EXHIBIT 10.18 MEMBERSHIP INTEREST PURCHASE AGREEMENTLLC Membership Agreement |
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EXHIBIT 10.18
*** 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.
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
AMONG
WCA WASTE CORPORATION,
WASTE CORPORATION OF MISSOURI, INC.,
GECKO INVESTMENTS, LLC
AND
THE SELLERS
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TABLE OF CONTENTS
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1. TRANSFER OF MEMBERSHIP INTERESTS............................................ 5
1.1 The Transfer......................................................... 5
1.2 Continuation of the Company.......................................... 5
1.3 Termination of Membership Interests; Resignations.................... 6
2. CONSIDERATION............................................................... 6
2.1 Purchase Price....................................................... 6
2.2 Payment of Purchase Price............................................ 8
2.3 The Closing.......................................................... 9
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS............... 9
3.1 Due Organization..................................................... 9
3.2 Authorization, Validity and Effect of Agreements..................... 9
3.3 Membership Interests of the Company.................................. 10
3.4 Obligations to Issue or Sell Membership Interests.................... 10
3.5 Subsidiaries......................................................... 11
3.6 Predecessor Status; etc.............................................. 11
3.7 Financial Statements................................................. 11
3.8 Liabilities and Obligations.......................................... 11
3.9 Approvals............................................................ 12
3.10 Accounts and Notes Receivable........................................ 12
3.11 Permits and Intangibles.............................................. 12
3.12 Personal Property, Options and Leases................................ 12
3.13 Customers; Contracts and Commitments................................. 13
3.14 Real Property........................................................ 14
3.15 Insurance............................................................ 14
3.16 Employment Matters................................................... 14
3.17 Parachute Provisions................................................. 15
3.18 Benefit Plans; ERISA Compliance...................................... 15
3.19 Conformity with Law.................................................. 17
3.20 Taxes................................................................ 18
3.21 Completeness......................................................... 21
3.22 Government Contracts................................................. 21
3.23 Absence of Changes................................................... 21
3.24 Deposit Accounts; Powers of Attorney................................. 22
3.25 Proprietary Rights................................................... 22
3.26 Validity of Obligations.............................................. 23
3.27 Relations with Governments........................................... 23
3.28 Conflicts of Interest................................................ 23
3.29 Environmental Matters................................................ 24
3.30 No Broker's or Finder's Fees......................................... 26
3.31 Litigation........................................................... 26
3.32 Disclosure........................................................... 26
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4. REPRESENTATIONS OF BUYER PARTIES............................................ 27
4.1 Due Organization..................................................... 27
4.2 Execution............................................................ 27
4.3 Conformity with Law.................................................. 27
4.4 No Broker's or Finder's Fees......................................... 27
4.5 Access to Information; Counsel....................................... 27
5. COVENANTS OF THE PARTIES.................................................... 28
5.1 Notices and Approvals................................................ 28
5.2 Access to Information................................................ 28
5.3 Copies of Agreements................................................. 28
5.4 Records.............................................................. 29
5.5 Taxes................................................................ 29
5.6 Compliance with Laws................................................. 29
5.7 Notice of Breach..................................................... 30
5.8 Reasonable Efforts................................................... 30
5.9 Notification......................................................... 30
5.10 Injunctions.......................................................... 30
5.11 Audit................................................................ 30
5.12 Tax Returns.......................................................... 30
5.13 Cooperation and Transition........................................... 31
5.14 Sellers' Investment Representations and Covenants.................... 31
6. NONCOMPETITION.............................................................. 34
6.1 Prohibited Activities................................................ 34
6.2 Damages.............................................................. 36
6.3 Independent Covenant................................................. 36
6.4 Materiality and Enforceability....................................... 36
7. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION............................................................. 36
7.1 Survival of Covenants, Representations, and Warranties............... 36
7.2 Indemnification by the Sellers....................................... 37
7.3 Indemnification by the Buyer Parties................................. 37
7.4 Notice and Defense of Third Party Claims............................. 38
7.5 Payment and Interest................................................. 39
7.6 NEGLIGENCE AND STRICT LIABILITY...................................... 39
8. BUYER PARTIES' CONDITIONS TO CLOSING........................................ 40
8.1 Representations and Warranties....................................... 40
8.2 Compliance with Conditions........................................... 40
8.3 Suit or Proceeding................................................... 40
8.4 Consents and Approvals............................................... 40
8.5 Material Adverse Change.............................................. 41
8.6 Assignment and Assumption Agreement.................................. 41
8.7 Resignations; Releases............................................... 41
8.8 Permits and Licenses................................................. 41
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8.9 Clearance Certificates............................................... 41
8.10 Affidavit............................................................ 41
8.11 Satisfactory Completion of Due Diligence Investigation............... 41
9. CONDITIONS TO SELLERS' OBLIGATION TO CLOSE.................................. 42
9.1 Representations and Warranties....................................... 42
9.2 Compliance with Conditions........................................... 42
9.3 Suit or Proceeding................................................... 42
10. CLOSING DELIVERIES.......................................................... 42
10.1 Deliveries by the Sellers............................................ 42
10.2 Deliveries by the Buyer Parties...................................... 43
11. CERTAIN DEFINITIONS......................................................... 44
12. GENERAL..................................................................... 47
12.1 Costs................................................................ 47
12.2 Entire Agreement..................................................... 47
12.3 Counterparts......................................................... 48
12.4 Notices.............................................................. 48
12.5 Modification or Waiver............................................... 48
12.6 Binding Effect and Assignment........................................ 49
12.7 Governing Law; Venue................................................. 49
12.8 Section Headings..................................................... 49
12.9 Severability......................................................... 50
12.10 Drafting............................................................. 50
12.11 References........................................................... 50
12.12 Calendar Days, Weeks, Months and Quarters............................ 50
12.13 Gender; Plural and Singular.......................................... 50
12.14 Cumulative Rights.................................................... 50
12.15 No Implied Covenants................................................. 50
12.16 Indirect Action...................................................... 50
12.17 Attorneys' Fees...................................................... 51
12.18 Time of the Essence.................................................. 51
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is made
effective the 11th day of January, 2005, between WCA Waste Corporation, a
Delaware corporation ("Parent"), Waste Corporation of Missouri, Inc., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Buyer"), Gecko
Investments, LLC, an Ohio limited liability company (the "Company"), Andrew
Zelenkofske, Daniel J. Clark and Joseph E. LoConti (Zelenkofske, Clark and
LoConti, collectively, the "Sellers"). Parent and Buyer are sometimes referred
to herein individually as a "Buyer Party" and collectively as the "Buyer
Parties." The Company and the Sellers are sometimes referred to herein
individually as a "Seller Party" and collectively as the "Seller Parties." The
Seller Parties and the Buyer Parties are sometimes referred to herein
individually as a "Party" and collectively as the "Parties."
WHEREAS, the Company is engaged in the business of owning and operating a
municipal solid waste landfill and hauling business in Pike County, Missouri
(the "Business"); and
WHEREAS, Sellers are the owners of all the outstanding membership
interests of the Company; and
WHEREAS, Sellers wish to sell and Buyer wishes to purchase all of the
issued and outstanding membership interests of the Company, in exchange for cash
and shares of common stock, $0.01 par value per share of Parent ("Parent Common
Stock"), upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto do
hereby agree as follows:
1. TRANSFER OF MEMBERSHIP INTERESTS
1.1 THE TRANSFER. On and subject to the terms and conditions contained
in this Agreement, Sellers will sell, transfer, assign and deliver
to Buyer, and Buyer will purchase, accept and receive from Sellers,
in exchange for the aggregate consideration set forth in Section 2
hereof, all of the Sellers' right, title and interest in and to all
of the issued and outstanding membership interests in the Company
(the "Membership Interests"), together with all of the rights,
benefits, privileges and obligations of the Sellers in the
Membership Interests.
