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EXHIBIT 10.17 CLOSING AND ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

EXHIBIT 10.17 CLOSING AND ASSET PURCHASE AGREEMENT | Document Parties: WASTE REDUCTION OF SOUTH CAROLINA, INC. | WCA SHILOH LANDFILL, L.L.C | WASTE REDUCTION OF SOUTH CAROLINA, INC You are currently viewing:
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WASTE REDUCTION OF SOUTH CAROLINA, INC. | WCA SHILOH LANDFILL, L.L.C | WASTE REDUCTION OF SOUTH CAROLINA, INC

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Title: EXHIBIT 10.17 CLOSING AND ASSET PURCHASE AGREEMENT
Governing Law: South Carolina     Date: 3/24/2005
Law Firm: Leatherwood Walker Todd & Mann, P.C.    

EXHIBIT 10.17 CLOSING AND ASSET PURCHASE AGREEMENT, Parties: waste reduction of south carolina  inc. , wca shiloh landfill  l.l.c , waste reduction of south carolina  inc
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                                                                   EXHIBIT 10.17

 

*** 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"); WASTE REDUCTION OF SOUTH

CAROLINA, INC., a South Carolina corporation ("Seller"); and GARY W. SEYMORE, an

individual ("Seymore") (Seymore is hereinafter referred to as the

"Shareholder").

 

                                    PREMISES:

 

      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:

 

                                   AGREEMENT:

 

                            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

 

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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);

 

                                                                    Page 2 of 33

 

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            (i)    all right, title and interest of Seller in and to the name

      "Waste Reduction of South Carolina" (the "Business Name") and all rights

      of Seller to use the Business Name in the conduct of the Business or

      otherwise;

 

            (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 (864) 845-8355, (864) 269-3548 and (877) 872-7429 which

      are used by Seller in the conduct of the Business;

 

            (l)    [Intentionally Deleted]

 

            (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 or which the parties have agreed

      to exclude as more specifically set forth on Schedule 1.2(d) 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);

 

                                                                    Page 3 of 33

 

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             (h)    all minute books, stock records and corporate seals;

 

            (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 requires 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,

 

                                                                     Page 4 of 33

 

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trademark, service mark, 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, 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 ($***),

 

      SECTION 2.2 [Intentionally Deleted]

 

      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 [Intentionally Deleted]

 

      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. A portion of the purchase price paid

under the Auxiliary Agreement is a Convertible Note as defined in Section 2.4

thereof and is the Convertible Note referred to herein

 

                               ARTICLE 3. CLOSING

 

                                                                     Page 5 of 33

 

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      SECTION 3.1 TIME AND PLACE OF CLOSING. The closing of the transaction

contemplated herein shall take place at the offices of Leatherwood Walker Todd &

Mann, 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.

 

            (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:

 

                  (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

 

                                                                    Page 6 of 33

 

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            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

            Wells 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; and

 

                   (xii)   The Closing of the Auxiliary Agreement shall have

            closed or be closing contemporaneously with the Closing of this

            Agreement.

 

            (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;

 

                                                                    Page 7 of 33

 

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                  (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 Bill of Sale in the form

      attached hereto as Exhibit B, duly executed by Seller (the "Bill 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;

 

            (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)    a Transition Agreement substantially in the form of Exhibit

      3.4(k);

 

            (l)    [Intentionally Deleted]

 

                                                                    Page 8 of 33

 

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            (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 Earnest

      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;

 

            (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

 

                                                                    Page 9 of 33

 

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            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, 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

 

                                                                   Page 10 of 33

 

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      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 indicted 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 rollout 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.

 

            (f)    TITLE TO THE ASSETS. Except for liens securing the obligations

      described in Section 7.2(d), Seller has good and marketable title to all

      of the Assets, and at Closing all such 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 Assets hereunder. Except for liens securing the obligations described

      in Section 7.2(d), Buyer shall receive good and marketable title to the

      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)    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)

 

                                                                   Page 11 of 33

 

<PAGE>

 

             except where the failure to be so licensed, permitted or authorized

            would not have a material adverse effect on the Business or Assets.

 

                  (ii)   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.

 

                  (iii) There have been no material spills, leaks, deposits or

            other releases of Hazardous Materials into or onto the Operations

            Property by Seller.

 

                   (iv)   Except as set forth on Schedule 4.1(g) or 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 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

 

                                                                    Page 12 of 33

 

<PAGE>

 

      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 December 31, 2001, December 31, 2002 and

      December 31, 2003, and (b) the unaudited balance sheet (the "Most Recent

      Balance Sheet") and statements of operations as of and for the nine months

      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 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

 

                                                                   Page 13 of 33

 

<PAGE>

 

            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;

 

                  (xii)   postponed the payment of any Accounts Payable;

 

                  (xiii) entered into any employment agreement or modified the

            terms of any existing employment agreement;

 

                                                                   Page 14 of 33

 

<PAGE>

 

                   (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)


 
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