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EXHIBIT 10.47
ASSET PURCHASE AGREEMENT
Dated as of October 15, 1998, by and among
Waste Connections, Inc.
Waste Connections of Idaho, Inc.
R & N, LLC
Xxxxxx Sanitation, Inc.
NADL Sanitation, Inc.
Xxxxxxx X. Xxxxxx
Xxxx Xxxxx
Xxxxx X. Xxxxxx
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of October 15, 1998, entered into by
and among Waste Connections, Inc., a Delaware corporation ("WCI"), Waste
Connections of Idaho, Inc., a Delaware corporation ("BUYER"), R & N, LLC, an
Idaho limited liability company ("SELLER"), and Xxxxxx Sanitation, Inc., NADL
Sanitation, Inc., Xxxxxxx X. Xxxxxx, Xxxx Xxxxx ("XXXX") and Xxxxx X. Xxxxxx
(the "MEMBERS").
WHEREAS, Seller is engaged in the collection and transportation of solid
waste in the Cities of Mountain Home, Xxxxxx and Grand View, Idaho, and in
certain unincorporated areas of Xxxxxx and Owyhee County, Idaho, and other
related activities (collectively, the "BUSINESS");
WHEREAS, the Members own all of the limited liability company membership
interests of the Seller; and
WHEREAS, Buyer wishes to purchase, and Seller wishes to sell
substantially all of its assets, properties, rights, privileges and interests
owned leased, held or used by Seller in connection with the operation of the
Business except certain nonbusiness related assets.
WHEREAS, concurrent with the execution of this Agreement, Buyer will
enter into a Real Estate Purchase Agreement (the "REAL ESTATE AGREEMENT") of
certain real estate located in Mountain Home, California, used in the Business
by Seller;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto, each intending to be bound hereby, agree as
follows:
1. PURCHASE AND SALE OF ASSETS.
1.1. Sale and Transfer of Assets. Subject to and in accordance
with the terms and conditions of this Agreement, at the Closing on the Closing
Date (as defined below) Seller shall convey, transfer, deliver and assign to
Buyer, and Buyer shall accept from Seller all of the assets, rights, privileges
and interests, tangible, intangible, real, personal or mixed, and wherever
located, now or hereafter owned, leased, held or used primarily in connection
with the ownership, operation and management of the Business, including without
limitation (collectively, the "ASSETS"):
(a) the trucks, containers, operating machinery and
equipment, processing equipment, shop tools, parts, supplies,
accessories, inventory, physical assets and other tangible personal
property used primarily in connection with the ownership, operation and
management of the Business;
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(b) all contracts, leases, agreements, customer
accounts, commitments and arrangements specifically identified in
Schedule 3.12(a) as contracts contemplated to be assumed by Buyer
pursuant to this Agreement (the "ASSUMED CONTRACTS");
(c) all permits, licenses, titles (including motor
vehicle titles and current registrations), fuel permits, zoning and land
use approvals and authorizations, including, without limitation, any
conditional or special use approvals or zoning variances, occupancy
permits, and any other similar documents from any and all governmental
authorities constituting a material authorization or entitlement or
otherwise material to the operation or management of the Business owned
by, issued to, or held by or otherwise benefiting Seller (the
"GOVERNMENTAL PERMITS");
(d) all customer lists of Seller relating to the
Business;
(e) the logos, trade names, fictitious business names
and service marks of Seller, including without limitation, the right to
use the name "R&N Sanitation";
(f) the goodwill of the Business;
(g) all claims, causes of action, choses in action,
rights of recovery and rights of set-off of any kind, against any person
or entity, including without limitation any liens, security interests,
pledges or other rights to payment or to enforce payment in connection
with products delivered by Seller on or prior to the Closing Date;
(h) all guarantees, warranties, indemnities and similar
rights in favor of Seller with respect to any of the Assets and all
books and records primarily in connection with the operation of the
Business;
(i) all operating and financial records relating to the
Business, including without limitation all ledgers, books of account,
deprecation schedules, inventory information, records relating to
payables and receivables, copies of cancelled checks and bank
statements, equipment records, maintenance records, disposal records and
information concerning customers; and
(j) all accounts receivables of Seller. Buyer and
Seller acknowledge that Seller will have been paid before the Closing
Date for certain services to be rendered by Buyer after the Closing Date
with respect to Seller's prepaid customer accounts and Seller will have
rendered services to certain customers prior to the Closing Date who
will be billed by Buyer after the Closing Date with respect to certain
other of Seller's customer accounts that are paid in arrears.
Accordingly, within 30 days after the Closing Date, Buyer and Seller
shall prorate these prepaid and postpaid accounts as of the Closing Date
and shall reconcile the net amount due, whereupon the party owing the
other will immediately pay the net amount due.
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Notwithstanding the foregoing, Buyer shall not acquire any of the assets listed
on Schedule 3.2 (the "EXCLUDED ASSETS").
1.2. Assumption by Buyer of Certain Contracts. Buyer hereby
assumes and agrees to pay, perform and discharge in a timely manner, effective
the day after the Closing Date, all of the obligations, liabilities and
commitments of Seller accruing after the Closing Date under or with respect to
each Assumed Contract (but not including any obligation or liability for any
breach thereof occurring on or prior to the Closing Date) and all of the Closing
Date Debt (as defined in Section 3.19).
1.3. Excluded Liabilities. Notwithstanding the provisions of
Section 1.2 or any other provision hereof or any Schedule or Exhibit hereto and
regardless of any disclosure to Buyer, Buyer shall not assume or be bound by any
other duties, responsibilities, obligations, indebtedness or other liabilities
of Seller or to which Seller or any of the Assets or the Business may be bound
or affected, of whatever kind or nature, whether known, unknown, contingent or
otherwise, arising before, on or after the Closing Date (including without
limitation trade payables and taxes arising from the operation of the Business
or the sale of the Assets) except those obligations and liabilities expressly
assumed by Buyer pursuant to Section 1.2 (the "EXCLUDED LIABILITIES").
1.4. Purchase Price. The purchase price (the "PURCHASE PRICE")
for the Assets shall be an amount equal to Two Million Seven Hundred Fifty
Thousand Dollars ($2,750,000), minus the Closing Date Debt (as defined in
Section 3.19), and shall be paid as provided in Section 1.5. The Purchase Price
paid at the Closing will be based on Schedule 3.19 as delivered at the Closing,
which the parties understand will include only estimates of the Closing Date
Debt. Within 30 days after the Closing Date, the parties will determine the
actual Closing Date Debt and will advise Seller of such actual amount. If the
Purchase Price increases, the Buyer will promptly pay any additional amount due
to Seller; if the Purchase Price declines, Seller will promptly repay any amount
due to the Buyer.
1.5. Payment of Purchase Price. The Purchase Price, as adjusted
pursuant to Section 1.4, shall be paid in cash at the Closing by wire transfer
or check payable in clearinghouse funds, excepting the portion allocated to the
real estate pursuant to Section 1.7, which shall be paid according to the Real
Estate Agreement. WCI shall pay the Closing Date Debt by wire transfer.
1.6. Certain Taxes. Seller shall pay any and all sales, use,
excise, transfer and conveyance taxes payable or assessable in connection with
or as a result of the transfer of the Assets under the terms of this Agreement
and the transactions contemplated hereby. Buyer shall not be responsible for any
business, occupation, withholding, possessory interest or similar tax or
assessment or any other tax or fee of any kind relating to any period on or
prior to the Closing Date with respect to Seller, the Assets or the ownership,
operation or management of the Business.
1.7. Allocation of Purchase Price. Ten Thousand Dollars ($10,000)
of the Purchase Price shall be allocated to the covenant not to compete
described in Section 10.1(a)
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hereof and One Hundred Thousand Dollars ($100,000) shall be allocated to the
subject real estate of the Real Estate Agreement.
