Exhibit 10.1
Membership Interest Purchase Agreement
(Waste Services Industries, LLC)
This Membership Interest Purchase Agreement (this “Agreement”) is entered into
as of February 15, 2017 (the “Effective Date”), by and between Meridian Waste
Solutions, Inc., a New York corporation (“Buyer”), and Waste Services
Industries, LLC, a Delaware limited liability company (“Seller”). Buyer and
Seller are referred to collectively herein as the “Parties” and each a “Party.”
BACKGROUND FACTS
Seller owns all legal and beneficial right, title and interest in and to all of
the issued and outstanding membership interests of The CFS Group, LLC, a
Virginia limited liability company (“CFS Group”), The CFS Group Disposal &
Recycling Services, LLC, a Virginia limited liability company (“CFS Disposal”),
and RWG5, LLC, a Virginia limited liability company (“RWG5” and together with
CFS Group and CFS Disposal, the “Companies” and each a “Company”).
The Companies, collectively, (i) own fee simple title to approximately 200+/-
acres of real property located at 45 Old Mansion Road, Lunenburg Virginia,
23952, including all Improvements, structures and fixtures located thereon and
appurtenances thereto, as more particularly described in Exhibit A attached
hereto (the “Lunenburg Property”), which is operated as a municipal solid waste
landfill on the Lunenburg Property having not less than 250,000 cubic yards of
useable airspace at Closing (the “Lunenburg Landfill”), together with all
applicable state and local Permits, Governmental Authorizations, Consents,
Approvals, licenses, and any other permits and approvals necessary or required
to own, operate, develop and construct the Lunenburg Landfill; (ii) own fee
simple title to (A) approximately 83+/- acres of real property located at 390
Industrial Drive, Petersburg, Virginia, 23803, (B) approximately 2.926+/- acres
of real property located at 2053 North Factory Lane, Petersburg, Virginia 23803,
and (C) approximately 8.6471+/- acres of real property located at 350 Industrial
Drive, Petersburg, Virginia 23803, including all Improvements, structures and
fixtures located thereon and appurtenances thereto, as more particularly
described in Exhibit B attached here to (the “Petersburg Property”), which the
parcel described in the forgoing (A) is operated as a municipal solid waste
landfill on the Petersburg Property having not less than 2,477,000 cubic yards
of useable airspace at Closing (the “Petersburg Landfill”) and the parcels
described in the forgoing (B) and (C) are intended for use in the future
expansion of the Petersburg Landfill, together with all applicable state and
local Permits, Governmental Authorizations, Consents, Approvals, licenses, and
any other permits and approvals necessary or required to own, operate, develop
and construct the Petersburg Landfill; (iii) lease approximately 1.265+/- acres
of real property located at 337-B Industrial Drive, Petersburg, Virginia, 23803,
including all Improvements, structures and fixtures located thereon and
appurtenances thereto, as more particularly described in Exhibit C attached here
to (the “Transfer Station Property”), which is operated as a municipal solid
waste transfer station located on the Transfer Station Property (the “Transfer
Station”), together with all applicable state and local Permits, Governmental
Authorizations, Consents, Approvals, licenses, and any other permits and
approvals necessary or required to own or lease, operate, develop and construct
the Transfer Station; (iv) lease warehouse space in two buildings located at
333-B and 333-C Industrial Drive, Petersburg, Virginia 23803, as more
particularly described in Exhibit D attached here to (the “Hauling Company
Property”), which is operated as a residential, commercial roll-off, and front
load solid waste collection, transportation and disposal business (the “Hauling
Company Business”), together with all applicable state and local Permits,
Governmental Authorizations, Consents, Approvals, licenses, and any other
permits and approvals necessary or required to own or lease and operate the
Hauling Company Business; and (v) lease warehouse space located at 337
Industrial Drive, Petersburg, Virginia, 23803, as more particularly described in
Exhibit E attached hereto (the “DuPont Recycle Property”), which is operated as
a recycling facility for DuPont Tyvek post-industrial scrap collected by the
Hauling Company Business (the “DuPont Recycle Business”). The Lunenburg
Landfill, Petersburg Landfill, Transfer Station, Hauling Company Business and
DuPont Recycle Business are collectively, the “Businesses” and each a
“Business.” The Lunenburg Property, Petersburg Property, Transfer Station
Property, Hauling Company Property and DuPont Recycle Property are collectively,
the “Properties” and each a “Property.”
 
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Buyer desires to purchase and acquire from Seller all of the issued and
outstanding membership interests of the Companies, and Seller desires to sell
all of the issued and outstanding membership interests of the Companies to
Buyer, all in accordance with the terms and conditions set forth in this
Agreement.
RECITAL OF CONSIDERATION
Now, therefore, in consideration of the premises and the mutual covenants and
agreements contained herein, the receipt and sufficiency of which is hereby
acknowledged, the Parties, intending to be legally bound, agree as follows:
SECTION 1
DEFINITIONS AND USAGE
1.1 Definitions. For purposes of this Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, initially capitalized
terms used in this Agreement have the meanings set forth in Schedule 1.1.
1.2 Interpretation and Usage. In this Agreement, unless a clear contrary
intention appears: (a) the singular number includes the plural number and vice
versa; (b) reference to any Person includes such Person’s successors and assigns
but, if applicable, only if such successors and assigns are not prohibited by
this Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually; (c) reference to any gender
includes the other gender and the neuter, as applicable; (d) reference to any
agreement, document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof; (e) reference to any Legal Requirement means such Legal
Requirement as amended, modified, codified, replaced or reenacted, in whole or
in part, and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision of any
Legal Requirement means that provision of such Legal Requirement from time to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision; (f)
“hereunder,” “hereof,” “hereto,” and words of similar import will be deemed
references to this Agreement as a whole and not to any particular Section or
other provision hereof or any Exhibit or Schedule attached hereto; (g)
“including” (and with correlative meaning “include” and “includes”) means
including, without limiting the generality of any description preceding such
term, and will be deemed to be followed by the words “without limitation”; (h)
Section headings are provided for convenience of reference only and will not
affect the construction or interpretation of any provision hereof; (i) any
references to “Section”, “Schedule” or “Exhibit” followed by a number or letter
or combination of the two refers to the corresponding Section, Schedule or
Exhibit of or to this Agreement; (j) with respect to the determination of any
period of time, “from” means “from and including” and “to” means “to but
excluding”; and (k) references to documents, instruments or agreements will be
deemed to refer as well to all addenda, exhibits, schedules or amendments
thereto.
1.3 Legal Representation of the Parties. This Agreement was negotiated by the
Parties with the benefit of legal representation, and any rule of construction
or interpretation otherwise requiring this Agreement to be construed or
interpreted against any Party will not apply to any construction or
interpretation hereof.
1.4 Incorporation by Reference. The Parties agree that the Background Facts set
forth above are true and correct and are hereby incorporated herein by this
reference.
SECTION 2
PURCHASE OF THE MEMBERSHIP INTERESTS FROM THE SELLER
2.1 Purchase and Sale of Membership Interests. On and subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell to Buyer, all of the membership interests in the Companies, free
and clear of all Liens (the “Membership Interests”), for the consideration
specified in Section 2.2.
 
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2.2 Consideration. For and in consideration of the sale, assignment, transfer
and conveyance of the Membership Interests by Seller, Buyer agrees to pay to
Seller, as follows (the “Purchase Price”):
(i) Prior to the execution of this Agreement, Buyer has deposited with Seller
the sum of One Million Five Hundred Thousand and 00/100 DOLLARS ($1,500,000.00)
(the “Deposit”). The Deposit has been used by Seller to pay the amounts set
forth on Schedule 2.2(i) to the parties set forth on Schedule 2.2(i).
(ii) At the Closing, Forty Million and no/100 Dollars ($40,000,000.00) (the
“Cash Purchase Price”), less the Deposit and amounts payable pursuant to Section
2.4 and subject to the Working Capital Adjustment set forth at shall be
delivered by Buyer to Seller by wire transfer pursuant to the wiring
instructions set forth on Schedule 2.2(ii).
(iii) Five Hundred Thousand and no/100ths (500,000.00) shares of Buyer’s
restricted voting common stock, par value $0.025 per share (the “Purchase Price
Shares”), shall be issued to Seller at Closing.
(iv)            The Purchase Price shall be allocated in accordance with
Schedule 2.2(iv). After the Closing, the Parties shall make consistent use of
the allocation, fair market value and useful lives specified in Schedule 2.2(iv)
for all Tax purposes and in all filings, declarations and reports with the IRS
in respect thereof, including the reports required to be filed under Section
1060 of the Code. In any proceeding related to the determination of any Tax,
neither Buyer nor Seller shall contend or represent that such allocation is not
a correct allocation.
2.3 Closing Date. Unless Buyer and Seller otherwise agree, the purchase and sale
of the Membership Interests will take place by facsimile transmission or by
electronic mail in PDF format of all required documents (with the original
executed documents to be delivered by overnight courier) to the offices of
Richard J. Dreger, located at 11660 Alpharetta Highway, Building 700, Suite 730,
Roswell, Georgia 30076, and will occur within five Business Days after
satisfaction of the required conditions as set forth in this Agreement (“Closing
Date” or “Closing”). At Closing, all of Seller’s right, title and interest in
and to the Membership Interests and in any such right, title or interest that
Seller may have or had with respect to the Businesses will be transferred and
conveyed to Buyer free and clear of all Liens. 
2.4           Payment of Current Seller Liabilities; Retained Liabilities.
Schedule 2.4 (to be updated immediately prior to Closing) lists (i) the amount
of the aggregate Indebtedness of the Companies outstanding on the Closing Date,
all of which is to be paid at the Closing together with all prepayment penalties
and costs incurred or to be incurred in connection with the repayment of any
such Indebtedness; (ii) the aggregate amount of all undischarged judgments
against the Companies; (iii) the aggregate amount of all obligations secured by
Tax Liens against the Companies as of the Closing Date; (iv) the total of the
aggregate mortgage debt secured by, and the judgment Liens encumbering, and the
federal Tax Liens filed against, any of the Assets, including the Properties as
of the Closing Date, (v) any obligation of the Companies as of the Closing Date
to reimburse or advance amounts to any officer, director, manager, employee or
agent of the Companies, (vi) all Accounts Payable for goods or services received
by or performed for the benefit of the Companies entirely prior to the Closing
Date, and (vii) the amount of any and all accrued obligations of the Companies
as of the Closing Date pursuant to: any employment, severance, retention or
termination agreement or Contract to which any Company is a party, any bonus
program or plan of any Company, all Employee Benefit Plans of the Companies and
all other employee benefit plans and other employee benefits with respect to
employees of any Company, and any Company obligation relating to payroll,
vacation, sick leave, workers’ compensation, unemployment benefits, pension
benefits, employee stock option or profit-sharing plans, health care plans or
benefits or any other employee plans or benefits of any kind for the current or
former employees of the Companies (subsections (i)-(vii) collectively, “Current
Seller Liabilities” and each a “Current Seller Liability”); (viii) any Liability
arising out of or relating to services performed by the Companies in connection
with the Businesses entirely before the Closing Date; (ix) any Liability under
any Company Contract that arises after the Closing Date out of or relating to
any Breach or other action that occurred entirely before the Closing Date; (x)
any Liability under any Excluded Contract; (xi) any Liability for (A) any Taxes
relating to or arising as a result of the operation of the Businesses prior to
the Closing Date, and (B) any Tax Liability of Seller that will arise as a
result of the sale of the Membership Interests pursuant to this Agreement; (xii)
(A) any Liability arising out of or relating to any Company employee grievance
arising out of or relating to events or actions that occurred entirely before
Closing, and (B) any Liability to indemnify, reimburse or advance amounts to any
officer, director, member, manager, employee or agent of the Companies arising
out of or relating to events or actions that occurred entirely before Closing;
(xiii) any Liability arising out of any Current Litigation Matters; and (xiv)
any Liability of Seller or the Companies based upon Seller’s acts occurring
after the Closing Date (collectively, subsections (viii) – (xiv) the “Retained
Liabilities”). Schedule 2.4, when delivered and updated at Closing by the
Parties, will include wire transfer instructions for creditors holding
Indebtedness and any other Current Seller Liabilities, and attached to Schedule
2.4 will be pay-off letters or instructions from such creditors or other payees.
On or prior to the Closing, Seller will pay all Current Seller Liabilities not
previously discharged by Seller by deduction from the Purchase Price the amounts
listed on Schedule 2.4 and pursuant to the pay-off letters or instructions from
such creditors attached to Schedule 2.4. Following the Closing, Seller will
promptly obtain and file all applicable Lien discharges for any Lien encumbering
any Asset from all applicable creditors and deliver copies of such filings to
Buyer. All Current Seller Liabilities and Retained Liabilities shall remain the
exclusive responsibility of Seller and will be assigned to, retained, paid,
performed and discharged exclusively by Seller and will not be retained by the
Companies nor assumed or acquired by, or conveyed or transferred to, Buyer or
any Related Person of Buyer.
 
