<PAGE>
EXHIBIT 2.4
*** 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 OF NORTH CAROLINA, L.P.,
AS BUYER,
AND
MRR SOUTHERN, L.L.C.,
AS SELLER,
AND
MATERIAL RECOVERY, LLC,
MATERIAL RECLAMATION, LLC,
MRR OF HIGH POINT, LLC,
AND
MRR WAKE TRANSFER STATION, LLC
AS THE COMPANIES
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MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS
MEMBERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement") is
made
effective the 14th day of January, 2005,
between WCA of North Carolina, L.P., a
Delaware limited partnership ("Buyer"), as
Buyer, and MRR Southern, LLC, a North
Carolina limited liability company
("Seller"), Material Recovery, LLC, a North
Carolina limited liability company
("Recovery"), Material Reclamation, LLC, a
North Carolina limited liability company
("Reclamation"), MRR of High Point,
LLC, a North Carolina limited liability
company ("High Point") and MRR Wake
Transfer Station, LLC, a North Carolina
limited liability company ("Wake" and
collectively, with High Point, Recovery and
Reclamation, the "Companies and each
a "Company"), and is joined herein by WCA
Waste Corporation, a Delaware
corporation ("WCA") and by F. Norbert
Hector, Jr., D. H. Griffin, Paul M.
Givens, Edward I. Weisiger, Jr. and David
Griffin, Jr. (each a "Principal" and
collectively the "Principals") to the
limited extent expressly provided herein.
Buyer, Seller and the Companies are
sometimes hereinafter referred to
individually as a "Party" and collectively
as the "Parties."
RECITALS
Seller is the sole member of
each of the Companies. The Companies have C&D
landfill operations in Guilford and Wake
Counties, North Carolina. Recovery,
Reclamation and Wake own and operate a
C&D landfill, reclamation center, and a
transfer station, respectively, in Wake
County, North Carolina, and High Point
owns and operates a C&D landfill in the
city of High Point, North Carolina.
Buyer has
agreed to purchase and Seller has agreed to sell Seller's
entire
membership interest in each of the
Companies in accordance with the terms of
this Agreement.
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. PURCHASE OF MEMBERSHIP
INTERESTS
Subject to
the terms and conditions of this Agreement, Buyer will purchase
from Seller, and Seller will sell, deliver
and assign to Buyer, the sole
membership interest in each of the
Companies (each a Membership Interest" and
collectively, the "Membership Interests")
for the consideration specified below.
2. CONSIDERATION
2.1 CASH
PURCHASE PRICE. Subject to the terms and conditions set forth
in
this Agreement, the aggregate purchase
price to be paid for the membership
interests of the Companies shall be
THIRTY-EIGHT MILLION FIVE HUNDRED THOUSAND
DOLLARS AND NO/100 DOLLARS ($38,500,000.00)
(the "Cash Purchase Price"), as
adjusted by the Working Capital Adjustment
(as so adjusted, the "Adjusted Cash
Purchase Price"). Buyer and Seller
acknowledge that a portion of the Purchase
Price will be wired or otherwise paid to
the applicable creditors of the
Companies to discharge all Funded Debt.
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2.2
EARNOUT.
(a) In addition, $1,500,000.00 (the "Earnout Holdback") shall
be
retained by
Buyer and paid to Seller as set forth on Schedule 2.2(a)
attached
hereto.
(b) In addition, $1,500,000.00 (the "Approval-Based Holdback")
shall
be
retained by Buyer and paid to Seller not more than fifteen (15)
days
after
Buyer (or an Affiliate thereof) has obtained all material
permits,
licenses,
consents, and approvals required by the North Carolina
Department
of Environment and Natural Resources ("DENR") for the operation
of a
transfer station/materials recovery facility at a site in the
county
of
Guilford or Forsyth, North Carolina approved and purchased by
Buyer
(which
approval and purchase of a site identified by Seller shall not
be
unreasonably withheld or delayed); provided, however, that Seller
may
elect to
forego all payments pursuant to this Section 2.2(b) by
notifying
(pursuant
to Section 12.4 herein) Buyer of such election, and provided
further,
that all obligations of Buyer pursuant to this Section 2.2(b)
shall
terminate on the third anniversary of the Closing Date; and
provided
further,
that Buyer shall pay Seller the Approval-Based Holdback
regardless
of whether Seller is in any way responsible for Buyer or any of
the
Companies (or any Affiliates of any of the Companies) obtaining
such
permits,
licenses, consents, and approvals within said three-year
period,
except if
Seller is not responsible, to a material extent, for Buyer or
any of its
Affiliates obtaining such permits, licenses, consents, and
approvals
within such period, then the Approval-Based Holdback will be
reduced by
the amounts of the reasonable costs incurred by Buyer to obtain
same, but
in no event may such reduction exceed $100,000 so as to cause
Seller to
receive less than $1,400,000. If, pursuant to the preceding
sentence,
Buyer pays Seller less than $1,500,000, then Buyer will provide
such
information as Seller may reasonably request that establishes
the
amount of
Buyer's cost to obtain the permit, license, consent or
approval.
Fifty
percent (50%) of the Approval-Based Holdback will be paid by
Buyer
to Seller
by wire transfer of immediately available funds to a bank
account
designated by Seller, and fifty percent (50%) of the
Approval-Based Holdback will be paid by Buyer to Seller in the form
of
Shares (as
defined in Section (c) of Schedule 2.2(a)); provided, that the
number of
Shares to be delivered to Buyer upon payment of the
Approval-Based Holdback shall be determined by dividing fifty
percent
(50%) of
the Approval-Based Holdback by the average of the closing price
per Share
on each of the 10 Business Days immediately preceding the date
that Buyer
(or an Affiliate thereof) has obtained all material permits,
licenses,
consents, and approvals required by DENR as set forth above;
provided,
further, that either Party, in its sole discretion, may elect
to
pay, on
the one hand, or receive, on the other hand cash in lieu of
Shares. In
no event shall any payment of cash in lieu of Shares exceed
$750,000.00.
2.3
WORKING CAPITAL ADJUSTMENT. If the Companies' ratio of Current
Assets
to Current Liabilities (each as defined in
Article 11) is not *** to *** as of
the Closing Date, then the Purchase Price
will be adjusted as follows:
(a) Prior to Closing, Seller shall estimate the Current Assets
and
Current
Liabilities of the Companies as of the Closing Date. In
connection
therewith,
Seller shall develop a worksheet and the basis for making the
computations of Current Assets and Current Liabilities (the
"Worksheet")
that will
also be used to determine the Actual Working Capital
Adjustment.
