EXHIBIT 4.9
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made as of this 14th day of
January, 2003, by and between the parties designated on SCHEDULE A hereto
(collectively, the "SELLERS"), Capital Environmental Resource Inc., an Ontario
(Canada) corporation ("PARENT"), and Omni Waste, Inc., a Delaware corporation
("BUYER"). All capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in that certain Operating Agreement of
OMNI WASTE OF OSCEOLA COUNTY LLC (f/k/a Oak Hammock Disposal Company LLC, the
"COMPANY") dated November 22, 2000, as amended by an Amendment to the Articles
of Organization and Operating Agreement dated as of March 31, 2001 (the
"OPERATING AGREEMENT").
WHEREAS, the Sellers own Membership Interests in the Company representing
an aggregate of 76.5 Points and a Sharing Ratio of 76.5% (the "SUBJECT
MEMBERSHIP INTERESTS");
WHEREAS, the Sellers desire to sell to Buyer, and Buyer desires to
purchase from the Sellers, the Subject Membership Interests on the terms and
conditions set forth herein;
WHEREAS, concurrently with execution of this Agreement, Parent and Buyer
are entering into that certain Purchase Agreement (the "OTHER MEMBER'S PURCHASE
AGREEMENT"), by and between Parent, Buyer and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. (the
"OTHER MEMBER"), pursuant to the terms of which Buyer shall purchase from the
Other Member and the Other Member shall sell to Buyer, all of the Other Member's
Membership Interests in the Company on the terms set forth therein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 PURCHASE AND SALE
1.1 PURCHASE AND SALE.
(a) Upon the terms and subject to the conditions contained herein, and
in reliance on the representations, warranties, covenants, terms and conditions
of this Agreement, the Sellers shall sell, transfer and assign to Buyer the
Subject Membership Interests free and clear of all Liens, and shall cause Buyer
to be admitted as a Member of the Company with 76.5 Points and a Sharing Ratio
of 76.5% (without giving effect to the transactions contemplated by the Other
Member's Purchase Agreement), for an aggregate purchase price of fifty-seven
million three hundred seventy-five United States dollars (US $57,375,000) (the
"TOTAL CONSIDERATION"), payable PRO RATA to the Sellers based on the Sellers'
respective Points as set forth on SCHEDULE A hereto. The Total Consideration
shall be paid as follows: (i) $30,000,000 (evidenced by a promissory note
executed by Buyer and Parent and delivered to Sellers at Closing) shall be paid
to the Sellers on April 1, 2003 (PROVIDED that in the event the Closing has not
occurred by such date due to the Sellers' failure to satisfy the conditions to
Closing set forth in SECTIONS 4.1 or 4.11, such amount shall be paid to the
Sellers on the Closing Date (as defined in SECTION 1.2 hereof)), and (ii)
$27,375,000 (evidenced by a promissory note executed by Buyer and Parent and
delivered to Sellers at Closing) shall be paid to the Sellers upon the earlier
of January 1,
2004 and such date as the construction of the Landfill Site (as hereinafter
defined) is complete and the Landfill Site is open for commercial use. For
purposes of this SECTION 1.1(a), the "LANDFILL SITE" means the Class 1 solid
waste landfill site owned by the Company and located in Osceola County, Florida
with 24,000,000 cubic yards of air space. Any portion of the Total Consideration
paid in cash pursuant to this SECTION 1.1(a) shall be hereinafter referred to as
the "CASH CONSIDERATION."
(b) Each Seller shall, in its sole discretion, have the right to
receive up to 25% of such Seller's PRO RATA portion of the Total Consideration
in shares of Parent's Common Stock (the "STOCK CONSIDERATION"), upon delivery of
a written election to Parent no later than five (5) days prior to the Closing
Date, which Common Stock shall be valued at $4.00 per share for purposes of such
calculation. The Stock Consideration (and stock certificates representing such
Stock Consideration) shall be issued to any Seller electing to receive Stock
Consideration from Parent pursuant to this SECTION 1.1(b) (each, an "ELECTING
SELLER"), free and clear of any and all Liens, and shall be issued on the date
on which the Cash Consideration in lieu of which the Stock Consideration is
being paid; PROVIDED that the Stock Consideration shall be allocated to the Cash
Consideration payable under Sections 1.1(a)(i) and 1.1(a)(ii) in proportion to
the relative amounts payable under such Sections (such that, for example, if a
Seller elects to receive 25% of his or its PRO RATA portion of the Total
Consideration in the form of Stock Consideration, 25% of the Cash Consideration
payable under Section 1.1(a)(i) shall be issued in the form of Stock
Consideration on the date such Cash Consideration is payable under Section
1.1(a)(i) and 25% of the Cash Consideration payable under Section 1.1(a)(ii)
shall be issued in the form of Stock Consideration on the date such Cash
Consideration is payable under Section 1.1(a)(ii)).
(c) Upon execution and delivery of this Agreement by Sellers, Parent
shall pay on behalf of Buyer a deposit of five million United States dollars (US
$5,000,000) (the "DEPOSIT") to the Sellers PRO RATA based on the Sellers'
respective Points. If the Closing occurs, the Deposit shall be applied toward
that portion of the Total Consideration payable by Buyer pursuant to SECTION
1.1(a)(ii) hereof. Upon any termination of this Agreement pursuant to SECTION
7.1(d) hereof, the Deposit shall be returned to Parent by the Sellers within
five (5) business days after the effective date of termination. If this
Agreement is terminated pursuant to SECTION 7.1(a), SECTION 7.1(b) or SECTION
7.1(c) hereof, the Deposit shall be considered non-refundable and shall be and
remain the property of Sellers, free of any claim, right, title or interest of
Buyer or Parent.
1.2 CLOSING. The purchase and sale of the Shares (the "CLOSING") shall
take place at 10:00 a.m. EDT on the next day after all of the conditions to
closing set forth in SECTIONS 4 and 5 hereof have been satisfied or waived or
such other date as the parties may mutually agree (the "CLOSING DATE") at the
offices of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. At the Closing, the Sellers shall deliver instruments
evidencing the transfer of the Subject Membership Interests to Buyer in
consideration of the delivery of the promissory notes evidencing the obligation
by Buyer and Parent to pay the Cash Consideration in accordance with the terms
and conditions set forth in Section 1.1 hereof.
SECTION 2 REPRESENTATIONS; WARRANTIES AND COVENANTS OF THE SELLERS
Except as specifically set forth herein, Sellers do not make any other
representations or warranties. The Sellers, jointly and severally, hereby
represent and warrant to Buyer and Parent as of the date hereof:
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2.1 ORGANIZATION. The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Ohio, and is duly qualified or registered to do business as a foreign limited
liability company in Florida and, to the Sellers' Knowledge, in each
jurisdiction in which the failure to be so qualified could have a Material
Adverse Effect. The Company has the requisite power and authority to own and
hold its properties and to carry on its business as presently conducted.
Accurate and complete copies of the Articles of Organization and Operating
Agreement of the Company and all amendments thereto (the "GOVERNING DOCUMENTS")
have been furnished to Parent and/or its counsel and are attached hereto as
EXHIBIT A. No Seller is, and to the Sellers' Knowledge, no other party to the
Governing Documents is, in violation of any term or provision of the Governing
Documents. The Company is not in violation of any term or provision of any
agreement, instrument, judgment, decree or order by which it or its assets are
bound.
2.2 AUTHORIZATION AND NON-CONTRAVENTION.
(a) Each Seller has all requisite power, authority and capacity to
enter into this Agreement and each and every other agreement, certificate,
instrument and document to be executed and delivered by such Seller hereunder
and to perform such Seller's obligations hereunder and thereunder.
(b) This Agreement and all documents executed pursuant hereto and the
Operating Agreement are valid and binding obligations of each Seller,
enforceable in accordance with their respective terms.