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2.5 Closing Obligations.
(a) Deliveries by Seller. At the Closing, Seller will deliver to Buyer: (i) the
various certificates, instruments, and documents referred to in Section 6.1.
(b) Deliveries by Buyer. At the Closing, Buyer will deliver to Seller: (i) the
various certificates, instruments, and documents referred to in Section 6.2; and
(ii) the applicable consideration specified in Section 2.2.
2.6           
Working Capital Adjustments. The Cash Purchase Price shall be adjusted by the
“Working Capital Adjustment”, which shall be determined as follows:
(i)           Increased by the following amounts:
 
A.
Prepaid items representing the expenses incurred by the Companies in the
Ordinary Course of Business prior to the Closing Date for services to be
performed or goods to be received, in whole or in part, after the Closing Date,
as set forth on Schedule 2.6(i)(A).
B.
Outstanding Accounts Receivable of the Companies as of the Closing Date, which
are set forth on Schedule 2.6(i)(B). For the purposes of calculating the
Estimated Working Capital Adjustment, the outstanding Accounts Receivable of the
Companies as of the Closing Date shall be based upon the following aging
categories and amounts:
 
(1)
95% of the Accounts Receivables outstanding for 30 days or less as of the
Closing Date;
 
(2)
70% of the Accounts Receivables outstanding for more 30 days but less than 60
days as of the Closing Date; and
 
(3)
25% of the Accounts Receivables outstanding for more 60 days but less than 90
days as of the Closing Date.
 
Notwithstanding the foregoing calculation method with respect to the Estimated
Working Capital Adjustment, for the purposes of calculating the Final Working
Capital Determination and the Final Statement, the value of the outstanding
Accounts Receivable of the Companies as of the Closing Date shall equal the
amounts actually collected within 90 days after the Closing Date with respect to
the specific Accounts Receivable set forth on Schedule 2.6(i)(B).
 
 
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 (ii)           Decreased by the following amounts:
 
A.
The amount of any deferred revenue or prepaid income for services to be
performed in connection with the Ordinary Course of Business of the Companies on
or after the Closing Date as described on Schedule 2.6(ii)(A).
 
B.
The amounts set forth on Schedule 2.6(ii)(B) which constitute the remaining
amounts to be paid on or after the Closing Date for the current terms of the
equipment leases described on Schedule 2.6(ii)(B).
 
Five (5) business days prior to the Closing, Seller shall have delivered to
Buyer the estimated Working Capital Adjustment (the “Estimated Working Capital
Adjustment”), which shall be attached to this Agreement as Schedule 2.6 used for
determining the preliminary amount of the Working Capital Adjustment paid to
Seller at Closing.
Within ninety (90) calendar days after the Closing Date, Buyer shall prepare and
deliver to Seller: (i) a balance sheet as of the Closing Date (the “Closing Date
Balance Sheet”), and (ii) a statement reflecting Buyer’s determination of the
Working Capital Adjustment as of the Closing Date (the “Final Working Capital
Determination”) and the calculation thereof (the “Final Statement”). Buyer shall
provide Seller with access to copies of all work papers and other relevant
documents to verify the entries contained in the Closing Date Balance Sheet and
the Final Statement. Seller shall have a period of thirty (30) calendar days
after delivery of the Closing Date Balance Sheet and the Final Statement to
review them and make any written objections Seller may have in writing to Buyer.
If written objections to the Closing Date Balance Sheet and Final Statement are
delivered to Buyer within such thirty (30) day period, then Buyer and Seller
shall attempt to resolve the matter or matters in dispute. If no written
objections are made by Seller within such thirty (30) day period, the Final Net
Working Capital Determination shall be deemed accepted by Seller and the
Purchase Price shall be adjusted by the amount of the Working Capital Adjustment
pursuant to the Final Statement.
If disputes with Final Working Capital Determination cannot be resolved by Buyer
and Seller within thirty (30) calendar days after the delivery of Seller’s
objections to the Closing Date Balance Sheet or the Final Statement, then the
specific matters in dispute (the “Disputed Amounts”), along with each party’s
written calculation of the Final Working Capital Determination, the Closing Date
Balance Sheet, the Final Statement, Seller’s written objections, and all work
papers related thereto (the “Determination Materials”) shall be submitted to an
independent certified accounting firm (the “Accounting Arbitrator”) with an
office in Richmond, Virginia mutually agreed to by the Parties. The Accounting
Arbitrator shall review the Determination Materials and shall determine, in
accordance with this paragraph, the Final Working Capital Determination (and any
adjustment, if any, shall only be based upon the Disputed Amounts), which may
not be outside the range comprised of the parties Final Working Capital
Determinations, and which shall be final, binding and non-appealable. Within
five (5) calendar days after delivery of such opinion to Buyer and Seller, the
Purchase Price shall be adjusted by the amount of the Final Working Capital
Determination by the Accounting Arbitrator. All fees and other costs charged by
the Accounting Arbitrator shall be borne based upon the percentage that the
amount actually contested but not awarded to Seller or Buyer, respectively,
bears to the aggregate amount actually contested by Seller and Buyer.
 
If the Final Net Working Capital Determination is less than the Estimated
Working Capital Adjustment, Seller shall pay the amount of such shortfall to
Purchaser within ten (10) days of the deemed acceptance of the Final Net Working
Capital Determination or the receipt of the Final Working Capital Determination
from the Accounting Arbitrator, as the case may be. If the Final Net Working
Capital Determination is greater than the Estimated Working Capital Adjustment,
Purchaser shall pay Seller the amount of such difference within ten (10) days of
the deemed acceptance of the Final Net Working Capital Determination or the
receipt of the Final Working Capital Determination from the Accounting
Arbitrator, as the case may be. The parties shall make any deliveries or payment
required by this Section 2.6 within ten (10) days after (i) any undisputed
portion of the Final Net Working Capital Determination is deemed accepted by
Seller, and (ii) for the Disputed Amounts, the determination of the Final
Working Capital Determination. Any payments made pursuant to this paragraph
shall be treated for all purposes as an adjustment to the Purchase Price.
 
 
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In the event any amount from any of the Accounts Receivable set forth on
Schedule 2.6(i)(B) is not actually collected by the Companies within 90 days
after the Closing Date (and the failure of such collection is taken into account
in connection with the Final Working Capital Determination) but is subsequently
collected by the Companies, the Companies shall pay such amount to Seller within
5 Business Days of receipt thereof. The Companies shall bill and send invoices
with respect to all Accounts Receivable set forth on Schedule 2.6(i)(B) in the
ordinary course consistent with the past practice of the Companies but shall
have no further duties to collect such Accounts Receivable. All amounts
collected by the Companies from any customer or affiliate of a customer owing
amounts related to any of the Accounts Receivable set forth on Schedule
2.6(i)(B) shall apply to the oldest outstanding invoices of such customer or its
affiliate first.
 
2.7 Closing Costs; Expenses.
(a) Seller agrees to pay all documentary stamp tax or other transfer taxes
relating to the transfer of the Membership Interests to Buyer. Seller shall be
solely responsible for all State or Federal income Taxes or similar Taxes
imposed on Seller as a result of the Contemplated Transactions. Seller
acknowledges and agrees that neither the Buyer nor the Companies shall have a
duty or obligation to pay any Taxes attributable to Seller as a result of the
purchase and sale of the Membership Interests.
(b) Each Party shall be solely responsible for any legal or accounting fees,
brokerage or finders’ fees or agents’ commissions or other similar payments
incurred by or agreed to by such Party in connection with the execution and
delivery of this Agreement or the completion of the Contemplated Transactions.
(c) Property taxes, transaction privilege taxes and periodic fees, if any,
related to the ownership or operation of the Property, Assets or the Business
(but not State or Federal income taxes) and all other applicable taxes and
assessments related to the Assets, Businesses and Properties will be prorated;
provided, however, that if the rate and/or amount of the taxes for the year of
the Closing are not available on the Closing Date, such taxes will be prorated
based upon the prior tax year’s assessment. Seller will be responsible for all
such taxes attributable to the Assets, Business and Property through the Closing
Date and Buyer will be responsible for all such taxes attributable to the Assets
from and after the Closing Date. If Buyer undertakes any dispute, protest or
request for reassessment with respect to all or any portion of taxes for the tax
year in which the Closing occurs, or any previous year, any refund relating to
any previous year will be the property of Seller, and any refund relating to the
tax year in which the Closing occurs (reduced by the out-of-pocket costs
incurred in regard to such dispute, protest or request for reassessment) will be
prorated between Seller and Buyer as of the Closing Date.
(d) Payroll obligations, including salaries and payroll taxes will be prorated
at Closing.
SECTION 3
REPRESENTATIONS AND WARRANTIES CONCERNING
PURCHASE AND SALE OF THE MEMBERSHIP INTERESTS OF THE COMPANIES
3.1 Representations and Warranties of Seller. In order to induce Buyer to enter
into this Agreement and consummate the Contemplated Transactions, Seller
represents and warrants to Buyer as follows:
(a) Organization of Seller. Seller is a limited liability company duly
organized, validly existing, and in good standing under the laws of the State of
Delaware. Seller is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is required, except
those jurisdictions where the failure to qualify would not have a Material
Adverse Effect.
 
