<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
(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
<PAGE>
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
<PAGE>
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)
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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
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<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)