(c) The admission of Buyer as a Member and the sale, transfer and
assignment of the Subject Membership Interests to Buyer by each Seller as
contemplated herein have been approved by all of the Members of the Company in
accordance with the terms of the Operating Agreement (including, without
limitation, the terms of SECTION 5.5, SECTION 6.1 and ARTICLE 7 thereof) and no
other consents or approvals of any governmental authority or other Person are
required in connection with the sale, transfer and assignment of the Subject
Membership Interests to Buyer or admission of Buyer as a Member pursuant to this
Agreement.
(d) The execution of this Agreement and the sale, transfer and
assignment of the Subject Membership Interests to Buyer pursuant to this
Agreement will not (i) violate, conflict with or result in a default under any
contract or obligation to which the Company or any Seller is a party or by which
any of them or their respective assets are bound, or any provision of the
Operating Agreement; (ii) cause the creation of any Lien upon any of the assets
of the Company or any Seller; (iii) violate or result in a violation of, or
constitute a default (whether after the giving of notice, lapse of time or both)
under, any provision of any law, regulation or rule, or any order of, or any
restriction imposed by, any court or other governmental agency applicable to the
Company or any Seller; (iv) except as set forth in SCHEDULE 2.2(d)(iv) hereto,
require from the Company or any Seller any notice to, declaration or filing with
any governmental authority or other third party; or (v) except as set forth in
SCHEDULE 2.2(d)(v) hereto, constitute a violation of, accelerate any obligation
under, or give rise to a right of revocation or termination of, any agreement or
Permit to which the Company is a party or by which the Company is bound.
2.3 CAPITALIZATION; OWNERSHIP.
(a) The Sellers own (beneficially and of record) and have the sole
unrestricted right, subject to the terms of the Operating Agreement, to sell the
Subject Membership Interests,
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free and clear of all Liens. Upon transfer to Buyer by the Sellers of the
Subject Membership Interests, Buyer will have good and marketable title to the
Subject Membership Interests, free and clear of all Liens. Except as provided in
the Operating Agreement, no Seller is a party to any, and, to the Sellers'
Knowledge, there are no, agreements, written or oral, relating to the
acquisition, disposition or voting of the securities of the Company. Effective
as of the Closing Date, by virtue of the transfer of the Subject Membership
Interests to Buyer, without taking into consideration the transactions
contemplated by the Other Member's Purchase Agreement, Buyer shall become a
Member of the Company with 76.5 Points and a Sharing Ratio of 76.5% and Buyer
shall have all of the preferences and rights of a Member set forth in the
Operating Agreement, including without limitation, Economic Rights and Voting
Rights commensurate with a 76.5% ownership interest in the Company, the right to
receive information about the Company and any other rights of a Member under the
Act.
(b) As of the date hereof, the authorized and outstanding Membership
Interests of the Company are held beneficially and of record by the Persons set
forth on SCHEDULE 2.3A hereof, and the Points of each Member are as set forth on
SCHEDULE 2.3B hereof. Except as contemplated under this Agreement, there are no
outstanding securities of the Company or any subscriptions, options, warrants,
agreements, arrangements or commitments of any kind for or relating to the
issuance or sale of, or outstanding securities convertible into or exchangeable
for, any securities of the Company. The Company has no obligation to purchase,
redeem, or otherwise acquire any of its equity interests or any interests
therein, except as provided in the Governing Documents.
(c) All Membership Interests have been offered, issued, sold and
delivered in material compliance with all applicable federal and state
securities laws and not in violation of any preemptive rights. The relative
rights, preferences, provisions, qualifications, limitations and restrictions in
respect of the Membership Interests are as set forth in the Governing Documents
and the Act.
(d) Except as set forth in the Operating Agreement, there are no (a)
preemptive rights, rights of first refusal, put or call rights or obligations or
anti-dilution rights with respect to the issuance, sale or redemption of the
Company's securities, including Membership Interests, and (b) no documents,
instruments or agreements, written or oral, relating to the acquisition,
disposition or voting of the Company's securities, including Membership
Interests, or restrictions on the transfer of the Company's securities,
including Membership Interests.
2.4 ABSENCE OF UNDISCLOSED LIABILITIES. The Sellers have delivered to
Parent an unaudited balance sheet of the Company as of January 9, 2003, a copy
of which is attached hereto as EXHIBIT B (the "BALANCE SHEET"). The Balance
Sheet has been prepared in accordance with accounting principles generally
accepted in the United States and fairly and accurately presents in all material
respects the financial position of the Company as of the date thereof. Except as
set forth in the Balance Sheet or in SCHEDULE 2.4, the Company does not have any
liabilities or obligations of any nature, whether accrued, absolute, contingent
or otherwise, asserted or unasserted, known or unknown (including, without
limitation, liabilities as guarantor or otherwise with respect to obligations of
others, or material liabilities for Taxes due or to become due, regardless of
whether claims in respect thereof had been asserted as of such date), except
liabilities and obligations incurred in the ordinary course of business
consistent with past practice. Since the date of the Balance Sheet, no event or
series of events have occurred which have had or are reasonably likely to have a
Material Adverse Effect. Following the date of the execution of this Agreement,
Buyer and Parent shall assume and be responsible for all costs,
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expenses and liabilities of the Company incurred, after such date, in the
ordinary course of business consistent with past practice; PROVIDED that any
such costs, expenses and liabilities to be so assumed by Buyer and Parent in
excess of US$10,000.00 shall be subject to prior written approval by Parent.
2.5 TITLE TO PROPERTIES. The Company has good, valid and marketable
title to all of the assets used or held for use in, or which are necessary to
conduct the business of the Company as currently conducted, free and clear of
all Liens, except as set forth on SCHEDULE 2.5 hereto, and none of such assets
is subject to any conditional sale agreement. There are no defaults by the
Company, or, to the Sellers' Knowledge, by any other party, under any agreements
that might interfere with the conduct of the Company's business as currently
conducted.
2.6 TAX MATTERS. The Company has timely and properly filed all
federal, state, local and foreign Tax returns required to be filed by it through
the date hereof, and has paid or caused to be paid all Taxes required to be paid
by it through the date hereof whether disputed or not, except Taxes which have
not yet accrued or otherwise become due. The Company has withheld and paid all
Taxes required to be withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, customer, creditor, member, or other
third party. For all periods since its inception, the Company has been
classified as a partnership for Federal income Tax purposes, and has taken all
action necessary to ensure that it is taxed as a partnership for Federal and
state income Tax purposes. All required Tax returns, including amendments to
date, have been prepared in good faith without negligence or willful
misrepresentation and are complete and accurate in all material respects. No
governmental entity has proposed (tentatively or definitively), asserted or
assessed or, to the Sellers' Knowledge, threatened to propose or assert, any
deficiency, assessment or claim for Taxes, and, to the Sellers' Knowledge, there
is no basis for any such delinquency, assessment or claim; and none of the
Company, any Seller, or any other Member of the Company has executed any waiver
of the statute of limitations for the assessment or collection of any Tax with
respect to the Company or its operations. In the event it is necessary for the
Company to file a final Tax return with respect to the period the Company was
owned by the Sellers, Parent and Buyer agree to cooperate with respect to any
information needed for such filing.
2.7 LITIGATION. With the exception of proceedings specifically
relating to the Pending Permits (as defined below) and except as otherwise set
forth in SCHEDULE 2.7 hereto, there is no action, claim, litigation or
governmental or administrative proceeding or investigation pending or, to the
Sellers' Knowledge, threatened (i) against the Company, (ii) affecting the
properties or assets of the Company, (iii) as to matters relating to the
Company, against any officer, director or member or key employee of the Company,
or (iv) which might call into question the validity of, hinder the
enforceability of, or otherwise restrict or limit the ability of any Seller to
perform its obligations under this Agreement.