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(b) Authorization of Transaction. Seller has full power and legal capacity to
execute and deliver this Agreement, and all other agreements and written
instruments to which Seller is a party as contemplated hereby, and to perform
its obligations hereunder and thereunder. This Agreement, and such other
agreements and written instruments, constitute the valid and legally binding
obligations of Seller, enforceable in accordance with their terms and
conditions, except as enforcement thereof may be limited by applicable
Insolvency Laws. The execution, delivery, and performance of this Agreement and
all other agreements contemplated hereby have been duly authorized by Seller.
Seller has all right, power and capacity to execute and deliver this Agreement,
and all other agreements, documents and written instruments to be executed by
Seller in connection with the Contemplated Transactions, and to perform its
obligations under this Agreement and all such other agreements, documents and
written instruments.
(c) No Conflict with Restrictions; No Default. Except as set forth on Schedule
3.1(c), neither the execution, delivery, and performance of this Agreement nor
Seller’s performance of and compliance with the terms and provisions
contemplated hereby (i) will conflict with, violate, or result in a Breach of
any of the terms, covenants, conditions, or provisions of any Legal Requirements
in effect on the date hereof applicable to, or any Order, Consent or
Governmental Authorization of any Governmental Body directed to, or binding on
Seller, (ii) will conflict with, violate, result in a Breach of, or constitute a
default under any of the terms, conditions, or provisions of any agreement or
instrument to which, Seller is a party or by which Seller is or may be bound or
to which any of their properties or assets is subject, (iii) will conflict with,
violate, result in a Breach of, constitute a default under (whether with notice
or lapse of time or both), accelerate or permit the acceleration of the
performance required by, give to others any material interests or rights, or
require any Consent under any indenture, mortgage, lease agreement, or
instrument to which either Seller is a party or by which Seller or Seller’s
property or assets is or may be bound, or (iv) will result in the creation or
imposition of any Lien upon any of the Properties or Assets of the Companies, or
upon the Membership Interests, or cause Buyer (or any Related Person thereof) or
the Companies to become subject to, or to become liable for the payment of, any
Tax.
(d) Consents; Governmental Authorizations. Except as set forth on Schedule
3.1(d), Seller is not required to give any notice to, or obtain any Consent
from, any Person in connection with the execution and delivery of this Agreement
or the consummation of any of the Contemplated Transactions. Any registration,
declaration, or filing with, or Consent, or Governmental Authorization or Order
by any Governmental Body that is required in connection with the valid
execution, delivery, acceptance, and performance by Seller under this Agreement
or the consummation by Seller of any transaction contemplated hereby will be
completed, made, or obtained on or before the Closing Date.
(e) Litigation. Except as set forth in Schedule 3.1(e), there are no Proceedings
pending or, to the Knowledge of Seller and the Companies, threatened against or
affecting Seller or any of their properties, assets, rights, or businesses in
any court or before or by any Governmental Body that could, if adversely
determined (or, in the case of an investigation, could lead to any Proceeding
that could, if adversely determined), reasonably be expected to materially
impair Seller’s ability to perform its obligations under this Agreement or to
have a Material Adverse Effect on the Companies; and Seller has not received any
currently effective notice of any default, and Seller is not in default, under
any applicable Order of any Governmental Body that could reasonably be expected
to impair Seller’s ability to perform its obligations under this Agreement or to
have a Material Adverse Effect on the Companies.
(f) Brokers’ Fees. Seller has no obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the Contemplated Transactions.
(g) Membership Interests. As of the Closing Date, Seller will hold of record and
will own beneficially all of the issued and outstanding Membership Interests of
the Companies as described in Section 4.2, free and clear of any restrictions on
transfer (other than any restrictions under the Securities Act and state
securities laws), Taxes, Liens, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. Seller is not a party to any option,
warrant, purchase right, or other Contract or commitment that could require
Seller to sell, transfer, or otherwise dispose of any Membership Interests or
other equity interests of the Companies (other than this Agreement). Seller is
not a party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any of the Membership Interests of the Companies. At
Closing, upon payment of the Purchase Price as herein provided pursuant to
Section 2.2, good and valid title to the Membership Interests described in
Section 4.2 will pass to Buyer, free and clear of all Liens, restrictions on
transfer (other than any restrictions under the Securities Act and state
securities laws), Taxes, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands.
 
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(h) Exempt Transaction. Assuming the accuracy of the representations and
warranties of Buyer set forth in Section 3.2, the sale and exchange of the
Membership Interests of the Companies as contemplated herein will be exempt from
the registration requirements of the Securities Act, and will be exempt from
registration and qualification under the registration or qualification
requirements of all applicable state securities laws. Seller has not taken and
will not take any action that would cause the loss of any such exemption.
Assuming the accuracy of the representations and warranties of Buyer set forth
in Section 3.2, the sale and exchange of the Membership Interests of the
Companies as contemplated herein will comply with all applicable Legal
Requirements.
3.2 Representations and Warranties of Buyer. Buyer represents and warrants to
Seller that the statements contained in this Section 3.2 are correct and
complete:
(a) Organization of Buyer. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of New York. Buyer is
duly authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required, except those
jurisdictions where the failure to qualify would not have a Material Adverse
Effect.
(b) Authorization of Transaction. Buyer has full power and authority to execute
and deliver this Agreement, and all other agreements and written instruments to
which Buyer is a party as contemplated hereby, and to perform its obligations
hereunder and thereunder. This Agreement, and such other agreements and written
instruments, constitutes the valid and legally binding obligation of Buyer,
enforceable in accordance with its terms and conditions, except as enforcement
thereof may be limited by applicable Insolvency Laws. The execution, delivery,
and performance of this Agreement and all other agreements contemplated hereby
have been duly authorized by Buyer. Buyer has all right, power and capacity to
execute and deliver this Agreement, and all other agreements, documents and
written instruments to be executed by Buyer in connection with the Contemplated
Transactions, and to perform its obligations under this Agreement and all such
other agreements, documents and written instruments.
(c) Notices and Consents. Except as set forth on Schedule 3.2(c), Buyer is not
required to give any notice to, or obtain any Consent from, any Person in
connection with the execution and delivery of this Agreement or the consummation
of any of the Contemplated Transactions.
(d) Litigation. There are no Proceedings pending or, to the Knowledge of Buyer,
threatened against or affecting Buyer or any of its properties, assets, rights,
or businesses in any court or before or by any Governmental Body that could, if
adversely determined (or, in the case of an investigation, could lead to any
Proceeding that could, if adversely determined), reasonably be expected to
materially impair Buyer’s ability to perform its obligations under this
Agreement; and Buyer has not received any currently effective written notice of
any default, and Buyer is not in default, under any applicable Order of any
Governmental Body that could reasonably be expected to impair Buyer’s ability to
perform its obligations under this Agreement.
(e)           Taxes and Tax Returns. Except as shown on Schedule 3.2(e), each of
Buyer and its subsidiaries has duly and timely filed (including all applicable
extensions) all material Tax returns required to be filed by it on or before the
Effective Date (all such returns being accurate and complete in all material
respects), has paid all Taxes shown thereon as arising and has duly paid or made
provision for the payment of all Taxes that have been incurred or are due or
claimed to be due from it by federal, state, foreign or local taxing authorities
other than Taxes that are not yet delinquent or are being contested in good
faith, have not been finally determined and have been adequately reserved
against. Except as shown on Schedule 3.2(e), there are no material disputes
pending, or claims asserted, for Taxes or assessments upon Buyer or any of its
subsidiaries for which Buyer does not have reserves that are adequate under
GAAP.
 
8

 
 
(f)    Environmental Liability. Except as disclosed in the SEC Documents, there
are no legal, administrative, arbitral or other Proceedings, claims, actions,
causes of action, orders, assessments (including penalty assessments) or notices
of any kind with respect to any environmental, health or safety matters or any
private or governmental environmental, health or safety investigations or
remediation activities of any nature seeking to impose, or that are reasonably
likely to result in, any liability or obligation of Buyer or any of its
subsidiaries arising under common law or under any local, state or federal
environmental, health or safety statute, regulation or ordinance, including
CERCLA, pending or, to Buyer’s Knowledge, threatened against Buyer or any of its
subsidiaries. To the Knowledge of Buyer, there is no reasonable basis for, or
circumstances that are reasonably likely to give rise to, any such proceeding,
claim, action, investigation or remediation by any governmental entity or any
third party that would give rise to any liability or obligation on the part of
Buyer or any of its subsidiaries. Neither Buyer nor any of its subsidiaries is
subject to any agreement, order, judgment, decree, letter or memorandum by or
with any governmental entity or third party imposing any liability or obligation
with respect to any of the foregoing.
 
(g)         Brokers’ Fees. Buyer has no obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the Contemplated
Transactions.
(h)         Purchase for Investment. Buyer is acquiring the Membership Interests
for investment and not with a view to distributing all or any part thereof in
any transaction which would constitute a “distribution” within the meaning of
the Securities Act. Buyer acknowledges that the Membership Interests have not
been registered under the Securities Act.
(i)         Investor Qualifications. Buyer: (i) has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its investment in the Membership Interests; (ii) is able
to bear the complete loss of its investment in the Membership Interests; (iii)
has had the opportunity to ask questions of the Seller and each of the Companies
and their management concerning the terms and conditions of the Membership
Interests, the business of each of the Companies, the Companies’ ownership and
use of their respective assets, estimates and judgments utilized and relied upon
by the Companies in preparing their financial statements; (iv) has had the
opportunity to obtain additional information about each of the Companies and its
business and all of Buyer’s questions have been answered to its satisfaction;
and (v) is otherwise an “accredited investor” as such term is defined in Rule
501 promulgated under the Securities Act.
(j)           Capitalization. The authorized capital stock of Buyer consists of
75,000,000 shares of common stock, par value $0.025 per share, of which
6,438,112 shares were issued and outstanding as of the Effective Date. The
Purchase Price Shares have been duly authorized and when issued and delivered to
Seller at the Closing, will be validly issued, fully paid and non-assessable.
All of the Purchase Price Shares to be issued to Seller in accordance with this
Agreement will be issued and delivered by Buyer in compliance with all
applicable state and federal laws concerning the issuance of securities and none
of the Purchase Price Shares will be issued in violation of the preemptive
rights of any shareholder of Buyer.
 
(k)           Preemptive Rights. Except as disclosed in the SEC Documents (as
hereinafter defined), there are no preemptive or similar rights on the part of
any holders of any class of securities of Buyer. Except as disclosed in the SEC
Documents, other than this Agreement, no subscriptions, options, warrants,
conversion or other rights, agreements, commitments, arrangements or
understandings of any kind obligating Buyer, any of its subsidiaries or any
other affiliate of the foregoing, contingently or otherwise, to issue or sell,
or cause to be issued or sold, any shares of capital stock of any class of
Buyer, or any securities convertible into or exchangeable for any such shares,
are outstanding, and no authorization therefor has been given. There are no
outstanding contractual or other rights or obligations to or of Buyer, any of
its subsidiaries or any affiliate of the foregoing to repurchase, redeem or
otherwise acquire any outstanding shares of other equity interests of Buyer.
 