1.8. Consulting Relationship. The Members agree to assist Buyer
with the integration of the Business into Buyer by supervising the daily
operations of Buyer and advising and assisting Buyer with customer-related
issues for a period of four (4) weeks commencing on the Closing Date
(hereinafter, the Consulting Period). In exchange for the Members' consulting
assistance during the Consulting Period, WCI shall pay each of them a consulting
fee equal to their current rate of pay for the duration of the Consulting Period
and Buyer shall not, at any time during the Consulting Period, replace any of
the employees of Seller as of the Closing Date.
2. CLOSING TIME AND PLACE
Subject to the terms and conditions of this Agreement, the closing of
the transactions contemplated herein (the "CLOSING") shall take place at such
time on October 15, 1998 (the "CLOSING DATE"), at the offices of Shartsis,
Xxxxxx & Xxxxxxxx LLP, in San Francisco, California, or through an exchange of
consideration and signed documents using overnight courier service. At the
Closing, Buyer and Seller shall deliver to each other the documents, instruments
and other items described in Section 5 of this Agreement. For financial
reporting purposes, the Closing will be deemed effective October 1, 1998.
3. REPRESENTATIONS AND WARRANTIES OF SELLER AND THE
MEMBERS
Seller and the Members, jointly and severally, (i) represent and warrant
that each of the following representations and warranties is true as of the
Closing Date, and (ii) agree that such representations and warranties shall
survive the Closing.
3.1. Standing and Authority for the Business. Seller is duly
organized, validly existing and in good standing under the laws of the State of
Idaho. Seller has full power and authority to own and lease the Assets and to
carry on the Business as now conducted. Seller is not required to be qualified
or licensed to conduct business as a foreign company in any other jurisdiction
where the failure to qualify would have a material adverse effect on the Seller.
3.2. All Assets Being Acquired. The Assets being acquired by
Buyer hereunder constitute all of the assets of Seller used and necessary to
conduct and operate the Business as presently conducted and operated (other than
certain assets set forth on Schedule 3.2, which are the Excluded Assets).
3.3. Authority for Agreement. Seller and each of the Members have
full right, power and authority to enter into this Agreement and to perform its
or his obligations hereunder. The execution and delivery of this Agreement by
Seller has been duly authorized by Seller's managers and/or members. This
Agreement has been duly and validly executed and delivered by Seller and each of
the Members and, subject to the due authorization, execution and delivery by WCI
and Buyer, constitutes the legal, valid and binding obligation of Seller and
each of the Members, enforceable against Seller and each of the Members in
accordance with its terms.
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3.4. No Breach or Default. Except as disclosed on Schedule 3.4,
the execution and delivery by Seller and each of the Members of this Agreement,
and the consummation by Seller and each of the Members of the transactions
contemplated hereby, will not:
(a) result in the breach of any of the terms or
conditions of, or constitute a default under, or allow for the
acceleration or termination of, or in any manner release any party from
any obligation under, any mortgage, lease, note, bond, indenture, or
material contract, agreement, license or other instrument or obligation
of any kind or nature to which Seller or any of the Members is a party,
or by which Seller or the Assets, are or may be bound or affected; or
(b) violate any law or any order, writ, injunction or
decree of any court, administrative agency or governmental authority, or
require the approval, consent or permission of any governmental or
regulatory authority;
(c) violate the Articles of Organization of Seller; or
(d) violate any agreements to which any Member is a
party relating to the Assets and the Business.
3.5. Financial Statements. Seller has delivered to Buyer, as
Schedule 3.5, copies of the financial statements ("FINANCIAL STATEMENTS") for
its two most recent fiscal years, reviewed by Xxxxxx-Xxxxxx, P.A. and interim
financial statements for the period ended August 31, 1998 (the "BALANCE SHEET
DATE"). The Financial Statements are true and correct and fairly present the
financial condition and results of operations of the Business for the respective
periods indicated. The Financial Statements for the years ending 1996 and 1997
were prepared on the accrual basis of accounting, which is a comprehensive basis
of accounting other than generally accepted accounting principles. Except as
disclosed on Schedules 3.5, 3.6, 3.19(a) or 3.19(b), Seller had, as of the
Balance Sheet Date, and will have, as of the Closing Date, no liabilities of any
nature, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities due or to become due.
3.6. Liabilities. Parts I, II, III and IV of Schedule 3.6, are
accurate lists and descriptions of all liabilities of Seller relating to the
Business required to be described below in the format set forth below.
(a) Part I of Schedule 3.6 lists, as of the Closing
Date, other than with respect to trade payables and as of the end of the
month prior to the Closing Date with respect to trade payables, all
indebtedness for money borrowed and all other fixed and uncontested
liabilities of any kind, character and description, whether reflected or
not reflected on the Financial Statements and whether accrued or
absolute, and states as to each such liability the amount of such
liability and to whom payable. From the end of the month prior to the
Closing Date, trade payables have been incurred only in the ordinary
course of business consistent with comparable prior periods.
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(b) Part II of Schedule 3.6 lists, as of the Closing
Date, all claims, suits and proceedings which are pending against Seller
relating to the Business and, to the knowledge of Seller, all material
contingent liabilities and all material claims, suits and proceedings
threatened or anticipated against Seller relating to the Business. For
each such liability, Part II of Schedule 3.6 includes a summary
description of such liability, including, without limitation: (i) the
name of each court, agency, bureau, board or body before which any such
claim, suit or proceeding is pending, including, without limitation,
those arising under Environmental Laws (as defined in Section 3.20),
those relating to personal injury or property damage (including all
workers' compensation and occupational disease and injury claims, suits
and proceedings) and those citations arising under the Federal
Occupational Safety and Health Act or any comparable state law, (ii) the
date such claim, suit or proceeding was instituted, (iii) the parties to
such claim, suit or proceeding, (iv) a description of the factual basis
alleged to underlie such claim, suit or proceeding, including the date
or dates of all material occurrences, and (v) the amount claimed and
other relief sought.
(c) Part III of Schedule 3.6 lists, as of the Closing
Date and to the extent not otherwise included in Part I of Schedule 3.6,
all material liens, claims and encumbrances secured by any of the
Assets, including a description of the nature of such lien, claim or
encumbrance, the amount secured if it secures a liability, the nature of
the obligation secured, and the party holding such lien, claim or
encumbrance.
(d) Part IV of Schedule 3.6 lists, as of the Closing
Date and to the extent not otherwise included in Part I or Part III of
Schedule 3.6, all real property and material personal property leasehold
interests to which Seller is a party as lessor or lessee relating to the
Business or affecting or relating to any Facility Property (as described
in Section 3.8).
3.7. Conduct of the Business. Except as set forth on Schedule
3.7, since the Balance Sheet Date and prior to the Closing:
(a) The Business has been conducted only in the
ordinary course of business consistent with past practices; and
(b) There has been no change in Seller's financial
condition, the Assets, liabilities (contingent or otherwise), income or
operations of Seller relating to the Business other than changes in the
ordinary course of business, none of which either singly or in the
aggregate has been materially adverse, or which could have a material
adverse effect on the financial condition, Assets, liabilities
(contingent or otherwise), income or operations of the Business.