2.8 ENVIRONMENTAL MATTERS. (i) No hazardous wastes, substances or
materials or oil or petroleum products have been generated, transported, used,
disposed of, stored or treated by the Company and (ii) to the Seller's
Knowledge, no hazardous wastes, substances or materials, or oil or petroleum
products have ever been released, discharged, disposed of, placed or stored
under or upon any real property ever owned, leased or operated by the Company.
The Company has complied with all applicable Environmental Laws (as defined
below). Except for proceedings and information requests specifically relating to
the Pending Permits, there is no pending or, to the Sellers' Knowledge,
threatened civil or criminal litigation,
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written notice of violation, formal administrative proceeding, or investigation,
inquiry or information request by any governmental entity, relating to any
Environmental Law involving the Company or any of its assets. To the Sellers'
Knowledge, the applications for the Pending Permits (copies of which have been
delivered to Buyer and Parent) set forth all environmental audits or assessments
undertaken by or on behalf of the Company or any governmental agency with
respect to the Company or its assets, employees, facilities or properties, the
results of groundwater and soil testing, the results of underground fuel, water
or waste tank tests and soil samples, and written communications with Federal,
state or local governments on environmental matters. For purposes of this
Agreement, "ENVIRONMENTAL LAW" means any federal, state or local law, statute,
rule or regulation or the common law relating to the protection of human health
or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), the
Resource Conservation and Recovery Act of 1976, and any statute, regulation or
order pertaining to (i) the treatment, storage, disposal, generation and
transportation of industrial, toxic or hazardous materials or substances or
solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater
and soil contamination; (iv) the release or threatened release into the
environment of industrial, toxic or hazardous materials or substances, or solid
or hazardous waste, including without limitation, emissions, discharges,
injections, spills, escapes or dumping of pollutants, contaminants, or
chemicals; (v) the protection of wildlife, marine life and wetlands, including
without limitation all endangered and threatened species; (vi) storage tanks,
vessels, abandoned or discarded barrels, containers and other closed
receptacles; (vii) the health and safety of employees and other Persons; and
(viii) the manufacture, processing, use, distribution, treatment, storage,
disposal, transportation or handling of pollutants, contaminants, toxic or
hazardous materials or substances or oil or petroleum products or solid or
hazardous waste. As used in this SECTION 2.8, the terms "release" and
"environment" shall have the meanings set forth in CERCLA.
2.9 PERMITS; COMPLIANCE WITH LAWS. The Company has obtained the
Permits set forth on SCHEDULE 2.9A (the "ISSUED PERMITS") and all such Issued
Permits are valid and in full force and effect, subject to appeal under
applicable laws and regulations after the date hereof. The Company has duly
applied for the Permits set forth on SCHEDULE 2.9B ("PENDING PERMITS"). Except
for the Issued Permits and the Pending Permits, to Seller's Knowledge, no other
Permits are necessary to conduct the business of the Company as currently
conducted or as proposed to be conducted, except as set forth on SCHEDULE 2.9C.
The Company is in material compliance with all applicable statutes, ordinances,
orders, rules and regulations promulgated by any federal, state, municipal or
other governmental authority, including, without limitation, the rules and
regulations of the Securities and Exchange Commission and the Environmental
Protection Agency. Except for requests for information, notices and inquiries
specifically relating to the Issued Permits and the Pending Permits, the Company
has never entered into or been subject to any judgment, consent decree,
compliance order or administrative order with respect to any aspect of the
business, affairs, properties or assets of the Company or received any request
for information, notice, demand letter, administrative inquiry or formal or
informal complaint or claim from any regulatory agency with respect to any
aspect of the business, affairs, properties or assets of the Company.
2.10 REAL ESTATE. SCHEDULE 2.10 sets forth an accurate, correct and
complete list of each parcel of real property owned by the Company (the "REAL
ESTATE"), including a street address, complete legal description and a list of
all contracts and agreements, oral or written, relating to or affecting the Real
Estate or any interest therein. The Sellers have delivered to Parent accurate,
correct and complete copies of all such contracts and agreements. The
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Company is the sole and exclusive legal and equitable owner of all right, title
and interest in and has good, marketable and insurable title in fee simple
absolute to, and is in possession of, all Real Estate which it purports to own.
Neither the whole nor any portion of any Real Estate or any real property
leased, occupied or used by the Company (the "LEASED REAL ESTATE") has been
condemned, requisitioned or otherwise taken by any public authority, and no
notice of any such condemnation, requisition or taking has been received by any
Seller or the Company. To the Sellers' Knowledge, no such condemnation,
requisition or taking is threatened or contemplated. To the Sellers' Knowledge,
there are no public improvements which may result in special assessments against
or otherwise affecting the Real Estate. To the Sellers' Knowledge, no fact or
condition exists which could result in the termination or impairment of access
to the Real Estate or the Leased Real Estate or discontinuation of sewer, water,
electric, gas, telephone, waste disposal or other utilities or services to the
extent such utilities currently exist at the Real Estate. The Sellers have
delivered to Parent complete copies of all existing title insurance policies,
title reports, and surveys, with respect to each parcel of Real Estate. To the
Sellers' Knowledge, the Company is not in violation of any zoning, building or
safety ordinance, regulation or requirement or other law or regulation
applicable to the operation of the Real Estate or the Leased Real Estate, nor
has it received any notice of such violation.
2.11 REAL ESTATE LEASES. SCHEDULE 2.11 sets forth an accurate, correct
and complete list of all real property leased or subleased by the Company,
including identification of the lease or sublease, street address, legal
description and list of contracts, agreements, leases, subleases, options and
commitments, oral or written, affecting such real property or any interest
therein to which the Company is a party or by which any of its interests in real
property is bound (the "REAL ESTATE LEASES"). The Company has been in peaceable
possession of the premises covered by each Real Estate Lease since the
commencement of the original term of such lease, and is not in default of, and
to the Seller's Knowledge no other party thereto is in default of, any such
lease. Each Seller has delivered to Parent accurate, correct and complete copies
of each Real Estate Lease and copies of existing title insurance policies, title
reports, surveys, environmental audits and similar reports, if any, for the real
property subject to the Real Estate Leases.
2.12 BROKER'S OR FINDER'S FEES. There are no brokerage commissions,
finder's fees or similar fees or commissions payable by any Seller or the
Company in connection with the transactions contemplated hereby.
2.13 INVESTMENT STATUS. Each Seller represents that it is an
"accredited investor" as such term is defined in Rule 501 under the Securities
Act. Each Electing Seller represents that it is acquiring such Stock
Consideration for its own account, for investment only and not with a view to,
or any present intention of, effecting a distribution of such securities or any
part thereof except pursuant to a registration statement or an available
exemption under applicable law. Each Electing Seller acknowledges that such
securities have not been registered under the Securities Act or the securities
laws of any state or other jurisdiction and cannot be disposed of unless they
are subsequently registered under the Securities Act and any applicable state
laws or unless an exemption from such registration is available. Each Electing
Seller (a) has such knowledge and experience in financial and business matters
so as to be capable of evaluating and understanding the merits and risks of an
investment in Parent, (b) has received certain information concerning Parent and
has had the opportunity to obtain additional information as desired in order to
evaluate the merits and the risks of an investment in Parent and (c) is able to
bear the economic risk of its investment in Parent and the Stock Consideration
in that, among other factors, such Electing Seller can afford to hold the Stock
Consideration for an
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indefinite period and can afford a complete loss of its investment in Parent.
Each Seller is a resident of the state set forth on SCHEDULE 2.13 hereto and the
offer and sale of the Stock Consideration to each such Seller will take place in
such state.