1.2 CONTINUATION OF THE COMPANY. The Parties acknowledge that Buyer will
continue the business of the Company despite the termination of
Sellers' membership interests therein and that the Company shall not
be dissolved as a result. Sellers, in their capacity as managers and
members of the Company, hereby consent to the transfer of the
Membership Interests to Buyer pursuant to this Agreement and to
Buyer's becoming the sole member of the Company thereby.
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1.3 TERMINATION OF MEMBERSHIP INTERESTS; RESIGNATIONS. Sellers hereby
acknowledge and agree that, as a result of this transfer of the
Membership Interests to Buyer, Sellers will cease to hold any
membership interest in or be members of the Company. At the Closing,
Sellers shall resign any positions held with the Company, including
any positions as managing members, managers or officers of the
Company, effective as of the Closing Date, and further agree that
they shall not transact any further business or incur any further
obligations on behalf of the Company, or hold themselves out as
members, managing members, managers, officers, agents or
representatives of the Company, from and after the Closing Date.
2. CONSIDERATION
2.1 PURCHASE PRICE. The aggregate price (the "Purchase Price") to be
paid by the Buyer Parties to the Sellers for the Membership
Interests, which the Parties hereby agree constitutes fair value for
the Membership Interests, shall consist of the following:
(a) Closing Consideration. At Closing, or, with respect to the
Closing Stock Consideration, promptly following the Closing, the
Buyer Parties shall pay and deliver to the Sellers:
(1) cash in an amount equal to Five Million, Five Hundred
Thousand Dollars ($5,500,000), less the total amount necessary
to fully pay and satisfy all of the debt, capital lease and
similar obligations of the Company at and as of the Closing
set forth on Schedule 2.1(a) hereto (as such amounts are set
forth in pay-off letters attached to Schedule 2.1(a)) (the
"Closing Cash Consideration");
(2) Four Hundred Twenty-Eight Thousand, Forty One (428,041)
shares of Parent Common Stock ("Closing Stock Consideration"),
which the Parties agree is equal to that number of shares of
Parent Common Stock determined by dividing Four Million, One
Hundred Fifty-Two Thousand Dollars ($4,152,000) by Nine
Dollars and Seventy Cents ($9.70), the average of the closing
prices per share of Parent Common Stock for the ten
consecutive trading days ending on November 29, 2004, as
reported by the Nasdaq Stock Market; and
(3) convertible notes of Parent in the forms attached hereto
as Exhibit A in the aggregate principal amount equal to One
Million, Five Hundred Thousand Dollars ($1,500,000), issued in
the names of the persons listed on Schedule 2.2(d) hereto, in
the amounts set forth on such schedule;
(b) Stock Holdback. In addition to the amounts set forth in Section
2.1(a) above, the Buyer Parties shall pay and deliver if, as and
when specified in this Section 2.1(b), the following additional
shares of Parent Common Stock (the "Stock Holdback"):
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(1) 10,309 shares shall be retained and held back by the Buyer
Parties to reimburse and compensate the Buyer Parties and the
Company for any Losses related to the proposed Settlement
Agreement between the Company and the State of Missouri
(including any increase in the Company's or the Buyer Parties'
operating expenses resulting from covenants or conditions
imposed on the Company by the Settlement Agreement);
(2) 20,619 shares shall be retained and held back by the Buyer
Parties to reimburse and compensate the Buyer Parties and the
Company for any Losses related to the failure to obtain, or
any delay in obtaining, all necessary approvals, permits,
consents and licenses of governmental authorities for the
opening and operation of a landfill cell under construction at
the Company's landfill located in Pike County, Missouri,
including costs, including lost profits, associated with
closing down the landfill and/or transferring operations to a
temporary facility; and
(3) 51,546 shares shall be retained and held back by the Buyer
Parties to satisfy all amounts owing in respect of the Liens
(as defined in Section 3.14 hereof) on the Company's Real
Property (as defined in Section 3.14 hereof) reflected on
Schedule 2.1(b) attached hereto, and to pay any related costs