3.8. Permits and Licenses.
(a) Schedule 3.8(a) is a full and complete list, and
includes copies, of all material permits, licenses, franchises, titles
(including motor vehicle titles and
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current registrations), fuel permits, zoning and land use approvals and
authorizations, including, without limitation, any conditional or
special use approvals or zoning variances, occupancy permits, and any
other similar documents constituting a material authorization or
entitlement or otherwise material to the operation of the Business by
Seller (collectively the "GOVERNMENTAL PERMITS") owned by, issued to,
held by or otherwise benefiting Seller as of the Closing Date. The
status of the Governmental Permits related to the disposal areas owned
or used by Seller, including, without limitation, any conditions thereto
and, if applicable, the expiration dates thereof, are also described in
Schedule 3.8(a). Schedule 3.8(a) also sets forth the name of any
governmental agency from whom Seller or Buyer must obtain consent (the
"REQUIRED GOVERNMENTAL CONSENTS") in order to effect a direct or
indirect transfer of the Governmental Permits required as a result of
the consummation of the transactions contemplated by this Agreement.
Except as set forth on Schedule 3.8(a), all of the Governmental Permits
enumerated and listed on Schedule 3.8(a) are and will be adequate for
the operation of the Business of Seller and of each Facility Property as
presently operated and are valid and in full force and effect. All of
said Governmental Permits and agreements have been duly obtained and are
in full force and effect, and there are no proceedings pending or, to
the knowledge of Seller, threatened which may result in the revocation,
cancellation, suspension or adverse modification of any of the same.
Seller has no knowledge of any reason why all such Governmental Permits
and agreements will not remain in effect after consummation of the
transactions contemplated hereby.
(b) As part of Schedule 3.8(a), Seller has delivered to
Buyer: (i) all records, notifications, reports, permit and license
applications, engineering and geologic studies, and environmental impact
reports, tests or assessments (collectively, "RECORDS, NOTIFICATIONS AND
REPORTS") that (A) are material to the operation of the Business, or (B)
relate to the discharge or release of materials into the environment
and/or the handling or transportation of waste materials or hazardous or
toxic substances or otherwise relate to the protection of the public
health or the environment, or (C) were filed with or submitted to
appropriate governmental agencies during the past five years by Seller
or their agents, and (ii) all material notifications from such
governmental agencies to Seller or their agents in response to or
relating to any of such Records, Notifications and Reports.
(c) Schedule 3.8(c) lists, as of the Closing Date, each
facility leased, operated or otherwise used by Seller for the Business,
the lease, operation or use of which is being transferred to, assumed by
or otherwise acquired directly or indirectly by Buyer pursuant to this
Agreement (each, a "FACILITY" and collectively, the "FACILITIES").
Except as otherwise disclosed on Schedule 3.8(c):
(i) Each Facility is fully licensed, permitted
and authorized to carry on its current business under all
applicable federal, state and local statutes, orders, approvals,
zoning or land use requirements, rules and regulations and no
Facility is a non-conforming use or otherwise subject to any
restrictions regarding reconstruction.
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(ii) All activities and operations at each
Facility are being and have been conducted in compliance in all
material respects with the requirements, criteria, standards and
conditions set forth in all applicable federal, state and local
statutes, orders, approvals, permits, zoning or land use
requirements and restrictions, variances, licenses, rules and
regulations.
(iii) Each Facility is located on real property
owned or leased by Seller (each a "FACILITY PROPERTY"). The
Facility Properties leased by Seller consist only of one parcel
where the Business offices are located and two parcels where
Seller's trucks and equipment are stored.
(iv) To Seller's knowledge, there are no
circumstances, conditions or reasons which are likely to be the
basis for revocation or suspension of any Facility's site
assessments, permits, licenses, consents, authorizations, zoning
or land use permits, variances or approvals relating to any
Facility owned by Seller, any of the Members or any Affiliate (as
hereinafter defined) of any of the Members and leased to Seller
to be used in the Business after the Closing, and to the
knowledge of Seller there are no circumstances, conditions or
reasons which are likely to be the basis for revocation or
suspension of any site assessments, permits, licenses, consents,
authorizations, zoning or land use permits, variances or
approvals relating to any such Facility.
(d) Seller does not currently own, operate or control,
and has never in the past owned, operated or controlled, any landfill or
treatment, storage or disposal facility.
3.9. [INTENTIONALLY OMITTED]
3.10. Fixed Assets.
(a) Schedule 3.10(a) lists, as of the Closing Date,
substantially all the fixed assets (other than real estate) of Seller
used in the Business, including, without limitation, identification of
each vehicle by description and serial number, identification of
machinery, equipment and general descriptions of parts, supplies and
inventory. Except as described on Schedule 3.10(a), all of Seller's
containers, vehicles, machinery and equipment necessary for the
operation of the Business are in good working order and condition,
normal wear and tear excepted, and all of the motor vehicles and other
rolling stock of Seller are in material compliance with all applicable
laws, rules and regulations. To best of Seller's knowledge, all such
vehicles, machinery and equipment are substantially fit for the purposes
for which they are utilized and are free from defects which could cause
them to fail. All leases of fixed assets are in full force and effect
and binding upon the parties thereto; neither Seller nor any other party
to such leases is in breach of any of the material provisions thereof.
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(b) Seller has good, valid and marketable title to all
personal properties and assets, tangible and intangible, actually used
or necessary for the conduct of the Business, free of any encumbrance or
charge of any kind except: (i) liens for current taxes not yet due; and
(ii) minor imperfections of title and encumbrances, if any, that are not
substantial in amount, do not materially detract from the value of the
property subject thereto, do not materially impair the value of the
Business or the Assets, and have arisen only in the ordinary course of
business and consistent with past practice. There are and as of the
Closing Date will be no leases, occupancy agreements, options, rights of
first refusal or any other agreements or arrangements, either oral or
written, that create or confer in any person or entity the right to
acquire, occupy or possess, now or in the future, any Assets, or any
portion thereof, or create in or confer on any person or entity any
right, title or interest therein or in any portion thereof.
3.11. Acquisition/Disposal of Assets. Except as indicated on
Schedule 3.11, since the Balance Sheet Date, Seller has not acquired or sold or
otherwise disposed of any properties or assets which, singly or in the
aggregate, have a value in excess of $5,000, or which are material to the
operation of the Business as presently conducted.
3.12. Contracts and Agreements; Adverse Restrictions; Judgments,
Orders, Etc.
(a) Schedule 3.12(a) lists, as of the Closing Date, and
includes copies of, all insurance policies, material contracts and
agreements relating to the Business to which Seller is a party or by
which any of the Assets is bound (including, but not limited to, joint
venture or partnership agreements, contracts with any labor
organizations, promissory notes, loan agreements, bonds, mortgages,
deeds of trust, liens, pledges, conditional sales contracts or other
security agreements) (the "Assumed Contracts"). Except as disclosed on
Schedule 3.12(a), all such contracts and agreements included in Schedule
3.12(a) are and on the Closing Date shall be in full force and effect
and binding upon the parties thereto. Except as described or cross
referenced on Schedule 3.12(a), neither Seller nor, to Seller's or any
of the Members' knowledge, any other parties to such contracts and
agreements is in breach thereof, and none of the parties has threatened
to breach any of the material provisions thereof or notified Seller or
any of the Members of a default thereunder, or exercised any options
thereunder.
(b) Except as set forth on Schedule 3.12(b), there is
no outstanding judgment, order, writ, injunction or decree against
Seller, the result of which could materially adversely affect Seller,
the Business or any of the Assets, nor has Seller been notified that any
such judgment, order, writ, injunction or decree has been requested.
3.13. Personnel. Schedule 3.13 is a complete list, as of the
Closing Date, of all employees (by type or classification) of Seller relating to
the Business and their respective rates of compensation, including (i) the
portions thereof attributable to bonuses, (ii) any other salary, bonus, equity
participation, or other compensation arrangement made with or promised to any of
them, and (iii) copies of all employment agreements with employees. Schedule
3.13 also lists the driver's license number for each driver of motor vehicles
used in the Business.
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3.14. Benefit Plans and Union Contracts.
