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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.
--------------------------------------------------------------------------------
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.
5
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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
7
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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
8
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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
9
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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").
11
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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
12
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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
13
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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
Company
all wages, salaries, commissions on jobs finished, bonuses
and other direct compensation for all services performed
(including
accrued vacation) by them prior to the Closing and all amounts
required to be reimbursed to the employees, and none of the
Buyer
Parties or the Company will, by reason of anything done prior to
the
Closing, be liable to any employee for "severance pay" or any
other
payment. The Company is in material compliance with all
federal,
state, local and foreign laws and regulations
14
<PAGE>
respecting employment and employment practices, terms and
conditions
of employment and wages and hours.
3.17
PARACHUTE PROVISIONS.
The Seller Parties have delivered to Parent on
Schedule 3.17 an accurate schedule showing all of the Company's
employment agreements and any other agreements containing
"parachute" provisions, and deferred compensation agreements
(which
shall be Retained Liabilities pursuant to Section 3.8),
together
with copies of such plans, agreements and any trusts related
thereto, and classifications of employees covered thereby as of
the
Balance Sheet Date.
3.18
BENEFIT PLANS; ERISA
COMPLIANCE.
(a) Schedule 3.18 contains a list of all "employee pension
benefit
plans" (as defined in Section 3(2) of Employee Retirement
Income
Security Act of 1974, as amended ("ERISA")) (sometimes referred
to
in this Section 3.18 as "Pension Plans"), "employee welfare
benefit
plans" (as defined in Section 3(1) of ERISA) (sometimes referred
to
in this Section 3.18 as "Welfare Plans") and all other Benefit
Plans, as defined below, currently maintained in whole or in
part,
contributed to, or required to be contributed to by the Company
for
the benefit of any present or former officer, employee or
director
of the Company. For purposes of this Agreement, the term
"Benefit
Plan" shall mean any collective bargaining agreement or any
bonus,
pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option,
phantom
stock, retirement, vacation, severance, disability, death
benefit,
hospitalization, medical, dependent care, cafeteria, employee
assistance, scholarship or other plan, program, arrangement or
understanding (whether or not legally binding) maintained in
whole
or in part, contributed to, or required to be contributed to by
the
Company for the benefit of any present or former officer,
employee
or director of the Company which is not a Pension Plan or
Welfare
Plan. The Seller Parties have delivered to Parent true, complete
and
correct copies of (a) each of the Company's Pension Plans,
Welfare
Plans and Benefit Plan (or, in the case of any unwritten
Benefit
Plans, descriptions thereof), (b) all material correspondence
for
the last three (3) years prior to the Closing Date with the IRS
or
the United States Department of Labor relating to plan
qualification, filing of required forms, pending, contemplated
or
announced plan audits with respect to any such Pension Plan,
Welfare
Plan or
Benefit Plan, if any and (c) all other information
reasonably requested by Parent.
(b) The Company does not maintain any Pension Plan or Benefit
Plan
intended to be a tax qualified plan described Section 401(a) of
the
Code, and no such plan is or has been subject to the minimum
funding
rules of Code Section 412 or ERISA Section 302, or the plan
termination insurance provisions of Title IV of ERISA.
(c) Each of the Pension Plans, Welfare Plans and Benefit Plans
sponsored by, and each of the benefit plans formerly sponsored
by,
the Company: (i) has been in material compliance with all
reporting
and disclosure requirements of (A) Part 1 or Subtitle B of Title
I
of ERISA, if applicable, or (B) other applicable law, (ii)
15
<PAGE>
has had the appropriate required Form 5500 (or equivalent
annual
report) filed timely with the appropriate governmental entity
for
each year of its existence, (iii) has at all times complied with
the
bonding requirements of (A) Section 412 of ERISA, if applicable,
or
(B) other applicable law, (iv) has no issue pending (other than
the
payment of benefits in the normal course) nor any issue
resolved
adversely to the Company or any of its subsidiaries which may
subject the Company or any of its subsidiaries to the payment of
any
material penalty, interest, tax or other obligation, nor is
there
any basis for any imposition of any such liability, and (v) has
been
maintained in all respects in material compliance with the
applicable requirements of ERISA, the Code and other applicable
law
not otherwise covered hereunder so as not to give rise to any
material liabilities to the Company.
