EXHIBIT 10.16
*** Indicates material has been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission. A complete copy of
this Agreement has been filed with the Securities and Exchange Commission.
CLOSING AND ASSET PURCHASE AGREEMENT
THIS CLOSING AND ASSET PURCHASE AGREEMENT (the "Agreement") is executed
and delivered as of this 30th day of November, 2004 between WCA SHILOH LANDFILL,
L.L.C., a Delaware limited liability company ("Buyer"); TRASH AWAY, INC., a
South Carolina corporation ("Seller"); and XXXX X. XXXXXXX, an individual
("Xxxxxxx") (Xxxxxxx is hereinafter referred to as the "Shareholder").
P R E M I S E S:
WHEREAS, Seller operates a construction and demolition waste collection,
transportation, recycling and disposal business located in and around
Greenville, South Carolina (the "Business"); and
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; and
WHEREAS, Shareholder holds all of the outstanding shares of capital stock
of Seller and Buyer is unwilling to enter into this Agreement without the
covenants and promises of Shareholder herein set forth; and
WHEREAS, a material condition of Buyer entering into this Agreement is
Shareholder entering into certain agreements on behalf of Shareholder and other
businesses of the Shareholder, including but not limited to that certain
Purchase and Sale of Assets Agreement of even date herewith by and between
Buyer, Shareholder, and Waste Reduction of South Carolina, Inc, (collectively,
the "Auxiliary Agreement").
NOW, THEREFORE, in consideration of Ten Dollars ($10), 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:
A G R E E M E N T:
ARTICLE 1. SALE OF ASSETS
SECTION 1.1 DESCRIPTION OF ASSETS. Upon the terms and subject to the
conditions set forth in this Agreement, Seller does hereby grant, convey, sell,
transfer and assign to Buyer all of its right, title and interest in and to all
of the assets, properties and contractual rights owned by Seller or used by
Seller in connection with the Business, wherever located, except for the
Excluded Assets (as hereinafter defined), including, but not limited to, the
following:
(a) all equipment used or for use in the operation of the Business,
including, without limitation, the equipment listed on Schedule 1.1(a)
attached hereto and made a part hereof (the "Equipment");
(b) all of the motor vehicles used or for use in the Business, and
all radios, attachments, accessories and materials handling equipment now
located in or on such motor vehicles (the "Rolling Stock"), as the same
are listed and more completely described by manufacturer, model number and
model year on Schedule 1.1(b), attached hereto and made a part hereof;
(c) all right, title and interest of Seller in, to and under (i) any
and all agreements (whether oral or in writing) with Seller's customers as
of the Closing Date which relate to the operation or conduct of the
Business (the "Customer Accounts"), and (ii) any and all leases,
contracts, advertising materials, license agreements, and other
agreements, arrangements and/or commitments which are related to the
Assets (as hereinafter defined), the Business and/or the Customer Accounts
(the "Third Party Contracts" and, together with the Customer Accounts, the
"Contracts"), except for such Third Party Contracts obligating the Seller
to deliver any waste to any disposal facility or to any such third party
(which shall be Retained Liabilities, as described more fully in Section
7.1 herein) ; and true and complete copies of each of the Contracts which
is in writing shall be delivered to Buyer on or prior to the execution and
delivery of this Agreement by Seller and Shareholder;
(d) to the extent assignable, all of Seller's manual and automated
routing and billing information, data and components thereof, including
without limitation all information and all routing and billing computer
software and programs containing any information regarding Customer
Accounts;
(e) all computer hardware, software, office equipment and related
information technology assets (including licenses)except for those listed
on Schedule 1.2(g);
(f) all of Seller's inventory of parts, tires and accessories of
every kind, nature and description to the extent that the same is used or
for use in connection with the Assets (the "Inventory");
(g) all right, title and interest of Seller in and to any and all of
Seller's customer lists, vendor lists, supplier lists, trade secrets,
proprietary rights, symbols, trademarks, service marks, logos and trade
names and other instruments used in connection with, or related to, the
Business, the Assets and/or the Customer Accounts (the "Intangible
Rights");
(h) to the extent assignable, all of Seller's permits,
qualifications, licenses, franchises, consents and other approvals
relating to the Business (the "Permits"), true and complete copies of
which are attached hereto on Schedule 1.1(h);
(i) all right, title and interest of Seller in and to the name
"Trash Away" (the "Business Name") and all rights of Seller to use the
Business Name in the conduct of the Business or otherwise;
Page 2 of 34
(j) all of Seller's existing books and records, documents, files and
other material related to all current or past customers of the Business;
(k) all right, title, and interest of Seller in and to the telephone
numbers (000) 000-0000, (000) 000-0000 and (000) 000-0000 which are used
by Seller in the conduct of the Business;
(l) all right, title and interest of Seller in and to the web
address "xxx.xxxxx-xxxx.xxx";
(m) 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 there shall be
excluded from the Assets the following which are not being sold to Buyer
pursuant to this Agreement (the "Excluded Assets"):
(a) all cash on hand and on deposit of Seller, except as set forth
in Section 1.4 hereof;
(b) accounts payable of Seller ("Accounts Payable") (i) as of the
close of business on the day immediately preceding the Closing (as defined
herein) and (ii) attributable to the operation of the Business prior to
the Closing Date (as defined herein);
(c) all of Seller's accounts receivable and other rights to payment
of money and all rights in and to any returned, reclaimed and repossessed
goods, together with all rights, claims, counterclaims, titles,
securities, security interests, liens and guaranties evidencing, securing,
guaranteeing payment of, relating to or otherwise with respect to such
accounts receivable and all rights, including any rights to recoupment,
recovery, reclamation and resale to the extent they exist prior to the
Closing (the "Accounts Receivable").
(d) all trip tickets for services performed prior to the Closing;
provided Buyer shall upon prior reasonable notice have access to such
after closing for legitimate business reasons.
(e) all contracts and contractual rights and obligations of Seller
(whether oral or in writing) which are not related to the Customer
Accounts, the Assets and/or the Business on which the parties have agreed
to exclude as more specifically set forth on Schedule 1.2(e) hereto; and
(f) all employment or consulting agreements to which Seller is a
party or by which Seller is bound.
(g) all computer hardware, software, office equipment and related
information, technology assets (including licenses) listed on Schedule
1.2(g);
(h) all minute books, stock records and corporate seals;
Page 3 of 34
(i) all fuel receipts;
(j) all insurance policies and rights thereunder;
(k) all personnel records and other records that Seller is required
by law to retain in its possession;
(l) all claims for refund of taxes of any kind and nature and other
governmental charges of whatever nature;
(m) all rights in connection with and assets of any employee benefit
plans of Seller;
(n) all rights to indemnity from third parties under contracts or at
law or in equity arising out of acts, omissions and events occurring
preclosing;
(o) all rights of Seller under this Agreement and any agreements
executed in connection herewith;
(p) any items listed on Schedule 1.2(p).
SECTION 1.3 NON-ASSIGNMENT OF CERTAIN CONTRACTS. Notwithstanding anything
to the contrary in this Agreement, to the extent that the assignment hereunder
of any Contract 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 its best efforts to
obtain the consent of such other party to such assignment to Buyer. If such
consent is not obtained, Seller shall cooperate with Buyer in any reasonable
arrangement designed to provide Buyer with the benefits under any such Contract,
and enforcement, for the account and benefit of Buyer, of any and all rights of
Seller against any other person arising out of the breach or cancellation of any
such Contract by such other person, or otherwise. Attached hereto as Schedule
1.3 is a list of each Contract which may require the consent of a third party to
the assignment thereof. Buyer shall identify with an asterisk which Contracts
Buyer will require a consent be obtained prior to closing. If any such consent
shall not be obtained, Buyer shall have the right to terminate.
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 for services
to be rendered after the Closing related to the Business (the "Prepaid
Accounts"). Seller shall be entitled to all cash on hand or on deposit related
to services performed on or before the close of business on the date of Closing
and Buyer shall be entitled to all cash on hand or on deposit related to
services to be performed after the Closing Date.
SECTION 1.5 CHANGE OF NAME. On the Closing Date, Seller shall discontinue
any use of the Business Name and/or any name similar to the Business Name, or
any other symbol, trademark, service xxxx, logo or trade name now used by Seller
in the conduct of the Business. On the Closing Date, Seller shall deliver to
Buyer, in form suitable for filing, such certificates,
Page 4 of 34
consents and other documents as are necessary to effect the transfer of the
registration of the Business Name to Buyer in South Carolina and any other
jurisdiction in which the Business is operated on or prior to the Closing Date,
and Seller shall grant to Buyer any consents and take any other and further
action, all at Seller's own expense, requested by Buyer to enable Buyer to
reserve or register any such name for use by Buyer in South Carolina or any
other jurisdiction in which the Business is operated on or prior to the Closing
Date.
SECTION 1.6 POST CLOSING ACCOUNTS RECEIVABLE. The parties acknowledge that
payments on preclosing invoices will be directed to be paid to Seller's post
office box and post closing invoices of Buyer will direct payment to be paid to
a different post office box. Consequently, in all likelihood Seller will receive
payments that should be directed to Buyer and Buyer will receive payments that
should be directed to Seller. Each party agrees that any payments received by it
which are property of the other shall be held in trust for the benefit of the
other. No less frequently than weekly, each party shall account to the other
for any such payments received by either delivery any checks received (enclosed
is necessary) or remitting a sum equal to the amount received.
ARTICLE 2. PURCHASE PRICE
SECTION 2.1 PURCHASE PRICE. The Total Purchase Price for the Assets is ***
DOLLARS ($***) (the "Cash Purchase Price"). Subject to Sections 2.2 , 2.3, and
2.5 below, at Closing, Buyer shall pay to Seller in immediately available funds
the sum of *** DOLLARS $***, and shall issue to Shareholder the Convertible Note
as set forth in Section 2.4 below.
SECTION 2.2 DEPOSIT MONEY. The parties acknowledge that Buyer has
delivered a non refundable deposit to Seller in the amount of ONE HUNDRED
THOUSAND AND NO/100 DOLLARS ($100,000.00) (the "Xxxxxxx Money") which will be
applied to the purchase price at Closing.