If the
estimated Current Liabilities exceed the estimated
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Current
Assets, the amount of such excess shall be deducted on a ***
basis
from the
Adjusted Cash Purchase Price. If the estimated Current Assets
exceed the
estimated Current Liabilities, the amount of such excess shall
be added
on a *** basis to the Adjusted Cash Purchase Price. Any such
adjustment
is referred to as the "Working Capital Adjustment." A form of
this
Worksheet, reflecting Current Assets and Current Liabilities of
the
Companies
as of December 31, 2004, and supporting information is attached
hereto as
Exhibit A for illustrative purposes only.
(b) Within 75 days after the Closing Date, Buyer shall deliver
to
Seller a
statement (the "Statement") setting forth what it believes are
the actual
Current Assets and Current Liabilities as of the Closing Date,
together
with the amount of the proposed Actual Working Capital
Adjustment. Buyer will prepare the Statement using the Worksheet
in
accordance
with the provisions of this Agreement and consistent with the
Worksheet.
The Statement shall contain a supporting schedule detailing the
proposed
Actual Working Capital Adjustment, and be accompanied with
copies
of the
work papers and back up materials used by Buyer in preparing
the
Statement.
If the Actual Working Capital Adjustment is a positive amount,
Buyer
shall pay to Seller, within fifteen (15) days from the date of
delivery
of the Statement, an amount equal to such positive amount. If
the
Actual
Working Capital Adjustment is a negative amount, Seller shall
promptly
pay to Buyer, within fifteen (15) days from the date of
delivery
of the
Statement, an amount equal to such negative amount.
(c) Seller and its accounting representatives will be entitled
to
examine
the work papers related to the preparation of the Statement and
to
discuss
the preparation of the Statement with WCA's and Buyer's
accounting
personnel.
If Seller disagrees with the calculation of the Actual Working
Capital
Adjustment, it must deliver to Buyer, within 30 days after the
date Buyer
delivered the Statement to Seller, a written description of
each such
disagreement. Seller and Buyer will negotiate in good faith to
resolve
any such disagreements. If, after a period of 30 days following
the date
on which such written description is delivered, Seller and
Buyer
have not
resolved each such disagreement, then either Seller or Buyer
will
be
entitled to submit such disagreements to Grant Thornton LLP
(the
"Resolution Accountants") so long as such submitting party
provides
written
notice of such submission to the nonsubmitting party. Within
five
Business Days after
receipt of such written notice, Seller and Buyer will
each
deliver to the Resolution Accountants a written settlement
offer
setting
forth its calculation of the Actual Working Capital Adjustment
(each, a
"Settlement Offer"). Buyer will grant (and will cause each of
the
Companies
to grant) to the Resolution Accountants reasonable access to
Buyer's
and the Companies' books and records. WCA and Buyer will cause
their
accounting personnel to discuss with the Resolution Accountants
the
preparation of the Statement and the calculation of Actual Working
Capital
Adjustment
and to grant to the Resolution Accountants reasonable access to
the work
papers of WCA's and Buyer's accountants and accounting
personnel.
The
Resolution Accountants will resolve the disagreements within 30
days
after the
date on which they are engaged or as soon thereafter as
possible.
The calculation of the Actual Working Capital Adjustment by the
Resolution Accountants will be
binding upon the Parties. The cost of the
services
of the Resolution Accountants will be borne by the Party whose
Settlement
Offer differs the most from the working capital (i.e., the
difference
of Current Assets minus Current
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3
<PAGE>
Liabilities) as finally determined by the Resolution Accountants.
If both
Settlement
Offers differ equally, such cost will be borne half by Seller
and half
by Buyer. If any Party fails to deliver a Settlement Offer in
accordance
with this Section 2.3(c), such cost will be borne by such
Party.
2.4
EXCLUDED ASSETS. Prior to Closing, the Companies will distribute
to
Seller, and the Purchase Price will not
relate to, the following property, which
property will not be directly or indirectly
conveyed to Buyer (the "Excluded
Assets"):
(a) The CBI Magnum Force Grinder (SN: 0570), as more fully
described
on that
certain invoice (Invoice Number 2079) from D. H. Griffin of
Texas,
Inc. to
the Company dated September 8, 2003 (referred to in the
negotiations as the portable grinder).
(b) The land described in the attachments to Exhibit B attached
hereto
that is currently titled in the name of MRR High Point, LLC.
Such
distribution shall be made pursuant to a special warranty deed
which shall
include
certain restrictions, all as set forth in the form attached
hereto
as Exhibit
B (the "Deed").
(c) That certain Agreement for Purchase and Sale of Real
Property
between
High Point and Ernest W. and Jane D. Miller dated on or around
March 3,
2003 and that certain Agreement for Purchase and Sale of Real
Property
between High Point and Edward L. Myrick dated on or around
March
2003.
(d) All trade name, trademark and other rights to "MRR;"
provided,
however,
that Buyer may use "MRR" for a period not to exceed 120 days
following
closing, so long as Buyer diligently pursues the substitution
of
"WCA" for
"MRR" during such period.
Notwithstanding anything to the contrary in
this Agreement, the representations
and warranties in Article 3 shall not apply
to Excluded Assets.
2.5
ALLOCATION OF PURCHASE PRICE. The Parties acknowledge and agree
that
under the principles of Sections
301.7701-3(a) and (b)(ii) of the Treasury
Regulations the sale and assignment of the
Membership Interests by Seller to
Buyer shall be treated for federal tax
purposes as a sale of the assets of the
Companies by Seller to Buyer. The Purchase
Price shall be allocated by the
Parties among the assets of the Companies
in the manner required by Section 1060
of the Internal Revenue Code of 1986, as
amended and consistent with Schedule
2.5 hereto (the "Allocation"), and the
Parties hereby agree to adhere to the
Allocation in all reports, returns and
other documents filed with any
governmental authority (including Internal
Revenue Service Form 8594 and any
other filings required by Section 1060 of
the Code); provided, however, that
nothing contained herein shall require any
Party to contest or to litigate in
any forum any proposed deficiency or
adjustment by any taxing authority or
agency which challenges the Allocation.
Amounts of the Purchase Price allocated
to items included in Current Assets and
Current Liabilities will be subject to
appropriate adjustment to reflect the final
determination of Current Assets,
Current Liabilities and the Working Capital
Adjustment in accordance with
Section 2.3.