(a) Schedule 3.14(a) is a complete list as of the
Closing Date, and includes complete copies, of all employee benefit
plans and agreements currently maintained or contributed to by Seller
relating to the Business, including employment agreements and any other
agreements containing "golden parachute" provisions, retirement plans,
welfare benefit plans and deferred compensation agreements, together
with copies of such plans, agreements and any trusts related thereto,
and classifications of employees covered thereby as of the Closing Date.
Except for the employee benefit plans described on Schedule 3.14(a),
Seller has no other pension, profit sharing, deferred compensation, or
other employee benefit plans or arrangements with any party. Except as
disclosed on Schedule 3.14(a), all employee benefit plans listed on
Schedule 3.14(a) are fully funded and in substantial compliance with all
applicable federal, state and local statutes, ordinances and
regulations. All such plans that are intended to qualify under Section
401(a) of the Internal Revenue Code have been determined by the Internal
Revenue Service to be so qualified, and copies of such determination
letters are included as part of Schedule 3.14(a). All reports and other
documents required to be filed with any governmental agency or
distributed to plan participants or beneficiaries (including, but not
limited to, actuarial reports, audits or tax returns) have been timely
filed or distributed, and copies thereof are included as part of
Schedule 3.14(a). All employee benefit plans listed on such Schedule
have been operated in accordance with the terms and provisions of the
plan documents and all related documents and policies. Seller has not
incurred any liability for excise tax or penalty due to the Internal
Revenue Service or U.S. Department of Labor nor any liability to the
Pension Benefit Guaranty Corporation for any employee benefit plan, nor
have Seller, nor party-in-interest or disqualified person, engaged in
any transaction or other activity which would give rise to such
liability. Seller has not participated in or made contributions to any
"multi-employer plan" as defined in the Employee Retirement Income
Security Act of 1974 ("ERISA"), nor would Seller be subject to any
withdrawal liability with respect to such a plan if any such employer
withdrew from such a plan immediately prior to the Closing Date. No
employee pension benefit plan is under funded on a termination basis as
of the date of this Agreement.
(b) Schedule 3.14(b) is a complete list, as of the
Closing Date, and includes complete copies of all union contracts and
agreements between Seller and any collective bargaining group relating
to the Business. In the operation of the Business, Seller has complied
in all material respects with all applicable federal and state laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours, and nondiscrimination in employment, and
are not engaged in any unfair labor practice. There is no charge pending
nor, to Seller's or the Members' knowledge, is there any charge
threatened against Seller relating to the Business before any court or
agency and alleging unlawful discrimination in employment practices.
There is no charge of or proceeding with regard to any unfair labor
practice relating to the Business that is pending before the National
Labor Relations Board. There is no labor strike, dispute, slow down or
stoppage as of the Closing Date, existing or threatened against Seller
relating to the Business; no union organizational activity exists
respecting employees of Seller relating
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to the Business not currently subject to a collective bargaining
agreement; except as set forth on Schedule 3.14(b), the Business has not
experienced any work stoppage or material labor difficulty; the union
contracts or other agreements delivered as part of Schedule 3.14(b)
constitute all agreements with the unions or other collective bargaining
groups relating to the Business, and there are no other arrangements or
established practices relating to the employees covered by any
collective bargaining agreement; and Schedule 3.14(b) contains as of the
Closing Date a list of all arbitration or grievance proceedings relating
to the Business that have occurred since the Balance Sheet Date. No one
has petitioned within the last five years, and no one is now
petitioning, for union representation of any employees of Seller
relating to the Business. Seller has not experienced any labor strike,
slow-down, work stoppage, or other job action during the last five years
relating to the Business.
3.15. Taxes.
(a) Seller has timely filed all requisite federal,
state, local and other tax and information returns due for all fiscal
periods ended on or before the Closing Date. All such returns are
accurate and complete. Except as set forth on Schedule 3.15, there are
no open years, examinations in progress, extensions of any statute of
limitations or claims against Seller relating to federal, state, local
or other taxes (including penalties and interest) for any period or
periods prior to and including the Closing Date and no notice of any
claim for taxes has been received. Copies of (i) any tax examinations,
(ii) extensions of statutory limitations and (iii) the federal income,
and state franchise, income and sales tax returns of Seller for the last
three fiscal years are attached as part of Schedule 3.15. Seller has not
been contacted by any federal, state or local taxing authority regarding
a prospective examination.
(b) Except as set forth on Schedule 3.15 (which
schedule also includes the amount due) Seller has duly paid all taxes
and other related charges required to be paid prior to the Closing Date.
The reserves for taxes contained in the Financial Statements are
adequate to cover the tax liability of Seller as of the Closing Date.
(c) Seller has withheld all required amounts from their
employees for all pay periods in full and complete compliance with the
withholding provisions of applicable federal, state and local laws. All
required federal, state and local and other returns with respect to
income tax withholding, social security, and unemployment taxes have
been duly filed by Seller for all periods for which returns are due, and
the amounts shown on all such returns to be due and payable have been
paid in full.
3.16. Copies Complete; Consents and Approvals. Except as
disclosed on Schedule 3.16, the copies of all leases, instruments, agreements,
licenses, permits, certificates or other documents that have been delivered to
Buyer in connection with the transactions contemplated hereby are complete and
accurate as of the Closing Date and are true and correct copies of the originals
thereof. None of such leases, instruments, agreements, licenses, permits,
certificates or other documents requires notice to, or consent or approval of,
any governmental
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agency or other third party to any of the transactions contemplated hereby,
except such consents and approvals as are listed on Schedule 3.16, all of which
will have been obtained prior to the Closing Date.
3.17. Customers, Xxxxxxxx, Current Receipts and Receivables.
Schedule 3.17 is a current, accurate and complete list of, and includes:
(a) the customers of the Business that Seller serves on
an ongoing basis, including name, location and current billing rate, as
of the Closing Date; and
(b) an accurate and complete aging of all accounts and
notes receivable from customers as of the last day of the month
preceding the Closing Date, showing amounts due in 30-day aging
categories. Except to the extent of the allowance for bad debts
reflected on the Financial Statements or otherwise disclosed on Schedule
3.17, Seller's accounts and notes receivable are collectible in the
amounts shown on Schedule 3.17.
Since the Balance Sheet Date, Seller has not lost any customers and no customers
have threatened or otherwise informed Seller that they intend to discontinue
doing business with Seller. Seller has no knowledge of any intention of any of
such customers that operates a coal mine to terminate or reduce the scope of its
operations at the locations served by the Business, and none of such customers
has indicated to Seller that it is considering terminating or reducing the scope
of any of its operations at any of such locations.
3.18. Brokers; Finders. No person has acted directly or
indirectly as a broker, finder or financial advisor for Seller or the Members in
connection with the transactions contemplated by this Agreement and no person is
entitled to any broker's, finder's, financial advisory or similar fee or payment
in respect thereof based in any way on any agreement, arrangement or
understanding made by or on behalf of Seller or the Members.
3.19. Closing Date Debt. At the Closing, Seller shall prepare and
deliver to Buyer Schedule 3.19, which shall set forth the amount of (i) the
aggregate debt (excluding trade payables) of Seller outstanding on the Closing
Date relating to the Business, which debt will be repaid at or immediately after
the Closing Date, including in each case all interest accrued through and
including the Closing Date and all prepayment penalties to be incurred in
connection with the repayment of any such debt required to be repaid, plus (ii)
the present value of all capitalized lease obligations (determined in accordance
with generally accepted accounting principles) included in the Assumed Contracts
or encumbering the Assets and (iii) the present value, discounted at the lease
rate factor, if known, inherent in the lease or, if the lease rate factor is not
known, at the rate charged to Seller by a third party lender in connection with
its most recent borrowing to finance equipment, of all lease obligations that
are not capitalized lease obligations included in the Assumed Contracts or
encumbering the Assets (the "CLOSING DATE DEBT").