and expenses the Buyer Parties may incur in obtaining the full
release and removal from the applicable real property records
of all such Liens. The Parties acknowledge and agree that the
Sellers are jointly and severally obligated to obtain releases
of all such Liens and clear them from the real property
records applicable to the Company's Real Property and shall
use their respective best efforts to do so as soon as possible
following the Closing. Notwithstanding the foregoing, if
within ninety (90) days after the Closing the Sellers shall
not have provided the Buyer Parties with written evidence
satisfactory to the Buyer Parties in their reasonable
discretion that all of the Liens reflected on Schedule 2.1(b)
have been fully released and cleared from the real property
records applicable to the Company's Real Property, the Buyer
Parties may take all such actions as the Buyer Parties, in
their reasonable discretion, deem necessary to satisfy in full
and obtain releases of the Company and the Company's Real
Property from any and all such Liens then remaining of record,
and all of the obligations to which such Liens relate, as well
as all costs and expenses incurred by the Buyer Parties in
connection with satisfying and obtaining releases from such
Liens shall be satisfied first out of the Stock Holdback.
(c) Release of Stock Holdback. With respect to the Losses,
obligations, costs and expenses described in Sections 2.1(b)(1) and
2.1(b)(2) above, and so as to reimburse and compensate Parent, Buyer
and the Company for such amounts, the Parties agree that the Buyer
Parties shall give written notice of such Losses, obligations, costs
and expenses to the Sellers reasonably promptly following the
accrual of such Losses, obligations, costs and expenses, and that
the Buyer Parties
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shall be relieved of any obligation to deliver and be entitled to
cancel, and Sellers shall forfeit any right to receive, that number
of shares of the Stock Holdback with a market value (which, for
purposes of this Section 2.1(c), shall be equal to the closing
market price for shares of Parent Common Stock on the day on which
the Buyer Parties deliver such written notice to the Sellers or, if
such day is not a trading day, the next trading day immediately
following such day) equal to such amounts (as reasonably estimated
by the Buyer Parties). With respect to the Losses, obligations,
costs and expenses described in Section 2.1(b)(3), and so as to
reimburse and compensate Parent, Buyer and the Company for such
amounts, the Parties agree that the Buyer Parties shall be relieved
of any obligation to deliver and be entitled to cancel, and Sellers
shall forfeit any right to receive, that number of shares of the
Stock Holdback as set forth in clause (z) below. To the extent that
the value of the shares of Parent Common Stock in the Stock Holdback
are insufficient to pay such Losses or to fully pay, satisfy and
reimburse such obligations, costs and expenses, any remaining
amounts shall be paid by the Sellers. Shares of Parent Common Stock
remaining of the Stock Holdback, if any, shall be paid to the
Sellers according to the percentages or other formula set forth in
Schedule 2.1(c) hereto as follows: (x) with respect to the shares
held back pursuant to Section 2.1(b)(1) above, such shares shall be
released to Sellers upon the entering of a final Settlement
Agreement between the Company and the State of Missouri, (y) with
respect to the shares held back pursuant to Section 2.1(b)(2) above,
such shares shall be released to Sellers upon the opening and
commencement of operations of the new landfill cell referenced above
and (z) with respect to the shares held back pursuant to Section
2.1(b)(3) above, Schedule 2.1(b) sets forth the number of shares to
be released upon the satisfaction, release and clearance from the
applicable real property records of each Lien reflected on Schedule
2.1(b), as evidenced by the Buyer Parties' receipt of an endorsement
issued under the title policy covering the Company's Real Property;
provided, however, that neither the Buyer Parties nor the Company
shall have any obligation to request such an endorsement or to
release shares from the Stock Holdback more frequently than once a
month. Notwithstanding the foregoing, the Sellers shall be
responsible for and shall pay promptly when due all fines and
assessments in connection with the Settlement Agreement referenced
above.