(d) There are no voluntary employee benefit associations
maintained
by the Company and intended to be exempt from federal income
tax
under Section 501(c)(9) of the Code.
(e) Neither the execution of this Agreement nor the consummation
of
the transactions contemplated by this Agreement will give rise
to
any, or trigger any, change of control, severance or other
similar
provisions in any Pension Plan, Welfare Plan or Benefit Plan
sponsored by the Company. The consummation of any transaction
contemplated by this Agreement will not result in any: (i)
payment
(whether of severance pay or otherwise) becoming due from the
Company to any of its officers, employees, former employees or
directors or to the trustee under any "rabbi trust" or similar
arrangement; (ii) benefit under any Benefit Plan of the Company
being established or becoming accelerated, vested or payable;
or
(iii) payment or series of payments by the Company, directly or
indirectly, to any person that would constitute a "parachute
payment" within the meaning of Section 280G of the Code.
(f) The Company does not provide any material post-retirement
medical, health, disability or death protection coverage or
contribute to or maintain any employee welfare benefit plan
which
provides for medical, health, disability or death benefit
coverage
following termination of employment by any officer, director or
employee except as is required by Section 4980B(f) of the Code
or
other applicable statute, nor has the Company made any
representations, agreements, covenants or commitments to
provide
that coverage.
(g) With respect to any Welfare Plan of the Company, (i) each
such
Welfare Plan that is a group health plan, as such term is defined
in
Section 5000(b)(1) of the Code, complies in all material
respects
with any applicable requirements of Part 6 of Title I of ERISA
and
Section 4980B(f) of the Code and (ii) each such Welfare Plan
(including any such plan covering retirees or other former
employees) may be amended or terminated with respect to health
benefits without material liability to the Company on or at any
time
after the Closing Date.
16
<PAGE>
(h) All contributions required by law or by a collective
bargaining
or other agreement to be made under any Pension Plan, Welfare
Plan
or Benefit Plan of the Company with respect to all periods
through
the Closing Date, including a pro rata share of contributions
due
for the current plan year, will have been made by such date or
provided for by adequate reserves by the Company. No changes in
contribution rates or benefit levels have been implemented or
negotiated (but not yet implemented), with respect to any
Pension
Plan, Welfare Plan or Benefit Plan of the Company since the date
on
which the information provided in the attached Schedule has
been
provided, and no such changes are scheduled to occur.
(i) The Company has not, nor will the Company have, any liability
or
obligation for taxes, penalties, contributions, losses, claims,
damages, judgments, settlement costs, expenses, costs, or any
other
liability or liabilities of any nature whatsoever arising out of
or
in any manner relating to any Pension Plan, Welfare Plan or
Benefit
Plan (including but not limited to employee benefit plans such
as
foreign plans which are not subject to ERISA), that has been, or
is,
contributed to by any entity, whether or not incorporated, which
is
deemed to be under common control (as defined in Section 414 of
the
Code), with the Company.
3.19
CONFORMITY WITH
LAW.
(a) The Company has complied with, and the Company is not in
material default under, any law, rule, ordinance, ruling,
directive,
or regulation or under any order, award, judgment or decree of
any
court or federal, state, municipal or other governmental
department,
commission, board, bureau, agency or instrumentality having
jurisdiction over the Company or any of its assets or
businesses;
there are no claims, actions, suits or Proceedings, pending or
threatened, against or affecting the Company, at law or in
equity,
or before or by any federal, state, municipal or other
governmental
department, commission, board, bureau, agency or
instrumentality
having jurisdiction over the Company or its business; and no
notice
of any claim, action, suit or Proceeding, whether pending or
threatened, has been received by the Company.
(b) The Company has conducted and is conducting its business in
material compliance with the requirements, standards, criteria
and
conditions set forth in applicable federal, state and local
statutes, ordinances, permits, licenses, orders, approvals,
variances, rules and regulations, including, without limitation,
all
such laws, rules, ordinances, decrees and orders relating to
intellectual property protection, transportation, wage and
hour,
antitrust matters, consumer protection, currency exchange,
environmental protection, equal employment opportunity, health
and
occupational safety, pension and employee benefit matters,
securities and investor protection matters, labor and
employment
matters, and trading-with-the-enemy matters.