 
9

 
(l)           SEC Documents. Buyer has timely filed with the U.S. Securities and
Exchange Commission (the “Commission”) all forms, reports and other documents
required to be filed by it under the Securities and Exchange Act of 1934, as
amended (the “Exchange Act”) or the Securities Act of 1933, as amended (the
“Securities Act”) (as such documents have been amended through the date hereof,
collectively, the “SEC Documents”). The SEC Documents, including without
limitation any financial statements or schedules included therein, at the time
filed, complied in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be. The consolidated
financial statements of Buyer included in the SEC Documents comply in all
material respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, have been prepared
in accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10-Q of the Commission) and fairly
present (subject, in the case of the unaudited statements, to normal, recurring
audit adjustments and for the absence of footnotes) the consolidated financial
position of Buyer and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flow for the periods than
ended.
 
(m)            Market for Common Stock. The stock of Buyer is quoted on the OTC
Markets under the symbol “MRDN.” Buyer has not, in the twelve (12) months
preceding the date hereof, received notice from any trading market on which
shares of the common stock of Buyer (the “Common Stock”) are or have been listed
or quoted to the effect that Buyer is not in compliance with the listing or
maintenance requirements of such trading market. Buyer is in compliance in all
material respects with all such listing and maintenance requirements and the
consummation of the transactions contemplated by this Agreement do not violate
any rules or regulations of a trading market on which shares of the Common Stock
of Buyer are or have been listed.
 

(n)            Enforcement Actions or Proceedings. Except for normal
examinations conducted by a governmental or regulatory agency in the ordinary
course of the business of Buyer and its subsidiaries, or as disclosed in the SEC
Documents, no governmental or regulatory agency has pending any Proceeding,
enforcement action or, to the Knowledge of Buyer, investigation into the
business, disclosures or operations of Buyer or its subsidiaries.
 
(o)            Accuracy of SEC Documents. At the time filed or furnished (and,
in the case of registration statements and proxy statements, on the dates of
effectiveness and the dates of the relevant meetings, respectively), each SEC
Document filed by the Buyer did not contain any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except that information
as of a later date (but before the date of this Agreement) shall be deemed to
modify information as of an earlier date.
 
(p)            Financial Statements. Neither Buyer nor any of its subsidiaries
has any liabilities, obligations or commitments of a type required to be
reflected on a balance sheet prepared in accordance with GAAP, except (i) those
liabilities that are reflected or reserved against in the financial statements
of the Buyer included in the SEC Documents, or (ii) liabilities incurred in the
Ordinary Course of Business consistent with past practice since the date of the
last of such financial statements.
 
SECTION 4                                 
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANIES
Seller represents and warrants to Buyer that the statements contained in this
Section 4 are true, correct and complete as of the Effective Date and as of the
Closing Date, except as set forth in the disclosure schedule delivered by Seller
to Buyer on the date hereof (the “Disclosure Schedule”). The Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section 4.
4.1 Organization, Qualification, and Power. Each of the Companies is a limited
liability company duly organized and validly existing under the laws of the
Commonwealth of Virginia. Each of the Companies is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required, except those jurisdictions where the failure to
qualify would not have a Material Adverse Effect. The Companies all have full
power and authority and all licenses, Consents, permits, Approvals, and
authorizations necessary to carry on the Business in which each Company is
engaged and to own or lease, as applicable, and use the Property owned and used
by each Company. Schedule 4.1 lists the members, managers, directors and
officers of the Companies. Seller has delivered to Buyer correct and complete
copies of the Organizational Documents of the Companies (as amended to date).
The Companies do not maintain minute books and the Membership Interests of the
Companies are not certificated. None of the Companies is in default under or in
violation of any provision of its Organizational Documents.
 
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4.2 Capitalization. Seller is the record owner of and has good and valid title
to the Membership Interests. The Membership Interests constitute 100% of the
total issued and outstanding membership interests in each Company. All of the
issued and outstanding Membership Interests of the Companies have been duly
authorized, are validly issued, fully paid, and non-assessable. Except as set
forth on Schedule 4.2, the Membership Interests of the Companies are held of
record by the Seller free and clear of any restriction on transfer, Taxes,
Liens, options, warrants, purchase rights, contracts, commitments, equities,
claims and demands (except restrictions under the Securities Act and state
securities laws). Except as set forth on Schedule 4.2, no other Person has any
right, title or interest in or to the Membership Interests or any other equity
interest of the Companies. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require any of the
Companies to issue, sell, or otherwise cause to become outstanding any of its
membership interests or any other equity interest or other security. There are
no outstanding or authorized appreciation, phantom stock, profit participation,
or similar rights with respect to the Companies. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
Membership Interests or units of the Companies. Schedule 4.2 contains and
complete and accurate capitalization of the Companies and the respective
ownership of the Membership Interests by the Seller. The Seller is the sole
member of the Companies.
4.3 No Conflict; Consents.
(a) Except as set forth on Schedule 4.3(a), neither the execution and delivery
of this Agreement by Seller, nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or without notice
or lapse of time): (i) Breach or otherwise conflict with any provision of the
Organizational Documents of the Companies, or contravene any resolution adopted
by the officers, managers, or members of the Companies; (ii) Breach or otherwise
conflict with any Legal Requirement or Order to which the Companies may be
subject or give any Governmental Body or other Person the right to challenge the
Contemplated Transactions or to exercise any remedy or obtain any relief under
any Legal Requirement or any Order to which the Companies may be subject; (iii)
Breach or otherwise conflict with or result in a violation or Breach of any of
the terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held or being applied for by or on behalf of the Companies or that
otherwise relates to the Companies or their Assets, including the Properties, or
the Businesses of the Companies; (iv) cause Buyer (or any Related Person
thereof) to become subject to, or to become liable for the payment of, any Tax;
(v) Breach or otherwise conflict with any provision of, or give any Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or payment under, or to cancel, terminate or modify,
any contract or agreement to which the Companies are a party or by which the
Companies are bound; or (vi) result in the imposition or creation of any Lien on
any of the Companies’ Businesses, or Assets, including the Properties.
(b) Except as set forth on Schedule 4.3(b), the Companies are not required to
give any notice to, or obtain any Consent from, any Person in connection with
the execution and delivery of this Agreement or the consummation of any of the
Contemplated Transactions, including any Consent required in order to preserve
and maintain all Governmental Authorizations required for the ownership and
continued operation of the Business of the Companies either before or after
Closing and the consummation of the Contemplated Transactions. Any registration,
declaration, or filing with, or Consent, or Governmental Authorization or Order
by, any Governmental Body with respect to the Companies that is required in
connection with the consummation of the Contemplated Transactions has been or
will be completed, made, or obtained on or before the Closing Date.
 
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4.4 Brokers’ Fees. The Companies have no obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the Contemplated
Transactions.
4.5 Books and Records. The books of and records of the Companies as well as all
books of account, financial statements and other financial records of each of
the Companies, all of which have been made available to Buyer, are complete and
correct in all material respects, represent actual, bona fide transactions and
have been maintained in accordance with sound business practices and GAAP.
4.6 Title to Assets. Each of the Companies has good and marketable title to, or
a valid leasehold interest in, all of the Assets, free and clear of all
Liens, except for those items set forth on Schedule 4.6. Except as set forth in
Schedule 4.6, the Assets are not leased, Seller has not granted to any Person
the right to use, operate or own the Assets owned by the Companies or any
portion thereof. There are no outstanding options, rights of first offer or
rights of first refusal to purchase any of the Assets owned by any Company, or
any portion thereof, or interest therein. The Assets of the Companies constitute
all the Assets, tangible and intangible, of any nature whatsoever, necessary to
operate the Businesses in the manner presently operated by the Companies and
include all of the operating assets of the Companies.
4.7 Description of Assets. Other than the right to recover damages in the
Adenauer Litigation (as hereinafter defined), the assets of the Companies
constitute only (a) the Properties, (b) the Company Contracts, (c) the Permits,
Approvals, Consents, Governmental Authorizations, licenses and other permits and
approvals obtained to date by the Seller or that will be obtained by Seller
prior to Closing to conduct the Businesses of the Companies and to own or lease,
operate, construct and develop the Lunenburg Landfill, the Petersburg Landfill,
the Transfer Station and the Hauling Company Business, including all right,
title and interest thereto, (d) all data, documentation, books and records
related to the Lunenburg Landfill, the Petersburg Landfill, the Transfer Station
and the Hauling Company Business, or the ownership or lease, operation,
construction or development thereof, or used or useful in the permitting,
siting, ownership or lease, construction, operation and development of the
Lunenburg Landfill, the Petersburg Landfill, the Transfer Station and the
Hauling Company Business, including research and engineering reports and
drawings, permit records, title reports and policies, surveys relating to the
Properties, correspondence and all other similar documents and records,
including all right, title and interest thereto, (e) all Intangible Personal
Property, (f) all Tangible Personal Property, and (g) the Intellectual Property
Assets (collectively, the “Assets”). Complete and correct copies of all material
documentation related to the Assets have been made available or provided to
Buyer. The Companies own no other assets.
4.8 Tangible Personal Property. All Tangible Personal Property owned or leased
by the Companies as of the Effective Date is and will be as of Closing in the
possession of the Companies, except for any Tangible Personal Property sold or
transferred in the Ordinary Course of Business between the Effective Date and
the Closing Date. The condition of the Assets of the Companies collectively is
sufficient to operate the Businesses in the manner presently operated by the
Companies and will be collectively in substantially similar condition as of
Closing as when they are inspected by Buyer during the Inspection Period,
ordinary wear and tear excepted.
4.9 Subsidiaries. Except as disclosed on Schedule 4.9, none of the Companies
own, and no Company has any right to acquire, directly or indirectly, any
outstanding capital stock of, or other equity interests in, any Person.
4.10 No Adverse Change. Since the Most Recent Fiscal Month End (as defined
below):
(a) there has not been any Material Adverse Change, and, to the Knowledge of
Seller, there has been no event, occurrence or development that could reasonably
be expected to have a Material Adverse Change;
(b) except for the Company Contracts and except as set forth on Schedule
4.10(b), none of the Companies have entered into any agreement, Contract, lease,
or license (or series of related agreements, contracts, leases, and licenses)
outside the Ordinary Course of Business;
 