SECTION 2.3 PAYMENT OF DEBTS OF SELLER. Seller agrees that on the Closing
Date all of the Assets (whether owned or leased) shall be delivered to Buyer
free of all debts, liens and other encumbrances whatsoever (including bank debt,
lease payments and lease end buy-out provisions) other than the obligation (and
lien associated therewith) as described in Section 7.2(d). At Seller's request
and direction, Buyer agrees to cause a portion of the Cash Purchase Price
otherwise payable to Seller on the Closing Date to be paid directly to creditors
of Seller. Set forth on Schedule 2.3 is a list of all debts, liens and other
encumbrances relating to the Assets together with their respective payoff
amounts as of the Closing Date.
SECTION 2.4 CONVERTIBLE NOTE. At the Closing, Buyer shall cause WCA Waste
Corporation ("WCA") to issue to Shareholder a promissory note (the "Convertible
Note") payable to the order of Shareholder in substantially the form attached
hereto as Exhibit "A", in the original principal amount of THREE MILLION AND
NO/100 DOLLARS ($3,000,000.00). The Convertible Note shall bear simple interest
at a rate of five percent (5%) per year interest payable monthly and shall
mature on the fifth anniversary thereof (the "Maturity Date"), at which time all
principal and accrued but unpaid interest thereunder shall become due and
payable. Seller may convert the Convertible Note, and WCA may pre-pay the
Convertible Note, at any time following the first anniversary of this Agreement,
each in accordance with the terms of the Convertible Note. The Convertible Note
shall provide that Buyer and its Affiliates shall
Page 5 of 34
not have the right to set off any claims against Seller under this Agreement or
any agreement executed in connection herewith until a final award has been
entered by an arbitrator or Seller has otherwise agreed.
SECTION 2.5 ALLOCATION OF CONSIDERATION BETWEEN AGREEMENTS. The parties
agree that the total consideration for the transactions contemplated in this
Agreement, together with the transactions contemplated in the Auxiliary
Agreement, is $11,013,000.00. The parties will allocate the purchase price among
the agreements prior to the Closing Date.
ARTICLE 3. CLOSING
SECTION 3.1 TIME AND PLACE OF CLOSING. The closing of the transaction
contemplated herein shall take place at the offices of Xxxxxxxxxxx Xxxxxx Xxxx &
Xxxx, P.C. (the "Closing") on November 30, 2004 (the "Closing Date") at 10:00
a.m. local time, or such other time and place to which the parties may agree in
writing, and shall be effective for all purposes as of 12:01 a.m., local time,
on December 1, 2004.
SECTION 3.2 PAYMENT OF TAXES AND OTHER CHARGES.
(a) At the Closing, the parties shall equally divide, and each pay
one-half of all real property transfer, sales, value added, use,
documentary stamp, recording charges and other taxes imposed or required
to be collected by any federal, state or local taxing authority in the
United States in connection with the transfer of the Acquired Assets. Each
of Buyer and Seller shall prepare and file, and shall fully cooperate with
the other party with respect to such preparation and filing of, any
returns and other filings relating to any such taxes, fees, charges, or
transfers, as may be required. Notwithstanding the foregoing, Buyer shall
be solely responsible for all costs and expenses incurred in connection
with obtaining title insurance on the Operations Property. At Closing,
Buyer and Seller shall allocate current year ad valorem personal and real
property taxes (or equivalent fees on vehicles) prorated based upon the
ownership period for each of Buyer and Seller for the covered period.
(b) For federal income tax purposes, the parties agree that the
aggregate purchase price is to be allocated as agreed upon by the parties
hereto as set forth on a Form 8594 to be agreed to by Buyer and Seller at
Closing. The Form 8594 delivered at Closing shall be based upon the
Closing Balance Sheet and subject to post-Closing adjustments by agreement
of the parties or as directed by a "Big Four" accounting firm mutually
acceptable to Seller and Buyer. The parties agree to be bound for all
purposes by such allocation and to file the Form 8594 without change with
the IRS.
(c) From the Closing Date, Buyer or Buyer's assignee shall be
responsible for all taxes attributable to or incurred by the Business
after the Closing.
SECTION 3.3 CONDITIONS TO CLOSING.
(a) BUYER'S CONDITIONS TO CLOSING. Buyer's obligation to close the
transaction contemplated herein shall be subject to the following
conditions precedent:
Page 6 of 34
(i) The representations and warranties of Seller and
Shareholder contained in this Agreement and the Auxiliary Agreement
shall be true and correct in all material respects on the Closing
Date, except that any such representation and warranty made as of a
specified date (other than the date of this Agreement) shall have
been true and correct in all material respects on and as of such
date;
(ii) Seller and Shareholder shall have performed in all
material respects all obligations and agreements and complied with
all covenants contained in this Agreement and the Auxiliary
Agreement, or in any documents delivered in connection herewith,
that are required to be performed and complied with by it or him, as
applicable, on or before the Closing Date;
(iii) Buyer shall have received a certificate from Seller and
Shareholder, executed on behalf of Seller by its duly authorized
officer, and by Shareholder, individually, certifying that the
conditions specified in Sections 3.3(a)(i) and 3.3(a)(ii) have been
satisfied (the "Seller's Closing Certificate");
(iv) No suits, actions or other proceedings shall have been
filed by any party seeking to prevent the Closing or otherwise
restrain the transaction contemplated herein or seeking damages in
connection therewith;
(v) Buyer shall, in its reasonable discretion, be satisfied
with the results of Buyer's due diligence with respect to the
Assets;
(vi) Seller shall have obtained and delivered to Buyer all
written consents of the other party to each Contract which Buyer has
indicated consent is required to be obtained prior to closing;
(vii) Buyer shall have received approval of this Agreement by
its Board of Directors;
(viii) Buyer shall have received approval of this Agreement by
the Board of Directors of WCA;
(ix) Buyer shall have received approval of this Agreement by
Xxxxx Fargo Bank, N.A., as Agent for Buyer's lenders;
(x) Seller shall have provided evidence satisfactory to Buyer
that, as of the Closing Date, Seller has all permits, licenses and
governmental approvals of whatever kind and nature which have been
necessary for the operation of the Assets shall have been granted
and are in full force and effect;
(xi) There shall have occurred no material damage,
destruction, loss, or material adverse change in the condition of
the Assets (whether or not covered by insurance) between the
execution date of this Agreement and the Closing;
(xii) The Closing of the Auxiliary Agreement shall have closed
or be closing contemporaneously with the Closing of this Agreement;
and
Page 7 of 34
(xiii) The employment agreements referenced in Section 3.4(k)
shall have been executed by the individuals named therein.
(b) SELLER'S CONDITIONS TO CLOSING. Seller's obligation to close the
transaction contemplated herein shall be subject to the following
conditions precedent:
(i) The representations and warranties of Buyer contained in
this Agreement and in the Auxiliary Agreement shall be true and
correct in all material respects on the Closing Date with the same
effect as if they were made on and as of the Closing Date, except
that any such representation and warranty made as of a specified
date (other than the date of this Agreement) shall have been true
and correct in all material respects on and as of such date;
(ii) Buyer shall have performed in all material respects all
obligations and agreements and complied with all covenants contained
in this Agreement and in the Auxiliary Agreement, or in any
documents delivered in connection herewith, that are required to be
performed and complied with by it on or before the Closing Date;
(iii) Seller shall have received a certificate from Buyer,
executed on behalf of Buyer by its duly authorized officer,
certifying that the conditions specified in Sections 3.3(b)(i) and
3.3(b)(ii) have been satisfied (the "Buyer's Closing Certificate");
(iv) No suits, actions, or other proceedings shall have been
filed by any third party seeking to prevent the Closing or otherwise
restrain the transaction contemplated herein or seeking damages in
connection therewith: and
(v) The Closing of the Auxiliary Agreement shall have closed
or be closing contemporaneously with the Closing of this Agreement.
SECTION 3.4 DELIVERIES BY SELLER AND SHAREHOLDER. At the Closing, Seller
and Shareholder shall deliver to Buyer:
(a) a General Conveyance, Assignment and Xxxx of Sale in the form
attached hereto as Exhibit B, duly executed by Seller (the "Xxxx of
Sale");
(b) a list of all customers of Seller for whom Seller has performed
services since 1996;
(c) a receipt duly executed by Seller acknowledging payment by Buyer
to Seller of the Cash Purchase Price;
(d) a release in the form attached hereto as Exhibit C-1, duly
executed by each of Seller and Shareholder, releasing Buyer from any and
all claims it or he may have against Buyer or the Assets (exclusive of any
claims arising pursuant to this Agreement or in connection with the
transaction);
(e) a consent to assignment in a form reasonably satisfactory to
Buyer executed by the third party to any contract identified by Buyer
pursuant to Section 1.3;
Page 8 of 34
(f) the documents evidencing the change of name of Seller as
required by Section 1.5 in form to be filed subsequent to closing;
(g) all keys to Rolling Stock and Equipment in the Seller's
possession (properly tagged for identification);
(h) such resolutions, authorizations, certified Articles of
Incorporation and Bylaws relating to Seller as are necessary or required
by Buyer in connection with this transaction and including (i) Seller's
Articles of Incorporation certified by the South Carolina Secretary of
State; (ii) Seller's Secretary Certificate as to incumbency and specimen
signatures, the resolutions authorizing this Agreement, its Articles of
Incorporation and Bylaws; and (iii) a Certificate of Existence from the
Secretary of State of South Carolina;
(j) originals of Customer Contracts;
(k) Executed employment agreements between Buyer and Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxx X. Xxxxxxx and Xxxxxxx Xxxxxxxx, substantially in the form
attached hereto as Exhibit 3.4(k).
(l) [Intentionally Deleted]
(m) the Seller's Closing Certificate, as contemplated under Section
3.3(a)(iii), duly executed by each of Seller and Shareholder; and
(n) [Intentionally Deleted]
(o) all other documents, instruments and writings reasonably
requested by Buyer to be delivered by Seller at or prior to the Closing.
SECTION 3.5 DELIVERIES BY BUYER. At the Closing, Buyer shall deliver to
Seller:
(a) the Cash Purchase Price, less the ratable share of the Xxxxxxx
Money applicable to this Agreement pursuant to Section 2.2, and the funds
payable to Seller's creditors pursuant to Section 2.3;
(b) the Convertible Note;
(c) such resolutions, authorizations, certified Certificate of
Organization, Limited Liability Company Agreement, Certificate of
Incorporation and By-Laws relating to Buyer and WCA as are necessary or
required by Seller in connection with this transaction and including (i)
Buyer's and WCA's Certificate of Organization and Certificate of
Incorporation certified by the Delaware Secretary of State; (ii) Buyer's
and WCA's Secretary Certificate as to incumbency and specimen signatures,
the resolutions authorizing this Agreement, its Certificate of
Organization and Limited Liability Company Agreement; and (iii) a Good
Standing Certificate of Buyer and of WCA from the Delaware Secretary of
State;
Page 9 of 34
(d) the Buyer's Closing Certificate, as contemplated under Section
3.3(b)(iii), duly executed by Buyer; and
(e) all other documents, instruments and writings reasonably
requested by Seller to be delivered by Buyer at or prior to the Closing.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
OF SELLER AND SHAREHOLDER
SECTION 4.1 Seller and Shareholder, jointly and severally, represent and
warrant to Buyer that:
(a) AUTHORITY.