(c) The Company has not received any notification of any
asserted
present or past unremedied failure by it to comply with any of
such
laws, rules, ordinances, decrees or orders.
17
<PAGE>
3.20
TAXES. Except as set
forth in Schedule 3.20:
(a) The Company has timely filed or, if not yet due, will
timely
file all Tax Returns required to be filed by it on or before
the
Closing Date and all such Tax Returns are or, in the case of
Tax
Returns not yet filed, will be, true, correct and complete in
all
material respects and the Company has paid when due all Taxes
reported thereon or, in the case of Taxes not yet due, will pay
such
Taxes when due. All Taxes required to be paid by the Company
(whether or not shown on any Tax Return) have been paid on a
timely
basis.
(b) Copies of (i) any Tax examinations, (ii) extensions of
statutory
limitations, and (iii) the federal and local income Tax returns
of
the
Company for the most recent three (3) Tax years (or such
shorter
period of time as the Company has existed) are attached as
Schedule
3.20.
(c) The amounts shown as accruals for Taxes on the Interim
Financial
Statements delivered to Parent as a part of Schedule 3.7(b) are
sufficient for the payment of all Taxes of the kinds indicated
(including penalties and interest) for all fiscal periods ended
on
or before the Closing Date, the Company has reserved an amount
sufficient to pay all such Taxes, and the working capital of
the
Company is sufficient to pay any such Tax applicable to it.
(d) No extension of time has been requested or granted for the
Company to file any Tax Return that has not yet been filed or to
pay
any Tax that has not yet been paid and the Company has not granted
a
power of attorney that remains outstanding with regard to any
Tax
matter.
(e) The Company has complied in all respects with all
applicable
Laws, rules and regulations relating to withholding Taxes and
information returns, including, without limitation, the
withholding
and
reporting requirements under Sections 1441 through 1464, 3401
through 3406, and 6041 through 6048 of the Code, as well as any
similar provisions under any other laws, and has, within the
time
and manner prescribed by law, withheld from employee wages and
other
payments and paid over to the proper government body all
amounts
required to have been so withheld and paid.
(f) There is no pending or, to the knowledge of the Company or
any
Seller, proposed Tax audit of the Company or any Seller with
regard
to Tax Matters relating to the Company.
(g) The Parent has received copies of all material audit reports
and
correspondence between the Company, or any Seller with regard to
Tax
matters relating to the Company, and any Tax Authority issued
or
made during the last three (3) years. A complete summary of all
oral
communications between the Company or any Seller and any Tax
Authority relating to any Tax audits of the Company during such
years, including without limitation any Tax audit that is in
18
<PAGE>
progress or for which a still effective extension of the statute
of
limitations was granted.
(h) The Company has not received within the last four (4) years
notice of a Tax deficiency (or such shorter period of time as
the
Company has existed) and, to the knowledge of the Company, no
Tax
deficiency is pending or proposed, and no issue has been raised
in
any Tax audit which, by application of similar principles to
any
past, present or future period, would result in an adjustment to
the
amounts reported in a subsequent period.
(i) There are no Liens, other than Permitted Exceptions,
arising
from or related to Taxes on or ending against the Company or any
of
its properties.
(j) There are no presently outstanding waivers or extensions or
requests for waiver or extension of the time within which a Tax
deficiency may be asserted or assessed.
(k) The Company has not changed any Tax accounting method during
any
of the seven (7) most recent Taxable years ending on or before
the
Closing Date, (or such shorter period of time as the Company
has
existed). The Company has not taken any action, whether or not
required, that has resulted or will result in deferring a
liability
for Taxes of the Company from any taxable period ending on or
before
the Closing Date to any taxable period ending after such date,
unless such action is in accordance with past practice.
(l) The Company has never been required to include in income
any
adjustment pursuant to section 481 of the Code and no Tax
Authority
has ever made or proposed any such adjustment. The Company has
never
entered into a closing agreement, as described in section 7121
of
the Code, or an advance pricing agreement or other agreement with
a
Tax Authority relating to Taxes.