2.2 PAYMENT OF PURCHASE PRICE.
(a) The Closing Cash Consideration (less such amounts necessary to
fully pay and satisfy all debt, capital lease and similar
obligations of the Company at Closing pursuant to Section 2.1(a)(1)
above) shall be paid by wire transfer of immediately available funds
to an account or accounts designated by the Sellers in the amounts
set forth on Schedule 2.2 hereto.
(b) At the Closing, the Buyer Parties shall pay, by wire transfer or
other immediately available funds, the total amount necessary to
fully pay and satisfy all debt, capital lease and similar
obligations of the Company at Closing pursuant
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to Section 2.1(a)(1) above, which shall be paid out of the Closing
Cash Consideration.
(c) The portion of the Closing Stock Consideration payable to the
Sellers pursuant to Section 2.1(a)(1) above and, if and when payable
pursuant to Section 2.1(b)(2) above, the Stock Holdback (or portion
thereof) shall be delivered to the Sellers in the amounts set forth
on Schedule 2.2 hereto.
(d) At the Closing, Parent shall execute and deliver the convertible
notes of Parent pursuant to Section 2.1(a)(3).
2.3 THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Parent
located at One Riverway, Suite 1400, Houston, Texas 77056, at 10:00
a.m., local time, on January 11, 2005, or at such other place or
time as the Parties may mutually agree upon (the date that the
Closing actually occurs being referred to as the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS
The Company and the Sellers make the following representations and
warranties jointly and severally and, unless the context clearly indicates
otherwise, all references to the "Seller Parties" in this Article 3 shall apply
to the Company and the Sellers, jointly and severally, as if each such entity
and person were specifically referenced herein. The Seller Parties represent and
warrant that all of the following representations and warranties are true as of
the date of this Agreement and shall be true as of the Closing:
3.1 DUE ORGANIZATION. The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of
its state of organization, and is duly authorized, qualified and
licensed under all applicable laws, regulations, ordinances and
orders of public authorities to carry on its business in the places
and in the manner as now conducted or as proposed to be conducted.
Copies of the Articles of Organization (certified by the Secretary
of State of the Company's state of organization) and Operating
Agreement (certified by the Secretary of the Company) of the
Company, if any, and the organizational documents of each of the
Company's subsidiaries, if any, are all attached hereto as Schedule
3.1. The company records and minute books of the Company and the
Company's subsidiaries, as heretofore made available to Parent, are
correct and complete.
3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS.
(a) This Agreement (i) constitutes, and all agreements and documents
contemplated hereby when executed and delivered pursuant hereto for
value received will constitute, the valid and legally binding
obligations of each of the Seller Parties enforceable in accordance
with their terms, subject to (A) applicable bankruptcy, insolvency
or other similar laws relating to creditor's rights generally and
(B) general principles of equity, regardless of whether considered
in a
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proceeding in equity or at law, and (ii) has been duly authorized in
accordance with the Ohio Limited Liability Company Act and the
Articles of Organization and Operating Agreement of the Company.
(b) The execution and delivery of this Agreement by each of the
Seller Parties does not, and the consummation of the transactions
contemplated hereby by the Seller Parties will not, (i) except as
set forth on Schedule 3.2 hereof, require the consent, approval or
authorization of, or declaration, filing or registration with, any
governmental or regulatory authority or any third party; (ii) result
in the breach of any term or provision of, or constitute a default
under, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or the lapse of time
or both) any obligation under, or result in the creation or
imposition of any Lien (as defined in Section 3.14) upon any part of
the property of the Company pursuant to any provision of, any order,
judgment, arbitration award, injunction, decree, indenture,
mortgage, lease, license, lien, or other agreement or instrument to
which the Company is a party or by which it is bound; or (iii)
violate or conflict with any provision of the Articles of
Organization or Operating Agreement of the Company as amended to the
date hereof.