(i) Seller is a duly organized and validly existing South
Carolina corporation, duly qualified or authorized to do business in
the State of South Carolina and in each jurisdiction in which such
qualification or authorization is required except where failure to
be so qualified or licensed would not have a material adverse effect
on the Assets or the Business. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby
and the compliance by Seller and Shareholder with the terms of this
Agreement do not and will not conflict with or result in a breach of
any terms of, or constitute a default under, the Articles of
Incorporation or Bylaws of Seller, or any instrument or other
agreement to which Seller or Shareholder is a party or by which
Seller or Shareholder, or any of their respective properties or
assets, is bound. This Agreement constitutes a valid obligation of
Seller and Shareholder enforceable against Seller and Shareholder in
accordance with its terms except as may be limited by applicable
bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditor's rights generally and
except for the limitations imposed by general principles of equity.
(ii) Shareholder is competent, under no duress or legal
restraint, and has all necessary authority to enter into this
Agreement, perform Shareholder's obligations hereunder and
consummate the transactions contemplated hereby.
(iii) Seller has the full power and authority to enter into
this Agreement and to consummate the transactions contemplated
hereby. Seller has taken all action necessary to approve the sale of
the Assets to Buyer, including Shareholder approvals, if necessary,
and except as otherwise set forth herein, no other authorization or
approval is required for any of the foregoing.
(iv) All of the issued and outstanding shares of capital stock
of Seller are owned of record and beneficially by the Shareholder,
free and clear of all liens, security interests and encumbrances
whatsoever.
(v) Seller does not have any subsidiaries or any other equity
interest in any limited liability company, corporation, partnership
or similar entity.
(b) COMPLIANCE WITH LAW. To Seller's knowledge, neither Seller nor
any Shareholder is in default under any applicable federal, state or local
laws, statutes,
Page 10 of 34
ordinances, permits, licenses, orders, approvals, variances, rules or
regulations or judicial or administrative decisions ("Applicable Laws")
which would have a material adverse effect upon the Assets or the
Business. Seller has been granted all material licenses, permits,
consents, authorizations and approvals from federal, state and local
government regulatory bodies necessary or desirable to carry on the
Business, all of which are currently in full force and effect. To Seller's
knowledge, the operation, conduct and ownership of the properties, assets
and Business of Seller are being, and at all times have been, conducted in
compliance with all Applicable Laws in all material respects. No notice
from any governmental body has been served upon or given to Seller
claiming that the Business or any of the Assets is not in conformity with
any Applicable Law.
(c) EQUIPMENT. Listed on Schedule 1.1(a) hereto is a complete and
accurate list of all Equipment used or for use in connection with the
Business. In the aggregate, the Equipment including the Rolling Stock is
sufficient to conduct the business as historically conducted.
(d) ROLLING STOCK. Listed on Schedule 1.1(b) hereto is a complete
and accurate list of all Rolling Stock.
(e) CONTRACTS AND LEASES. Listed on Schedule 4.1(e) hereto is a
complete and accurate list of all of the Contracts as of the date hereof
(i) with all Customers from which five percent (5%) or more of the
Business' average monthly revenue is derived, or (ii) other than customer
agreements entered into in the ordinary course of business by which the
Seller is or the Assets are bound. Also listed on Schedule 4.1(e) hereto
is a complete and accurate list of all of the leases as of the date hereof
which will be assumed by Buyer (the "Assumed Leases"). Except to the
extent consent to assignment may be required as indicated in Section 1.3
and except as set forth on Schedule 4.1(e), all Contracts and Assumed
Leases are (and unless terminated by a party in accordance with its terms
will be immediately following the Closing) in full force and effect and
are valid, binding and enforceable against the respective parties thereto
in accordance with their respective provisions. Seller is not in material
default under any of the Contracts or Assumed Leases; nor has there
occurred an event or condition (including 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 material default under
any obligation under any of the Contracts or Assumed Leases; no claim of
such a default has been asserted and there is no reasonable basis upon
which such a claim could validly be made. To the best of the Seller's and
Shareholder's knowledge, no person intends or desires to modify, waive,
amend, rescind, release, cancel or terminate any of the Contracts or
Assumed Leases; provided the foregoing shall not be construed to apply to
any termination of a temporary rolloff which although the arrangement may
be subject to a written trip ticket which contains contractual provisions
does not have a specified term and by its nature is a temporary
arrangement which may end at any time. Notwithstanding the foregoing,
nothing in this Section 4.1(e) or otherwise in this Agreement shall be
construed as a guaranty or warranty that any of the customers of the
Business, including without limitation those operating under oral
arrangements will continue to purchase services after the Closing.
Page 11 of 34
(f) TITLE TO THE PERSONAL PROPERTY ASSETS. Except for liens securing
the obligations described in Section 7.2(d), Seller has good and
marketable title to all of the Assets which consists of items of personal
property (the "Personal Property Assets"), and at Closing all such
Personal Property Assets will be free and clear of all liens,
encumbrances, security interests, equities or restrictions whatsoever,
direct or indirect, accrued, absolute, contingent or otherwise and, by
virtue of the grant, conveyance, sale, transfer, and assignment of the
Personal Property Assets hereunder. Except for liens securing the
obligations described in Section 7.2(d), Buyer shall receive good and
marketable title to the Personal Property Assets, free and clear of all
liens, lease payments (including lease-end buy-out payments),
encumbrances, security interests, equities or restrictions whatsoever
other than liens for taxes not yet due and payable.
(g) TITLE TO OPERATIONS PROPERTY. Seller currently operates the
Business on the real property listed on Schedule 4.1(g). (the "Operations
Property"). Except as set forth on Schedule 4.1(g), Seller has never
owned, leased or otherwise occupied, had an interest in or operated any
real property other than the Operations Property. Except as set forth on
Schedule 4.1(g);
(i) Seller has good and marketable fee simple title to the
Operating Property, free and clear of all liens and encumbrances
other than (i) utility easements, restrictive covenants and minor
imperfections of title, if any, none of which materially detracts
from the value or impairs the present use of the Operations Property
subject thereto or impairs the present operations of the Business
and each as set forth more fully on Schedule 4.1(g), (ii) liens and
encumbrances of record and which would be observable upon a physical
inspection of the Operations Property and riparian rights of
landowners who are downstream of the stream which crosses the
Operating Property, (iii) zoning laws and other land use
restrictions that do not impair the present use of the Operations
Property subject thereto, and (iv) encumbrances related to taxes not
yet due or payable or that are being contested in good faith and for
which appropriate reserves have been taken (the encumbrances
described in clauses (i), (ii), (iii) and (iv) being referred to
collectively as the "PERMITTED ENCUMBRANCES") and (v) encumbrances
which will be released at or prior to the Closing. There is no
pending or, to the knowledge of Seller, threatened legal action
alleging any zoning violations, or affecting any portion or all of
the Operations Property, including any condemnation action, and
Seller does not know of any basis for such action.
(ii) Seller does not own or hold, and is not obligated under
or a party to, any option, right of first refusal or other
contractual right to purchase, acquire, sell or dispose of the
Operations Property or any portion thereof or interest therein.
(iii) Seller does not owe any money to any architect,
contractor, subcontractor or materialmen for labor or materials
performed, rendered or supplied to or in connection with the
Operations Property, and there is no construction or other
improvements work being done at and there are no
Page 12 of 34
construction or other improvement materials being supplied to the
Operations Property.
(iv) The Operations Property is, and at all times during
operation of the Business has been, fully licensed, permitted and
authorized for the operation of the Business under all Applicable
Laws relating to the protection of the environment, the Operations
Property and the conduct of the Business thereon (including, without
limitation, all zoning restrictions and land use requirements)
except where the failure to be so licensed, permitted or authorized
would not have a material adverse effect on the Business or Assets.
(v) Neither Seller, Shareholder nor the Operations Property
(with respect to activities of Seller) now is or ever has been
involved in any litigation or administrative proceeding seeking to
impose fines, penalties or other liabilities or seeking injunctive
relief for violation of any Applicable Laws relating to the
environment.
(vi) There have been no material spills, leaks, deposits or
other releases of Hazardous Materials into or onto the Operations
Property by Seller.
(vii) Except as permitted by law, the Operations Property does
not contain any underground or above-ground storage tanks or
transformers containing Hazardous Materials, petroleum products or
wastes or other hazardous substances regulated by 40 CFR 280 or
other Applicable Laws which were placed on the Operations Property
by Seller or to its knowledge by any third party. All above and
below ground tanks currently in use on the Operations Property are
being used and maintained in accordance with all Applicable Laws.
(h) LITIGATION. Except as set forth on Schedule 4.1(h) hereof,
Seller has no knowledge of any claim (including Notices of Violation),
litigation, action, suit or proceeding, administrative or judicial,
pending or threatened against Seller or Shareholder, or involving the
Assets or the Business, at law or in equity, before any federal, state or
local court or regulatory agency, or other governmental authority. Neither
Seller nor Shareholder has any knowledge of any of the above, and neither
Seller nor Shareholder has any knowledge of any facts or circumstances
that exist which would, with the passage of time or giving of notice (or
both), give rise to any of the above.
(i) EMPLOYEES. Attached as Schedule 4.1(i) hereof is a complete list
of all employees of the Business and their respective rates of
compensation (including a breakdown of the portion thereof attributable to
salary, bonus and other compensation, respectively) as of the date of
Closing. Each employee is an employee at will and there are no other
collective bargaining agreements affecting any employee of Seller. There
is no pending or, to the best of Seller's and Shareholder's knowledge,
threatened labor dispute involving Seller and any group of its employees
nor has Seller experienced any labor interruptions over the past three
years. Shareholder will cause Seller to terminate each of its employees as
of the close of business on the Closing Date. Buyer agrees to employ such
former employees of Seller as Buyer deems appropriate, provided that each
such person seeking employment meets the qualifications established by
Buyer. Except as set forth in 26 CFR 54.4980B-9, it is expressly
understood that Buyer shall not assume
Page 13 of 34
or be responsible for any severance or other employee benefit arising out
of an individual's employment by Seller prior to the Closing Date. Nothing
herein will be deemed to give any individual a right of employment and
Buyer shall not be obligated to hire any of Seller's employees.