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(c) except as set forth on Schedule 4.10(c), to the Knowledge of Seller, no
party (including the Companies) has accelerated, terminated, modified, given
rise to a notice of default, or cancelled any agreement, Contract, lease,
Permit, Governmental Authorization, or license (or series of related agreements,
contracts, leases, and licenses) to which the Companies are a party or by which
they is bound or which materially affect the Companies and their Assets and
Businesses;
(d) except as set forth on Schedule 4.10(d), none of the Companies have granted
any Liens upon any of its Assets, tangible or intangible;
(e) except as set forth on Schedule 4.10(e), none of the Companies have made any
capital expenditure (or series of related capital expenditures) outside the
Ordinary Course of Business;
(f) none of the Companies have made any capital investment in, any loan to, or
any acquisition of the securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions) or have issued any note,
bond, or other debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation;
(g) none of the Companies have sold, leased, transferred, or assigned any of its
Assets, outside the Ordinary Course of Business;
(h) (i) there has been no acceleration of Accounts Receivable, (ii) any
agreement to the delay or postponement of the payment of accounts payable or
other obligations of the Companies, or (iii) change in any material respect in
the Companies’ practices in connection with the payment of accounts payable in
respect of purchases from suppliers;
(i) none of the Companies have cancelled, compromised, waived, or released any
right or claim (or series of related rights and claims) or suffered any
extraordinary loss;
(j) none of the Companies have transferred, assigned, or granted any license or
sublicense of any rights under or with respect to any Intellectual Property
Assets;
(k) except as set forth on Schedule 4.10(k), there has been no change made or
authorized in the Organizational Documents of the Companies;
(l) none of the Companies have issued, sold, pledged or otherwise disposed of
any of its equity interests, or granted any options, warrants, or other rights
to purchase or obtain (including upon conversion, exchange, or exercise) any of
equity interests or securities;
(m) none of the Companies has declared, set aside, or paid any dividend or made
any distribution with respect to its equity interests (whether in cash or in
kind) or redeemed, purchased, or otherwise acquired any of its equity interests;
(n) except as set forth on Schedule 4.10(n), none of the Companies have
experienced any material damage, destruction, or loss (whether or not covered by
insurance) to its property and Assets, including any Property or any Business;
(o) except as set forth on Schedule 4.10(o), none of the Companies have made any
loan to, or entered into any other transaction with, any of its members,
managers, officers, directors, or employees;
(p) none of the Companies have entered into any employment Contract, severance
or other benefit agreement, consulting agreement or collective bargaining
agreement, written or oral, or modified the terms of any existing such Contract
or agreement;
 
13

 
(q) none of the Companies have granted any increase in the base compensation of
any of its officers, directors, members, managers or employees outside the
Ordinary Course of Business;
(r) none of the Companies have adopted, amended, modified, or terminated any
bonus, profit sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its members, managers, officers, directors
and employees (or taken any such action with respect to any other Employee
Benefit Plan);
(s) none of the Companies have made any other change in employment terms for any
of its directors, officers, members, managers and employees outside the Ordinary
Course of Business;
(t) none of the Companies have made or pledged to make any charitable or other
capital contribution;
(u) neither Seller nor the Companies have received any written notice from any
Governmental Body or any other Person regarding the ability of the Companies own
or operate the Businesses or the Assets, or the intention of any Governmental
Body to challenge or oppose the Buyer’s ownership or operation of the Businesses
or the Assets;
(v) except as set forth on Schedule 4.10(v), none of the Companies have
discharged, in whole or in part, a material obligation or Lien outside the
Ordinary Course of Business;
(w) except as set forth on Schedule 4.10(w), there has been no written
indication by any customer or supplier of the Businesses of an intention to
discontinue or change the terms of its relationship with the Companies or the
Businesses;
(x) none of the Companies have disclosed any Confidential Information except
pursuant to a non-disclosure or similar agreement governing such disclosure;
(y) there has been no change in the accounting methods, principles or practices
for financial accounting with respect to the Companies (except for those changes
required by the Companies’ independent auditors to comply with GAAP) or for IRS
reporting purposes;
(z) neither the Seller nor any of the Companies has committed to do any of the
foregoing; and
(aa)      there has not been any other material occurrence, event, incident,
action, or transaction outside the Ordinary Course of Business involving the
Companies.
4.11 Undisclosed Liabilities; Financial Statements; Accounts Receivable.
(a) Except as specifically disclosed on Schedule 4.11(a), the Companies have no
liabilities, obligations or commitments of a type required to be reflected on a
balance sheet prepared in accordance with GAAP, except (i) those which are
adequately reflected or reserved against in the Most Recent Financial Statements
as of the Most Recent Fiscal Month End, and (ii) those which have been incurred
in the Ordinary Course of Business since the Most Recent Fiscal Month End and
which are not material in amount.
(b) Schedule 4.11(b) contains copies of the following financial statements
(collectively, the “Financial Statements”): (a) audited balance sheets and
statements of income, changes in members’ equity, and cash flow as of and for
the fiscal years ended December 31, 2015 (the “Most Recent Fiscal Year End”) for
the Companies; and (b) unaudited balance sheets and statements of income,
changes in stockholders’ equity, and cash flow (the “Most Recent Financial
Statements”) as of and for the nine (9) months ended September 30, 2016 (the
“Most Recent Fiscal Month End”), for the Companies. In addition, on or before
Closing, Sellers will provide Buyer with the Closing Statement in accordance
with Section 6.1(j). The Financial Statements (including the notes thereto) have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby, present fairly in accordance with GAAP the
financial condition of the Companies as of such dates and the results of
operations of the Companies for such periods, are correct and complete in all
material respects, and are consistent with the books and records of the
Companies (which books and records are correct and complete in all material
respects); provided, however, that the Most Recent Financial Statements are
subject to normal year-end adjustments (which will not be material individually
or in the aggregate) and lack footnotes and other presentation items.
 
14

 
(c) Schedule 4.11(c) to this Agreement sets forth a list of the Accounts
Receivable as of the date hereof.
 
4.12 Permits.
(a) Schedule 4.12(a) contains (i) a complete and accurate list of all material
Permits, licenses, Consents, Governmental Authorizations and Approvals owned by
the Companies that are necessary or required to own, construct, operate and
develop the Businesses, the Assets and the Properties (collectively, the
“Permits”). Schedule 4.12(a) also contains a complete and accurate list of all
Permits, Governmental Authorizations, Consents, licenses, and Approvals for
which the Companies or Seller have made application with respect to the
ownership, operation, construction, and development of the Businesses and the
Properties where such application is still pending as of the Effective Date and
at Closing. The Companies have not received any written notice from any
Governmental Body of rejection of any such application or any notice that any
such application is being considered for rejection. Each Permit is valid and in
full force and effect. The Permits listed or required to be listed in Schedule
4.12(a) collectively constitute all of the material Permits necessary or
required to permit the Companies to lawfully conduct and operate each Business
on each Property in accordance with all Legal Requirements. The Companies are in
material compliance with all of the terms and requirements of each Permit listed
or required to be listed in Schedule 4.12(a).
(b) Seller has delivered or made available, or has caused to be delivered or
made available, to Buyer (or its Representatives) copies of (i) all Permits and
Approvals and applications therefor referred to above in this Section 4.12, and
(ii) all other written correspondence between Seller or the Companies (or their
Representatives) and the applicable Governmental Bodies in connection with such
Permits and applications therefor since January 1, 2013.
(c) Except as set forth in Schedule 4.12(c), to the Knowledge of Seller, no
event has occurred or circumstance exists that could reasonably be expected to
(A) constitute or result in a material violation of or a material failure to
comply with any material term or material requirement of any Permit listed or
required to be listed in Schedule 4.12(a), or (B) result in the revocation,
withdrawal, suspension, cancellation or termination of, or any modification to,
any Permit or Approval.
(d) Except as set forth in Schedule 4.12(d), neither Seller nor the Companies
have received any notice from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible or potential violation of or failure
to comply with any term or requirement of any Permit or (B) any actual,
proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of or modification to any Permit; and
(e) All applications required to have been filed for the renewal of the
Governmental Authorizations listed or required to be listed in Schedule 4.12(a)
have been duly filed on a timely basis with the appropriate Governmental Bodies,
and all other filings required to have been made with respect to such Permits
have been duly made on a timely basis with the appropriate Governmental Bodies.
4.13 Governmental Authorizations.
 
15

 
(a) Schedule 4.13(a) contains a complete and accurate list of each Governmental
Authorization (including document title or name, issuing authority and
identifying number) held by the Companies or the Seller that relates to the
Companies, the Assets, including the Properties, or the Businesses. Seller has
delivered or made available to Buyer a true and complete copy of all such
Governmental Authorizations. Each Governmental Authorization listed or required
to be listed on Schedule 4.13(a) is valid and in full force and effect. The
Companies are in material compliance with all of the terms and requirements of
each Governmental Authorization identified or required to be identified on
Schedule 4.13(a). To the Knowledge of Seller, no event has occurred or
circumstance exists that could reasonably be expected to (a) constitute or
result in a material violation of or a material failure to comply with any term
or requirement of any Governmental Authorization listed or required to be listed
on Schedule 4.13(a), or (b) result in the revocation, withdrawal, suspension,
cancellation or termination of, or any modification to, any Governmental
Authorization listed or required to be listed on Schedule 4.13(a).
(b) Except as set forth in Schedule 4.13(b), neither the Companies nor the
Seller have received within four (4) years prior to the Most Recent Fiscal Year
End, any notice from any Governmental Body or any other Person regarding (i) any
actual, alleged, possible or potential violation of or failure to comply with
any term or requirement of any Governmental Authorization relating to any
Company, any Business or the Assets, including any Property, or (ii) any actual,
proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of or modification to any Governmental Authorization
relating to the Companies, the Businesses or the Assets, including the
Properties. Any registration, declaration, or filing with, or Consent, or other
Governmental Authorization or order by, any Governmental Body that is required
in connection with the valid execution, delivery, acceptance, and performance by
Seller and the Companies under this Agreement, or the consummation by Seller of
any Contemplated transaction under this Agreement, has been or will be
completed, made, or obtained on or before the Closing Date.
(c) All applications required to have been filed for the renewal of the
Governmental Authorizations listed or required to be listed on Schedule 4.13(a)
have been duly filed on a timely basis with the appropriate Governmental Bodies,
and all other filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely basis with the
appropriate Governmental Bodies.
(d) The Governmental Authorizations listed or required to be listed on Schedule
4.13(a) collectively constitute all of the Governmental Authorizations necessary
to permit the Companies to lawfully own, lease, operate, construct and develop
each Business on each Property and to otherwise operate and conduct the
Businesses in the manner in which the Companies are currently conducted. Such
Governmental Authorizations also collectively constitute all of the Governmental
Authorizations necessary to permit the Companies to own, lease, occupy, operate,
improve, develop and use the Assets, including the Properties, and the
Businesses in the manner in which the Companies currently own occupy, operate,
improve, develop and use the Assets, including the Properties and operate the
Businesses, and are valid and in full force and effect.
4.14 Compliance With Legal Requirements.
(a) Except as set forth in Schedule 4.14: (i) to the Knowledge of Seller, the
Companies are, and at all times have been, in material compliance with each
Legal Requirement that is or was applicable to it or to the conduct or operation
of the Businesses or the ownership or use of any of their Assets, including the
Properties; (ii) to the Knowledge of Seller, no event has occurred or
circumstance exists that (with or without notice or lapse of time) (A) may
constitute or result in a violation by any Company of, or a failure on the part
of any Company to comply with, any material Legal Requirement, or (B) may give
rise to any obligation on the part of any Company to undertake, or to bear all
or any portion of the cost of, any Remedial Action of any nature; and (iii)
neither the Seller nor the Companies have received any notice from any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible or potential violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible or potential obligation on the
part of the Company to undertake, or to bear all or any portion of the cost of,
any Remedial Action of any nature.
4.15 Tax Matters.
 