(m) The Company does not own any property that is tax-exempt
use
property within the meaning of section 168(h) of the Code, that
is
described in section 168(f)(8) of the Code as in effect prior to
its
amendment by the
Tax Reform Act of 1986, that is tax-exempt bond
financed property within the meaning of Section 168(g) of the
Code
or that is "limited use property" within the meaning of Rev.
Proc.
76-30.
(n) None of the
property of the Company directly or indirectly
secures any debt the interest on which is tax exempt under
section
103(a) of the Code.
(o) The Company is not a party to any arrangement to which
sections
162(m) or 280G of the Code could under any circumstances apply.
(p) The Company is a partnership for federal income tax
purposes,
and has been a partnership for federal income tax purposes
throughout its entire existence.
19
<PAGE>
(q) The Company is not now or has never been (i) an includable
member, including a parent, of an "affiliated group" within the
meaning of section 1504(a) of the Code or otherwise liable for
the
Taxes of a person other than itself pursuant to Treasury
Regulation
section 1.1502-6 or any similar provision of state, local or
foreign
law, whether or not as a transferee, a successor, by operation
of
law, by contract or otherwise, (ii) a member of any
consolidated,
combined or unitary Tax Return filing group, (iii) a party to
any
Tax sharing agreement, Tax indemnity agreement or similar
agreement,
arrangement or practice with respect to Taxes, including an
agreement that obligates it to make any payment computed by
reference to the Taxes, Taxable income or Tax losses of any
other
individual or entity, (iv) the owner of a more than 50% interest,
by
voting power or by value, in an entity treated as corporation
for
federal income tax purposes, or the (v) the owner of an interest
in
an entity that is or is treated as a Tax partnership, trust,
regulated investment company as defined in section 851 of the
Code,
real estate investment trust as defined in section 856 of the
Code
or foreign personal holding company as defined in section 552(a)
of
the Code.
(r) The Company has disclosed on its federal, state, local and
foreign income Tax Returns all positions taken therein that
could
give rise to a penalty under section 6662 of the Code or any
corresponding provision of state, local or foreign Tax law.
(s) No unresolved claim, and to the knowledge of the Company,
no
claim has ever been made by a Tax Authority in a jurisdiction
in
which the Company does not pay Taxes or file Tax Returns that
such
entity is or may be subject to Tax in such jurisdiction.
(t) The Company has never requested a private ruling from a Tax
Authority on any matter.
(u) The Company has retained all supporting and backup papers,
receipts, spreadsheets and other information necessary for the
preparation of all Tax Returns that have not yet been filed and
the
defense of Tax audits involving all Taxable periods either ended
on
or during the six (6) years prior to the Closing Date (or such
shorter period of time as the Company has existed).
(v) The Company has collected and remitted to the appropriate
Tax
Authorities all sales and use and similar Taxes required to
have
been collected and remitted on or prior to the Closing Date and
has
been furnished, and if required has filed, properly completed
exemption certificates for all exempt transactions. The Company
has
maintained and has in its possession all records, supporting
documents and exemption and resale certificates required by
applicable sales Tax statutes and regulations to be retained in
connection with the collection and remittance of sales and use
and
similar Taxes for all periods up to and including the Closing
Date.
20
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Each reference to a provision in this Section 3.20 shall be
treated
for state, local and foreign Tax purposes as a reference to
analogous or similar provisions of state and local law.
3.21
COMPLETENESS. The
certified copies of the Articles of Organization
and Operating Agreement, both as amended to date, of the Company
and
the copies of all leases, instruments, agreements, licenses,
permits, certificates or other documents which are included on
schedules attached hereto or which have been delivered to Parent
in
connection with the transactions contemplated hereby are
complete
and correct; neither the Company nor any other Party hereto is
in
default thereunder; except as set forth in the schedules and
documents attached to this Agreement, the rights and benefits of
the
Company thereunder will not be adversely affected by the
transactions contemplated hereby; and the execution of this
Agreement and the performance of the obligations hereunder will
not
violate or result in a breach or constitute a default under any
of
the terms or provisions thereof. None of such leases,
instruments,
agreements, contracts, licenses, permits, certificates or other
documents requires notice to, or the consent or approval of,
any
governmental agency or other third party to any of the
transactions
contemplated hereby to remain in full force and effect or give
rise
to any right to termination, cancellation or acceleration or loss
of
any right or benefit hereunder.