Each Seller understands that because the Stock Consideration has not been
registered under the Securities Act or securities or "blue sky" laws of any
jurisdiction, none of the Stock Consideration may be sold unless such Stock
Consideration is subsequently registered under the Securities Act or exemptions
from such registration are available. Each Seller acknowledges and understands
that it has no independent right to require Parent to register the Stock
Consideration. Each Seller understands that the certificate(s) representing the
Stock Consideration will bear a legend in substantially the form provided below
(in addition to any legend required under applicable state securities laws):
"THE SHARES REPRESENTED HEREBY MAY NOT BE PLEDGED, SOLD OR IN ANY
OTHER WAY TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
IN EFFECT AT THAT TIME, OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT."
SECTION 3 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer and Parent, jointly and severally, hereby represent and warrant to
the Sellers as of the date hereof:
3.1 INVESTMENT STATUS. Parent represents that it is an "accredited
investor" as such term is defined in Rule 501 under the Securities Act. Buyer
represents that it is purchasing the Subject Membership Interests for its own
account, for investment only and not with a view to, or any present intention
of, effecting a distribution of such securities or any part thereof except
pursuant to a registration statement or an available exemption under applicable
law. Buyer acknowledges that such securities have not been registered under the
Securities Act or the securities laws of any state or other jurisdiction and
cannot be disposed of unless they are subsequently registered under the
Securities Act and any applicable state laws or unless an exemption from such
registration is available. Buyer (a) has such knowledge and experience in
financial and business matters so as to be capable of evaluating and
understanding the merits and risks of an investment in the Company, (b) has
received certain information concerning the Company and has had the opportunity
to obtain additional information as desired in order to evaluate the merits and
the risks of an investment in the Company and (c) is able to bear the economic
risk of its investment in the Company and the Subject Membership Interests in
that, among other factors, Buyer can afford to hold the Subject Membership
Interests for an indefinite period and can afford a complete loss of its
investment in the Company.
3.2 AUTHORITY. Each of Buyer and Parent represents that it has full
right, authority and power under its charter and by-laws to enter into this
Agreement and each agreement, document and instrument to be executed and
delivered by or on behalf of Buyer and/or Parent pursuant to or as contemplated
by this Agreement and to carry out the transactions contemplated hereby and
thereby, and the execution, delivery and performance by Buyer and/or Parent of
this Agreement and each such other agreement, document and instrument have been
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duly authorized by all necessary action under their respective charter and
by-laws. This Agreement and each agreement, document and instrument executed and
delivered by Buyer and/or Parent pursuant to or as contemplated by this
Agreement constitute, or when executed and delivered will constitute, valid and
binding obligations of Buyer and/or Parent, as applicable, enforceable in
accordance with their respective terms.
3.3 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified or registered to do business as a foreign corporation in Florida
and in each jurisdiction in which the failure to be so qualified might call into
question the validity of, hinder the enforceability of, or otherwise restrict or
limit the ability of Buyer to perform its obligations under this Agreement.
Parent is a corporation duly organized, validly existing and in good standing
under the laws of Ontario, Canada.
3.4 SEC REPORTS. Parent has filed all forms and reports required to be
filed with the SEC since December 31, 2001 pursuant to the requirements of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and all rules
and regulations promulgated thereunder. All such forms and reports filed with
the SEC since December 31, 2001 have been prepared and filed on a timely basis
in accordance with the applicable requirements of the Exchange Act, and all
rules and regulations promulgated thereunder, and did not at the time they were
filed (or if amended or superseded by a filing prior to the date hereof, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein or in light of the circumstances under which they
were made, not misleading.
3.5 BROKER'S OR FINDER'S FEES. There are no brokerage commissions,
finder's fees or similar fees or commissions payable by Buyer or Parent in
connection with the transactions contemplated hereby.
3.6 LITIGATION. There is no action, claim, litigation or governmental
or administrative proceeding or investigation pending or, to Buyer's or Parent's
knowledge, threatened against Buyer or Parent which might call into question the
validity of, hinder the enforceability of, or otherwise restrict or limit the
ability of Buyer or Parent to perform its obligations under this Agreement.
SECTION 4 CLOSING CONDITIONS OF BUYER. Buyer's obligation to purchase and
Buyer's and Parent's obligation to pay for the Subject Membership Interests at
the Closing, and Parent's obligation to issue the Stock Consideration, shall be
subject to the fulfillment to Parent's satisfaction, or the waiver by Parent, on
or before the Closing Date of the following conditions:
4.1 REPRESENTATIONS, WARRANTIES, COVENANTS. The representations and
warranties of the Sellers contained in this Agreement shall be, if specifically
qualified by materiality or Material Adverse Effect, true in all respects and,
if not so qualified, shall be true in all material respects, in each case on and
as of the Closing Date with the same effect as if made on and as of the Closing
Date, and the covenants and agreements contained in this Agreement to be
complied with by the Sellers on or before the Closing Date shall have been
complied with in all material respects. The Sellers shall have delivered to
Buyer and Parent a certificate, executed by each of the Sellers, dated the
Closing Date to the foregoing effect.
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4.2 SUBJECT MEMBERSHIP INTERESTS. Each Seller shall have delivered to
Buyer and Parent instruments in form and substance satisfactory to Buyer and
Parent evidencing (a) the sale, transfer and assignment of the Subject
Membership Interests to Buyer, and properly vesting in Buyer title to, and
ownership of, the Subject Membership Interests free and clear of all Liens and
(b) admission of Buyer as a Member of the Company owning 76.5 Points,
representing a Sharing Ratio of 76.5%.
4.3 AUTHORIZATION. The Sellers shall have delivered to Buyer and
Parent written consents of each of the Members of the Company permitting the
sale, transfer and assignment of the Subject Membership Interests to Buyer and
the admission of Buyer as a Member of the Company.
4.4 PURCHASE AGREEMENT. The transactions contemplated under the Other
Member's Purchase Agreement shall have been consummated such that Buyer shall
own Membership Interests in the Company representing 100 Points with a Sharing
Ratio of 100%.
4.5 AMENDED OPERATING AGREEMENT. An Amendment to the Operating
Agreement shall have been duly executed by each Member in order to admit Buyer
as a Member of the Company and set forth the Points and Sharing Ratio of Buyer
as the sole Member and to effect the resignation of the Sellers' and the Other
Member's designees to the Company's Management Committee, such Amendment to be
in form and substance satisfactory to Parent in its sole discretion.
4.6 MATERIAL ADVERSE CHANGE. Since the date of this Agreement, no event or
series of events shall have occurred which has or is likely to have a Material
Adverse Effect.
4.7 OPINION OF COUNSEL. Buyer and Parent shall have received an opinion of
counsel to the Sellers, dated the Closing Date, in form and substance reasonably
satisfactory to Parent.
4.8 COMPLIANCE WITH LAW. The sale of the Subject Membership Interests to
Buyer shall be in conformity with all applicable state and federal securities
laws.
4.9 NO ORDERS. No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Closing or any of the other
transactions contemplated hereby shall be in effect.
4.10 CONSENTS. Buyer and Parent shall have obtained all authorizations,
consents and approvals of third parties, governments and governmental agencies
required for them to consummate the transactions contemplated hereby, including,
without limitation, all consents required under applicable federal and state
securities laws, and the expiration or termination of all applicable waiting
periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, each of which are set forth in SCHEDULE 4.10 hereto (collectively, the
"BUYER CONSENTS AND APPROVALS").
4.11 COUNTY WAIVER. The County of Osceola (the "COUNTY") shall have waived
in writing its right of first refusal as set forth in SCHEDULE 2.2(d)(v) hereto
with respect to the transactions contemplated hereby (the "RIGHT OF FIRST
REFUSAL") or said Right of First Refusal shall have expired by its terms without
exercise thereof by the County.