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(a) From the date of its organization, each Company has been taxed and treated
as a partnership under the Code and relevant state law for federal and/or state
income tax purposes.
(b) Each Company has filed all Tax Returns that it was required to file under
applicable Legal Requirements and regulations. Except as described on Schedule
4.15(b), all such Tax Returns were correct and complete in all respects and have
been prepared in substantial compliance with all applicable laws and
regulations. All Taxes due and owing by the Companies (whether or not shown on
any Tax Return) have been paid. No Company is currently the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever been
made by an authority in a jurisdiction where no Company files Tax Returns that
any Company is or may be subject to taxation by that jurisdiction. There are no
Liens for Taxes (other than Taxes not yet due and payable) upon any of the
Assets of the Companies. As of the Closing Date, each Company will have paid all
Taxes (other than Taxes not yet due and payable) and with respect to any Taxes
that are not yet due and payable as of the Closing Date, each Company has
adequately reserved for such Taxes, except as described on Schedule 4.15(b).
(c) Each Company has withheld and paid all Taxes required to have been withheld
and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, member, or other third party.
(d) Neither Seller, nor any member, manager, director or officer (or employee
responsible for Tax matters) of the Companies, expects any authority to assess
any additional Taxes for any period for which Tax Returns have been filed.
Except as shown on Schedule 4.15(d), no foreign, federal, state, or local tax
audits or administrative or judicial Tax proceedings are pending or being
conducted with respect to any Company. No Company has received from any foreign,
federal, state, or local taxing authority (including jurisdictions where such
Company has filed Tax Returns) any (i) notice indicating an intent to open an
audit or other review, (ii) request for information related to Tax matters, or
(iii) notice of deficiency or proposed adjustment for any amount of Tax
proposed, asserted, or assessed by any taxing authority against such Company.
(e) Schedule 4.15(e) lists all federal, state, local, and foreign income Tax
Returns filed with respect to each Company for taxable periods ended on or after
December 31, 2013, indicates those Tax Returns that have been audited, and
indicates those Tax Returns that currently are the subject of audit. Seller has
delivered to Buyer correct and complete copies of all federal income Tax
Returns, examination reports, and statements of deficiencies assessed against or
agreed to by each Company filed or received since the formation of each Company.
(f) No Company has waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency.
(g) Schedule 4.15(g) sets forth the tax basis of each Company in its depreciable
assets as of December 31, 2015, the most recent practicable date, as well as on
an estimated pro forma basis immediately prior to the Closing (without giving
effect to the consummation of the Contemplated Transactions).
(h) Except as set forth on Schedule 4.15(h), the unpaid Taxes of each Company,
if any (i) did not, as of the most recent fiscal month end of each Company,
exceed the reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of the most recent balance sheet of each Company, and (ii) do not
exceed that reserve as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of each Company in filing its
Tax Returns. Since the date of the most recent balance sheet of each Company, no
Company has incurred any liability for Taxes arising from extraordinary gains or
losses, as that term is used in GAAP, outside the Ordinary Course of Business
consistent with past custom and practice.
(i) No Company will be required to include any item of income in, or exclude any
item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any: (i) change in method
of accounting for a taxable period ending on or prior to the Closing Date, (ii)
“closing agreement” as described in Code Section 7121 (or any corresponding or
similar provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date, (iii) installment sale or open transaction
disposition made on or prior to the Closing Date, or (iv) prepaid amount
received on or prior to the Closing Date.
 
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4.16 Condition of the Properties.
(i) To the Knowledge of Seller, there are no structural deficiencies or latent
or patent defects affecting any of the Improvements on any Property and, to the
Knowledge of Seller, there are no facts or conditions affecting any of the
Improvements which would, individually or in the aggregate, reasonably be
expected to interfere in any material respect with the use or occupancy of the
Improvements or any portion thereof as they are currently being used by the
Companies.
(ii) There is no condemnation, expropriation or other proceeding in eminent
domain, pending or, to the Knowledge of Seller, threatened, affecting any of the
Properties or any portion thereof or interest therein. Except as shown on
Schedule 4.16(i), there is no injunction, decree, order, writ or judgment
outstanding, nor any claims, litigation, administrative actions or similar
proceedings, pending or, to the Knowledge of Seller, threatened, relating to the
ownership, lease, use or occupancy of each Property or any portion thereof.
(iii) To the Knowledge of Seller, the operation of the Lunenburg Landfill does
not violate the current zoning for the Lunenburg Property. The Petersburg
Property is currently zoned (i) “Ordinance 09-ORD-57” under Article 37,
Municipal Solid Waste Landfill Uses, of the Petersburg Zoning Ordinance
(Landfill); and (ii) “M-2” Heavy Industrial District under Article 37, Municipal
Solid Waste Landfill Uses, of the Petersburg Zoning Ordinance (350 Industrial
Drive and 2053 North Factory Lane). To the Knowledge of Seller, the operation of
the Transfer Station does not violate the current zoning for the Transfer
Station Property. To the Knowledge of Seller, the operation of the Hauling
Company does not violate the current zoning for the Hauling Company Property. To
the Knowledge of Seller, there is no pending or anticipated change in any zoning
or land use laws applicable to the Properties that will materially impair the
development, construction, operation or use of any Property or any portion
thereof as a municipal solid waste landfill, a municipal solid waste transfer
station, or a Hauling Company Business, or otherwise as each Property is
currently being used. The Seller has not received any notice of violation of any
building, zoning, comprehensive planning, subdivision, health and safety and
other land use laws, regulations, ordinances and rules affecting the Properties.
To the Knowledge of Seller, the Properties are in compliance with all Legal
Requirements, including all applicable building, zoning, comprehensive planning,
subdivision, health and safety and other land use laws, regulations, ordinances
and rules affecting the Properties (collectively, the “Real Property Laws”),
and, to the Knowledge of Seller, the current use, operation and occupancy of the
Properties, including the use, occupancy and operation of the Businesses, does
not violate any Real Property Laws. The Seller has not received any written
notice of violation of any Real Property Law.
(iv)  All water, oil, gas, electrical, telecommunications, sewer, storm and
waste water systems and other utility services or systems for each Property
which have been installed are operational.
(v) All material Governmental Authorizations, Approvals, Consents and Permits
which are required or appropriate to use or occupy the Properties by the
Companies and for the Companies to own, operate, construct and develop the
Businesses on the Properties have been issued and are in full force and effect.
Except as shown on Schedule 4.16(v), Seller has not received any notice from any
Governmental Body or other entity having jurisdiction over the Properties
threatening a current or prospective suspension, revocation, modification or
cancellation of any Governmental Authorization, Consent, Approval or Permit and,
to the Knowledge of Seller, there is no basis for the issuance of any such
notice or the taking of any such action.
(vi) Other than as set forth on Schedule 4.l6(viii), to the Knowledge of Seller,
there are no leases affecting any Property and, to the Knowledge of Seller, the
Properties are not subject to any outstanding agreement of sale, option, or
other right of any third party to acquire any interest therein, except this
Agreement. Other than as set forth on Schedule 4.l6(vi), none of the Seller or
the Companies is a party to any Contract or any other agreement which will
affect the Properties, the Companies and/or Buyer from and after the Closing,
including, but not limited to any maintenance, repair, service, pest control or
supply, management, employment, equipment, equipment rental, or any other
agreements used in connection with the Properties.
 
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(vii) To the Knowledge of Seller, each Property has legal access to a public
right-of-way. None of the Seller or the Companies is a party to any easements,
rights of way, reservations of gas, timber, mineral rights, leases or other
Liens which do not appear in the Public Records of City of Petersburg, Virginia
or the County of Lunenburg, Virginia. Seller shall not grant, convey, dispose
of, sell, encumber, assign or transfer any interest in any Property, including
but not limited to any contract, option, lease, easement, or other agreement
granting any interest whatsoever in the Properties, without the prior written
consent of Buyer. Except as set forth in Schedule 4.16(vii), the Companies hold
fee simple title to the Properties.
(viii) Schedule 4.16(viii) lists each Real Property Lease to which any Company
is a party. Each Real Property Lease is legal, valid, binding, enforceable and
in full force and effect. Except as set forth on Schedule 4.16(viii), the
Contemplated Transactions do not require the Consent of any other party to such
Real Property Lease, will not result in a Breach of or default under such Real
Property Lease, and will not otherwise cause such Real Property Lease to cease
to be legal, valid, binding, enforceable and in full force and effect on
identical terms following the Closing. The possession and quiet enjoyment of the
any Property under any Real Property Lease has not been disturbed and there are
no currently unresolved disputes with respect to such Real Property Lease.
Neither the Companies, nor, to the Knowledge of Seller, any other party to such
Real Property Lease, is in Breach or default under the Real Property Lease, and,
to the Knowledge of Seller, no event has occurred or circumstance exists which,
with the delivery of notice, the passage of time or both, would constitute such
a Breach or default, or permit the termination, modification or acceleration of
rent under such Real Property Lease. No security deposit or portion thereof
deposited with respect to such Real Property Lease has been applied in respect
of a breach or default under such Real Property Lease which has not been
redeposited in full. No Company owes, or will owe in the future, any brokerage
commissions or finder’s fees with respect to such Real Property Lease. Except as
shown on Schedule 4.16(viii), the other party to each Real Property Lease is not
an affiliate of, and otherwise does not have any economic interest in Seller or
its respective Related Persons. Except as shown on Schedule 4.16(viii), neither
Seller nor any Company has subleased, licensed or otherwise granted any Person
the right to use or occupy any Property or any portion thereof. Except as shown
on Schedule 4.16(viii), neither Seller no any Company has collaterally assigned
or granted any other security interest in any Property subject to a Real
Property Lease or any interest therein. Except as shown on Schedule 4.16(viii),
there are no Liens or other encumbrances on the estate or interest created by
any Real Property Lease.
4.17 Conveyance of Entire Interest In the Companies. At Closing, all of Seller’s
right, title and interest in and to the Membership Interests will be transferred
and conveyed to Buyer free and clear of all Liens.
4.18 Contracts.
(a) The only Contracts to which any Company is a party are described in Schedule
4.18(a) (“Company Contracts”), and correct and complete copies of all such
Contracts have been made available or provided to Buyer.
(b) The Seller does not have and may not acquire any rights under any Company
Contract, and Seller does not have and will not become subject to any obligation
under any Company Contract, that relates to the Businesses of the Companies.
(c) Except as set forth on Schedule 4.18(c), (i) the Company Contracts are
legal, valid, binding, enforceable, and in full force and effect (except as
enforcement thereof may be limited by applicable Insolvency Laws), and will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the Contemplated Transactions;
(ii) each Company is, and at all times has been, in material compliance with all
applicable terms and requirements of the Company Contracts; (iii) to the
Knowledge of Seller, no event has occurred or circumstance exists that (with or
without notice or lapse of time) will contravene, conflict with or result in a
Breach of, or give the Companies or other Person the right to declare a default
or exercise any remedy under, or to accelerate the maturity or performance of,
or payment under, or to cancel, terminate or modify, the Company Contracts; (iv)
to the Knowledge of Seller, no party to the Company Contracts has threatened to
terminate its business relationship with the Companies for any reason; and (v)
neither Seller or any Company has given to or received from any other Person any
notice regarding the actual, alleged, possible or potential Breach of any
Company Contract.
 