(j) EMPLOYEE RELATIONS AND BENEFIT PLANS. Set forth on Schedule
4.1(j) is an accurate and complete list of all agreements of any kind
between Seller and its employees or group of employees, including, without
limitation, employment agreements, collective bargaining agreements and
benefit plans. Except as set forth in 26 CFR 54.4980B-9 Buyer shall not,
by the execution and delivery of this Agreement or otherwise, become
obligated to or assume any liabilities or contractual obligations with
respect to any employee of Seller or otherwise become liable for or
obligated in any manner (contractual or otherwise) to any employee of
Seller, including, without limiting the generality of the foregoing, any
liability or obligation pursuant to any collective bargaining agreement,
employment agreement, or pension, profit sharing or other employee benefit
plan (within the meaning of Section 3(3) of the Employment Retirement
Income Security Act of 1974, as amended) or any other fringe benefit
program maintained by Seller or to which Seller contributes or any
liability for the withdrawal or partial withdrawal from or termination of
any such plan or program by Seller.
(k) FINANCIAL STATEMENTS. Schedule 4.1(k) attached hereto contains
the following financial statements of Seller (collectively, the "Unaudited
Financials"): (a) unaudited balance sheets and statements of operations as
of and for the fiscal years ended September 30, 2002, September 30, 2003,
and September 30, 2004, and (b) the unaudited balance sheet (the "Most
Recent Balance Sheet") and statements of operations as of and for the one
(1) month ended October 31, 2004 (the "Balance Sheet Date"). The Unaudited
Financials have been prepared in accordance with accounting principles
consistently applied with during prior periods, are complete and correct
in all material respects and fairly present the financial condition and
results of the operation of Seller as of the dates and for the periods
indicated thereon, and contain and reflect adequate reserves for all
material liabilities and obligations of Seller of any nature, whether
absolute, contingent or otherwise, except for liabilities and obligations
which are not required to be stated and reserves not required to be
maintained under Generally Accepted Accounting Principles and except in
the case of Unaudited Financials covering interim periods to year end
adjustments, the net effect of which shall not be material in nature or
amount. Except as may be noted thereon, the statements of income included
in the Unaudited Financials do not contain any material items of
extraordinary or nonrecurring income or any other income not earned in the
ordinary course of business. Except as set forth on Schedule 4.1(k), the
books of account of Seller have been maintained in all material respects
in accordance with prudent business practices.
(l) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Unaudited
Financials or on Schedule 4.1(l), since the Balance Sheet Date, there has
not occurred:
(i) Any adverse change in the assets, liabilities (whether
absolute, accrued, contingent or otherwise), condition (financial or
otherwise), results of operations, business or prospects of Seller
not reflected in the Unaudited
Page 14 of 34
Financials which are specific to Seller and not general to business
or inventory which would involve a one-time loss or a loss of
revenue during a twelve-month period of in excess of $10,000;
(ii) Any cancellation of an existing Customer Contract
(written or oral) with respect to which the customer is obligated to
pay in excess of $5,000 per month. (Buyer acknowledges that there
can be inconsistent revenue streams due to the cyclical nature of
temporary construction sites and other non-contract temporary
customers.);
(iii) Except for changes in the ordinary course of business
consistent with past practices, any amendment or modification of any
material Contract, or any termination of any agreement that would
have been a material Contract were such agreement in existence as of
the date hereof;
(iv) Any increase in the compensation (including, without
limitation, the rate of commissions) payable to, or any payment of a
cash bonus to, any officer, director or employee of, or consultant
to, Seller;
(v) Any transaction by Seller, whether or not covered by the
foregoing, not in the ordinary course of business and not consistent
with past practices;
(vi) Any alteration in the manner of keeping the books,
accounts or records of Seller, or in the accounting practices
therein reflected;
(vii) Any acquisition or redemption by Seller of any of its
equity securities or any loan by Seller to any of its security
holders or partners as applicable;
(viii) [Intentionally Deleted]
(ix) Any damage or destruction to, or loss of, any assets or
property owned, leased or used by Seller (whether or not covered by
insurance) in excess of $5,000; and Seller has not:
(x) created or permitted the creation or imposition of any
security interest upon any of the Assets, except for security
interests arising by operation of law or in the ordinary course of
Seller's business and which will terminate at Closing;
(xi) waived any of its rights or claims that singly or in the
aggregate are material to the Business;
Page 15 of 34
(xii) postponed the payment of any Accounts Payable;
(xiii) entered into any employment agreement or modified the
terms of any existing employment agreement;
(xiv) adopted, amended, modified or terminated any collective
bargaining agreement, or pension, profit sharing or other employee
benefit plan;
(xv) canceled or terminated any Customer Account with respect
to which the customer is obligated to pay in excess of $5,000 per
month; or
(xvi) entered into any agreement to do any of the things
described in the preceding subsections (i) - (xv) of this Section
4.1(l).
(m) TAXES. 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 the Business or the Assets 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 with respect to the Business or the Assets
have been paid, including, without limiting the generality of the
foregoing, all federal, state and local income, sales, use, franchise,
excise and property taxes.
(n) HAZARDOUS MATERIALS. Except in a manner which is in material
compliance with applicable Environmental Laws, neither Seller nor
Shareholder has ever generated, transported, stored, handled, recycled,
reclaimed, disposed of, or contracted for the disposal of: (i) hazardous
materials, hazardous wastes, hazardous substances, toxic wastes or
substances, infectious or medical waste, radioactive waste or sewage
sludges, petroleum or petroleum products, natural gas, or natural gas
products, radioactive materials, asbestos, lead, urea formaldehyde foam
insulation, transformers or other equipment that contains dielectric fluid
containing levels of polychlorinated biphenyls ("PCBs"), and radon gas;
(ii) any chemicals, materials, waste or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any Environmental Laws (as
hereinafter defined) (herein, collectively, "Hazardous Materials"); and
(iii) any other chemical, material, waste or substance which is in any way
regulated by any federal, state or local government authority, agency or
instrumentality, including mixtures thereof with other materials, and
including any materials such as asbestos and lead. The term "Environmental
Laws" includes, but is not limited to, any federal, state or local
statute, law, rule, regulation, ordinance, code, policy or rule of common
law now in effect and in each case as amended to date and any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent decree, or judgment, relating to the
environment, human health or safety, or Hazardous Materials, including
without limitation the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Sections 9601 et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. Sections 1801, et
seq.; the Resource
Page 16 of 34
Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Sections
6901, et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Sections 1201 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Sections 2601, et seq.; the Clean Air Act, 42 U.S.C. Sections 7401, et
seq.; the Safe Drinking Water Act, 42 U.S.C. Sections 3808, et seq.; the
Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C.
Section 136, et seq.; applicable State law counterparts of the foregoing,
and the rules and regulations promulgated under any of the foregoing.
Seller has never owned, operated, had an interest in, engaged in and/or
leased a waste transfer, recycling, treatment, storage or disposal
facility, business or activity other than the Business. In most cases,
Seller has obtained and maintained all necessary trip tickets, signed by
the applicable waste generators, and other records demonstrating the
nature of the waste transported in connection with the Business. To
Seller's knowledge, no employee, contractor or agent of Seller has, in the
course and scope of employment with Seller, been harmed by exposure to
Hazardous Materials. Seller has no direct or contingent liability or
obligation for or in connection with any claimed release, discharge or
leak of any substance into the environment and to Seller's knowledge, no
portion of the Operations Property is listed on the CERCLIS list or the
National Priorities List of Hazardous Waste Sites or any similar list
maintained by the State of South Carolina. Attached hereto as Schedule
4.1(n) is a complete list of the names and addresses of all disposal sites
at any time now or in the past utilized by Seller, none of which sites is,
to Seller's actual knowledge, listed on the CERCLIS list or the National
Priorities List of Hazardous Waste Sites or any comparable South Carolina
list. To Seller's actual knowledge, neither Seller nor Shareholder is
listed as a potentially responsible party under CERCLA or any comparable
or similar South Carolina statute; to Seller's knowledge, neither Seller
nor Shareholder has received any notice of such a listing; and to Seller's
knowledge, neither Seller nor Shareholder knows of any facts or
circumstances which could give rise to such a listing.
(o) GOVERNMENT NOTICES; PERMITS; INTANGIBLE RIGHTS. Seller has
delivered to Buyer on Schedule 4.1(o) an accurate list and summary
description as of the Closing Date of all of its certificates of need,
permits, titles (including motor vehicle titles and current
registrations), fuel permits, licenses, orders, approvals, franchises,
certificates, trademarks, trade names, patents, patent applications and
registered copyrights owned or held by Seller with respect to the Assets,
all of which are valid, in good standing and in full force and effect.
Except as set forth on Schedule 4.1(o), such permits, titles, licenses,
orders, approvals, franchises, certificates, trademarks, trade names,
patents, patent applications, copyrights and similar rights of approvals
are adequate for the operation of the Assets. Except as set forth on
Schedule 4.1(o), Seller has delivered or in connection herewith is
delivering to Buyer a description and copies as of the date of this
Agreement and as of the Closing of all of its material records, reports,
notifications, certificates of need, permits, pending permit applications,
engineering studies, environmental impact studies filed or submitted or
required to be filed or submitted to governmental agencies, other
governmental approvals or applications for approval and of all material
notifications from such governmental agencies, with respect to the Assets
which are in its possession where such filings are related to motor
vehicles, fuel or environmental matters. Buyer agrees to maintain such
records for not less than the time required by law for Buyer or Seller to
maintain such records. Notwithstanding, the foregoing Seller shall retain
all fuel receipts but shall provide reasonable access thereto to Buyer
upon
Page 17 of 34
reasonable prior written notice. All of the statements made and all of the
information provided by Seller or its agents or representatives in the
permit documents with respect to the Permits, are true and correct in all
material respects.
(p) ABSENCE OF PRICE RENEGOTIATION CONTRACTS. Seller is not now nor
has ever been a party to any governmental contracts subject to price
redetermination or renegotiation.