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2.6
BREAK-UP FEE. If the transactions to be consummated at Closing are
not
consummated on or before March 1, 2005,
then WCA shall pay Seller, on or before
March 10, 2005 in immediately available
funds, $1,250,000.00 in consideration
for the covenants and agreements of Seller
set forth herein (the "Break-up
Fee"); provided, however, that WCA shall
not be obligated to pay Seller the
Break-up Fee if, but only if, (a) the
conditions set forth in Section 8.7
(determined without regard to (i) any
condition or requirement that local
authorities may impose requiring DENR or
any other state agency to issue any
permit, license, approval or franchise with
respect to the transactions to be
consummated pursuant to, otherwise
contemplated by, this Agreement prior to such
local authority issuing its permit,
license, approval or franchise or (ii) any
issues relating to WCA or Buyer or their
Affiliates) have not been satisfied or
waived in writing on or before March 1,
2005, (b) Buyer terminates this
Agreement as a result of the condition in
Section 8.1 having not been satisfied,
after giving Seller written notice to cure
the nonsatisfaction of such
condition, and Seller fails to cure same
within 30 days following such notice or
Seller declines to cure same, or (c) Buyer
terminates this Agreement as a result
of the condition in Section 8.2 having not
been satisfied, after giving Seller
written notice to cure the nonsatisfaction
of such condition, and Seller fails
to cure same within 30 days following such
notice or Seller declines to cure
same. Payment of the Break-up Fee as set
forth herein shall constitute a mutual
release by the parties with respect to all
matters and obligations set forth
herein.
2.7
EXTENSION OPTION. If the Closing has not occurred prior to or on
March
1, 2005, Buyer will have the option, to be
exercised by giving written notice to
Seller on or before 12:00 noon (CST) on
March 1, 2005, to pay the following
amount(s) by the following payment date(s)
in order to extend the March 1st
termination dates in Sections 10.5(b) to
the following termination date(s): (a)
$1,500,000 (the "Deposit"), plus $25,000 by
March 1, 2005 to extend until March
7, 2005; (b) an additional $35,000 by March
7, 2005 to extend until March 14,
2005; (c) an additional $45,000 by March
14, 2005 to extend until March 21,
2005; and (d) an additional $55,000 by
March 21, 2005 to extend until April 1,
2005; provided, however, that if Buyer has
notified Seller of nonsatisfaction of
a condition in accordance with Section
2.6(b) or (c) and Seller is attempting to
cure such nonsatisfaction and such cure
period extends beyond March 1, 2005,
then Buyer will still need to notify Seller
in writing on or before 12:00 noon
(CST) on March 1, 2005, of its exercise of
any options to extend under this
Section 2.7, but Buyer will not have to pay
the amounts in clauses (a) - (d)
above until the earlier of the date of cure
or waiver of the applicable
condition, if Buyer does not close on such
earlier date. All of the
aforementioned payments (the "Payments")
shall be made by Buyer to Seller via
wire transfer of immediately available
funds and shall be accompanied by written
notice of the extension. The extensions in
clauses (b), (c) and (d) are also
conditioned upon the proper exercise of
each preceding potential extension. If
Buyer exercises any or all of the
extensions above, (i) the Payments (including
the Deposit) shall be nonrefundable, (ii)
the Payments shall be in lieu of the
Break-Up Fee and Section 2.6 shall be of no
force or effect, (iii) the Deposit
will be applied toward the Cash Purchase
Price if the Closing occurs prior to or
on the date the termination date was
extended to under the applicable clause
(a), (b), (c) or (d) above and (iv) if the
Closing does not occur, the Payments
will constitute a mutual release by the
parties with respect to all matters and
obligations set forth herein.
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3. REPRESENTATIONS AND
WARRANTIES OF SELLER
Seller
represents and warrants that all of the following
representations
and warranties are true as of the date of
this Agreement and shall be true on
the Closing Date:
3.1 DUE
ORGANIZATION.
(a) Each of the Companies is a limited liability company duly
organized
and validly existing under the laws of the State of North
Carolina.
Copies of the Articles of Organization of each Company
(certified
by the Secretary of State of North Carolina) are attached
hereto as
Schedule 3.1(a).
(b) Seller is a limited liability company, duly organized and
validly
existing under the laws of the State of North Carolina.
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
Seller
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 proceeding in equity or at law, and
(ii) has
been duly authorized in accordance with the Articles of
Organization and Operating Agreement of Seller.
(b) The execution and delivery of this Agreement by Seller does
not,
and the
consummation of the transactions contemplated hereby by Seller
will not
except as set forth on Schedule 3.2 hereof, (i) 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 upon any part of the property of Seller pursuant to
any
provision of, any order, judgment, arbitration award,
injunction,
decree,
indenture, mortgage, lease, license, lien, or other agreement
or
instrument
to which Seller 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 Seller as amended to the date hereof.
3.3
MEMBERSHIP INTERESTS OF THE COMPANY. Seller is the sole member
and
owns and otherwise holds, the only
membership interest in each of the Companies.
Each Membership Interest has been duly
authorized and validly issued, is owned
of record and beneficially by Seller and is
free and clear of all liens,
encumbrances and claims of every kind. All
of the 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 the
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 any
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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 any Company, or (b)
contracts, arrangements or commitments,
written or otherwise, under which any
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 any Company or Seller)
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 any Company, and no
person has made or, to Seller's Knowledge,
threatened to make any such claim. In
addition, none of the Companies has any
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.
3.5
SUBSIDIARIES. None of the Companies (a) presently owns, of record
or
beneficially, or controls, 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,
directly or indirectly, a participant
in any joint venture, partnership or other
non-corporate entity.
3.6
PREDECESSOR STATUS; ETC. None of the Companies has been a
subsidiary
or division of a corporation nor been a
part of an acquisition which was later
rescinded.
3.7
FINANCIAL STATEMENTS.
(a) Seller has furnished to Buyer (and copies of which are
attached
hereto as
Schedule 3.7(a)): (i) each Company's balance sheet as of
December
31, 2003; (ii) each Company's income statement for the year
ending
December 31, 2003; (iii) each of Recovery's and Reclamation's
balance
sheet as of December 31, 2002; (iv) each of Recovery's and
Reclamation's income statement for the year ended December 31,
2002; and
(v)
Reclamation's income statement for the year ended December 31,
2001.