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(d) Except as set forth on Schedule 4.18(d), there are no renegotiations of,
attempts to renegotiate or outstanding rights to renegotiate any material
amounts paid or payable to the Companies under the Company Contracts Outside the
Ordinary Course of Business with any Person having the contractual or statutory
right to demand or require such renegotiation and no such Person has made
written demand for such renegotiation.
(e) Each Company Contract relating to the sale or provision of services by the
Companies has been entered into in the Ordinary Course of Business of any
Company and has been entered into without the commission of any act alone or in
concert with any other Person, or any consideration having been paid or
promised, that is or would be in violation of any Legal Requirement.
4.19 Powers of Attorney. There are no outstanding powers of attorney executed on
behalf of the Companies.
4.20 Litigation. Except as set forth in Schedule 4.20 (which lists pending or
threatened Proceedings, all of which are referred to as “Current Litigation
Matters”), there is no pending or, to the Knowledge of Seller, threatened
Proceeding: (i) by or against the Companies; (ii) that could reasonably be
expected to have a Material Adverse Affect on the Business of, or any of the
Assets owned or used by, the Companies or (iii) that challenges, or that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with, any of the Contemplated Transactions, the Businesses or the Assets, or the
ownership, construction, development, or operation of any of the Properties as
either a municipal solid waste landfill, municipal solid waste transfer station
or Hauling Company Business by the Companies. To the Knowledge of Seller, no
event has occurred or circumstance exists that is reasonably likely to give rise
to or serve as a Basis for the commencement of any such Proceeding. Except as
set forth in Schedule 4.20, (i) there is no Order to which the Companies, their
Businesses or any of the Assets is subject or that in any way relates to or
could reasonably be expected to affect the Companies, the Businesses or the
Assets, or the ownership, construction, development, or operation of the
Properties as either a municipal solid waste landfill, municipal solid waste
transfer station or Hauling Company Business by the Companies; and (ii) no
officer, director, member, manager, agent or employee of the Companies is
subject to any Order that prohibits such officer, director member, manager,
agent or employee from engaging in or continuing any conduct, activity or
practice relating to the Businesses of the Companies. Except as set forth on
Schedule 4.20, (i) each of Seller and the Companies are, and at all times have
been, in compliance with all of the terms and requirements of any Order, (ii) to
the Knowledge of Seller, no event has occurred or circumstance exists that is
reasonably likely to constitute or result in (with or without notice or lapse of
time) a violation of or failure to comply with any term or requirement of any
such Order, and (iii) neither Seller nor the Companies has received any notice
from any Governmental Body or any other Person regarding any actual, alleged,
possible or potential violation of, or failure to comply with, any term or
requirement of any such Order.
4.21 Employees. Schedule 4.21 sets forth for all employees of the Companies: the
(i) name, (ii) job title, (iii) date of hiring or engagement, (iv) date of
commencement of employment or engagement, (v) current or deferred compensation
paid or payable, (vi) sick and vacation leave that is accrued but unused, (vii)
service credited for purposes of vesting and eligibility to participate under
any Employee Benefit Plan, or any other employee benefit plan and (viii) details
of any material disciplinary problems within the past two (2) years. No retired
employees of the Companies, or their dependents, are receiving benefits or are
scheduled to receive benefits in the future from the Companies. To the Knowledge
of Seller, no officer, director, agent, manager, employee, consultant, or
independent contractor of the Companies is bound by any Contract that purports
to limit the ability of such officer, director, manager, agent, employee,
consultant, or independent contractor (a) to engage in or continue or perform
any conduct, activity, duties or practice relating to the Businesses of the
Companies or (b) to assign to the Companies or to any other Person any rights to
any invention, improvement, or discovery used in the Businesses. To the
Knowledge of Seller, no former or current officer, director, member, manager,
agent, employee, consultant, or independent contractor of the Companies is a
party to, or is otherwise bound by, any Contract that in any way adversely
affected, affects, or will affect the ability of the Companies to conduct the
Businesses as currently carried on by the Companies. Except as set forth on
Schedule 4.22, all salaries, wages and other compensation and benefits payable
to each officer, director, agent, manager, employee, consultant, or independent
contractor of the Companies has been accrued and paid by the Companies when due
for all periods through the Closing Date, or will have been paid by the
Companies when due for all periods through the Closing Date. Except as set forth
in Schedule 4.21, the employment of each employee who is employed by each
Company can be terminated by the Companies upon not more than fourteen (14)
days’ notice without severance, penalty or premium, other than payment of
accrued salaries, wages and vacation benefits. Neither Seller nor any Company
has violated the Worker Adjustment and Retraining Notification Act (the “WARN
Act”) or any similar state or local Legal Requirement. Robert W. Guidry, Charles
A. Wilcox, Timothy L. Webb, and A. Jeffrey Kraus are the only employees or
individuals actively engaged in the fundamental operations of the Companies who
own any interest in Guarantor.
 
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4.22 Labor Disputes; Compliance.
(a) Except as set forth on Schedule 4.22, each Company has complied in all
respects at all times with all Legal Requirements, including all Occupational
Safety and Health Laws, relating to employment practices, terms and conditions
of employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, payment of social security and similar Taxes, collective
bargaining and other requirements under applicable Legal Requirements. The
Companies are not liable for the payment of any Taxes, including any social
security and similar Taxes, fines, penalties, interest, back wages, front pay,
liquidated or compensatory damages, exemplary damages or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements.
(b) The Companies have not been, and are not now, a party to any collective
bargaining agreement or other labor Contract. There has not been, there is not
presently pending or existing, and to The Knowledge of Seller, there is not
threatened, any strike, slowdown, picketing, work stoppage or employee grievance
process involving the Companies. Except as set forth on Schedule 4.22, to the
Knowledge of Seller, no event has occurred or circumstance exists that could
provide the Basis for any work stoppage or other labor dispute. Except as set
forth on Schedule 4.22, there has not been, there is not presently pending or
existing, and, to the Knowledge of Seller, there is not overtly threatened any
Proceeding, charge, grievance proceeding or other claim against or affecting the
Companies (or any director, officer, manager, member or employee thereof)
relating to the actual or alleged violation of any Legal Requirement pertaining
to labor relations or employment matters, including any charge or complaint
filed by an employee or union with the National Labor Relations Board, the Equal
Employment Opportunity Commission or any comparable Governmental Body, and there
is no organizational activity or other labor dispute against or affecting the
Companies or the Businesses. There is no organizational activity or other labor
dispute against or affecting the Businesses or the Companies and no application
or petition for an election of or for certification of a collective bargaining
agent is pending. No grievance or arbitration Proceeding exists that might have
a Material Adverse Effect upon the Companies or the conduct of the Businesses.
Except as set forth on Schedule 4.22, neither the Companies nor the Seller have
been served notice of, and Seller and the Companies do not otherwise have
Knowledge of, any grievance or arbitration Proceeding by any employee of the
Companies that might have an adverse effect upon the Companies, the Assets or
the conduct of the Businesses. Since January 1, 2013, there has been no charge
of discrimination filed against or, to the Knowledge of Seller, threatened
against the Companies with the Equal Employment Opportunity Commission or
similar Governmental Body. There is no lockout by the Companies of any employees
of the Companies, and no such action is contemplated by Seller or the Companies.
4.23 Employee Benefits. Schedule 4.23 sets forth each Employee Benefit Plan
pursuant to which any employee or former employee is entitled to benefits that
the Companies maintain, to which the Companies contribute, or have any
obligation to contribute. Schedule 4.23 also sets forth each Employee Welfare
Benefit Plan (as defined by ERISA) which the Companies maintain, contribute to
or have an obligation to contribute to for providing health or life insurance or
other welfare-type benefits for current or future retired or terminated
directors, officers or employees (or any spouse or other dependent thereof) of
the Companies other than in accordance with COBRA. 
 
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4.24 Guaranties. Except as set forth on Schedule 4.24, the Companies are not a
guarantor and are not otherwise liable for any obligation (including
Indebtedness) of any other Person.
4.25 Environmental Matters.
(a) Except as disclosed on Schedule 4.25, (i) the Companies have not treated,
stored, disposed of, arranged for or permitted the disposal of, transported,
handled, manufactured, distributed, or released any substance, including without
limitation any Hazardous Material, or owned or operated any property or facility
(and no such property or facility is contaminated by any such substance) so as
to give rise to any current or future Liabilities, including any Liability for
fines, penalties, response costs, corrective action costs, personal injury,
property damage, natural resources damages or attorney’s fees, pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (“CERCLA”), the Solid Waste Disposal Act, as amended (“SWDA”) or any
other Environmental Laws; (ii) the Properties do not now contain any underground
storage tanks; (iii) neither this Agreement nor the consummation of the
Contemplated Transactions will result in any obligations for site investigation
or cleanup, or notification to or consent of government agencies or third
parties, pursuant to any of the so-called “transaction-triggered” or
“responsible property transfer” Environmental Laws; and (iv) the Companies have
not assumed, including without limitation any obligation for corrective or
Remedial Action, any obligation of any other Person relating to Environmental
Laws.
(b) Except as disclosed on Schedule 4.25 (b) to the Knowledge of Seller, (i)
each Company has complied in all material respects, and is presently in
compliance in all material respects, with all applicable Environmental Laws
pertaining to the ownership and operation of the Assets, the Properties and the
Businesses, and (ii) neither Seller nor the Companies have received any
communication alleging that they are not in compliance with any Environmental
Law. Except as disclosed on Schedule 4.25 (b), there are no pending or, to the
Knowledge of Seller, threatened Proceedings of any nature resulting from any
Environmental, Health and Safety Liabilities or arising under or pursuant to any
Environmental Law with respect to or affecting the Companies, the Businesses,
the Properties or any of the Assets of the Companies. Except as disclosed on
Schedule 4.25 (b), to the Knowledge of Seller, no Property contains wetlands,
vegetation, animal species or significant historic/archaeological sites which
are subject to special regulations or limitations under any Legal Requirement.
To the Knowledge of Seller, no unacceptable material has deposited or buried on
or under the Properties in violation of any Permit, Governmental Authorization
or Legal Requirement, no toxic wastes or Hazardous Materials have been
deposited, disposed of, stored, generated or released on or from the Properties,
and there are no cemeteries, grave sites or other burial sites located on the
Properties.
4.26 Certain Business Relationships with the Company. Except as disclosed on
Schedule 4.26, neither Seller, nor their Related Persons, nor the officers,
directors, managers, members and employees of the Companies have been involved
in any business arrangement or relationship with the Companies within the past
twelve (12) months, and neither Seller, nor their Related Persons, nor the
officers, directors, employees, members, managers, directors and officers of the
Companies owns any asset, tangible or intangible, which is used in the Business
of the Companies. Neither the Companies nor its Related Persons, their
respective officers, employees, members, managers, directors and officers of the
Companies nor any Seller nor any Related Person of any of them owns, or has
owned, of record or as a beneficial owner, an equity interest or any other
financial or profit interest in any Person that has (a) had business dealings or
a material financial interest in any transaction with the Companies other than
business dealings or transactions disclosed in Schedule 4.26, each of which has
been conducted in the Ordinary Course of Business with the Companies at
substantially prevailing market prices and on substantially prevailing market
terms or (b) engaged in competition with the Companies with respect to any line
of the products or services of the Companies in any market presently served by
the Companies. Except as set forth in Schedule 4.26, neither the Companies nor
its Related Persons, their respective officers, employees, members, managers,
directors and officers of the Companies, nor the Seller nor any Related Person
of any of them is a party to any Contract with, or has any claim or right
against, the Companies.
 