3.20. Compliance With Laws. Except as disclosed on Schedule 3.20,
Seller has materially complied with, and Seller is presently in material
compliance with, federal, state
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and local laws, ordinances, codes, rules, regulations, Governmental Permits,
orders, judgments, awards, decrees, consent judgments, consent orders and
requirements applicable to Seller relating to the Business (collectively
"LAWS"), including, but not limited to, Laws relating to the public health,
safety or protection of the environment (collectively, "ENVIRONMENTAL LAWS").
Except as disclosed on Schedule 3.20, there has been no assertion by any party
that Seller is in material violation of any Laws. Specifically and without
limiting the generality of the foregoing, except as disclosed on Schedule 3.20:
(a) Except as permitted under applicable laws and
regulations, including, without limitation, the Federal Resource
Conservation Recovery Act, 42 USC Section 6901 et seq. ("RCRA"), the
Business has not accepted, processed, handled, transferred, generated,
treated, stored or disposed of any Hazardous Material (as defined in
Section 3.20(c) below) nor has it accepted, processed, handled,
transferred, generated, treated, stored or disposed of asbestos, medical
waste, radioactive waste or municipal waste, except in compliance with
Environmental Laws.
(b) During Seller's ownership of the Facility Property
and to the best of Seller's knowledge prior to Seller's ownership of the
Facility Property, no Hazardous Material, other than that allowed under
Environmental Laws, including, without limitation, RCRA, has been
disposed of, or otherwise released on any Facility Property.
(c) During Seller's ownership of the Facility Property
and to the best of Seller's knowledge prior to Seller's ownership of the
Facility Property, no Facility Property has ever been subject to nor has
Seller received any notice of any private, administrative or judicial
action, or notice of any intended private, administrative or judicial
action relating to the presence or alleged presence of Hazardous
Material in, under, upon or emanating from any Facility Property. There
are no pending and no threatened actions or proceedings from any
governmental agency or any other entity involving remediation of any
condition of any Facility Property, including, without limitation,
petroleum contamination, pursuant to Environmental Laws.
(d) Except as allowed under Environmental Laws, the
Business has not knowingly sent, transported or arranged for the
transportation or disposal of any Hazardous Material, to any site,
location or facility.
(e) As used in this Agreement, "HAZARDOUS MATERIAL"
shall mean (i) any substances defined as "HAZARDOUS WASTE" in 40 CFR
261, and in any corresponding Idaho statute or regulation; and (ii) any
substance the presence of which requires remediation pursuant to any
Environmental Laws.
3.21. Patents, Trademarks, Trade Names, etc. Schedule 3.21 lists
all patents, trade names, fictitious business names, trademarks, service marks,
and copyrights owned by Seller or which they are licensed to use in connection
with the Business (other than licenses to use software for personal computer
operating systems that were provided when the computer was purchased and
licenses to use software for personal computers that are granted to retail
purchasers
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of such software). No patents, trade secrets, know-how, intellectual property,
trademarks, trade names, assumed names, copyrights, or designations used by
Seller in the Business infringe on any patents, trademarks, or copyrights, or
any other rights of any person. Neither Seller nor any of the Members knows or
has any reason to believe that there are any claims of third parties to the use
of any such names or any similar name, or knows of or has any reason to believe
that there exists any basis for any such claim or claims.
3.22. Assets, etc., Necessary to the Business. Seller owns or
leases all properties and assets, real, personal, and mixed, tangible and
intangible, and, except as disclosed on Schedules 3.4, 3.8(a), 3.12(a) and 3.16,
are a party to all Governmental Permits and other agreements necessary to permit
Seller to carry on the Business as presently conducted.
3.23. Suppliers and Customers. Seller has no knowledge of any
fact (other than general economic and industry conditions) which indicates that
any of the suppliers supplying products, components, materials or providing use
of, or access to, landfills or disposal sites to Seller intends to cease
providing such items to Seller, nor does Seller have knowledge of any fact
(other than general economic and industry conditions) which gives Seller reason
to believe that any of the customers of the Business intends to terminate, limit
or reduce its business relations with Seller relating to the Business.
3.24. Absence of Certain Business Practices. Neither Seller nor
any of the Members has directly or indirectly within the past five years given
or agreed to give any gift or similar benefit to any customer, supplier,
governmental employee or other person who is or may be in a position to help or
hinder the Business in connection with any actual or proposed transaction which
(a) might subject Seller to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, or (b) if not continued in the future,
subject Buyer to suit or penalty in any private or governmental litigation or
proceeding.
3.25. Disclosure Schedules. Any matter disclosed by Seller on any
Schedule to this Agreement shall be deemed to have been disclosed on every other
Schedule that refers to such Schedule by cross reference so long as the nature
of the matter disclosed is obvious from a fair reading of the Schedule on which
the matter is disclosed.
3.26. No Misleading Statements. The representations and
warranties of Seller and the Members contained in this Agreement, the Exhibits
and Schedules hereto and all other documents and information furnished to Buyer
and their representatives pursuant hereto are complete and accurate in all
material respects and do not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made and to be
made not misleading.
3.27. Accurate and Complete Records. The books, ledgers,
financial records and other records of Seller relating to the Business:
(a) have been made available to Buyer and its agents at
Seller's offices or at the offices of Buyer's attorneys or Seller's
attorneys;
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(b) have been, in all material respects, maintained in
accordance with all applicable laws, rules and regulations; and
(c) are accurate and complete in all material respects,
and reflect all material transactions.
4. REPRESENTATIONS AND WARRANTIES OF WCI AND BUYER
WCI and Buyer, jointly and severally, represent and warrant to Seller
and each Member that each of the following representations and warranties is
true as of the Closing Date, and agree that such representations and warranties
shall survive the Closing:
4.1. Existence and Good Standing. WCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and is qualified to transact
business as a foreign corporation in the State of Idaho.
4.2. Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by WCI and Buyer, and, subject to the due
authorization, execution and delivery by Seller and each of the Members,
constitutes a legal, valid and binding obligation of WCI and Buyer. Each of WCI
and Buyer has full corporate power, legal right and corporate authority to enter
into and perform its obligations under this Agreement and to carry on the
Business as presently conducted. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and the fulfillment
of and compliance with the terms and conditions hereof do not and will not,
after the giving of notice, or the lapse of time or otherwise: (a) violate any
provisions of any judicial or administrative order, award, judgment or decree
applicable to Buyer or WCI: (b) conflict with any of the provisions of the
Certificate of Incorporation or Bylaws of Buyer or WCI; or (c) conflict with,
result in a breach of or constitute a default under any material agreement or
instrument to which Buyer or WCI is a party or by which either is bound.
4.3. No Misleading Statements. The representations and warranties
of WCI and Buyer contained in this Agreement, the Exhibits and Schedules hereto
and all other documents and information furnished to Seller and the Members
pursuant hereto are materially complete and accurate, and do not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements made and to be made not misleading as of the Closing
Date.
5. CLOSING DELIVERIES
At the Closing or at the time otherwise indicated, the respective
parties shall make the deliveries indicated:
5.1. WCI's and Buyer's Deliveries.
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(a) WCI shall deliver the Purchase Price and the WCI
Stock on the Closing Date pursuant to Section 1.5.
(b) WCI and Buyer shall execute and deliver to Seller
counterparts of the Xxxx of Sale (as defined in Section 5.2(a)) and the
Assignment (as defined in Section 5.2(b)); and
(c) WCI and Buyer shall execute and deliver such other
documents and instruments as are reasonably requested by Seller in order
to consummate the transactions contemplated by this Agreement.