The
financial statements referred to in this subsection are herein
collectively referred to as the "Financial Statements."
(b) Seller has furnished to Buyer (and copies of which are
attached
hereto as
Schedule 3.7(b)): (i) each Company's balance sheet as of
November
30, 2004; and (ii) each Company's income statement for the
period
beginning
January 1, 2004 and ending November 30, 2004; provided,
however,
that such
interim financial statements are subject to normal, recurring
year-end
adjustments and lack notes. The financial statements referred
to
in this
subsection are herein collectively referred to as the "Interim
Financial
Statements."
(c) Each Company's Financial Statements and Interim Financial
Statements
do as the date hereof and will as of the Closing Date, and each
Company's
Post-Signing Financial Statements (as defined in Section 5.9)
will as of
the Closing Date, fully and fairly set forth the financial
condition
of such Company in all material respects 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
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otherwise
stated therein or in any attachment to Schedules 3.7(a) and
3.7(b)
attached hereto.
3.8
LIABILITIES AND OBLIGATIONS. Except as disclosed in the
Financial
Statements and Interim Financial Statements
and arising in due course since
November 30, 2004, there are no liabilities
of any Company required to be
disclosed pursuant to generally accepted
accounting principles. Schedule 3.8(a)
lists all liabilities of any Company that
are required to be recorded as such
pursuant to generally accepted accounting
principles as of the Closing, except
for Current Liabilities and liabilities
that will be discharged or assumed by
Seller at Closing (all such liabilities, if
any, shall be referred to herein as
the "Retained Liabilities"). At the time of
the Closing, Seller will deliver to
Buyer on Schedule 3.8(b) an accurate list
of all of the liabilities of each of
the Companies that are required to be
recorded as such pursuant to generally
accepted accounting principles as of the
moment immediately preceding the
Closing that are not Current Liabilities,
Funded Debt or Retained Liabilities
(the "Seller Assumed Liabilities").
3.9 THIS
SECTION INTENTIONALLY DELETED.
3.10
ACCOUNTS AND NOTES RECEIVABLE. Seller has delivered to Buyer on
Schedule 3.10 an accurate list as of
November 30, 2004 of each Company's
accounts and notes receivable, including
receivables from and advances to Seller
and amounts which are not reflected in the
most recent available balance sheet.
Seller shall provide Buyer with an aging of
all accounts and notes receivable
showing amounts due in 30-day aging
categories for each Company.
3.11
PERMITS AND INTANGIBLES. Seller has delivered to Buyer on
Schedule
3.11 an accurate list and summary
description of all material 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 each 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 each Company's business in
all material respects, as constituted
immediately prior to the Closing. Except
as set forth on Schedule 3.11 Seller has
delivered to Buyer a description and
copies as of the date of this Agreement, of
all of its material records,
reports, notifications, certificates of
need, permits, pending permit
applications, and engineering 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. Seller has delivered to
Buyer
on Schedule 3.12 an accurate list and a
description as of the date hereof of all
material personal property, leases for
equipment and real properties on which
are situated buildings, warehouses,
workshops, garages and other structures used
in the operation of its business, and any
option to purchase real property. All
leases set forth on Schedule 3.12 are in
full force and effect and constitute
valid and binding agreements of Companies
and, to Seller's Knowledge, the
parties (and their successors) thereto in
accordance with their respective
terms. All fixed assets used by each
Company in the operation of its business
are either owned by such Company or leased
under an agreement indicated on
Schedule 3.12. Except as described on
Schedule 3.12, each Company owns, leases
or otherwise has the rights to use all of
the assets and properties it uses in,
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and that are material to, its business.
Except for Permitted Exceptions and as
otherwise 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 any
Company.
3.13
CUSTOMERS; CONTRACTS AND COMMITMENTS.
(a) Schedule 3.13(a) sets forth a true and complete list of all
of
the
Companies' written contracts, written agreements and other
written
instruments that will be outstanding immediately after the Closing
(and
not
discharged or otherwise terminated or assumed by Seller as a
Seller
Assumed
Liability at the Closing) (a) by which any Company is bound or
affected
or (b) to which any Company is a party or by which any 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 Company or Seller 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 such Company's business, as
presently
constituted.
(b) Except as set forth on Schedule 3.13(b): (i) this Agreement
will
not give
rise to the right of any party to terminate or modify any
contract
or agreement, and (ii) none of the Companies is bound by or
subject to
(and no assets or properties of any Company are bound by or
subject
to) any arrangement with any labor union.
(c) Except as set forth on Schedule 3.13(c), none of the
Companies
is a party
to any oral agreement that will be binding at or after the
Closing.
3.14 REAL
PROPERTY. Except as set forth on Schedules 3.14(a) and 3.14(d)
attached hereto:
(a) Each Company owns good and marketable title to its real
property
described
on Schedule 3.14(a) (the "Company's Real Property," which does
not
include any of the Excluded Assets or the Leased Property), free
and
clear of
any lien, mortgage, charge, restriction, pledge, security
interest,
option, lease, claim, easement, encroachment or encumbrance
("Lien"),
other than Permitted Exceptions, and no person has an option to
purchase
all or any portion of such real property;
(b) Except for Permitted Exceptions, no Company's Real Property
is
subject to
any pending or, to Seller's Knowledge, threatened condemnation
Proceedings against all or part thereof;
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(c) None of the Companies has ever granted any person or entity
a
lease,
sublease, license, concession, or other right, written or oral,
to
use or
occupy such Company's Real Property, nor has any 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 such
Company's
Real Property; and
(d) Except for the leased property described on Schedule
3.14(d)
(the
"Leased Property"), none of the Companies has ever owned,
occupied,
or
conducted operations on any lands, other than such Company's
Real
Property.
3.15
INSURANCE. Seller has delivered to Buyer on Schedule 3.15 an
accurate
list of all insurance policies on which any
Company is a named insured. With
respect to such insurance policies and
except as set forth on Schedule 3.15, (a)
there are no open claims and (b) there are
no claims against any Company listed
on its insurance loss runs since December
18, 2002. Such insurance policies are
currently in full force and effect and such
policies (or comparable policies)
shall remain in full force and effect
through the Closing Date. No Company's
insurance has ever been canceled, and none
of the Companies has ever been denied
coverage.
3.16
EMPLOYMENT MATTERS. Except as set forth on Schedule 3.16, none of
the
Companies has ever had any employees.