(q) GROSS REVENUES. The gross revenues generated by the Business for
the twelve-month period ended September 30, 2004, were $***.
(r) ABSENCE OF CERTAIN BUSINESS PRACTICES. Seller has not, nor has
any employee, agent or other person acting on Seller's behalf, directly or
indirectly, given or agreed to give any gift or similar benefit to any
customer, supplier, competitor or governmental employee or official
(domestic or foreign) that would subject Seller to any damage or penalty
in any civil, criminal or governmental litigation or proceeding.
(s) TRANSACTIONS WITH RELATED PARTIES. Except as set forth on
Schedule 4.1(s) attached hereto, since January 1, 2001, (i) there have
been no transactions by Seller with (x) any member of Shareholder's
family, (y) any person or legal entity that is directly or indirectly
controlled by Shareholder or one or more members of Shareholder's family,
or (z) any person or legal entity that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under
common control with Seller (those identified in (x) through (z) above
being referred to collectively as a "Related Party"), and (ii) there are
no written agreements now in effect between Seller and any Related Party.
In addition, none of the transactions with Shareholder or any Related
Party that have occurred has provided to Seller assets, income, financing
or business on a basis significantly more or less favorable than that
available from unaffiliated persons. Schedule 4.1(s) also (i) states the
amounts due from Seller to any Related Party and the amounts due from any
Related Party to Seller, (ii) describes the transactions out of which such
amounts due arose, and (iii) describes any interest of Seller or any
Related Party in any supplier or customer of, or any other entity that has
had business dealings with, Seller. After the Closing, except as set forth
on Schedule 4.1(s), there will be no obligations or other liabilities
between Buyer, on the one hand, and Seller or any Related Party, on the
other hand, other than pursuant to this Agreement.
(t) INSURANCE. Attached to Schedule 4.1(t) is a complete set of
copies of all insurance policies or certificates regarding same and of all
claims made by Seller on any liability or other insurance policies during
the past five years, and loss runs for the past five years. Schedule
4.1(t) is a complete list of all insurance currently in place over the
three years preceding the Closing, and accurately sets forth the types of
coverages, deductible amounts, carriers and expiration dates thereof.
Except as included in Schedule 4.1(t), no notice or other communication
has been received by the Seller from any insurance company within the
three years preceding the Closing canceling or threatening to cancel the
insurance policies.
Page 18 of 34
(u) ABSENCE OF UNDISCLOSED LIABILITIES. There are no material
liabilities of Seller, whether absolute, accrued, contingent or otherwise,
and whether due or to become due, not reflected on or reserved for in the
Unaudited Financials, as applicable, except for executory obligations
under contracts including those not assigned to Buyer in connection
herewith, immaterial Contracts for the purchase of supplies or the sale of
products incurred in the ordinary course of business. There are no
commitments, Contracts or undertakings covering purchases in excess of
Seller's normal operating requirements or covering the purchases of items
of Equipment in excess of the requirements of Seller.
(v) NO POWERS OF ATTORNEY OR SURETYSHIPS. Except as set forth on
Schedule 4.1(v), (i) Seller has not granted any general or special powers
of attorney, and (ii) Seller has no obligation or liability (whether
actual, contingent or otherwise) as guarantor, surety, co-signer,
endorser, co-maker, indemnitor, or obligor on an asset or income
maintenance agreement or otherwise in respect of the obligation of any
person, corporation, partnership, joint venture, association, organization
or other entity.
(w) BROKERAGE FEES. No person or legal entity is entitled to any
brokerage or finder's fee or other commission from Seller or Shareholder
in connection with the Closing of this Agreement or the consummation of
the transactions contemplated hereunder.
(x) LETTERS OF CREDIT, BONDS, ETC.
(i) Except as disclosed in Schedule 4.1(x), Seller is not the
beneficiary of any letters of credit, performance or other bonds, or
any other financial instruments guaranteeing the payment or
performance of any third party under any Contract; and
(ii) Except as disclosed in Schedule 4.1(x), Seller is not
required to provide any letter of credit, performance or other bond,
or any other financial instrument for the purpose of guaranteeing
the Seller's payment or performance under any Contract.
(y) COMPLETENESS OF DISCLOSURE. This Agreement and the Schedules
hereto and to the knowledge of Seller all other material written
information and documents furnished to Buyer and its representatives and
upon which Buyer can demonstrate that it relied and as a result of such
reliance was damaged 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 either Seller or Shareholder becomes
aware of any fact or circumstance which would change a representation or
warranty of Seller or Shareholder in this Agreement, the party with such
knowledge shall immediately give notice of such fact or circumstance to
Buyer. However, such notification shall not relieve Seller or Shareholder
of his, her or its respective obligations under this Agreement, and at the
sole option of Buyer, the truth and accuracy of any and all warranties and
representations of Seller and Shareholder at the date of this Agreement
shall be a precondition to the consummation of this transaction.
Page 19 of 34
SECTION 4.2 SURVIVAL. Each of the representations and warranties set forth
in this Article 4 shall survive the Closing and the transfer of the Assets for
the period of time and as more fully set forth in Section 8.6 hereof.
ARTICLE 5. COVENANTS OF SELLER AND SHAREHOLDER
SECTION 5.1 TRANSITION OPERATIONS. From and after the Closing until the
period of the noncompete provisions set forth in Section 5.2 have terminated,
neither Seller nor Shareholder 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. Specifically, and without
limitation, after the Closing until the period of the non compete provisions set
forth in Section 5.2 have terminated, Seller and Shareholder will:
(a) Refer all customer inquiries relating to the Business to Buyer;
and
(b) For a period of 120 days following the date of Closing, without
additional consideration, assist Buyer with the orderly transition of the
operations of the Business from Seller to Buyer. Such assistance shall
include, without limitation, assisting Buyer in obtaining contracts with
current customers, routing transition activities and developing sufficient
information to allow Buyer to compile accurate customer xxxxxxxx, and
immediately upon receipt, deliver original certificates of title and/or
registrations with respect to the Rolling Stock and the Equipment, duly
endorsed by Seller to Buyer. The foregoing is not intended to require
Shareholder to maintain regular office hours or work on anything other
than a part-time basis. Any and all costs or expenses incurred by Seller
or Shareholder including travel expenses in connection with the foregoing
shall be paid by Buyer.
(c) For the initial period of 30 days following the Closing within
the 120 day period described above, Shareholder shall assist Buyer on a
full-time basis for consideration of $2,000 payable during such period.
SECTION 5.2 NONCOMPETITION.
(a) For a period of *** after the Closing, except as set forth in
the following paragraph, neither (i) Seller, nor (ii) Shareholder, shall
for any reason whatsoever, directly or indirectly, for itself or himself
or on behalf of or in conjunction with any other person, company,
partnership, corporation or business of whatever kind or nature engage, as
an officer, director, shareholder, owner, manager, Shareholder, partner,
joint venturer, lender or in any other capacity, whether as an employee,
independent contractor, consultant, advisor, agent or otherwise, or as a
sales representative, of any business in direct or indirect competition
with Buyer located or operating within *** (the "Territory"). For purposes
of this Agreement, the term "Affiliate" shall mean in respect of any
specified party, any other person or legal entity that, directly or
indirectly, controls, is controlled by, or is under common control with,
such specified party or if such specified party.
Notwithstanding the foregoing provisions of this paragraph (a) Seller and
the Shareholder may be a passive investor owning no more than five percent
(5%) of the outstanding
Page 20 of 34
equity securities (including, but not limited to, debt or other
obligations that are convertible into equity securities) of any
corporation or other entity the equity securities of which are listed on a
national securities exchange or traded on the NASDAQ National Market
System and with which such persons have no other connection whatsoever.
(b) For a period of *** after the Closing Date, neither Seller nor
Shareholder shall offer to employ any person who is, at that time, or who
has been known by Shareholder to have been within one (1) year prior to
that time, an employee of the Business.
(c) For a period of *** after the Closing Date, neither Seller nor
Shareholder shall engage or participate in any effort or act to solicit or
induce any customer, supplier, associate, employee, sales or other agent,
independent contractor or other person that has a business relationship
with the Business, within the Territory, or which has been a customer,
supplier, employee, sales or other agent, independent contractor, or other
person in a business relationship with the Business, Buyer or any of
Buyer's Affiliates within the Territory within *** prior to that time, to
discontinue such relationship with the Business.
(d) Seller and Shareholder acknowledge that the damages that would
be suffered by Buyer as a result of any breach of the provisions of this
Section 5.2 may not be calculable and that an award of a monetary judgment
for such a breach would be an inadequate remedy. Consequently, Buyer shall
have the right, in addition to any other rights it may have, to obtain, in
any court of competent jurisdiction, injunctive relief to restrain any
breach or threatened breach of any provision of this Section 5.2 or
otherwise to specifically enforce any of the provisions hereof, and Buyer
shall not be obligated to post a bond or other security in seeking such
relief. This remedy is in addition to damages directly or indirectly
suffered by Buyer or its Affiliate and if the court or other tribunal
determines that the breach or threatened breach was material and it is
otherwise equitable, reasonable attorneys fees.
(e) Each of Seller and Shareholder hereby acknowledges and agrees
that a part of the consideration for the agreements contained in this
Section 5.2 is the aggregate of the direct and indirect benefits that each
of Seller and Shareholder are receiving under this Agreement and the
Auxiliary Agreement, including but not limited to the Purchase Price paid
by Buyer. Each of Seller and Shareholder further acknowledges and agrees
that this Agreement contains reasonable limitations as to the time,
geographical area, and scope of activity to be restrained, and does not
impose a greater restraint than is necessary to protect the goodwill and
other legitimate business interests of Buyer, the value of the Assets and
the Business acquired by Buyer. Therefore, each of Seller and Shareholder
agrees that all restrictions are fairly compensated for and that no
unreasonable restrictions exist. In the event that any court of competent
jurisdiction finally determines that the time period, scope or the
geographic area of any covenant contained in this Section 5.2 is
unreasonable or excessive and any such covenant is to that extent made
unenforceable, the parties agree that the restrictions contained in this
Section 5.2 shall remain in full force and effect for the greatest time
period and scope and within the greatest geographic area as is permissible
without rendering such covenant unenforceable. The parties intend that
each of the covenants contained in Sections 5.2(a), (b), (c) and (d) shall
be deemed to
Page 21 of 34
constitute separate covenants. The parties further agree that the
consideration paid to the Seller hereunder is paid for the benefit of
Shareholder, that Shareholder will derive substantial benefits therefrom
and, therefore, the covenants contained in this Section 5.2 are binding
upon Shareholder.