3.22
GOVERNMENT CONTRACTS.
Except as set forth on Schedule 3.22, the
Company is
not now, and has never been, a party to any governmental
contract subject to price redetermination or renegotiation.
3.23
ABSENCE OF CHANGES.
Except as set forth in Schedule 3.23, since the
Balance Sheet Date, there has not been:
(a) any material adverse change in the financial condition,
assets,
liabilities (contingent or otherwise), income or business of
the
Company;
(b) any damage, destruction or loss (whether or not covered by
insurance), change in zoning, or change in any law, rule,
regulation, ordinance, or permit condition, materially
adversely
affecting the properties or business of the Company;
(c) any change in the authorized or outstanding membership
interests
of the Company or any grant of any options, warrants, calls,
conversion rights or commitments;
(d) any declaration or payment of any dividend or distribution
in
respect of the membership interests or any direct or indirect
redemption, purchase or other acquisition of any of the
membership
interests of the Company;
(e) any bonus or any increase in the compensation, sales
commissions, fringe benefits or fee arrangement payable or to
become
payable by the Company to any of its managers, managing
members,
officers, employees, consultants or agents or any change in the
method by which sales commissions are calculated and paid;
21
<PAGE>
(f) any work interruptions, labor grievances or claims filed or,
to
any Seller Party's knowledge, any proposed law or regulation or
any
event or condition of any character, materially adversely
affecting
the business or future prospects of the Company;
(g) any sale or transfer, or any agreement to sell or transfer,
any
assets, property or rights of the Company to any person;
(h) any cancellation, or agreement to cancel, any indebtedness
or
other obligation owing to the Company;
(i) any plan, agreement or arrangement granting any
preferential
rights to purchase or acquire any interest in the assets,
property
or rights of the Company or requiring consent of any party to
the
transfer and assignment of any such assets, property or rights;
(j) any purchase or acquisition, or agreement, plan or
arrangement
to purchase or acquire, any property, rights or assets of the
Company;
(k) any waiver of any material rights or claims of the Company;
(l) any breach, amendment or termination of any material
contract,
agreement, license, permit or other right to which the Company is
a
party; or
(m) any transaction by the Company outside the ordinary course
of
its business.
3.24
DEPOSIT ACCOUNTS;
POWERS OF ATTORNEY.
(a) The Company has delivered to Parent on Schedule 3.24 an
accurate
list as of the date of this Agreement, of:
(1) the name of each financial institution in which the
Company has accounts or safe deposit boxes;
(2) the names in which such accounts or boxes are held;
(3) the type of accounts; and
(4) the name of each person authorized to draw thereon or have
access thereto.
(b) Schedule 3.24 also sets forth the name of each person,
corporation, firm or other entity holding a general or special
power
of attorney from the Company or any of its subsidiaries and a
description of the terms of such power. Each such power has been
or
will be canceled on or before the Closing Date.
3.25
PROPRIETARY RIGHTS.
Except as set forth on Schedule 3.25, the
Company does not own or have any right or interest in any
Intellectual Property, or any license or
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assignment with respect thereto. The Company has not granted to
any
third party a license or other authorization to use any
Intellectual
Property of the Company, and no third party owns any ownership
interest in or holds any claim, lien or other encumbrance, on
the
Company's Intellectual Property. None of the Seller Parties has
received any notification that the Company has infringed upon or
is
infringing upon, or has engaged in or is engaging in any
unauthorized use or misappropriation of, any Intellectual
Property
owned by or belonging to any other person; and there is no
pending
or threatened claim, and no basis for the assertion of any
claim,
against the Company with respect to any such infringement,
unauthorized use or misappropriation. The Company has not
entered
into any licensing agreements to use the Intellectual Property
of
third parties, and does not owe to any third parties royalties
for
the use of Intellectual Property.