3.17
PARACHUTE PROVISIONS. None of the Companies has ever been a party
to
any employment agreements or any other
agreements containing "parachute"
provisions, or any deferred compensation
agreements.
3.18
BENEFIT PLANS; ERISA COMPLIANCE. Except as set forth on
Schedule
3.16, none of the Companies have ever had
any employees. Neither Seller nor any
ERISA Affiliate of Seller maintains or
contributes to, and is not obligated to
maintain or contribute to, any defined
benefit plan or any multi-employer plan
subject to Title IV of ERISA.
3.19
CONFORMITY WITH LAW.
(a) Each Company has complied in all material respects with,
and
none of
the Companies is 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 such Company or any of its
assets
or
businesses; there are no claims, actions, suits or Proceedings,
pending
or, to
Seller's Knowledge, threatened, against or affecting any
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 any Company or its
business; and
to
Seller's Knowledge no notice of any claim, action, suit or
Proceeding,
whether
pending or threatened, has been received by any Company.
(b) Each 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 all such laws, rules, ordinances,
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decrees
and orders relating to intellectual property protection,
transportation, wage and hour, antitrust matters, consumer
protection,
currency
exchange, 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) None of the Companies has 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.
3.20
TAXES. Each Company has timely filed all requisite federal and
other
Tax Returns for all fiscal periods ended on
or before the Closing Date; there
are no open years, examinations in progress
or claims against any Company for
federal and other Taxes (including
penalties and interest) for any period or
periods prior to and including the Closing
Date; and, except as set forth on
Schedule 3.20, no notice of any claim,
whether pending or threatened, for Taxes
has been received. None of the Companies is
a party to any Tax allocation or
sharing agreement (i.e., any agreement or
arrangement for the payment of Tax
liabilities or payment for Tax benefits
with respect to a consolidated, combined
or unitary Tax Return which includes any
Company); there are no requests for
rulings in respect of any Tax pending by
any Company with any tax authority;
except as set forth on Schedule 3.20, no
penalty or deficiency in respect of any
Taxes which has been assessed against any
Company remains unpaid; and, except as
set forth on Schedule 3.20, all taxes
(whether or not shown on any Tax Return)
for all fiscal years ending on or before
November 30, 2004 have been fully paid
or appropriate deposits or adequate
accruals have been made therefor in the
Financial Statements of each Company. The
amounts shown as accruals for Taxes on
the Interim Financial Statements of each
Company as of November 30, 2004
delivered to Buyer as a part of Schedule
3.7 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, each Company has reserved an
amount sufficient to pay all such Taxes,
and the working capital of each Company
is sufficient to pay any such Tax
applicable to it. Copies of (a) any tax
examinations, (b) extensions of statutory
limitations, and (c) the federal and
local income tax returns and franchise tax
returns of each Company for the last
three (3) fiscal years, or such shorter
period of time as each Company has
existed, are attached hereto as Schedule
3.20. For purposes of this Section
3.20, "Tax" shall mean any material amount
of United States or other federal,
state, provincial, local or foreign income,
gross receipts, property, sales,
goods and services use, license, excise,
franchise, employment, payroll,
withholding, alternative or add-on minimum,
ad valorem, transfer or excise tax,
or any other tax, custom, duty,
governmental fee or other like assessment or
charge, together with any material amount
of interest or penalty, imposed by any
governmental authority. "Tax Return" shall
mean any return, report or similar
statement required to be filed with respect
to any Tax (including any attached
schedules), including any information
return, claim for refund, amended return
and declaration of estimated Tax.
3.21 THIS
SECTION INTENTIONALLY DELETED.
3.22
GOVERNMENT CONTRACTS. Except as set forth on Schedule 3.22, none
of
the Companies is now, or has ever been, a
party to any governmental contract
subject to price redetermination or
renegotiation.
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3.23
ABSENCE OF CHANGES. Except for the distribution and transfer of
the
Excluded Assets on or before the Closing
Date and except as set forth in
Schedule 3.23, since November 30, 2004,
there has not been:
(a) any damage, destruction or loss (whether or not covered by
insurance), change in zoning, or, to Seller's Knowledge, change in
any
law, rule,
regulation, ordinance, or condition or term of any permit,
materially
adversely affecting the properties or business of any Company;
(b) any change in the authorized or outstanding membership
interests
of any
Company or any grant of any options, warrants, calls,
conversion
rights or
commitments;
(c) 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 any
Company;
(d) to Seller's Knowledge, any proposed law or regulation or
any
event or
condition of any character, materially adversely affecting any
Company's
business, as presently constituted;
(e) any sale or transfer, or any agreement to sell or transfer,
any
material
assets, property or rights of any Company to any person;
(f) any cancellation, or agreement to cancel without receiving
full
payment
therefor, any material indebtedness or other material
obligation
owing to
any Company;
(g) any plan, agreement or arrangement granting any
preferential
rights to
purchase or acquire any interest in the assets, property or
rights of
any Company or requiring consent of any party to the transfer
and
assignment of any such assets, property or rights;
(h) any purchase or acquisition, or agreement, plan or
arrangement
to
purchase or acquire, any material property, rights or assets of
any
Company;
(i)
any waiver of any material rights or claims of any Company;
(j) any material breach, amendment or termination of any
material
contract,
agreement, license, permit or other right to which any Company
is a
party; or
(k)
any material transaction by any Company outside the ordinary
course of
its business.
3.24
DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Seller has delivered to
Buyer
on Schedule 3.24 an accurate list as of the
date of this Agreement, of:
(a) the name of each financial institution in which each Company
has
accounts
or safe deposit boxes;
(b) the names in which such accounts or boxes are held;
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<PAGE>
(c) the type of accounts; and
(d) the name of each person authorized to draw thereon or have
access
thereto.
No person,
corporation, firm or other entity holds a general or special
power of attorney from any Company.
3.25
PROPRIETARY RIGHTS. Except as set forth on Schedule 3.25, none of
the
Companies owns or has any right or interest
in any material item of Intellectual
Property, or any license or assignment with
respect thereto. None of the
Companies has granted to any third party a
license or other authorization to use
any material item of Intellectual Property
of such Company, and no third party
owns any ownership interest in or holds any
claim, lien or other encumbrance
other than Permitted Exceptions, on such
Company's Intellectual Property.
Neither of the Companies nor Seller has
received any notification that any
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,
to Seller's Knowledge, threatened claim
with respect to any such infringement,
unauthorized use or misappropriation. None
of the Companies owes any third party
royalties for the use of Intellectual
Property.