(f) All of the covenants contained in this Section 5.2 shall be
construed as an agreement independent of any other provision of this
Agreement, and the existence of any claim or cause of action of either
Seller or Shareholder against Buyer, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by Buyer
of such covenants.
(g) Each of Seller and Shareholder agrees that the covenants
contained in this Section 5.2 are a material and substantial part of this
transaction.
(h) Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants, and because of the
immediate and irreparable damage that would be caused for which it would
have no other adequate remedy, Buyer and each of Seller and Shareholder
agrees that, in the event of a breach by either of Seller or Shareholder
of any of the covenants contained in this Article 5, such covenant or
covenants may be enforced against each of Seller and each Shareholder by
injunctions and restraining orders.
(i) Notwithstanding the above, in the event there is a default under
the Convertible Note, and such default continues for ten (10) business
days after written notice thereof, the provision of this Section 5.2 shall
terminate for all time.
SECTION 5.3 AUDIT ASSISTANCE. Buyer, at its own cost and expense, may
engage external auditors to audit Seller's financial records relating to the
Business (including up to three years of historical data). Seller agrees to take
all commercially reasonable efforts (at Buyer's cost) to cooperate with any such
audit and to assist in the completion of such audit, including, without
limitation, by providing, executing and acknowledging all such documents that
are necessary to complete the audit (including having Seller's financial records
converted, for Buyer's use only, to accrual based accounting financials in
accordance with GAAP), and by making any representations regarding the Business
and Seller's financial records, as may be reasonably requested by Buyer or the
external auditors and which Seller reasonably believes are accurate.
SECTION 5.4 SURVIVAL. Each of the covenants set forth in Sections 5.1 and
5.3 shall survive the Closing, the transfer of the Assets, the Xxxx of Sale and
all other documents, instruments or agreements relating to the transactions
contemplated herein as set forth in Section 8.7. Each of the covenants set forth
in Section 5.2 shall survive the Closing, the transfer of the Assets, the Xxxx
of Sale and all other documents, instruments or agreements relating to the
transactions contemplated herein as set forth in Section 5.2.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 6.1 Buyer represents and warrants to the Seller that:
Page 22 of 34
(a) Due Organization. Buyer is a duly organized and validly existing
Delaware limited liability company, duly qualified or authorized to carry
on its business 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 its business.
(b) Execution. Subject to receipt of the approval of WCA's and
Buyer's Board of Directors, (i) the execution, delivery and performance of
this Agreement and the transactions contemplated hereby are duly and
validly authorized by all requisite corporate action on the part of Buyer
and WCA, and (ii) this Agreement constitutes the legal, valid and binding
obligation of Buyer and WCA enforceable in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, moratorium
or similar laws of general application relating to or affecting creditor's
rights generally and except for the limitations imposed by general
principles of equity.
(c) Conformity with Law. Buyer and WCA have the power and right to
enter into and perform this Agreement and the transactions contemplated
herein. Neither Buyer's nor WCA's execution of this Agreement nor the
consummation of the transactions contemplated herein violate or conflict
with (i) any law, rule, regulation, ordinance or decree applicable to
Buyer or WCA; (ii) any provision of Buyer's Certificate of Organization or
Limited Liability Company Agreement; (iii) any provision of WCA's
Certificate of Incorporation or By-Laws; or (iv) any material agreement or
instrument to which Buyer or WCA is a party or by which it is bound.
(d) Due Diligence.
(i) Buyer has knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of the
transaction contemplated by this Agreement. Buyer confirms that
Shareholder has provided to the Buyer the opportunity to ask questions of
the management of the Seller and to acquire such additional information
about Seller and financial condition of Seller as the Buyer requested, and
to Buyer's knowledge, all such information has been received. Buyer
further acknowledges that neither Seller nor any Shareholder, director,
officer, employee, or agent has made any warranty, express or implied, as
to the future profitability of the Business for Buyer, or with respect to
any forecasts, projections, or business plans prepared by or on behalf of
Seller or Shareholder and delivered to Buyer in connection with the
Business and the negotiation and the execution of this Agreement.
(ii) Buyer is not aware of any inaccuracies of representations and
warranties of Seller under this Agreement. To the extent that Buyer has
become aware of any such inaccuracies prior to Closing (through its due
diligence or otherwise), Seller shall have no obligation to indemnify
Buyer under this Agreement.
SECTION 6.2 SURVIVAL. Each of the representations and warranties set forth
in this Article 6 shall survive the Closing and the transfer of the Assets.
Page 23 of 34
ARTICLE 7. NON-ASSUMPTION OF LIABILITIES
SECTION 7.1 NON-ASSUMPTION OF LIABILITIES. Buyer does not assume and shall
not be responsible for any liabilities, indebtedness or obligations of the
Selling Parties or the Business other than the Assumed Obligations (as defined
herein). Without limiting the generality of the foregoing sentence, the Parties
hereby agree that except as expressly set forth in Section 7.2 hereof, 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 either Seller or Shareholder whether legal or equitable, matured or
contingent, known or unknown, foreseen or unforeseen, ordinary or extraordinary,
patent or latent, whether arising out of occurrences prior to, at or after the
date of this Agreement, including, without limiting the generality of the
foregoing, any liability or obligation of Seller or Shareholder 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) any injury to or death of any person or damage to or
destruction of any property, whether based on negligence, breach of warranty, or
any other theory; (c) a violation of any Applicable Laws or the requirements
imposed by any governmental authority or of the rights of any third person,
including, without limitation, 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 other than ad valorem property taxes and
similar taxes prorated on closing statement; (d) the generation, collection,
transportation, storage or disposal by Seller of any materials, including,
without limitation, Hazardous Materials, prior to the Closing Date; (e) an
agreement or arrangement between Seller and its employees or any labor or
collective bargaining unit representing any such employees; (f) the severance
pay obligation of Seller or any employee benefit plan (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended)
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 by
reason of the termination of any such plan or program by Seller; (g)
indebtedness and all other obligations and liabilities of Seller to any bank or
other lender, except to the extent any such obligations or liability is an
Assumed Liability; (h) Seller and unrelated to Buyer initiated at any time,
whether or not listed on Schedule 4.1(h) (and to the extent any liability or
obligation arises out of or relates to both Seller and Buyer, each party's
liability shall be proportionately allocated between the parties); (i) any
liability, obligation, cost or expense related to the Excluded Assets; (j) any
liability, obligation cost or expense related to the Operations Property,
including, without limitation, the environmental condition thereof; (k) the
liabilities or obligations of Seller for brokerage or other commissions relative
to this Agreement or the transactions contemplated hereunder; (l) any liability
or obligation of Seller for taxes of any kind, related to periods before the
Closing Date, or whether incurred by Seller in connection with this Agreement,
the Business or the transactions contemplated hereby, except any taxes incurred
in connection with the operation of the Business by Buyer or otherwise
attributable to a period of time after the Closing; (m) any liability or
obligation to pay for any products, goods, raw materials or services delivered
or provided to Seller in respect of the Business or otherwise, except to the
extent such liability or obligation is an Assumed Liability; (n) any liability
or obligation of Seller under any guarantee or any agreement to provide
indemnification to any other person or entity unless as a part of an assumed
contract; (o) any liability or obligation arising from the acts or omissions of
Seller
Page 24 of 34
except to the extent that any such liability or obligation is an Assumed
Obligation; (p) all trade payables and accruals of the Seller in respect of the
Business or otherwise; (q) that certain Disposal Agreement by and between Waste
Reduction of South Carolina, Inc. and Laurens County Landfill, LLC dated October
5, 2001; and (r) that certain Disposal Agreement by and between Waste Reduction
of South Carolina, Inc. and R&B Landfill, Inc. dated August 1, 1998, as amended
by that certain First Amendment to Disposal Agreement dated June 29, 2000 ((a)
through (r) being referred to collectively as the "Retained Liabilities"). The
Seller shall retain all of the Retained Liabilities. The assumption of the
Assumed Liabilities by Buyer hereunder shall not in any respect enlarge any
rights of third parties under contracts or arrangements with Buyer or Seller and
nothing herein shall prevent any party from contesting in good faith any of the
Assumed Liabilities with any third party. Seller agrees to indemnify Buyer and
its successors and assigns from and against any liabilities or obligations
related to any Retained Liabilities in accordance with Section 8.1 hereof.
SECTION 7.2 ASSUMPTION OF SPECIFIC LIABILITIES. At the Closing, Buyer
shall assume and shall thereafter pay, discharge and perform in the ordinary
course and without enlarging the rights of any third party, the liabilities and
obligations appearing in Schedule 7.2 and the following liabilities and
obligations (collectively, the "Assumed Obligations"):
(a) the Contracts, except that Buyer shall not be responsible for
any payments or the performance of any obligations under any such
Contracts which relate to periods prior to the Closing; and
(b) the leases listed on Schedule 7.2(b), except that Buyer shall
not be responsible for any payments under any such leases which relate to
periods prior to the Closing;