5.2. Seller's Deliveries.
(a) Seller shall deliver to Buyer (and/or its designee)
an executed xxxx of sale (the "XXXX OF SALE") and other instruments of
transfer and conveyance for the full and complete transfer, conveyance,
assignment and delivery to Buyer on the Closing Date of all of Seller's
right, title and interest in and to all of the Assets, accompanied by
all third party consents required with respect thereto, including,
without limitation, written evidence of the release of the liens and
encumbrances with respect to the Assets;
(b) Seller shall deliver to Buyer an executed
assignment or transfer of the Assumed Contracts and Governmental Permits
(the "ASSIGNMENT") accompanied by all third party consents required with
respect thereto;
(c) Seller shall deliver to Buyer (and/or its designee)
all motor vehicle registrations and ownership documents for the motor
vehicles being acquired by Seller;
(d) Seller shall deliver to Buyer an opinion of counsel
for Seller, dated as of the Closing Date, in substantially the form
attached hereto as Exhibit 5.2(d).
(e) Seller shall execute and deliver such other
documents and instruments as are reasonably requested by WCI or Buyer in
order to consummate the transactions contemplated by this Agreement; and
(f) Seller shall deliver to Buyer evidence satisfactory
to Buyer showing that all written employment contracts and all oral
employment contracts other than those that are terminable "at will"
without payment of severance (other than normal severance benefits
approved by Buyer) or other benefits with non-union employees of Seller
(including, without limitation, rights to obtain equity in the Business
or Assets) have been terminated, effective on or before the Closing
Date.
6. INDEMNIFICATION
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6.1. Indemnity by Seller, the Members. Subject to Section 6.2,
Seller and the Members covenant and agree that they will, jointly and severally,
indemnify and hold harmless WCI and Buyer and their respective directors,
officers and agents and their respective successors and assigns (collectively
the "INDEMNITEES"), from and after the date of this Agreement, against any and
all losses, damages, assessments, fines, penalties, adjustments, liabilities,
claims, deficiencies, costs, expenses (including specifically, but without
limitation, reasonable attorneys' fees and expenses of investigation),
expenditures, including, without limitation, any "ENVIRONMENTAL SITE LOSSES" (as
such term is hereinafter defined) identified by a Indemnitee with respect to
each of the following contingencies until the expiration of the applicable
statute of limitations (all, the "INDEMNITY EVENTS"):
(a) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant relating to the Assets on
the part of Seller or the Members pursuant to the terms of this
Agreement or any misrepresentation in or omission from any Exhibit,
Schedule, list, certificate, or other instrument furnished or to be
furnished to WCI or Buyer pursuant to the terms of this Agreement
relating to the Assets, regardless of whether, in the case of a breach
of a representation or a warranty, WCI or Buyer relied on the truth of
such representation or warranty or had any knowledge of any breach
thereof.
(b) The design, development, construction or operation
of any "ENVIRONMENTAL SITE" as hereinafter defined, or the installation
or operation of an Underground Storage Tank ("UST") during any period on
or prior to the Closing Date. As used in this Agreement, "Environmental
Site" shall mean any facility, any UST and any other waste storage,
processing, treatment or disposal facility, and any other business site
or any other real property owned, leased, controlled or operated by
Seller or the Members or by any predecessor thereof on or prior to the
Closing Date and used in the Business, provided however, as to
activities of such predecessors, only to the extent that Seller or the
Members had knowledge of such activities. As used in this Agreement,
"ENVIRONMENTAL SITE LOSSES" shall mean any and all losses, damages
(including exemplary damages and penalties), liabilities, claims,
deficiencies, costs, expenses, and expenditures (including, without
limitation, expenses in connection with site evaluations, risk
assessments and feasibility studies) arising out of or required by an
interim or final judicial or administrative decree, judgment,
injunction, mandate, interim or final permit condition or restriction,
cease and desist order, abatement order, compliance order, consent
order, clean-up order, exhumation order, reclamation order or any other
remedial action that is required to be undertaken under federal, state
or local law in respect of operating activities on or affecting any
facility, any UST or any other Environmental Site, including, but not
limited to (x) any actual or alleged violation of any law or regulation
respecting the protection of the environment, including, but not limited
to, RCRA and CERCLA or any other law or regulation respecting the
protection of the air, water and land and (y) any remedies or
violations, whether by a private or public action, alleged or sought to
be assessed as a consequence, directly or indirectly, of any "RELEASE"
(as defined below) of pollutants (including odors) or Hazardous
Substances from any facility, any UST or any other Environmental Site
resulting from activities occurring prior to the Closing Date
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thereat, whether such Release is into the air, water (including
groundwater) or land and whether such Release arose before, during or
after the Closing Date. The term "Release" as used herein means any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the ambient
environment.
(c) All actions, suits, proceedings, demands,
assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) incident to any of the foregoing.
6.2. Limitations on Seller's and the Members' Indemnities. The
maximum amount which the Indemnitees can recover as a result of one or more
Indemnity Events pursuant to the provisions hereof for Claims shall not in the
aggregate exceed the Purchase Price.
6.3. Notice of Indemnity Claim.
(a) In the event that any claim ("CLAIM") is hereafter
asserted against or arises with respect to any Indemnitee as to which
such Indemnitee may be entitled to indemnification hereunder, Indemnitee
shall notify Seller and the Members (collectively, the "INDEMNIFYING
PARTY") in writing thereof (the "CLAIMS NOTICE") within 60 days after
(i) receipt of written notice of commencement of any third party
litigation against such Indemnitee, (ii) receipt by such Indemnitee of
written notice of any third party claim pursuant to an invoice, notice
of claim or assessment, against such Indemnitee, or (iii) such
Indemnitee becomes aware of the existence of any other event in respect
of which indemnification may be sought from the Indemnifying Party
(including, without limitation, any inaccuracy of any representation or
warranty or breach of any covenant). The Claims Notice shall describe
the Claim and the specific facts and circumstances in reasonable detail,
and shall indicate the amount, if known, or an estimate, if possible, of
the losses that have been or may be incurred or suffered by the
Indemnitee.
(b) The Indemnifying Party may elect to defend any
Claim for money damages where the cumulative total of all Claims
(including such Claims) do not exceed the limit set forth in Section 6.2
at the time the Claim is made, by the Indemnifying Party's own counsel;
provided, however, the Indemnifying Party may assume and undertake the
defense of such a third party Claim only upon written agreement by the
Indemnifying Party that the Indemnifying Party is obligated to fully
indemnify Indemnitee with respect to such action. Indemnitee may
participate, at WCI's Indemnitee's own expense, in the defense of any
Claim assumed by the Indemnifying Party. Without the written approval of
Indemnitee, which approval shall not be unreasonably withheld, the
Indemnifying Party shall not agree to any compromise of a Claim defended
by the Indemnifying Party.
(c) If, within 30 days of the Indemnifying Party's
receipt of a Claims Notice, the Indemnifying Party shall not have
provided the written agreement required by Section 6.3(b) and elected to
defend the Claims, Indemnitee shall have the right to assume control of
the defense and/or compromise of such Claim, and the costs and expenses
of
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such defense, including reasonable attorneys' fees, shall be added to
the Claim. The Indemnifying Party shall promptly, and in any event
within 30 days reimburse Indemnitee for the costs of defending the
Claim, including attorneys' fees and expenses.
(d) The party assuming the defense of any Claim shall
keep the other party reasonably informed at all times of the progress
and development of its or their defense of and compromise efforts with
respect to such Claim and shall furnish the other party with copies of
all relevant pleadings, correspondence and other papers. In addition,
the parties to this Agreement shall cooperate with each other and make
available to each other and their representatives all available relevant
records or other materials required by them for their use in defending,
compromising or contesting any Claim. The failure to timely deliver a
Claims Notice or otherwise notify the Indemnifying Party of the
commencement of such actions in accordance with this Section 6.3 shall
not relieve the Indemnifying Party from the obligation to indemnify
hereunder but only to the extent that the Indemnifying Party establishes
by competent evidence that it has been prejudiced thereby.