3.26 THIS
SECTION INTENTIONALLY DELETED.
3.27
RELATIONS WITH GOVERNMENTS. None of the Companies, and to
Seller's
Knowledge no member, manager, director,
officer, agent, employee or other person
acting on behalf of any Company, has used
any funds of any 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.
None of the Companies, and to Seller's
Knowledge no member, manager, director,
officer, agent, employee or other person
acting on behalf of any Company, has
accepted or received any improper or
unlawful contributions, payments, gifts or
expenditures.
3.28
RELATED PARTY TRANSACTIONS. Except as set forth on Schedule
3.28,
neither (a) any past or present officer,
manager or member of any of the
Companies, nor (b) Seller, nor (c) any
corporation, partnership, trust or other
entity of which any such past or present
officer, manager or member of any of
the Companies, 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 material
transaction with any Company, including
any agreement or other arrangement
providing for the furnishing of material
services by or to any Company or the rental
of any property from or to any
Company, or otherwise requiring or
contemplating any material payments by or to
any Company. Except as set forth in
Schedule 3.28, Seller does not have any
claims against, or is owed any amounts
(including, any bonuses, commissions,
royalties, rentals or other payments) by,
any of the Companies.
3.29
ENVIRONMENTAL MATTERS. To the Knowledge of Seller, Seller has
made
available to Buyer all of the
correspondence, agreements, notices or other
documents it has in its possession directly
related to the items set forth on
Schedule 3.29. To the Knowledge of
Seller,
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Schedule 3.29 also contains a list of all
sites used by any of the Companies to
dispose of C&D waste.
Except as
set forth in Schedule 3.29 to the Knowledge of Seller:
(a) Each 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 any Company or any of its organizational
predecessors (individually, any "Business Facility," and
collectively, the
"Business
Facilities") and all operations of each Company and its
Business
Facilities, are in material compliance and during their ownership
or
operation
by Seller have been in material compliance with all applicable
Environmental Laws;
(b) each Company and its Business Facilities have obtained and
are
in
material 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
such
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
such
Company;
(c) during the term of each Company's ownership of or control of
its
Business
Facilities ("Ownership Term"), such Company and its Business
Facilities, and any operations thereon, have not been and are
not
currently
subject to an unresolved Environmental Claim;
(d) there are no Environmental Claims or investigations pending
or
threatened, involving the release or threat of release of any
Polluting
Substances
from or on (i) any Business Facility of any Company, or (ii)
any other
property where Polluting Substances generated by any Company or
originating from any Business Facility of any Company have been
recycled,
stored,
treated, released or disposed, or (iii) any property to which
Polluting
Substances were transported by any Company or (iv) any property
on which
any Company performs or performed or may be required to perform
Remediation;
(e) there are no Polluting Substances on any Business Facility
of
any
Company in an amount or concentration which would require reporting
to
any
governmental authority by any Company or Remediation by any Company
to
comply
with the requirements of Environmental Laws and which have not
been
so
reported;
(f) none of the Companies has undertaken Remediation or other
decontamination or cleanup of any facility or site or entered into
any
agreement
or extended any offer for the payment of costs associated with
such
activity;
(g) there are no Environmental Claims for which any Company has
failed to
notify its insurers within contractually required notice
periods
or for
which insurers have denied coverage or reserved their rights to
deny
coverage;
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(h) none of the Companies is, as a result of the operation or
condition
of any Business Facility of such Company or the businesses
thereon as
conducted prior to or at Closing, subject to any: (i)
contingent
liability in connection with any release or threatened release
of
Polluting Substances into the environment other than the normal
or
routine
disposal of solid waste, whether on or off the Properties or
any
Business
Facility of such Company; (ii) reclamation, decontamination or
Remediation requirements under Environmental Laws, or any
reporting
requirements related thereto, except for ordinary closure
requirements
under
Environmental Laws; or (iii) consent order, compliance order or
administrative order relating to or issued under any Environmental
Law;
(i) except as referenced in the Environmental Permits, there are
no
obligations, undertakings or liabilities arising out of or relating
to
Environmental Laws which any Company has agreed to by contract;
(j) there are no, and there have never been any, storage tanks on
or
under any
Business Facility of any Company, and any Business Facility of
any
Company containing such tanks during the Ownership Term has
been
remediated, to the extent required by, and in compliance with
all
Environmental Laws;
(k) no drinking water intakes or water wells exist within a
two-mile
radius of
any Business Facility of any Company, which have been impacted
by the
operation of any Company and which could have an adverse effect
on
the
Environmental Permits; and
(l) there are no polychlorinated biphenyls on or in the
Properties
or any
Business Facility of any Company or any equipment or fixtures
thereon.
This
Section 3.29 sets out all of Seller's representations and
warranties
concerning or relating to environmental
matters, including its representations
and warranties concerning or relating to
Disposal, Environmental Claims,
Environmental Laws, Polluting Substances
and Remediation and supersedes and
otherwise preempts all other provisions of
this Article 3 (including Sections
3.2, 3.8, 3.11, 3.19 and 3.23) related to
the same subject matter.
3.30 NO
BROKER'S OR FINDER'S FEES. No agent, broker, investment banker,
person or firm has acted directly or
indirectly on behalf of Seller or any
Company in connection with this Agreement
or the transactions contemplated
herein who will be entitled to any broker's
or finder's fee or any other
commission or similar fee or expense,
directly or indirectly, in connection with
this Agreement or the transactions
contemplated herein.
3.31
LITIGATION. Except as set forth in Schedule 3.31, there are no
Proceedings pending or, to the Knowledge of
Seller, threatened against any
Company, challenging the validity or
propriety of the transactions contemplated
by this Agreement or any permit or other
governmental authorization and there is
no outstanding order, writ, injunction or
decree of any court, administrative
agency, governmental body or arbitration
tribunal against any Company or its
assets. Set forth on Schedule 3.31 are all
Proceedings during the last five
years to which any Company was a party, or
which, to the Knowledge of Seller,
were threatened against any Company.
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3.32
INCORPORATION OF OTHER DISCLOSURES. The schedules referenced in
this
Article 3 are located in the those certain
5 binders reviewed by the Parties in
the offices of Kennedy Covington Lobdell
& Hickman, L.L.P on the date hereof;
provided, that references to any schedule
(other than Schedule 3.8(b)) to this
Agreement shall also include all
information contained in any other schedule to
this Agreement or any other provision of
this Agreement.