3.26
VALIDITY OF
OBLIGATIONS. The execution and delivery of this
Agreement by the Company and the performance of the
transactions
contemplated herein have been duly and validly authorized and
approved by the managers and the members of the Company, and
this
Agreement has been duly and validly authorized by all necessary
limited liability company action and is a legal, valid and
binding
obligation of the Company and each Seller.
3.27
RELATIONS WITH
GOVERNMENTS. Neither the Company, nor any member,
manager, director, officer, agent, employee or other person
acting
on behalf of the Company, has used any funds of the Company for
improper or unlawful contributions, payments, gifts or
entertainment, or made any improper or unlawful expenditures
relating to political activity to domestic or foreign
government
officials or others. The Company has adequate financial controls
to
prevent such improper or unlawful contributions, payments,
gifts,
entertainment or expenditures. Neither the Company, nor any
member,
manager, director, officer, agent, employee or other person
acting
on behalf of the Company, has accepted or received any improper
or
unlawful contributions, payments, gifts or expenditures. The
Company
has at all times complied, and is in compliance, in all
material
respects, with the Foreign Corrupt Practices Act and in all
material
respects with all foreign laws and regulations relating to
prevention of corrupt practices.
3.28
CONFLICTS OF INTEREST.
Except as set forth on Schedule 3.28, neither
(a) any past or present officer, manager or member of the
Company,
nor (b) any relative of any past or present officer, manager or
member of the Company, nor (c) any corporation, partnership,
trust
or other entity of which any such past or present officer,
manager
or member of the Company has a direct or indirect interest or is
a
director, officer, member, manager, stockholder, partner or
trustee,
is or has ever been a party, directly or indirectly, to any
transaction with the Company, including without limitation any
agreement or other arrangement providing for the furnishing of
services by or to the Company or the rental of any property from
or
to the Company, or otherwise requiring or contemplating any
payments
by or to the Company. Except as set forth on Schedule 3.28,
neither
any present officer, manager or member of the Company, nor any
relative
of any such officer, manager or member, owns directly or
indirectly any interest in any corporation,
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firm, partnership, trust or other entity or business which is a
competitor, potential competitor, customer, client or supplier
of
the Company or any related business. For purposes of this
Section
3.28, competitors shall include, without limitation, persons or
entities engaged in waste transportation, recycling and/or
disposal
operations. The Sellers do not own any legal or equitable
interest
in, nor is any Seller the holder of liens on, any real
property,
equipment, fixtures, vehicles, Intellectual Property, contract
rights, permits, licenses, accounts, general intangibles, or
other
assets utilized by the Company in the operation of its
businesses.
Except as set forth in Schedule 3.28, none of the Sellers has
any
claims against, or are owed any amounts (including, without
limitation any bonuses, commissions, royalties, rentals or
other
payments) by, the Company. Except as set forth in Schedule 3.28,
no
Seller has incurred any liability, contingent or otherwise, to,
nor
is any Seller indebted to, the Company.
3.29
ENVIRONMENTAL MATTERS.
The Seller Parties have delivered to Parent
all of the correspondence, agreements, notices or other
documents
related to the items set forth on Schedule 3.29. Schedule 3.29
also
contains a list of all disposal sites used by the Business since
its
inception.
Except as set forth in Schedule 3.29:
(a) The Company and any property (whether real or personal) which
is
or was formerly leased, used, operated, owned or managed in whole
or
in part in any manner by the Company or any of its
organizational
predecessors (individually, any "Business Facility", and
collectively, the "Business Facilities") and all operations of
the
Company and its Business Facilities, are in material compliance
and
have been in material compliance with all applicable
Environmental
Laws;
(b) the Company and its Business Facilities have obtained and are
in
compliance with all permits, licenses, registrations, approvals
and
other authorizations (including all applications for all of the
foregoing) required under any Environmental Law for the business
of
the Company as currently conducted (collectively,
"Environmental
Permits"), and Schedule 3.29 contains an accurate and complete
listing of all of its Business Facilities and all of its
Environmental Permits of the Company;
(c) there is no past or present event, condition or
circumstance
that may interfere with the conduct of the Company's business in
the
manner now conducted relating to the Company's compliance with
Environmental Laws or which constitutes a violation thereof, or
which could have a material adverse effect upon th