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4.12 ROYALTY AGREEMENT. The Company, the Sellers and the Other Member
shall have entered into a Royalty Agreement, substantially in the form of
EXHIBIT C hereto.
4.13 EMPLOYMENT AGREEMENT. The Company and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have
entered into an Employment Agreement reflecting the terms set forth on EXHIBIT D
hereto.
4.14 BRONSONS LAND. The Company shall have reached definitive agreement
with Bronsons to satisfy the Company's obligations under that certain Agreement
for Exchange of Real Property dated as of August 2, 1999 by and between the
Company and the Bronsons (the "BRONSONS AGREEMENT") (by exchange of the ▇▇▇▇▇▇
real property described therein or other alternative real property available to
the Company), upon satisfaction of which the Company shall acquire all right,
title and interest, free and clear of all Liens, in the real property owned by
Bronsons and identified in the Bronsons Agreement, under terms and conditions
reasonably satisfactory to Parent (provided that it shall be presumed that in
the event that the costs of satisfying the obligations do not exceed $300,000
the economic terms shall be deemed reasonable).
SECTION 5 CLOSING CONDITIONS OF SELLER. The Sellers' obligation to sell the
Subject Membership Interests at the Closing shall be subject to the fulfillment
to the Sellers' satisfaction, or the waiver by the Sellers, on or before the
Closing Date of the following conditions:
5.1 REPRESENTATIONS, WARRANTIES, COVENANTS. The representations and
warranties of Buyer and Parent contained in this Agreement shall be, if
specifically qualified by materiality, true in all respects and, if not so
qualified, shall be true in all material respects, in each case on and as of the
Closing Date with the same effect as if made on and as of the Closing Date, and
the covenants and agreements contained in this Agreement to be complied with by
Buyer and Parent on or before the Closing Date shall have been complied with in
all material respects. Buyer and Parent shall have delivered to Sellers a
certificate executed by each of them, dated the Closing Date, to the foregoing
effect.
5.2 PURCHASE PRICE. Parent shall have delivered to each Seller promissory
notes for the Cash Consideration as specified in Section 1.1 hereof and shall
have delivered to each Electing Seller, if any, instruments in form and
substance satisfactory to such Electing Seller evidencing the Stock
Consideration, in each case, in accordance with the terms and conditions of this
Agreement.
5.3 NO ORDERS. No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Closing or any of the other
transactions contemplated hereby shall be in effect.
5.4 COUNTY WAIVER. The County shall have waived in writing its Right of
First Refusal or said Right of First Refusal shall have expired by its terms
without exercise thereof by the County.
5.5 ROYALTY AGREEMENT. The Company, the Sellers and the Other Member shall
have entered into a Royalty Agreement, substantially in the form of EXHIBIT C
hereto.
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5.6 RELEASE FROM MORTGAGE. The Sellers and their principals shall have
been released at the Closing from their guarantees of the Company's mortgage
loan from Southern Community Bank.
SECTION 6 COVENANTS OF SELLER
6.1 NO SOLICITATION OF TRANSACTIONS; ASSISTANCE WITH OTHER MEMBERSHIP
INTERESTS.
(a) Each Seller covenants and agrees that it will not, directly or
indirectly, and will instruct its investment bankers, attorneys, accountants and
other advisers or representatives (collectively, the "REPRESENTATIVES") not to,
directly or indirectly, solicit, initiate or encourage (including by means of
furnishing non-public information), or take any other action to facilitate, any
inquiries or the making of any proposal or offer that constitutes, or may
reasonably be expected to lead to, any Competing Transaction, or enter into or
maintain or continue discussions or negotiate with any Person in furtherance of
such inquiries or to effect a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any Representative retained by it
to take any such action. For purposes of this Agreement, "COMPETING TRANSACTION"
shall mean the occurrence of a transaction resulting in any of the following:
(i) the sale, assignment or other Transfer by any Seller of any Membership
Interests (or interest therein) to any Person other than Buyer and/or Parent;
(ii) any Person other than Buyer and/or Parent becoming the beneficial owner,
directly or indirectly, of any of the Membership Interests; (iii) the merger or
consolidation of the Company with any other entity; or (iv) the sale or transfer
(in one transaction or a series of related transactions) of all or substantial
part of the assets of the Company.
(b) A Seller shall promptly advise Parent in writing of any offer of a
Competing Transaction, the material terms and conditions of such offer and the
identity of the Person making such offer.
6.2 ALL REASONABLE EFFORTS; AGREEMENT TO COOPERATE.
(a) Each Seller shall use its best efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, obtaining a waiver of the
County's Right of First Refusal by no later than March 15, 2003, satisfying the
condition to Closing set forth in SECTION 4.14 hereof, and obtaining all
consents and approvals required under the Governing Documents.
(b) Without limiting the generality of the foregoing, and
notwithstanding anything in this Agreement to the contrary, each Seller shall
use its commercially reasonable efforts to take or cause to be taken all action
and to do, or cause to be done, and to assist and cooperate with the other
parties hereto in doing, all things necessary, proper or advisable to obtain all
Pending Permits and all consents, amendments or waivers required in connection
with the transactions contemplated by this Agreement, including, without
limitation, all necessary consents, approvals and authorizations as are required
to be obtained under any federal or state law or regulation.
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SECTION 7 TERMINATION
7.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the Closing
Date, pursuant to a written notice of such termination, as follows:
(a) by mutual written consent of each of Parent and the Sellers;
(b) by Parent upon a material breach of any representation, warranty,
covenant or agreement on the part of any Seller set forth in this Agreement, or
if any representation or warranty made by any Seller in this Agreement shall
have become untrue or inaccurate in any material respect;
(c) by the Sellers (i) upon a material breach of any representation,
warranty, covenant or agreement on the part of Buyer or Parent set forth in this
Agreement, or if any representation or warranty made by Buyer or Parent in this
Agreement shall have become untrue or inaccurate in any material respect, or
(ii) if the Closing has not occurred on or before March 31, 2003 due to the
failure of Buyer and/or Parent to obtain the Buyer Consents and Approvals; and
(d) by Parent in the event Sellers have not satisfied the condition to
Closing set forth in SECTION 4.11 or SECTION 4.14 hereof on or before March 15,
2003.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to SECTION 7.1, this Agreement shall forthwith become void,
there shall be no liability under this Agreement on the part of Parent, Buyer or
the Sellers, and all rights and obligations of each party hereto shall cease;
PROVIDED that nothing herein shall relieve any party from liability for any
breach of any representation, warranty, covenant or agreement of such party
contained in this Agreement prior to the date of termination; and PROVIDED
FURTHER that nothing herein shall relieve the Sellers from their obligation to
return the Deposit pursuant to the third sentence of SECTION 1.1(c), if
applicable.
SECTION 8 INDEMNIFICATION
8.1 INDEMNIFICATION BY SELLERS. The Sellers agree, subsequent to the
Closing, to jointly and severally indemnify and hold harmless Buyer, Parent, the
Company and their respective subsidiaries and affiliates and persons serving as
managers, officers, directors, partners or employees of any of the foregoing
(individually a "BUYER INDEMNIFIED PARTY" and collectively the "BUYER
INDEMNIFIED PARTIES") from and against any damages, liabilities, losses, taxes,
fines, penalties, costs, and expenses (including, without limitation, reasonable
fees of counsel) of any kind or nature whatsoever (whether or not arising out of
third-party claims and including all amounts paid in the investigation, defense
or settlement of the foregoing) which may be sustained or suffered by any of
them arising out of or based upon any breach of any representation, warranty or
covenant of the Sellers under this Agreement or in any certificate, schedule or
exhibit delivered pursuant hereto, or by reason of any claim, action or
proceeding arising from any breach of such representations, warranties or
covenants.