(e) In the event both the Indemnitee and the
Indemnifying Party are named as defendants in an action or proceeding
initiated by a third party, they shall both be represented by the same
counsel (on whom they shall agree), unless such counsel, the Indemnitee,
or the Indemnifying Party shall determine that such counsel has a
conflict of interest in representing both the Indemnitee and the
Indemnifying Party in the same action or proceeding and the Indemnitee
and the Indemnifying Party do not waive such conflict to the
satisfaction of such counsel.
6.4. Survival of Representations, Warranties and Agreements. The
representations and warranties of the parties contained in this Agreement and in
any certificate, Exhibit or Schedule delivered pursuant hereto, or in any other
writing delivered pursuant to the provisions of this Agreement (the
"REPRESENTATIONS AND WARRANTIES") and the liability of the party making such
Representations and Warranties for breaches thereof shall survive the
consummation of the transactions contemplated hereby. The parties hereto in
executing and delivering and in carrying out the provisions of this Agreement
are relying solely on the representations, warranties, Schedules, Exhibits,
agreements and covenants contained in this Agreement, or in any writing or
document delivered pursuant to the provisions of this Agreement, and not upon
any representation, warranty, agreement, promise or information, written or
oral, made by any persons other than as specifically set forth herein or
therein.
6.5. No Exhaustion of Remedies or Subrogation; Right of Set Off.
Seller and the Members waive any right to require any Indemnitee to (i) proceed
against any other person or (iii) pursue any other remedy whatsoever in the
power of any Indemnitee. Buyer may, but shall not be obligated to, set off
against any and all payments due Seller under this Agreement or any other
agreement between the parties, any amount to which WCI, Buyer or any other
Indemnitee is entitled to be indemnified hereunder with respect to any Indemnity
Event. Such right of set off shall be separate and apart from any and all other
rights and remedies that the Indemnities may have against Seller and the Members
or their successors.
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7. OTHER POST-CLOSING COVENANTS OF SELLER, THE MEMBERS, WCI
AND BUYER
7.1. Restrictive Covenants. Seller, the Members, the Members' and
Affiliates acknowledge that (i) WCI and Buyer, as the purchasers of the Assets
(including the goodwill of the Business), are and will be engaged in the same
business as the Business; (ii) Seller, the Members, the their Affiliates are
intimately familiar with the Business; (iii) the Business is currently conducted
in the State of Idaho and WCI and Buyer, directly and indirectly through their
Affiliates, currently conduct business in Idaho and intend, by acquisition or
otherwise, to expand the Business into other geographic areas of Idaho where it
is not presently conducted; (iv) Seller, the Members, and their Affiliates have
had access to trade secrets of, and confidential information concerning, the
Business; (v) the agreements and covenants contained in this Section 7.1 are
essential to protect the Business and the goodwill being acquired; and (vi)
Seller, the Members, and their Affiliates have the means to support themselves
and their dependents other than by engaging in a business substantially similar
to the Business and the provisions of this Section 7 will not impair such
ability. Seller and the Members covenant and agree as set forth in (a), (b) and
(c) below with respect to the Business:
(a) Non-Compete. For a period commencing on the Closing
Date and terminating five years thereafter (the "RESTRICTED PERIOD"),
Seller, the Members, and their Affiliates shall not, anywhere in the
Cities of Mountain Home, Xxxxxx and Grand View, Idaho, or in Xxxxxx or
Owyhee County, Idaho, directly or indirectly, acting individually or as
the owners, shareholders, partners, or employees of any entity, (i)
engage in the operation of a solid waste collection, transporting,
disposal and/or composting business, transfer facility, recycling
facility, materials recovery facility or solid waste landfill; (ii)
enter the employ of, or render any personal services to or for the
benefit of, or assist in or facilitate the solicitation of customers
for, or receive remuneration in the form of salary, commissions or
otherwise from, any business engaged in such activities; or (iii)
receive or purchase a financial interest in, make a loan to, or make a
gift in support of, any such business in any capacity, including,
without limitation, as a sole proprietor, partner, shareholder, officer,
director, principal, agent, trustee or lender; provided, however, that
any of Seller or the Members may own, directly or indirectly, solely as
an investment, securities of any business traded on any national
securities exchange or NASDAQ, provided none of Seller or the Members is
a controlling person of, or member of a group which controls, such
business and further provided that Seller and Members do not, in the
aggregate, directly or indirectly, own 2% or more of any class of
securities of such business.
(b) Confidential Information. During the Restricted
Period and thereafter, Seller, the Members and their Affiliates shall
keep secret and retain in strictest confidence, and shall not use for
the benefit of themselves or others, all data and information relating
to the Business ("CONFIDENTIAL INFORMATION"), including without
limitation, the existence of and terms of this Agreement, know-how,
trade secrets, customer lists, supplier lists, details of contracts,
pricing policies, operational methods, marketing plans or strategies,
bidding practices and policies, product development
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techniques or plans, and technical processes; provided, however, that
the term "Confidential Information" shall not include information that
(i) is or becomes generally available to the public other than as a
result of disclosure by Seller or any of the Members, or (ii) is general
knowledge in the solid waste handling and landfill business and not
specifically related to the Business.
(c) Property of the Business. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof)
relating to the Business, including such items stored in computer
memories, on microfiche or by any other means, made or compiled by or on
behalf of Seller or made available to Seller relating to the Business
(other than those relating to the Excluded Assets and the Excluded
Liabilities), but excluding any materials maintained by any attorneys
for Seller prior to the Closing, are and shall be the property of WCI or
Buyer and have been delivered or will be delivered or made available to
WCI or Buyer at the Closing.
(d) Non-Solicitation. Without the consent of WCI, which
may be granted or withheld by WCI in its discretion, Seller, the Members
and their Affiliates shall not, during the Restricted Period, solicit
any employees of WCI, Buyer or their Affiliates to leave the employ of
WCI, Buyer or their Affiliates and join Seller, any of Members or
Affiliate in any business endeavor owned or pursued by any of them.
(e) No Disparagement. From and after the Closing Date,
none of Seller nor the Members shall, in any way to any customer or
employee of the Business or Buyer, denigrate or derogate WCI, Buyer or
any of their subsidiaries, or any officer, director or employee, or any
product or service or procedure of any such company whether or not such
denigrating or derogatory statements shall be true and are based on acts
or omissions which are learned by Seller or the Members from and after
the date hereof or on acts or omissions which occur from and after the
date hereof, or otherwise. A statement shall be deemed denigrating or
derogatory to any person if it adversely affects the regard or esteem in
which such person or entity is held by such person. Without limiting the
generality of the foregoing, none of Seller nor the Members shall,
directly or indirectly in any way in respect of any such company or any
such directors or officers, communicate with, or take any action which
is adverse to the position of any such company with any customer or
employee of the Business or Buyer. This paragraph does not apply to the
extent that testimony is required by legal process, provided that WCI
has received not less than five days' prior written notice of such
proposed testimony, or such lesser actual notice as Seller or any Member
or Shareholder shall have.
7.2. Rights and Remedies Upon Breach. If Seller, the Members or
any Affiliate breaches, or threatens to commit a breach of, any of the
provisions of Section 7.1(a), (b) or (d) herein (the "RESTRICTIVE COVENANTS"),
WCI and Buyer shall have the following rights and remedies, each of which rights
and remedies shall be independent of the others and severally enforceable, and
each of which is in addition to, and not in lieu of, any other rights and
remedies available to Buyer at law or in equity:
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(a) Specific Performance. The right and remedy to have
the Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to
WCI and Buyer and that money damages would not provide an adequate
remedy to Buyer. Accordingly, in addition to any other rights or
remedies, WCI and Buyer shall be entitled to injunctive relief to
enforce the terms of the Restrictive Covenants and to restrain Seller
and the Members from any violation thereof.