3.33 THE
MORE SPECIFIC REPRESENTATIONS AND WARRANTIES CONTROL. No matter
is intended to be covered by more than one
representation and warranty. If not
for this Section 3.33 two or more
representations and warranties could cover the
same matter, the representation and
warranty that covers the matter more
specifically shall control and preempt the
more general of the representations
and warranties with respect to such matter.
Notwithstanding anything in Section
3.2, 3.11, 3.19 or 3.29 or any other
provision in this Agreement to the
contrary, the Seller and the Companies
shall not be deemed to be in breach of
any provision of this Agreement to the
extent any alleged breach relates to the
permits, licenses or approvals described in
Sections 8.6 or 8.7
4. REPRESENTATIONS OF WCA
AND BUYER
Buyer, WCA
or Buyer and WCA (jointly and severally), as the case may be,
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
Date.
4.1 DUE
ORGANIZATION.
(a) Buyer and WCA jointly and severally represent and warrant
that
Buyer is a
limited partnership duly organized, validly existing and in
good
standing under the laws of the State of Delaware.
(b) WCA represents and warrants that WCA is a corporation duly
organized,
validly existing and in good standing under the laws of the
State of
Delaware.
4.2
EXECUTION.
(a) Buyer and WCA jointly and severally represent and warrant
that
(i) the
execution, delivery and performance of this Agreement and the
transactions contemplated hereby are duly and validly authorized by
Buyer,
and (ii)
this Agreement constitutes the legal, valid and binding
obligation
of Buyer enforceable in accordance with its terms.
(b) WCA represents and warrants that (i) the execution, delivery
and
performance of this Agreement and the transactions contemplated
hereby are
duly and
validly authorized by all requisite corporate action on the
part
of WCA,
and (ii) this Agreement constitutes the legal, valid and
binding
obligation
of WCA enforceable in accordance with its terms.
4.3 CONFORMITY WITH LAW.
(a) Buyer and WCA jointly and severally represent and warrant
that
(i) Buyer
has the requisite power and right to enter into and perform
this
Agreement
and the
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transactions contemplated herein and (ii) neither Buyer's execution
of
this
Agreement nor the consummation of the transactions contemplated
herein
violate or conflict with (A) any law, rule, regulation,
ordinance
or decree
applicable to Buyer, (B) any provision of Buyer's limited
partnership agreement, certificate of limited partnership or
other
organizational documents, or (C) any material agreement or
instrument to
which
Buyer is a party or by which it is bound.
(b) WCA represents and warrants that (i) WCA has the corporate
power
and right
to enter into and perform this Agreement and the transactions
contemplated herein and (ii) neither WCA's execution of this
Agreement nor
the
consummation of the transactions contemplated herein violate or
conflict
with (A) any law, rule, regulation, ordinance or decree
applicable
to WCA, (B) any provision of WCA's certificate of
incorporation, bylaws and other organizational documents, or (C)
any
material
agreement or instrument to which WCA is a party or by which it
is
bound.
4.4 NO
BROKER'S OR FINDER'S FEES. Buyer and WCA jointly and severally
represent and warrant that no agent,
broker, investment banker, person or firm
has acted directly or indirectly on behalf
of Buyer or WCA in connection with
this Agreement or the transactions
contemplated herein who will be entitled to
any broker's or finder's fee or any other
commission or similar fee or expense,
directly or indirectly, in connection with
this Agreement or the transactions
contemplated herein.
4.5 ACCESS
TO INFORMATION; COUNSEL. Buyer and WCA jointly and severally
represent and warrant that Buyer and WCA
have been provided access to
information concerning each Company, and
have had the opportunity to consult
with counsel regarding this Agreement.
Notwithstanding the foregoing, Buyer's
investigation and representation by counsel
shall not limit or diminish Buyer's
reliance upon the representations,
warranties and covenants set forth in this
Agreement.
5. COVENANTS OF THE
PARTIES
5.1 NOTICES AND APPROVALS.
Seller on the one hand, and Buyer and WCA on
the other, shall timely give all notices
and request all approvals and
assignments that may be required under
applicable law or any of the permits,
agreements, orders or other instruments to
which any Company on the one hand,
and Buyer and WCA on the other, is bound on
the Closing Date, in connection with
the transactions to be consummated under
this Agreement. The parties will
cooperate to change the names of the
Companies by substituting "WCA" for "MRR."
5.2 ACCESS
TO INFORMATION.
(a) On and after the date of this Agreement through the Closing
Date,
Seller will furnish to Buyer such information with respect to
each
Company as
Buyer shall reasonably request. Without limitation of the
foregoing,
Seller shall (i) afford to Buyer and its officers, employees,
accountants, consultants, counsel and other authorized
representatives
reasonable
access, throughout the period prior to the earlier of the
Closing
Date or the date this Agreement is terminated pursuant to
Section
10.5
hereof, to each Company's plants, properties (including each
company's
Real Property), and books and records relating to each Company;
(ii) use
its best efforts to cause its representatives to
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<PAGE>
furnish to
Buyer and its authorized representatives such additional
financial
and operating data and other information as to each Company as
Buyer or
its duly authorized representatives may from time to time
reasonably
request; and (iii) afford Buyer and its representatives
reasonable
access, throughout the period prior to the Closing Date, to
each
Company's present and potential customers relating to the
Companies'
respective
businesses, such that Buyer may conduct such due diligence
investigation relating to the customer relations as Buyer deems
reasonably
necessary
or appropriate.
(b) Buyer and WCA covenant and agree that all due diligence
materials
will be used solely for the purposes of assessing the Companies
in
connection with Buyer's possible acquisition thereof pursuant to
this
Agreement,
and that any other use shall be strictly prohibited. The
parties
acknowledge that a certain Confidentiality and Non-disclosure
Agreement
dated November 23, 2004 was executed by WCA and Seller and
remains in
full force and effect.
5.3 THIS
SECTION INTENTIONALLY DELETED
5.4
COMPLIANCE WITH LAWS. Seller and Buyer shall comply with all
applicable laws as may be required for the
sale and transfer of the Companies
and for the performance of all other acts
and things contemplated by this
Agreement.