8.2 LIMITATIONS ON INDEMNIFICATION BY SELLERS. Notwithstanding the
foregoing, the right of Buyer Indemnified Parties to indemnification under
SECTION 8.1 (other than with respect to a claim of fraud or intentional
misrepresentation) shall be subject to the following provisions:
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(a) No indemnification shall be payable to a Buyer Indemnified Party
with respect to any claim asserted pursuant to SECTION 8.1 after the eighteenth
(18th) month following the Closing Date (the "INDEMNIFICATION CUT-OFF DATE");
PROVIDED, HOWEVER, (i) the Indemnification Cut-Off Date for a claim of breach of
the representations and warranties set forth in SECTION 2.6 shall be the
applicable statute of limitations for such claim, (ii) the Indemnification
Cut-Off Date for a claim of breach of the representations and warranties set
forth in SECTION 2.8 shall be the earlier of the seventh (7th) anniversary of
the Closing Date and the applicable statute of limitations for such claim, and
(iii) the limitation on indemnification set forth in this SECTION 8.2(a) shall
not apply to a claim of breach of the representations and warranties set forth
in SECTIONS 2.1, 2.2(a), 2.2(b), 2.2(c) and 2.3.
(b) No indemnification shall be payable to any Buyer Indemnified
Party, except to the extent that the total of all claims for indemnification
pursuant to SECTION 8.1 exceeds $100,000 in the aggregate.
(c) The maximum aggregate amount of indemnification payable pursuant
to SECTION 8.1 to Buyer Indemnified Parties shall be the amount of the Total
Consideration actually paid to the Sellers by Buyer or Parent.
8.3 INDEMNIFICATION BY PARENT. Parent agrees to indemnify and hold the
Sellers and their respective heirs and legal representatives (the "SELLER
INDEMNIFIED PARTIES") harmless from and against any damages, liabilities, losses
and expenses (including, without limitation, reasonable fees of counsel) of any
kind or nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by any of them arising out of or
based upon any breach of any representation, warranty or covenant of Parent
and/or Buyer under this Agreement or in any certificate, schedule or exhibit
delivered pursuant hereto, or by reason of any claim, action or proceeding
arising from any breach of such representations, warranties or covenants.
8.4 LIMITATION ON INDEMNIFICATION BY PARENT. Notwithstanding the
foregoing, the right of Sellers to indemnification under SECTION 8.3 (other than
with respect to a claim of fraud or intentional misrepresentation) shall be
subject to the following provisions:
(a) No indemnification shall be payable with respect to claims
asserted pursuant to SECTION 8.3 after the eighteenth (18th) month following the
Closing Date; PROVIDED, HOWEVER, that the limitation on indemnification set
forth in this SECTION 8.4(a) shall not apply to a claim of breach of the
representations and warranties set forth in SECTIONS 3.2 and 3.3 hereof.
(b) No indemnification shall be payable pursuant to SECTION 8.3,
except to the extent the total of all claims for indemnification pursuant to
SECTION 8.3 shall exceed US $100,000 in the aggregate.
(c) The maximum aggregate amount of indemnification to be payable
pursuant to SECTION 8.3 to the Seller Indemnified Parties shall be limited to
the amount of the Total Consideration (to the extent due under this Agreement
but unpaid by Buyer or Parent).
8.5 NOTICE; DEFENSE OF CLAIMS. An indemnified party may make claims
for indemnification hereunder by giving written notice thereof to the
indemnifying party within the period in which indemnification claims can be made
hereunder promptly upon becoming aware of any such claim. If indemnification is
sought for a claim or liability asserted by a third party,
14
the indemnified party shall also give written notice thereof to the indemnifying
party promptly after it receives notice of the claim or liability being
asserted. The failure to provide prompt notice as required by the preceding
sentences shall not relieve the indemnifying party from any liability except to
the extent that it is prejudiced by the failure or delay in giving such notice.
Such notice shall summarize the bases for the claim for indemnification and any
claim or liability being asserted by a third party. Within thirty (30) days
after receiving such notice the indemnifying party shall give written notice to
the indemnified party stating whether it disputes the claim for indemnification
and whether it will defend against any third party claim or liability at its own
cost and expense. If the indemnifying party fails to give notice that it
disputes a non-third party indemnification claim within thirty (30) days after
receipt of notice thereof, it shall be deemed to have accepted and agreed to
such claim, which shall become immediately due and payable. The indemnifying
party shall be entitled to direct the defense against a third party claim or
liability with counsel selected by it (subject to the consent of the indemnified
party, which consent shall not be unreasonably withheld) as long as the
indemnifying party is conducting a good faith and diligent defense, and to
compromise or settle such claim exercising reasonable business judgment. The
indemnified party shall at all times have the right to fully participate in the
defense of a third party claim or liability at his or its own expense directly
or through counsel; PROVIDED that an indemnified party shall have the right to
retain its own counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if such indemnified party shall have reasonably concluded
that representation of such indemnified party or parties by the counsel retained
by the indemnifying party or parties would be inappropriate due to actual or
potential differing interests between such indemnified party or parties and any
other party represented by such counsel in such proceeding. If no such notice of
intent to dispute and defend a third party claim or liability is given by the
indemnifying party, or if such good faith and diligent defense is not being or
ceases to be conducted by the indemnifying party, the indemnified party shall
have the right, at the expense of the indemnifying party, to undertake the
defense of such claim or liability (with counsel selected by the indemnified
party), and to compromise or settle it, exercising reasonable business judgment.
If the third party claim or liability is one that by its nature cannot be
defended solely by the indemnifying party, then the indemnified party shall make
available such information and assistance as the indemnifying party may
reasonably request and shall cooperate with the indemnifying party in such
defense, at the expense of the indemnifying party.
8.6 SOLE AND EXCLUSIVE REMEDY. From and after the Closing, the sole
and exclusive remedy of the parties hereto with respect to all monetary claims
(other than a claim of fraud or intentional misrepresentation) relating to this
Agreement or the transactions contemplated hereby shall be the indemnification
provisions set forth in this SECTION 8; PROVIDED that the foregoing shall not
limit the right of Buyer and/or Parent to enforce their rights for a breach by
the Sellers of the covenants set forth in SECTION 6 hereof.
SECTION 9 GENERAL
9.1 PUBLICITY. No party other than Parent or Buyer shall issue any
press release or public announcement pertaining to this Agreement or the
transactions contemplated hereby. The Sellers shall keep the terms and substance
of this Agreement (including, without limitation, with respect to the payment
terms), and the other agreements, instruments and documents to be entered into
by and among the Sellers, Buyer and/or Parent in connection herewith or
otherwise contemplated hereby, in confidence and will not disclose or
communicate in any way any such information to any person or entity except as
permitted by Parent in advance and in writing.
15
9.2 AMENDMENTS, WAIVERS AND CONSENTS. For the purposes of this
Agreement and all agreements executed pursuant hereto, no course of dealing
between or among any of the parties hereto and no delay on the part of any party
hereto in exercising any rights hereunder or thereunder shall operate as a
waiver of the rights hereof and thereof. No provision hereof may be waived
otherwise than by a written instrument signed by the party or parties so waiving
such covenant or other provision. No amendment to this Agreement may be made
without the written consent of each of the parties hereto.
9.3 GOVERNING LAW. This Agreement shall be deemed to be a contract
made under, and shall be construed in accordance with, the laws of the State of
Florida, without giving effect to conflict of laws principles thereof.
9.4 SECTION HEADINGS AND GENDER. The descriptive headings in this
Agreement have been inserted for convenience only and shall not be deemed to
limit or otherwise affect the construction of any provision thereof or hereof.
The use in this Agreement of the masculine pronoun in reference to a party
hereto shall be deemed to include the feminine or neuter, and vice versa, as the
context may require.