3.3 MEMBERSHIP INTERESTS OF THE COMPANY. The authorized membership
interests of the Company are shown on Schedule 3.3. All of the
Company's issued and outstanding membership interests have been duly
authorized and validly issued, are fully paid and nonassessable, are
owned of record and beneficially by the Sellers in the amounts set
forth in Schedule 3.3, and are free and clear of all liens,
encumbrances and claims of every kind. All such membership interests
were offered, issued, sold and delivered in compliance with all
applicable state and federal laws concerning the issuance of
securities. Further, none of such membership interests were issued
in violation of the preemptive rights of any past or present member.
3.4 OBLIGATIONS TO ISSUE OR SELL MEMBERSHIP INTERESTS. No right of first
refusal, option, warrant, call, conversion right or commitment of
any kind exists which obligates the Company to issue any of its
authorized but unissued membership interests. In addition, there are
no (a) outstanding securities or obligations which are convertible
into or exchangeable for any membership interests or other
securities of the Company or (b) contracts, arrangements or
commitments, written or otherwise, under which the Company is or may
become bound to sell or otherwise issue any membership interests or
any other securities. Without limiting the generality of the
foregoing, there is no valid basis upon which any person (other than
the Sellers) may claim to be in any way the record or beneficial
owner of, or to be entitled to acquire (of record or beneficially),
any membership interest or other security of the Company, and no
person has made or, to any Seller Party's respective knowledge,
threatened to make any such claim. In addition, the Company has no
obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its membership interests or any interests
therein or to pay any dividend or make any distribution in respect
thereof.
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3.5 SUBSIDIARIES. Except as set forth on Schedule 3.5, the Company (a)
does not presently own, of record or beneficially, or control,
directly or indirectly, any capital stock, securities convertible
into capital stock or any other equity interest in any corporation,
association or business entity; or (b) is not, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
3.6 PREDECESSOR STATUS; ETC. Set forth on Schedule 3.6 is a list of all
of the names of all predecessors of the Company, including the names
of any entities from whom the Company previously acquired
significant assets. Except as disclosed in Schedule 3.6, the Company
has never been a subsidiary or division of another corporation nor
been a part of an acquisition which was later rescinded.
3.7 FINANCIAL STATEMENTS.
(a) The Seller Parties have furnished to Parent (and copies of which
are attached hereto as Schedule 3.7(a)): (i) the Company's balance
sheet as of December 31, 2001, December 31, 2002 and December 31,
2003; and (ii) the Company's statement of operations for the years
ending December 31, 2001, December 31, 2002 and December 31, 2003.
The financial statements referred to in this subsection are herein
collectively referred to as the "Financial Statements."
(b) The Seller Parties have furnished to Parent (and copies of which
are attached hereto as Schedule 3.7(b)): (i) the Company's balance
sheet as of November 30, 2004 (the "Balance Sheet Date"); and (ii)
the Company's statement of operations for the period beginning
January 1, 2004 and ending November 30, 2004. The financial
statements referred to in this subsection are herein collectively
referred to as the "Interim Financial Statements."
(c) The Financial Statements and the Interim Financial Statements
fully and fairly set forth the financial condition of the Business
as of the dates indicated, and the results of its operations for the
periods indicated, and are in accordance with generally accepted
accounting principles consistently applied, except as otherwise
stated therein or in any attachment to Schedules 3.7(a) and 3.7(b)
attached hereto.