(c) the liabilities and obligations related to the operation of the
Business after the Closing Date, except for all such liabilities and
obligations arising out of facts and circumstances existing prior to the
Closing Date; and
(d) the note of Seller to Cornerstone Bank dated November 4, 2004 in
the principal amount of $127,645.00 with respect to a 2005 Peterbilt Model
357 Serial #1NPALUOXX5N845876.
ARTICLE 8. INDEMNIFICATION
SECTION 8.1 INDEMNIFICATION BY SELLER AND SHAREHOLDER. Notwithstanding any
investigation at any time made by or on behalf of Buyer, Seller and Shareholder,
jointly and severally, agree to defend, indemnify and hold harmless Buyer, and
its officers, shareholders, directors, divisions, subdivisions, affiliates,
parent, employees, agents, successors, assigns and the Assets (collectively the
"Buyer Indemnified Parties") from and against all losses, claims, actions,
causes of action, damages, liabilities, penalties, interest, expenses and other
costs of any kind or amount whatsoever (including, without limitation,
reasonable attorneys' and accountants' fees and other expenses), whether
equitable or legal, matured or contingent, known or unknown, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, (collectively the
"Losses") which result, either before or after the Closing Date, from any:
Page 25 of 34
(a) inaccuracy in any representation or warranty made by any of
Seller or Shareholder in this Agreement or pursuant hereto;
(b) breach of any representation or warranty under this Agreement by
any of Seller or Shareholder in this Agreement or pursuant hereto;
(c) failure of any of Seller or Shareholder to perform and observe
any term, provision, covenant, agreement or condition under this Agreement
or any other instrument contemplated by this Agreement, including, without
limitation, the covenants and agreements contained in Section 5.2 hereof;
(d) other than the Assumed Obligations, any liability of any of
Seller or Shareholder imposed upon Buyer (including, without limitation,
all liability for the generation, collection, transportation, storage or
disposal of any materials, including, without limitation, Hazardous
Materials, whether or not disclosed on Schedule 4.1(n) hereof);
(e) any material misrepresentation in, or omission from, any
Schedule to this Agreement;
(f) any liability of any of Seller or Shareholder imposed upon Buyer
as a result of any of Seller or Shareholder's failure to qualify for an
exemption from, and obtain the protection afforded by compliance with, the
notification requirements of, the bulk transfer or sales laws in force in
such jurisdictions in which such laws may be applicable to any of Seller
or Shareholder or the transactions contemplated under this Agreement;
(g) any liability of any of Seller or Shareholder resulting from one
or more pending or threatened lawsuits, whether or not listed on Schedule
4.1(h);
(h) any liability to, or asserted by, any employee or former
employee of Seller or beneficiary of any such employee or former employee
arising from events occurring prior to the Closing Date with respect to
their employment with Seller or from any of Seller or Shareholder's
alleged conduct prior to the Closing Date;
(i) any liability of any of Seller or Shareholder to creditors of
any of Seller or Shareholder which liability is imposed on Buyer whether
as a result of bankruptcy proceedings or otherwise and whether as an
account payable by either Selling Party or as a claim of alleged
fraudulent conveyance or preferential payments within the meaning of the
United States Bankruptcy Code or otherwise;
(j) all taxes of any of Seller or Shareholder for all taxable
periods (or parts thereof) ending on or before the Closing Date or
otherwise attributable to the operations, transactions, assets, or income
of any of Seller or Shareholder or its or his predecessors prior to the
Closing Date or otherwise attributable to any of Seller or Shareholder as
a result of the consummation of the transactions contemplated hereunder,
together with any expenses (including, without limitation, settlement
costs and any attorneys', accountants' and consultants' fees and other
expenses) incurred in connection with the contesting, collection or
assessment of such taxes; and
Page 26 of 34
Buyer shall be deemed to have suffered such loss, claim, action, cause of
action, damage, liability, expense or other cost, or to have paid or to have
become obligated to pay any sum on account of the matters referred to in
subparagraphs (a) - (m) of this Section 8.1 if the same shall be suffered, paid
or incurred by Buyer, or any parent, subsidiary, affiliate, or successor of
Buyer, as applicable. The amount of the loss, claim, action, cause of action,
damage, liability, expense or other cost deemed to be suffered, paid or incurred
by Buyer shall be an amount equal to the loss, claim, action, cause of action,
damage, liability, expense or other cost suffered, paid or incurred by such
parent, subsidiary, affiliate, or successor to the extent reasonable.
SECTION 8.2 INDEMNIFICATION BY BUYER. Notwithstanding any investigation at
any time made by or on behalf of Buyer, Buyer agrees to defend, indemnify and
hold harmless Seller and Shareholder and to the extent applicable, their
officers, directors, employees, agents, successors, heirs and assigns from and
against all losses, claims, actions, causes of action, damages, liabilities,
expenses and other costs of any kind or amount whatsoever (including, without
limitation, reasonable attorneys' fees), whether equitable or legal, matured or
contingent, known or unknown, foreseen or unforeseen, ordinary or extraordinary,
patent or latent, which result, either before or after the date of this
Agreement, from any:
(a) inaccuracy in any representation or warranty made by Buyer in
this Agreement or pursuant hereto;
(b) breach of any representation or warranty made by Buyer under
this Agreement or pursuant hereto;
(c) failure of Buyer duly to perform and observe any term,
provision, covenant, agreement or condition under this Agreement or any
other instrument contemplated by this Agreement; (d) misrepresentation in
or omission from any of Buyer's Schedules to this Agreement;
(e) liabilities or obligations related to the operation of the
Business after the Closing Date, except for all such liabilities or
obligations arising out of facts and circumstances existing prior to the
Closing Date; and
(f) any liability of Buyer imposed upon Seller.
SECTION 8.3 CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise for
indemnification hereunder, the party entitled to indemnification (the
"Indemnified Party") shall promptly notify the party obligated to provide
indemnification (the "Indemnifying Party") of the claim and, when known, the
facts constituting the basis for such claim; provided, however, that the failure
to so notify the Indemnifying Party shall not relieve the Indemnifying Party of
its obligation hereunder to the extent such failure does not materially
prejudice the Indemnifying Party. In the event of any claim for indemnification
hereunder resulting from or in connection with any claim or legal proceedings by
a third-party, the notice to the Indemnifying Party shall specify, if known, the
amount or an estimate of the amount of the liability arising therefrom.
SECTION 8.4 DEFENSE. In connection with any claim giving rise to indemnity
hereunder resulting from or arising out of any claim or legal proceeding by a
person who is not a party to the Agreement, the Indemnifying Party at its sole
cost and expense and with counsel reasonably
Page 27 of 34
satisfactory to the Indemnified Party may, upon written notice to the
Indemnified Party, assume the defense of any such claim or legal proceeding
within thirty (30) days after written notice of the claim is received subject to
a reservation of rights to contest its indemnity obligation and obtain
reimbursement from Indemnified Party for its costs and expenses in defending and
settling same. The Indemnified Party shall be entitled to participate in (but
not control) the defense of any such action, with its counsel and at its own
expense; provided, however, that if there are one or more legal defenses
available to the Indemnified Party that conflict with those available to the
Indemnifying Party, or if the Indemnifying Party fails to take reasonable steps
necessary to diligently defend the claim after receiving notice from the
Indemnified Party that it believes the Indemnifying Party has failed to do so,
the Indemnified Party may assume the defense of such claim; provided, further,
that the Indemnified Party may not settle such claim without the prior written
consent of the Indemnifying Party, which consent may not be unreasonably
withheld. If the Indemnified Party assumes the defense of the claim, the
Indemnifying Party shall reimburse the Indemnified Party for the reasonable fees
and expenses of counsels retained by the Indemnified Party and the Indemnifying
Party shall be entitled to participate in (but not control) the defense of such
claim, with its counsel and at its own expense. If the Indemnifying Party
thereafter seeks to question the manner in which the Indemnified Party defended
such third-party claim or the amount or nature of any such settlement, the
Indemnifying Party shall have the burden to prove by a preponderance of the
evidence that the Indemnified Party did not defend or settle such third-party
claim in a reasonably prudent manner. The parties agree to render, without
compensation but with reimbursement for out-of-pocket costs, to each other such
assistance as they may reasonably require of each other in order to insure the
proper and adequate defense of any action, suit or proceeding, whether or not
subject to indemnification hereunder.
SECTION 8.5 CERTAIN CLAIMS BY SHAREHOLDER. Notwithstanding anything
contained in this Agreement, Shareholder hereby agrees that he will not make any
claim for indemnification against Buyer by reason of the fact that he was a
shareholder, manager, director, officer, shareholder, employee or agent of
Seller, or was serving at the request of Seller as a shareholder, manager,
director, officer, shareholder, employee or agent of another entity, whether
such claim is for judgment, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses or otherwise or whether such claim is made pursuant
to any statute, charter document, bylaw, agreement or otherwise, with respect to
any action, lawsuit, proceeding, complaint, claim or demand brought by Buyer
against Shareholder pursuant to or arising under this Agreement.
SECTION 8.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. This
Agreement, including, but not limited to, all covenants, warranties and
representations contained herein, shall survive the Closing and the Xxxx of
Sale, and all other documents, instruments or agreements relating to the Assets
and the transactions contemplated herein, and shall not be deemed merged
therein; provided however the warranties, representations and covenants shall
only survive for a period of *** except for warranties, representations and
covenants in respect of post-closing instruction, access to records and the
like, taxes, ERISA liability and environmental matters which shall survive until
the expiration of the applicable statute of limitations.
Page 28 of 34
SECTION 8.7 LIMITATIONS ON INDEMNIFICATION.
(a) Any claim for indemnity under this Article 8 with respect to
representations, warranties and covenants shall be made within ***
following the end of the applicable survival period and with respect to
any other matters within *** of the date of Closing.
(b) Buyer Indemnified Parties shall not make any claim against
Seller or Shareholder hereunder except to the extent that the aggregate
amount of Losses for which such claiming parties are otherwise entitled to
indemnification pursuant to this Article 8 together with losses under the
Auxiliary Agreement and the Transition Agreement exceeds $*** (the
"Basket") whereupon the claiming parties shall be entitled to be paid the
excess of the aggregate amount of all such Losses over the Basket subject
to the limitations on maximum amount of recovery set forth in Section
8.7(c).
(c) The aggregate Losses payable by Seller and Shareholder pursuant
to this Article 8 with respect to all claims for indemnification together
with all claims under Article 8 of the Auxiliary Agreement and the
Transition Agreement shall not exceed $*** (the "Cap"); provided, however,
that this limitation shall not apply in the event of fraud.
(d) The gross amount which an Indemnifying Party is liable to, for,
or on behalf of the Indemnified Party pursuant to this Article (the
"Indemnifiable Loss") shall be reduced (including, without limitation,
retroactively) by any insurance proceeds or other amounts actually
recovered by or on behalf of such Indemnified Party related to the
Indemnifiable Loss, and shall be further reduced to take account of any
tax benefit to the Indemnified Party arising from the Indemnifiable Loss.
If an Indemnified Party shall have received or shall have had paid on its
behalf an indemnity payment in respect of an Indemnifiable Loss and shall
subsequently receive directly or indirectly insurance proceeds or tax
benefits in respect of such Indemnifiable Loss, then such Indemnified
Party shall pay to such Indemnifying Party the amount of such insurance
proceeds and tax benefits or, if less, the amount of such indemnity
payment. For purposes of this Section, tax benefits arising from an
Indemnifiable Loss shall be determined after taking into account the tax
detriment, if any, arising from the receipt of insurance proceeds or
indemnification payments by or on behalf of the Indemnified Party and the
tax benefit, if any, to the Indemnified Party arising from any payments to
the Indemnifying Party.