9.5 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute but one and the same instrument.
One or more counterparts of this Agreement may be delivered via facsimile, with
the intention that they shall have the same effect as an original counterpart
hereof.
9.6 NOTICES AND DEMANDS. Any notice or demand which is required or
provided to be given under this Agreement shall be deemed to have been
sufficiently given and received for all purposes when delivered by hand or
facsimile with confirmation of receipt by the receiving machine, or five (5)
business days after being sent by certified or registered mail, postage and
charges prepaid, return receipt requested, or two (2) business days after being
sent by overnight delivery providing receipt of delivery, to the following
addresses (or at such other address designated a party to the other party in
writing):
if to a Seller, at such Seller's address as set forth on SCHEDULE
A hereto.
if to Parent or Buyer:
Capital Environmental Resources Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: General Counsel
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
16
9.7 JURISDICTION; VENUE; WAIVER OF JURY TRIAL.
(a) Each of the parties to this Agreement hereby agrees that the state
and federal courts of the State of Florida shall have exclusive jurisdiction to
hear and determine any claims or disputes between the parties hereto pertaining
directly or indirectly to this Agreement, and all documents, instruments and
agreements executed pursuant hereto, or to any matter arising hereunder (unless
otherwise expressly provided for herein or therein). To the extent permitted by
law, each party hereby expressly submits and consents in advance to such
jurisdiction in any action or proceeding commenced by any of the other parties
hereto in any of such courts, and agrees that service of such summons and
complaint or other process or papers may be made by registered or certified mail
addressed to such party at the address to which notices are to be sent pursuant
to this Agreement. Each of the parties waives any claim that Florida is an
inconvenient forum or an improper forum based on lack of venue. The choice of
forum set forth in this SECTION 9.7 shall not be deemed to preclude the
enforcement of any judgment obtained in such forum or the taking of any action
to enforce the same in any other appropriate jurisdiction.
(b) Each party hereto hereby waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with
this Agreement. Each party hereto (i) certifies that no representative, agent or
attorney of the other party has represented, expressly or otherwise, that the
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this SECTION 9.7.
9.8 REMEDIES; SEVERABILITY. It is specifically understood and agreed
that any breach of the provisions of this Agreement by any Person subject hereto
will result in irreparable injury to the other parties hereto, that the remedy
at law alone will be an inadequate remedy for such breach, and that, in addition
to any other remedies which they may have, such other parties may enforce their
respective rights by actions for specific performance in the federal or state
courts in State of Florida (to the extent permitted by law). Whenever possible,
each provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be deemed prohibited or invalid under such applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or the other provisions of this Agreement.
9.9 ENTIRE AGREEMENT; INTEGRATION. This Agreement, including the
exhibits, schedules, documents and instruments referred to herein, constitutes
the entire agreement, and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
9.10 SECTION 1031 EXCHANGE. So long as the Closing shall not be
delayed thereby and no additional expense shall be incurred by Buyer and/or
Parent, should any of the Sellers desire to structure a portion of this
transaction as a like-kind exchange under Section 1031 of the Internal Revenue
Code of 1986, as amended, provided that such Section can be properly applied to
the transaction contemplated hereby, Buyer agrees to cooperate fully in such
endeavor.
9.11 ASSIGNMENT. No party may assign its right or obligations under
this Agreement (by operation of law or otherwise). Notwithstanding the
foregoing, (i) a Seller may
17
assign its right to receive payment of the Cash Consideration (but not any Stock
Consideration) to his spouse, or his ancestors, descendents or siblings (each, a
"FAMILY MEMBER"), to a trust of which such Seller is the settlor and a trustee
for the benefit of such Seller or his Family Members, to such Seller's heirs,
executors or administrators or to a trust for the benefit of such Seller or his
Family Members, under his will (collectively, the "PERMITTED TRANSFEREES"),
provided that any such Permitted Transferee agrees in writing to be bound by and
subject to the terms and conditions of this Agreement; and (ii) Parent or Buyer
may assign its rights and obligations under this Agreement to any person or
entity without the consent of the Sellers.
SECTION 10 DEFINITIONS
Unless the context specifically requires otherwise, capitalized terms used
in this Agreement shall have the meaning specified below:
"ACT" means Chapter 1705 of the Ohio Revised Code and any successor
statute, as amended from time to time.
"LIEN" means any lien, claim, option, charge, pledge, mortgage, security
interest, voting agreement, trust, encumbrance, right or restriction of any
nature.
"MATERIAL ADVERSE EFFECT" means any change or effect that is materially
adverse to the properties, assets, business or condition (financial or
otherwise) of the Company. Material Adverse Effect shall not include the denial
or appeal of any Pending Permit.
"PERMITS" means any franchises, authorizations, approvals, orders,
consents, licenses, certificates, permits, registrations, qualifications or
other rights and privileges.
"PERSON" means any individual, association, corporation, partnership,
limited liability company, joint venture, estate, trust or unincorporated
organization or any government or any agency or political subdivision thereof
including, without limitation, any partner, officer, stockholder, director,
member or employee of such Person.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLERS' KNOWLEDGE," "KNOWLEDGE OF THE SELLERS" (or words of similar
import) means receipt of notice by, or actual or constructive knowledge of, any
Seller after due inquiry.
"SUBSIDIARY" means any corporation more than fifty percent (50%) of the
outstanding voting securities of which, or any partnership, joint venture or
other entity more than fifty percent (50%) of the total equity interest of
which, is directly or indirectly owned by the Company or any other entity
otherwise controlled by or under common control with the Company.
"TAXES" means any federal, state, local, foreign or other taxes, including
without limitation income taxes, estimated taxes, excise taxes, sales taxes, use
taxes, gross receipts taxes, franchise taxes, employment and payroll related
taxes, withholding taxes, stamp taxes, transfer taxes and property taxes,
whether or not measured in whole or in part by net income.
"TRANSFER" means any direct or indirect transfer, donation, sale,
assignment, or other disposal or attempted disposal of all or any portion of
Membership Interests.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be duly executed and delivered by their proper and duly authorized
representatives as of the day and year first above written.
SELLERS:
TDCOM LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and CEO
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
HMB LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
Title: Manager
CKK HOLDINGS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Member
PARENT:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Title: Chairman and Chief Executive Officer
BUYER:
OMNI WASTE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Title: President
[Signature Page to Other Members' Purchase Agreement]
AMENDMENT TO PURCHASE AGREEMENT
THIS AMENDMENT TO PURCHASE AGREEMENT (the "AMENDMENT") dated as of April
1, 2003 amends that certain Purchase Agreement (the "PURCHASE AGREEMENT") dated
January 14, 2003 by and among the undersigned parties named under the heading
"Sellers" on the signature page hereto (collectively, the "SELLERS"), Capital
Environmental Resource Inc., an Ontario (Canada) corporation ("PARENT"), and
Omni Waste, Inc., a Delaware corporation ("BUYER"). Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement.
WHEREAS, the parties hereto desire to amend the Purchase Agreement to
modify the amount and form of the consideration to be paid to the Sellers by
Buyer and Parent and the timing of the Closing.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The Purchase Agreement is hereby amended by striking in its entirety
Section 1.1 thereof and replacing such Section with the following:
"1.1 PURCHASE AND SALE.
(a) Upon the terms and subject to the conditions contained
herein, and in reliance on the representations, warranties,
covenants, terms and conditions of this Agreement, the Sellers shall
sell, transfer and assign to Buyer the Subject Membership Interests
free and clear of all Liens, and shall cause Buyer to be admitted as
a Member of the Company with 76.5 Points and a Sharing Ratio of
76.5% (without giving effect to the transactions contemplated by the
Other Member's Purchase Agreement), for an aggregate cash purchase
price of fifty-five million eight hundred twenty-five thousand
United States dollars (US $55,825,000) (the "TOTAL CONSIDERATION" or
"CASH CONSIDERATION"), payable PRO RATA to the Sellers based on the
Sellers' respective Points as set forth on SCHEDULE A hereto."