3.8 LIABILITIES AND OBLIGATIONS. The Seller Parties have delivered to
Parent on Schedule 3.8(a) an accurate list, as of the Closing Date,
of all of the Company's liabilities of any kind, character and
description, whether accrued, absolute, secured or unsecured,
contingent or otherwise, together with, in the case of those
liabilities which are not fixed, an estimate of the maximum amount
which may be payable. For each such liability for which the amount
is not fixed or is contested, the Seller Parties have provided a
summary description of the liability. Schedule 3.8(b) lists all
liabilities which shall be assumed by the Sellers at Closing (all
such liabilities, together with all accounts payable of the Company
as of the Closing and all liabilities not disclosed to the Buyer
Parties on Schedule 3.8(a), if any, shall be referred to herein as
the "Retained Liabilities").
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3.9 APPROVALS. Except as set forth on Schedule 3.9, no authorization,
consent or approval of, or registration or filing with, any
governmental authority or any other person is or was required to be
obtained or made by any Seller Party in connection with the
execution, delivery or performance of this Agreement. All
authorizations, consents and approvals set forth on Schedule 3.9
have been obtained, and all registrations and filings have been
accomplished.
3.10 ACCOUNTS AND NOTES RECEIVABLE. The Seller Parties have delivered to
Parent on Schedule 3.10(a) an accurate list as of November 30, 2004
and as of the Closing Date of the Company's accounts and notes
receivable, including receivables from and advances to its
employees, managers and members and amounts which are not reflected
in the most recent available balance sheet. The Seller Parties shall
provide Parent with an aging of all accounts and notes receivable
showing amounts due in 30-day aging categories for the Company. Such
accounts and notes receivable of the Company are collectible in the
amounts shown on Schedule 3.10(a). Schedule 3.10(b) lists the
accounts receivable which shall be assigned by the Company to the
Sellers at Closing (all such assigned accounts receivable, if any,
shall be referred to herein as the "Assigned Receivables").
3.11 PERMITS AND INTANGIBLES. The Seller Parties have delivered to Parent
on Schedule 3.11 an accurate list and summary description as of the
Closing Date of all of the 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, copyrights
and similar rights of approvals owned or held by the Company, all of
which are now valid, in good standing and in full force and effect.
Except as set forth on Schedule 3.11, such permits, titles, fuel
permits, licenses, orders, approvals, franchises, certificates,
trademarks, trade names, patents, patent applications, copyrights
and similar rights of approvals are adequate for the operation of
the Company's business, as presently constituted. Except as set
forth on Schedule 3.11, the Seller Parties have delivered to Parent
a description and copies as of the date of this Agreement, of all of
the Company's 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.
3.12 PERSONAL PROPERTY, OPTIONS AND LEASES.
(a) The Seller Parties have delivered to Parent on Schedule 3.12 an
accurate list and a complete description as of the Balance Sheet
Date of all of personal property, leases for equipment and real
properties on which are situated buildings, warehouses, workshops,
garages and other structures used in the operation of the Company's
business, and any option or right of first refusal to purchase real
property and including an indication as to which assets were
formerly owned by business or personal Affiliates of the Company.
All leases set forth on Schedule
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3.12 are in full force and effect and constitute legal, valid and
binding agreements of the parties (and their successors) thereto in
accordance with their respective terms, and no default by the
Company or any other party thereto has occurred or is continuing
thereunder. All fixed assets used by the Company in the operation of
its business are either owned by the Company or leased under an
agreement indicated on Schedule 3.12. The Seller Parties have also
indicated on Schedule 3.12 a summary description of all of the
Company's plans or projects involving the opening of new operations,
expansion of any existing operations or the acquisition of any real
or personal property or existing business, to which management of
the Company has devoted any significant effort or expenditure in the
two year period prior to the date of this Agreement, which if
pursued by the Company would require additional expenditures of
significant efforts or capital. Except as described on Schedule
3.12, the Company owns all of the assets and properties it uses in
its business. Except as described on Schedule 3.12, there are no
liens, mortgages, charges, restrictions, pledges, security
interests, options, leases, claims, easements, encroachments or
encumbrances on any property or assets owned or used by the Company.