(b) Accounting. The right and remedy to require Seller
and the Members to account for and pay over to WCI or Buyer all
compensation, profits, monies, accruals, increments or other benefits
derived or received by Seller or the Members as the result of any
transactions constituting a breach of the Restrictive Covenants.
(c) Severability of Covenants. Seller and Members
acknowledge and agree that the Restrictive Covenants are reasonable and
valid in geographical and temporal scope and in all other respects. If
any court determines that any of the Restrictive Covenants, or any part
thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full effect,
without regard to the invalid portions.
(d) Blue-Penciling. If any court determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable because
of the duration or geographic scope of such provision, such court shall
reduce the duration or scope of such provision, as the case may be, to
the extent necessary to render it enforceable and, in its reduced form,
such provision shall then be enforced.
(e) Enforceability in Jurisdiction. WCI, Buyer, Seller
and Members intend to and hereby confer jurisdiction to enforce the
Restrictive Covenants upon the courts of any jurisdiction within the
geographic scope of the Restrictive Covenants. If the courts of any one
or more of such jurisdictions hold the Restrictive Covenants
unenforceable by reason of the breadth of such scope or otherwise, it is
the intention of WCI, Buyer, Seller and Members that such determination
not bar or in any way affect Buyer's right to the relief provided above
in the courts of any other jurisdiction within the geographic scope of
the Restrictive Covenants as to breaches of such covenants in such other
respective jurisdictions, such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and
independent covenants.
7.3. Removal of Property. Buyer agrees to remove one (1)
Caterpillar D7E Dozer, VIN #75E1879, from Seller's property located at
Glenns Ferry within ninety (90) days of the Closing Date.
7.4. Real Estate Agreement. Buyer and Seller shall execute and
deliver to one another the Real Estate Agreement within one (1) day of
the Closing Date.
8. GENERAL
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8.1. Additional Conveyances. Following the Closing, Seller and
Buyer shall each deliver or cause to be delivered at such times and places as
shall be reasonably agreed upon such additional instruments as Buyer or Seller
may reasonably request for the purpose of carrying out this Agreement. Seller
will cooperate with WCI and Buyer on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in connection with any
actions, proceedings or disputes of any nature with respect to matters
pertaining to all periods prior to the date of this Agreement.
8.2. Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, the successors or assigns of WCI,
Buyer and Seller and the heirs, legal representatives or assigns of the Members;
provided, however, that any such assignment shall be subject to the terms of
this Agreement and shall not relieve the assignor of its or his responsibilities
under this Agreement. Buyer may assign some or all of its rights hereunder to
another Affiliate of WCI.
8.3. Public Announcements. Except as required by law, Seller
shall not make any public announcement or filing with respect to the
transactions provided for herein without the prior written consent of WCI.
8.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
8.5. Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been duly given if in writing
and either delivered personally, sent by facsimile transmission or by air
courier service, or mailed by postage prepaid registered or certified U.S. mail,
return receipt requested, to the addresses designated below or such other
addresses as may be designated in writing by notice given hereunder, and shall
be effective upon personal delivery or facsimile transmission thereof or upon
delivery by registered or certified U.S. mail or one business day following
deposit with an air courier service:
If to Seller: Xxxxxxx X. Xxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxx Xxxx, Xxxxx 00000
With a copy to: Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx, L.L.P.
000 Xxxxx 0xx Xxxx
Post Xxxxxx Xxx 000
Xxxxxxxx Xxxx, Xxxxx 00000-0000
If to Buyer: Waste Connections, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx
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With a copy to: Xxxxxx X. Xxxxx, Esq.
Shartsis, Xxxxxx & Xxxxxxxx LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
8.6. Attorneys' Fees. In the event of any dispute or controversy
between WCI or Buyer on the one hand and Seller or Members on the other hand
relating to the interpretation of this Agreement or to the transactions
contemplated hereby, the prevailing party shall be entitled to recover from the
other party reasonable attorneys' fees and expenses incurred by the prevailing
party. Such award shall include post-judgment attorney's fees and costs.
8.7. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Idaho without regard to
its conflict of laws provisions.
8.8. Payment of Fees and Expenses. Whether or not the
transactions herein contemplated shall be consummated, each party hereto will
pay its own fees, expenses and disbursements incurred in connection herewith and
all other costs and expenses incurred in the performance and compliance with all
conditions to be performed hereunder.
8.9. Incorporation by Reference. All Schedules and Exhibits
attached hereto are incorporated herein by reference as though fully set forth
at each point referred to in this Agreement.
8.10. Captions. The captions in this Agreement are for
convenience only and shall not be considered a part hereof or affect the
construction or interpretation of any provisions of this Agreement.
8.11. Number and Gender of Words. Whenever the singular number is
used herein, the same shall include the plural where appropriate, and shall
apply to all of such number, and to each of them, jointly and severally, and
words of any gender shall include each other gender where appropriate.
8.12. Entire Agreement. This Agreement (including the Schedules
and Exhibits hereto) and the other documents delivered pursuant hereto
constitute the entire Agreement and understanding between Seller, the Members,
WCI and Buyer and supersedes any prior agreement and understanding relating to
the subject matter of this Agreement. This Agreement may be modified or amended
only by a written instrument executed by Seller, the Members, WCI and Buyer
acting through their officers, thereunto duly authorized.
8.13. Waiver. No waiver by any party hereto at any time of any
breach of, or compliance with, any condition or provision of this Agreement to
be performed by any other party hereto may be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or at any prior or
subsequent time.
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8.14. Construction. The language in all parts of this Agreement
must be in all cases construed simply according to its fair meaning and not
strictly for or against any party. Unless expressly set forth otherwise, all
references herein to a "day" are deemed to be a reference to a calendar day. All
references to "business day" mean any day of the year other than a Saturday,
Sunday or a public or bank holiday in California or Idaho. Unless expressly
stated otherwise, cross-references herein refer to provisions within this
Agreement and are not references to the overall transaction or to any other
document.
8.15. Affiliate. For purposes of this Agreement, the term
"AFFILIATE" means, with respect to any person, any person that directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with such person, and in the case of Seller includes
directors and officers, in the case of individuals includes the individual's
spouse, father, mother, grandfather, grandmother, brothers, sisters, children
and grandchildren, and in the case of a trust includes the grantors, trustees
and beneficiaries of the trust.
8.16. Knowledge. Wherever reference is made in this Agreement to
the "knowledge" of Seller or the Members, such term means the actual knowledge
of Seller, the Members or any director, officer or management employee of Seller
whose duties relate to the Business, or any knowledge which should have been
obtained by Seller, the Members or such employee upon reasonable inquiry by a
reasonable business person.
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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement by persons thereunto duly authorized as of the date first above
written.
SELLER: R & N, LLC
By:
----------------------------
Xxxxxxx X. Xxxxxx, Manager and
President
By:
----------------------------
Xxxx Xxxxx, Manager
THE MEMBERS: XXXXXX SANITATION, INC.
By:
----------------------------
Xxxxxxx X. Xxxxxx, President
NADL SANITATION, INC.
By:
----------------------------
Xxxx Xxxxx, President
----------------------------
Xxxx Xxxxxx
----------------------------
Xxxx Xxxxx
----------------------------
Xxxxx Xxxxxx
WCI: Waste Connections, Inc.
By:
----------------------------
Xxxxxx X. Xxxxxxxxxxxx, President
BUYER: Waste Connections of Idaho, Inc.
By:
----------------------------
Xxxxxx X. Xxxxxxxxxxxx, President
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