5.5
REASONABLE EFFORTS. Each of the parties hereto agrees to use
reasonable efforts to take or cause to be
taken all actions, and to do or cause
to be done all things reasonably necessary,
proper or advisable to satisfy
promptly all conditions required hereby to
be satisfied by such party in order
to consummate and make effective the
transactions contemplated hereby. WCA and
Buyer shall use their commercially
reasonable efforts to obtain additional
financing necessary to consummate this
transaction prior to Closing. Between the
date hereof and Closing, Seller, WCA and
Buyer shall fully cooperate with each
other and the applicable governmental
authorities to try to satisfy the
conditions in Sections 8.6 and 8.7 and
shall promptly provide all requested
information and attend all meetings that
Seller or Buyer, as the case may be,
reasonably deems to be appropriate in
connection with satisfying such
conditions.
5.6
NOTIFICATION. Seller shall notify Buyer, and Buyer shall
immediately
notify Seller, of any litigation,
arbitration or administrative proceeding
pending or, to its knowledge, threatened
against any Company, Seller or Buyer,
as the case may be, which challenges the
transactions contemplated hereby. If
Seller becomes aware prior to Closing of
any fact or condition that may
constitute a breach of any representation
or warranty of Seller or may
constitute a breach of any representation
or warranty of Seller if such
representation or warranty were made on the
date of the occurrence or discovery
of such fact or condition, then Seller will
promptly notify Buyer of such fact
or condition, amend any affected schedules
to the Agreement and deliver such
amended schedules to Buyer. If Buyer
becomes aware prior to Closing of any fact
or condition that may constitute a breach
of any representation or warranty of
Seller or Buyer or may constitute a breach
of any representation or warranty of
Seller or Buyer if such representation or
warranty were made on the Closing Date
or the date of the occurrence or discovery
of such fact or condition, then Buyer
will promptly notify Seller of such fact or
condition.
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LIB: CHARLOTTE
18
<PAGE>
5.7 AUDIT.
Beginning on the date hereof, Buyer, at its own cost and
expense, may engage external auditors to
audit any Company's financial records
(including up to three years of historical
data). Seller, to the extent
reasonable and appropriate and otherwise
consistent with the terms of this
Agreement, shall cooperate with such audit
and will assist in the completion of
such audit, including by providing such
documents that are necessary to complete
the audit and by making representations
regarding the Companies' businesses and
the Companies' financial records relating
to any period preceding the Closing,
but only to the extent that such actions
are requested in writing by, or at the
direction of, WCA's external auditors.
Buyer shall pay Seller for all of the
out-of-pocket expenses incurred by Seller
in complying with this Section 5.7.
5.8 TAX
RETURNS. With respect to any Tax Return of a Company, any audit
or
other examination by any governmental
authority after the Closing Date with
respect to that Company which includes any
period ending on or before the
Closing Date, Buyer shall consult with
Seller and Seller shall provide Buyer
such assistance as reasonably necessary in
connection with the preparation of
such Tax Return, audit or other examination
or any judicial or administrative
proceeding relating to that Company's
liability for Taxes for such period, and
Seller will provide Buyer with any
nonconfidential records or information
related to the Companies that it may have
that may be relevant to any of the
foregoing. Seller, however, shall not be
obligated to incur more than de minimis
expense with respect to providing such
assistance.
5.9
FINANCIAL INFORMATION. Seller shall provide to Buyer (a) by
January
31, 2005 the balance sheet and list of
accounts and notes receivable for each
Company as of December 31, 2004 and the
income statement for each Company for
the year ended December 31, 2004, and (b)
by February 21, 2005 the balance sheet
and list of accounts and notes receivable
for each Company as of January 31,
2005 and the income statement for each
Company for the period beginning January
1, 2005 and ending January 31, 2005;
provided, however, that all such statements
and lists will be subject to normal,
recurring year-end adjustments and will
lack notes. The financial statements
referred to in this Section 5.9 are herein
collectively referred to as the
"Post-Signing Financial Statements."
5.10
EMPLOYEES. Buyer shall offer employment to all employees of
Seller
who work at any of the Company sites
(except Dan Moore) at wages no less
favorable to the employees than their
current employment terms, and Seller shall
provide such assistance in connection
therewith as Buyer shall reasonably
request.
6. NONCOMPETITION
6.1
PROHIBITED ACTIVITIES:
(a) Except as set forth in the following paragraphs (b) and (e)
and
except to
the extent permitted in the disposal agreement between Buyer
and
D. H.
Griffin (or any of their Affiliates), neither Seller nor any of
the
Principals
(the "Restricted Parties"), shall for any reason whatsoever,
directly
or indirectly, for himself or on behalf of or in conjunction
with
any other
person, company, partnership, corporation or business of
whatever
kind or nature, whether as an officer, director, shareholder,
owner,
member, partner, joint venturer, lender, whether as an
employee,
independent contractor, consultant, advisor, or otherwise, or as a
sales
representative of, engage in the operation of, or own a direct or
indirect
interest
in, a landfill that accepts the disposal of loads of
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LIB: CHARLOTTE
19
<PAGE>
C&D
waste or a transfer station for C&D waste or a material
reclamation
center for
C&D waste and that is located within *** (the "Non-Compete
Area").
The parties, however, acknowledge and agree that the Restricted
Parties
(or one or more of their Affiliates) may engage in the
operation
of or own
a direct or indirect interest in MSW, LCID or other landfills
(but
excluding any LCID landfill that is greater than 2 acres in size,
if
it is
opened after Closing), transfer stations and material
reclamation
centers in
which incidental amounts of C&D waste may be discarded,
transferred, reclaimed or recycled as part of (and commingled with)
other
waste that
is not C&D waste, but any such landfills, transfer stations
or
material
reclamation centers in the Non-Compete Area may not receive for
disposal,
transfer, reclamation or recycling any loads that are entirely
or
primarily comprised of C&D waste.
(b) Notwithstanding Section 6.1(a), Seller (including through
an
Affiliate
thereof) may pursue and obtain the necessary permits and
approvals
from the applicable governmental agencies and authorities to
develop,
own and operate one or more Designated Sites (as defined in
6.1(c))
and develop, own and operate such Designated Sites, if within
one
year after
the Trigger Date, Seller offers to sell to Buyer (and Seller
shall be
required to so offer) Seller's interest in the Designated Site
and related
assets for a price, to be paid in immediately available funds,
equal to
the sum of (A) the product of *** multiplied by the Designated
Site's
projected annual EBITDA (as projected by Seller in good faith),
which
amount shall be paid to Seller at the time of consummation of
the
purchase
(th