(b) Upon execution and delivery of this Agreement by Sellers,
Parent shall pay (on behalf of Buyer) a deposit of five million
United States dollars (US $5,000,000.00) (the "FIRST DEPOSIT") to
the Sellers PRO RATA based on the Sellers' respective Points."
2. The Purchase Agreement is hereby amended to remove any and all
references to "Stock Consideration" and any provisions applicable thereto, and
to change the references to "Stock Consideration" or issuance thereof shall
refer to the "Cash Consideration" and the
payment thereof. Further, any references to the payment of the Cash
Consideration in the form of a promissory note shall be amended to refer to the
payment of the Cash Consideration in cash.
3. The Purchase Agreement is hereby amended by striking in its entirety
Section 1.2 thereof and replacing such Section with the following:
"1.2 CLOSING. The purchase and sale of the Subject Membership
Interests (the "CLOSING") shall take place, subject to the
satisfaction or waiver of all of the conditions to closing set forth
in Sections 4 and 5 hereof, at 2:00 p.m. EST on or prior to May 1,
2003 or such other date as the parties may mutually agree (the
"CLOSING DATE") at the offices of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. At the
Closing, the Sellers shall deliver instruments evidencing the
transfer of the Subject Membership Interests to Buyer in
consideration of the payment by Buyer (or Parent on behalf of Buyer)
of the Cash Consideration in accordance with the terms and
conditions set forth in Section 1.1 hereof."
4. The Purchase Agreement is hereby amended as follows:
(a) by replacing the reference to "March 31, 2003" in Section
7.1(c)(ii) thereof with "May 1, 2003";
(b) by replacing the reference to "March 15, 2003" in Section 7.1(d)
thereof with "May 1, 2003"; and
(c) by deleting the second proviso of Section 7.2 of thereof.
5. In consideration of the execution and delivery of this Amendment by the
Sellers, Buyer (or Parent on behalf of Buyer) shall pay, on April 1, 2003, an
additional deposit of five million United States dollars (US $5,000,000.00) (the
"SECOND DEPOSIT," together with the First Deposit, the "DEPOSIT") to the Sellers
PRO RATA based on the Sellers' respective Points by wire transfer of immediately
available funds to an accounts designated by the Sellers. If the Closing occurs,
the Deposit shall be applied toward the Total Consideration payable by Buyer
pursuant to Section 1.1(a) of the Purchase Agreement (as amended by this
Amendment). Upon any termination of the Purchase Agreement pursuant to Section
7.1(d) thereof (as amended by this Amendment), the Deposit shall be returned to
Buyer by the Sellers within five (5) business days after the effective date of
termination. If the Purchase Agreement is terminated pursuant to Section 7.1(a),
Section 7.1(b) or Section 7.1(c) thereof, the Deposit shall be considered
non-refundable and shall be and remain the property of Sellers, free of any
claim, right, title or interest of Buyer or Parent. Notwithstanding any
provision to the contrary in the Purchase Agreement (as amended by this
Amendment), the termination of the Purchase Agreement shall not relieve the
Sellers from their obligation to return the Deposit in accordance with the
foregoing provisions of this Section 5.
6. The parties hereto acknowledge and agree that the Total Consideration
set forth in Section 1.1 of the Purchase Agreement (as amend by this Amendment)
reflects a reduction of the
2
purchase price otherwise payable to the Sellers by $50,000, which represents the
amount in excess of $300,000 payable to Bronsons in order to satisfy the
condition to Closing set forth in Section 4.14 of the Purchase Agreement.
7. The parties hereto acknowledge and agree that the condition to Closing
set forth in Section 4.11 of the Purchase Agreement has been fully satisfied.
8. Except as otherwise set forth herein, all other terms and conditions of
the Purchase Agreement shall remain in full force and effect. The Purchase
Agreement, including the exhibits, schedules, documents and instruments referred
to therein, as amended by this Amendment, constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter thereof and hereof.
9. This Amendment shall be governed by and construed in accordance with
the laws of the State of Florida, without regard to the conflict of laws
principles thereof. This Amendment may be executed in multiple counterparts,
each of which shall constitute but one and the same instrument. One or more
counterparts of this Amendment may be delivered via facsimile, with the
intention that they shall have the same effect as an original counterpart
hereof.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to be
duly executed and delivered by their proper and duly authorized representatives
as of the day and year first above written.
SELLERS:
TDCOM LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and CEO
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
HMB LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
Title: Manager
CKK HOLDINGS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
PARENT:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Title: EVP and General Counsel
BUYER:
OMNI WASTE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Title: EVP and General Counsel
SECOND AMENDMENT TO PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AGREEMENT (the "AMENDMENT") dated as of
May 1, 2003 amends that certain Purchase Agreement (as amended to date, the
"PURCHASE AGREEMENT"), dated January 14, 2003, by and among the undersigned
parties named under the heading "Sellers" on the signature page hereto
(collectively, the "SELLERS"), Capital Environmental Resource Inc., an Ontario
(Canada) corporation ("PARENT"), and Waste Services, Inc., a Delaware
corporation (f/k/a Omni Waste, Inc. "BUYER"), as amended on April 1, 2003.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Purchase Agreement.
WHEREAS, the parties hereto desire to amend the Purchase Agreement to
extend the timing of the Closing.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The Purchase Agreement is hereby amended by striking in its entirety
Section 1.2 thereof and replacing such Section with the following:
"1.2 CLOSING. Subject to the satisfaction or waiver of all of the
conditions to closing set forth in Sections 4 and 5 hereof, the
purchase and sale of the Subject Membership Interests (the
"CLOSING") shall take place at 5:00 p.m. Eastern Time on May 6, 2003
or such other date as the parties may mutually agree (the "CLOSING
DATE") at the offices of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. At the Closing,
the Sellers shall deliver instruments evidencing the transfer of the
Subject Membership Interests to Buyer in consideration of the
payment by Buyer (or Parent on behalf of Buyer) of the Cash
Consideration in accordance with the terms and conditions set forth
in Section 1.1 hereof."
2. The Purchase Agreement is hereby amended as follows:
(a) by replacing the reference to "May 1, 2003" in Section
7.1(c)(ii) thereof with "May 6, 2003"; and
(b) by replacing the reference to "May 1, 2003" in Section 7.1(d)
thereof with "May 6, 2003".
3. Except as otherwise set forth herein, all other terms and conditions of
the Purchase Agreement shall remain in full force and effect. The Purchase
Agreement, including the exhibits, schedules, documents and instruments referred
to therein, as amended by this Amendment, constitutes the entire agreement, and
supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter thereof and hereof.
4. The parties hereto agree and acknowledge that the sole purpose of this
Amendment is to change the Closing Date under the Purchase Agreement and that
this Amendment does not otherwise constitute a waiver of either parties' rights
or obligations thereunder.
5. This Amendment shall be governed by and construed in accordance with
the laws of the State of Florida, without regard to the conflict of laws
principles thereof. This Amendment may be executed in multiple counterparts,
each of which shall constitute but one and the same instrument. One or more
counterparts of this Amendment may be delivered via facsimile, with the
intention that they shall have the same effect as an original counterpart
hereof.
[Signature Page Follows]
2
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Agreement to be
duly executed and delivered by their proper and duly authorized representatives
as of the day and year first above written.
SELLERS:
TDCOM LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
HMB LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Jr.
Title: Manager
CKK HOLDINGS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
PARENT:
CAPITAL ENVIRONMENTAL RESOURCE INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Title: Chief Executive Officer
BUYER:
WASTE SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Title: President