3.13 CUSTOMERS; CONTRACTS AND COMMITMENTS.
(a) Schedule 3.13(a) sets forth the names and addresses of all of
the Company's customers as of the date hereof, and sets forth
monthly billing information related to such customers. None of the
customers, to the knowledge of the Seller Parties, intends to
terminate or change significantly, its relationship as presently
existing, and the Company has not received notice to such effect.
(b) Schedule 3.13(b) sets forth a true and complete list of all of
the Company's contracts, agreements and other instruments and
arrangements (whether written or oral) to which the Company is a
party or by which the Company is bound (the "Contracts"), including
but not limited to: (i) arrangements relating to providing solid
waste collection, transportation or disposal services to any person
or entity; (ii) licenses, permits, insurance policies and other
arrangements concerning or relating to real estate; (iii)
employment, consulting, collective bargaining or other similar
arrangements relating to or for the benefit of current, future or
former employees, agents, and independent contractors or
consultants; (iv) agreements and instruments relating to the
borrowing of money or obtaining of or extension of credit, (v)
brokerage or finder's agreements; (vi) contracts involving a sharing
of profits or expenses; (vii) acquisition or divestiture agreements;
(viii) service or operating agreements, manufacturer's
representative agreements or distributorship agreements; (ix)
arrangements limiting or restraining any Seller Party with respect
to the Business from engaging or competing in any lines of business
or with any person; (x) documents granting a power of attorney; and
(xi) any other agreements or arrangements that are material to the
future operation of the Company.
(c) Except as set forth on Schedule 3.13(c): (i) this Agreement will
not give rise to the right of any party to terminate or modify any
contract or agreement, (ii) the
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Company is not a party to any contract, agreement or other
instrument or commitment which, singly or in the aggregate
materially and adversely affects or is likely to materially and
adversely affect the Company's business, operations, properties,
assets or condition (financial or otherwise); and (iii) the Company
is not bound by or subject to (and none of its assets or properties
is bound by or subject to) any arrangement with any labor union.
3.14 REAL PROPERTY. Except as set forth on Schedule 3.14 attached hereto:
(a) The Company owns good and marketable title to its real property
described on Schedule 3.14 (the "Company's Real Property"), free and
clear of any lien, mortgage, charge, restriction, pledge, security
interest, option, lease, claim, easement, encroachment or
encumbrance ("Lien"), other than the exceptions set forth in
Schedule 3.14 (the "Permitted Exceptions"), and no person has an
option to purchase all or any portion of such real property;
(b) The Company's Real Property is not subject to any pending or
threatened condemnation Proceedings against all or part thereof;
(c) The Company has never granted any person or entity a lease,
sublease, license, concession, or other right, written or oral, to
use or occupy the Company's Real Property, nor has the Company ever
entered into an option, right of first refusal, or other agreement
that would permit any person or entity to purchase all or part of
the Company's Real Property; and
(d) The Company has never owned, occupied, or conducted operations
on any lands, other than the Company's Real Property.
3.15 INSURANCE. The Seller Parties have delivered to Parent on Schedule
3.15 an accurate list of all of the Company's insurance policies, as
well as an accurate list of: (a) all of its insurance loss runs and
worker's compensation claims received for the past three (3) policy
years; (b) all open claims; and (c) all known circumstances
reasonably likely to result in a claim. Such insurance policies are
currently in full force and effect and shall remain in full force
and effect through the Closing Date. None of the Company's insurance
has ever been canceled, and the Company has never been denied
coverage.
3.16 EMPLOYMENT MATTERS. Schedule 3.16 contains a list of all employees
of the Company, including the annual compensation, hourly wages, and
daily rate of pay for all such employees. The Company has paid in
full to, or accrued as a current liability, all employees of the