Ronald J. Mittelstaedt
Fax: (916) 351-5607
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 Kansas, without giving effect to any choice or
conflict of law provision or rule (whether of the State of
Kansas or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State
of Kansas.
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 Kansas, Inc.
By: __________________________
Its: __________________________
SELLER:
BFI Waste Systems of
North America, Inc.
By: __________________________
Its: __________________________
PARENT:
Allied Waste Industries, Inc.
By: __________________________
Its: __________________________
LIST OF SCHEDULES
Exhibit A -- Legal Description of the Land
Exhibit B -- Operating Agreement
Exhibit C -- Unwind Agreement
Exhibit D -- Noncompetition Agreement
Exhibit E -- Guaranty
Schedule 1.1(c) -- Equipment
Schedule 1.1(d) -- Rolling Stock
Schedule 1.1(h) -- Customer Contracts, Related Approvals
and Employee Contracts
Schedule 1.1(m) -- Option Agreement
Schedule 5.3 -- Permits; Proprietary Rights
Schedule 5.4(c) -- Personal Property Leases
Schedule 5.5(c) -- Real Property Disclosure
Schedule 5.7 -- List of Insurance Policies
Schedule 5.8 -- Employees; Exceptions to "at will"
Employment
Schedule 5.10 -- Taxes
Schedule 5.11 -- Litigation
Schedule 5.13 -- Conduct of Business
Schedule 5.14 -- Environmental; List of Disposal Sites
Schedule 5.15 -- Underground Storage Tanks
EXHIBIT 10.3
WASTE CONNECTIONS ANNOUNCES FIRST CLOSING OF
NEW REVOLVING CREDIT FACILITY AND PURCHASE OF
KANSAS OPERATIONS FROM ALLIED WASTE INDUSTRIES, INC.
FOLSOM, CA, May 16, 2000 - Waste Connections, Inc. (NASDAQ:
WCNX) today announced it has simultaneously closed a new $385
million five-year revolving credit facility and the purchase of
certain Kansas operations from Allied Waste Industries, Inc.
The credit facility, which was led by Fleet National Bank and
Deutsche Bank, is structured so that it may be increased up to
$425 million. The operations acquired from Allied Waste include
all of its Wichita and Garden City, Kansas operations, which
include one landfill, a transfer station under construction and
a significant collection operation. These operations currently
generate approximately $30 million in annual revenue and $11
million in EBITDA.
Ronald J. Mittelstaedt, President and Chief Executive Officer of
Waste Connections, Inc. said, "The Allied transaction will
significantly strengthen our position in the Kansas and Oklahoma
markets and completes a series of negotiated transactions with
Allied that have substantially enhanced Waste Connections
positioning and financial strength throughout the mid-West.
Upon the opening of the transfer station, we expect to
internalize 1,500 to 2,000 tons per day into our area landfills
in Kansas and Oklahoma. This transaction gives us tremendous
visibility in our near term business plan. We would like to
welcome all of our new employees in Wichita and Garden City,
Kansas to our company. The new credit facility provides us with
additional financing capability and improved financial covenants
to continue our growth."
Waste Connections, Inc. is a regional, integrated, solid waste
services company that provides solid waste collection, transfer,
disposal and recycling services in secondary markets of the
Western U.S. The Company serves more than 580,000 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
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