(e) To the extent there are outstanding obligations under the
Convertible Note, any obligation of Seller or Shareholder to indemnify
Buyer shall be first offset against the Convertible Note and any remaining
sums shall be paid by Seller and shareholder.
SECTION 8.8 SOLE REMEDY. The provisions of this Article 8 shall be the
sole remedy available to a person for a breach of this Agreement.
Page 29 of 34
ARTICLE 9. GENERAL
SECTION 9.1 FURTHER ASSURANCES. From time to time after the Closing, each
of Seller and Shareholder will, without further consideration, execute and
deliver such other instruments of conveyance and transfer, and take such other
action as Buyer reasonably may request to more effectively convey and transfer
to and vest in Buyer and to put Buyer in possession of the Assets to be
transferred hereunder. Each of Seller and Shareholder will cooperate and use
their best efforts to have the present officers, directors and employees of
Seller cooperate with Buyer on and after the Closing in furnishing information,
evidence, testimony and other assistance in connection with any actions,
proceedings, arrangements or disputes of any nature with respect to matters
pertaining to all periods prior to the Closing.
SECTION 9.2 JOINT AND SEVERAL OBLIGATIONS. All representations, warranties
and agreements of Seller and Shareholder under this Agreement, the Schedules and
the transactions contemplated hereby shall be joint and several.
SECTION 9.3 NO WAIVER. Except as otherwise provided herein, 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; not 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 9.4 [Intentionally Deleted]
SECTION 9.5 NOTICE. All notices or communications required or permitted
under this Agreement shall be given in writing and served either by personal
delivery, overnight courier or by deposit in the United States mail and sent by
first class registered or certified mail, return receipt requested, postage
prepaid:
If to the Seller or
Shareholder: Xxxx X. Xxxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
with a copy to: Xxxxx X. Xxxxxxxx III
Xxxxxxxxxxx Xxxxxx Xxxx & Xxxx, P.C.
000 X. XxXxx Xxxxxx, Xxxxx 000
P. O. Xxx 00
Xxxxxxxxxx, XX 00000
If to Buyer: WCA Shiloh Landfill, L.L.C.
One Riverway, Suite 1400
Page 30 of 34
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, President
with a copy to: WCA Waste Corporation
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: J. Xxxxxx Xxxxxx, Vice President & General Counsel
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 days after deposit in the U.S. mail as provided above, or when actually
received, if earlier. Either party may change the address for notices or
communications to be given to it by written notice to the other party given as
provided in this Section.
SECTION 9.6 ENTIRE AGREEMENT. This Agreement, and the Exhibits, Schedules
hereto, Auxiliary Agreements, and the other agreements referred to herein (all
of which the parties hereto acknowledge are in writing), constitute the entire
agreement and understanding of the parties with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, oral or written, relative to said subject matter.
SECTION 9.7 BINDING EFFECT; ASSIGNMENT. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon the parties hereto and their respective executors, administrators,
heirs, legal representatives, successors and permitted assigns. Neither Seller
nor Shareholder may delegate any of its or his respective duties or obligations
hereunder, save and except that Seller and the Shareholder may assign their
rights hereunder to a qualified intermediary for purposes of consummating a
like-kind exchange pursuant to Section 1031 of the Internal Revenue Code of
1986, as amended. Buyer may assign this Agreement without the consent of any of
Seller or any Shareholder; provided, however, that the assignee under such
assignment shall agree to assume the obligations of the assignor under this
Agreement.
SECTION 9.8 [Intentionally Deleted]
SECTION 9.9 EXPENSES OF TRANSACTION. Seller and Shareholder shall pay all
costs and expenses incurred by them in connection with this Agreement and the
transactions contemplated hereby and thereby, including, without limitation, the
fees and expenses of the Seller's and Shareholder's attorneys and accountants
and will make all necessary arrangements so that the Assets will not be charged
with or diminished by any such cost or expense. Buyer shall pay all costs and
expenses incurred by it in connection with this Agreement and the transactions
contemplated hereby and thereby, including without limitation, the fees and
expenses of its attorneys and accountants and for obtaining title insurance on
the Operations Property.
SECTION 9.10 BROKER'S COMMISSION. Seller and Shareholder represents and
warrants to Buyer, and Buyer represents and warrants to each of Seller and
Shareholder, that the warranting party has had no dealings with any third-party
dealer, broker or agent so as to entitle such dealer, broker or agent to a
commission or fee in connection with the sale of the Assets to Buyer hereunder.
If for any reason any commission or fee shall become due, the party dealing with
such dealer, broker or agent shall pay such commission or fee and agrees to
indemnify and save the
Page 31 of 34
other party harmless from all claims for such commission or fee and from all
attorneys' fees, litigation costs and other expense relating to such claim.
SECTION 9.11 MODIFICATION; REMEDIES CUMULATIVE. This Agreement may not be
changed, amended, terminated, augmented, rescinded or otherwise altered, in
whole or in part, except by a writing executed by all of the parties hereto. No
right, remedy or election given by any term of this Agreement shall be deemed
exclusive but each shall be cumulative with all other rights, remedies and
elections available at law or in equity.
SECTION 9.12 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 to most
nearly 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 9.13 DUE DILIGENCE INVESTIGATION; KNOWLEDGE. All representations
and warranties contained herein that are made to the knowledge of a party shall
require that such party make reasonable investigation and inquiry with respect
thereto to ascertain the correctness and validity thereof. Without limiting the
foregoing sentence, when any fact is stated to be "to the knowledge of Seller"
or "to the best of Seller's knowledge," such reference shall mean that which
Xxxx X. Xxxxxxx knows or as a business owner should know in the ordinary course
of business. The representations, warranties and covenants of each Selling Party
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of Buyer, or its respective representatives
unless Buyer obtains actual knowledge to the contrary.
SECTION 9.14 [Intentionally Deleted]
SECTION 9.15 [Intentionally Deleted]
SECTION 9.16 ALLOCATION OF CERTAIN EXPENSES.
(a) All Allocable Expenses (as defined below) shall be prorated
between pre-Closing and post-Closing periods, and between the Seller and
the Buyer, based on the number of days elapsed, unless it is otherwise
evident on the face of an invoice or xxxx that a particular item, service
or expense is specifically attributable to a period before or after the
Closing. Allocation and settlement of all Allocable Expenses paid by the
parties shall be made within sixty (60) days following the Closing Date.
(b) "Allocable Expenses" means and includes operating expenses of
the Business benefiting or attributable to a period beginning before and
ending after the Closing Date. Examples of Allocable Expenses include
items such as rent, electricity, water, gas and telephone service,
advertising, equipment rental, maintenance expenses, and the like.
"Allocable Expenses" shall not include payroll expense, insurance expense,
interest expense or any other expense attributable solely to the operation
of the Assets or the conduct of the Business by the Seller, nor any
property taxes or assessments prorated at Closing.
Page 32 of 34
SECTION 9.17 MEDIATION/ARBITRATION.
(a) In the event of any dispute under this Agreement, the parties
hereto desire to avoid litigation. Accordingly, the aggrieved party will
give notice of the dispute to the other party and both parties will
attempt to settle the dispute during the thirty (30) day period following
such notice. If such dispute remains unsettled, the parties agree to then
submit such dispute to mediation. If the parties cannot agree on a
mediator, each will select a mediator and the two chosen mediators will
select a third mediator who shall alone hear the dispute. Such mediation
will, if possible, be conducted during the sixty (60) day period following
expiration of the thirty (30) day period. The costs of mediation
(including the mediator's fees and expenses and costs directly related to
the conduct of the mediation, but excluding each party's direct costs for
transportation, attorneys, etc., for which each will be responsible) will
be shared equally by the parties. If such mediation fails to resolve the
dispute, the parties agree such dispute will be submitted to final and
binding arbitration in accordance with the rules of JAMS/ENDispute by a
panel of three (3) arbitrators; provided if the claim is $100,000 or less,
the arbitration panel shall consist of one (1) arbitrator. Unless
otherwise directed by the arbitration panel, such arbitration must be
concluded within ninety (90) days of the expiration of the sixty (60) day
period previously specified for mediation. Any mediation or arbitration
conducted hereunder will be conducted in Greenville, South Carolina.
(b) If any party hereto resorts to arbitration to remedy a breach of
this Agreement, the prevailing party in the arbitration, in addition to
any other remedies available under this Agreement or by law, may collect
all or a portion of its reasonable attorney fees and other costs and
expenses of arbitration, including fees, expenses and compensation paid to
JAMS and the arbitrators at the discretion of the arbitration panel, who
shall consider both the reasonableness of the attorney fees and other
costs and the relative merits of each party's position. It is the intent
of all parties hereto to avoid arbitration without preventing a party from
seeking redress for a valid dispute. To that end, all parties express
their intent and agreement that unreasonable attorney fees and costs not
be awarded, and that all or a portion of reasonable attorney fees and
costs be awarded when in the arbitration panel's opinion is the prevailing
party. Further, it is all parties intent that any party seeking redress
through litigation despite the fact that arbitration is required by this
Agreement, shall not be entitled to recover any attorney fees or costs for
such litigation or in any subsequent arbitration, regardless of the
outcome of such litigation or subsequent arbitration.
(c) Notwithstanding anything contained herein to the contrary, Buyer
shall be entitled to pursue all legal and equitable remedies available to
it without regard to this Section 9.17 for any violation or threatened
violation of Section 5.2 hereof.
SECTION 9.18 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the internal laws of the State of
South Carolina.
SECTION 9.19 [Intentionally Deleted]
Page 33 of 34
SECTION 9.20 CONTRACT INTERPRETATION; CONSTRUCTION OF AGREEMENT.
(a) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Article, Section, Exhibit, Schedule,
preamble, Premises and party references are to this Agreement unless
otherwise stated.
(b) Each party hereto acknowledges that each party was actively
involved in the negotiation and drafting of this Agreement and, therefore,
no party, nor its respective counsel, shall be deemed the drafter of this
Agreement for purposes of construing the provisions of this Agreement, and
all language in all parts of this Agreement shall be construed in
accordance with its fair meaning, and not strictly for or against any
party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.
BUYER:
WCA SHILOH LANDFILL, L.L.C.,
A DELAWARE LIMITED LIABILITY COMPANY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Its: Vice President
SELLER:
TRASH AWAY, INC, a South Carolina
corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Its: President
SHAREHOLDER:
/s/ Xxxx X. Xxxxxxx
-----------------------------------
XXXX X. XXXXXXX
Page 34 of 34