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4.27 Intellectual Property. Schedule 4.27 contains a complete and accurate list
and summary of all Intellectual Property owned or possessed by the Companies, or
which the Companies have the right to use pursuant to a valid and enforceable,
written license, sublicense, agreement, or permission (collectively and together
with the Intangible Personal Property, the “Intellectual Property Assets”). Such
Intellectual Property Assets constitute all of the Intellectual Property
necessary for the operation of the Businesses of the Companies as presently
conducted. To the Knowledge of Seller, the Intellectual Property Assets do not
infringe on the intellectual property rights of any Person. The Companies are
the owner or licensee of all right, title and interest in and to each of the
Intellectual Property Assets, free and clear of all Liens. The Companies have
the right to use all of the Intellectual Property Assets without payment to any
third party. Each Company owns or has the right to use pursuant to ownership,
license, sublicense, agreement, permission or free and unrestricted availability
to general public all of the Intellectual Property Assets used by such Company.
To the Knowledge of Seller, the Companies have not interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and neither Seller, nor the Companies, or
their respective members, managers, directors and officers and employees has
ever received any written charge, complaint, claim, demand, or notice alleging
any such interference, infringement, misappropriation, or violation (including
any claim that the Companies must license or refrain from using any intellectual
property rights of any third party). To the Knowledge of Seller, no third party
has interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any proprietary intellectual property rights of the Companies.
4.28 Insurance. Schedule 4.28 sets forth the following information with respect
to each insurance policy (including policies providing property, casualty,
liability, and workers’ compensation coverage and bond and surety arrangements)
to which the Companies have been a party, a named insured, or otherwise the
beneficiary of coverage at any time within the past five (5) years (“Insurance
Policies” and “Insurance Policies”): (a) the name, address, and telephone number
of the agent; (b) the name of the insurer, the name of the policyholder, and the
name of each covered insured; and (c) the policy number and the period of
coverage. Such Insurance Policies constitute policies of insurance of the type
and in the amounts customarily carried by Persons conducting businesses or
assets similar to the Businesses and Assets of the Companies. True, correct and
complete copies of the Insurance Policies have been made available or furnished
to Buyer. With respect to each such Insurance Policy: (i) the Insurance Policy
is in full force and effect; (ii) the Insurance Policy will continue to be in
full force and effect on identical terms following the consummation of the
Contemplated Transactions; (iii) the Companies are not in Breach or default
(including with respect to the payment of premiums or the giving of notices),
and, to the Knowledge of Seller, no event has occurred which, with notice or the
lapse of time, would constitute such a Breach or default, or permit termination,
modification, or acceleration, under the Insurance Policy; and (iv) to the
Knowledge of Seller, no party to any Insurance Policy has repudiated any
provision thereof. All premiums due and payable on any of Insurance Policies or
renewals thereof have been paid or will be paid timely through the Closing Date.
Neither Seller nor the Companies have received any notice of cancellation or
non-renewal of any Insurance Policy nor, to the Knowledge of Seller, is the
termination of any such policies threatened. Neither Seller nor the Companies
have received any notice of cancellation or non-renewal of any Insurance Policy
nor, to the Knowledge of the Seller, is the termination of any such Insurance
Policies threatened. Neither the Seller nor the Companies have received any
notice from the insurer denying coverage or reserving rights with respect to a
material claim currently pending under any Insurance Policy or with respect to
any Insurance Policy in general. The Companies have not incurred any material
loss, damage, expense or obligation that was or would be covered by any
Insurance Policy for which it has not properly asserted a claim under any
Insurance Policy and which has been paid in an amount equal to the full claim
made or pending. The Companies have been covered during the past four (4) years
by insurance in scope and amount customary and reasonable for the Businesses in
which it has engaged. Schedule 4.28 describes any self-insurance arrangements
affecting the Companies.
4.29 Corrupt Practices. Except in compliance with all Legal Requirements,
neither the Seller, the Companies, nor any of their Related Persons, or each of
their respective officers, directors, employees or agents, have, directly or
indirectly, ever made, offered or agreed to offer anything of value to (a) any
employees, Representatives or agents of any customers of Seller or the Companies
for the purpose of attracting business to Seller or the Companies or (b) any
domestic governmental official, political party or candidate for government
office or any of their employees, Representatives or agents.
 
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4.30 Disposal Agreements. Except as disclosed on Schedule 4.30, the Companies
are not a party to, nor are they bound by, any Contract, undertaking,
obligation, responsibility or other agreement which requires any solid waste (of
any class) collected by any Company to be deposited in any landfill or
transferred through any transfer station or other disposal facility, or requires
any Company to deposit any such solid waste at the Properties or mandates the
terms and conditions pursuant to which the Companies will accept any such solid
waste at the Properties. Except as disclosed on Schedule 4.30, the Companies are
not bound by any disposal contract, put or pay contract or other agreement or
undertaking which after Closing will restrict the Companies in any way from
depositing, transferring or delivering any solid waste to the Properties or any
other solid waste disposal, processing or transfer facility selected by the
Companies.
4.31 Solvency. Neither Seller nor the Companies are Insolvent and neither the
Seller nor any Company has committed an act of bankruptcy, proposed a compromise
or arrangement to its creditors generally, had any petition in bankruptcy filed
against it, filed a petition or undertaken any action or proceeding to be
declared bankrupt, to liquidate its assets or to be dissolved. The Contemplated
Transactions will not cause the Companies to become Insolvent or to be unable to
satisfy and pay their respective debts and obligations generally as they come
due.
4.32 Exclusivity of Representations and Warranties. Buyer is not aware of any
facts and/or circumstances that would make any of the representations and
warranties of Seller contained in this Agreement untrue or misleading. In
entering into this Agreement, Buyer has relied solely upon its own investigation
and analysis and the representations and warranties of Seller contained in this
Agreement, and Buyer acknowledges that, other than as set forth in this
Agreement, neither Seller or any of its directors, officers, employees,
Affiliated Groups, members, agents or representatives makes or has made any
representation or warranty, either express or implied, (x) as to the accuracy or
completeness of any of the information provided or made available to Buyer or
any of its agents, representatives, lenders or Affiliated Groups prior to the
execution of this Agreement or (y) with respect to any projections, forecasts,
estimates, plans or budgets of future revenues, expenses or expenditures, future
results of operations (or any component thereof), future cash flows (or any
component thereof) or future financial condition (or any component thereof) of
the Company heretofore or hereafter delivered to or made available to Buyer or
any of their respective agents, representatives, lenders or Affiliated Groups.
Neither Seller nor any of its directors, officers, employees, Affiliated Groups,
members, agents or representatives has made, and shall not be deemed to have
made, any representations or warranties in the materials relating to the
business, assets or liabilities of the Companies made available to Buyer, and no
statement contained in any such materials or made in any such presentation shall
be deemed a representation or warranty hereunder or otherwise or deemed to be
relied upon by Buyer in executing, delivering and performing this Agreement and
the transactions contemplated hereby. It is understood that any cost estimates,
projections or other predictions, any data, any financial information or any
memoranda or offering materials or presentations, including but not limited to,
any offering memorandum or similar materials made available to Buyer and its
Representatives are not and shall not be deemed to be or to include
representations or warranties of Seller, and are not and shall not be deemed to
be relied upon by Buyer in executing, delivering and performing this Agreement
and the transactions contemplated hereby.
SECTION 5                                 
COVENANTS
5.1 General. The Parties will cooperate reasonably with each other and with
their respective Representatives in connection with any steps required to be
taken as part of their respective obligations under this Agreement, and will (a)
furnish upon reasonable request to each other such further information, (b)
execute and deliver to each other such other documents, and (c) do such other
acts and things, all as any other Party may reasonably request for the purpose
of carrying out the intent of this Agreement and the Contemplated Transactions.
In case at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, all at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor under Section 7 or Section 8, or unless
such cost or expense is the obligation of the non-requesting Party under this
Agreement). Seller acknowledges and agrees that, from and after the Closing,
Buyer will be entitled to possession of all documents, books, records (including
Tax records), Permits, Governmental Authorizations, certificates of title,
agreements, Company Contracts, Organizational Documents, financial data and all
other documents of any sort relating to the Companies (all of the forgoing, the
“Company Documents”).
 
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5.2 Inspection Period. Buyer shall have an inspection period beginning on the
Effective Date and ending January 31, 2017 (the “Inspection Period”). Buyer
shall have the Inspection Period within which to physically inspect the Assets,
including the Properties, and the Company Documents and to conduct its due
diligence with respect to the Assets, including the Properties, the Businesses
and the Companies. Buyer and Buyer’s officers, directors, employees,
consultants, agents and attorneys and other authorized representatives, shall
have the right to reasonable access to the Assets, the Properties and Company
Documents and to all records of Seller and the Companies related thereto,
including without limitation title information, property information, surveys,
maintenance records, environmental assessment reports, engineering reports and
any other information of the Companies, the Businesses and the Assets, at
reasonable times during the Inspection Period, without unreasonably interfering
with the operation of the Business, for the purpose of inspecting the Assets,
including the Properties, and the Businesses, and conducting all studies, tests,
inspections and measurements of all kinds as deemed necessary by Buyer,
reviewing the books and records of Seller and the Companies concerning the
Companies, the Businesses and the Assets, including the Properties, and
otherwise conducting its due diligence review of the Companies, the Businesses,
and the Assets, including the Properties. Seller shall cooperate with and assist
Buyer in making such inspections and reviews and in obtaining copies of any
documentation related to the Companies, the Businesses, and the Assets and
Properties, including the review and inspection of any and all Permits,
Approvals, Consents, licenses, Governmental Authorizations and other permits and
approvals necessary or required for the Companies to own, operate, construct and
develop the Businesses and in accordance with such other applicable local, state
and federal Legal Requirements. Seller shall make available to Buyer such of the
foregoing as may be in Seller’s possession, or the Companies’ possession, in
order to facilitate Buyer’s due diligence. Seller shall give Buyer any
authorizations which may be required by Buyer in order to gain access to records
or other information pertaining to the Companies, the Assets, including the
Properties, and the Businesses, or the use thereof maintained by any third
party, Governmental Body or organizations. Buyer and Seller shall mutually
agree, prior to the expiration of the Inspection Period, on any Company Contract
that Buyer does not wish for any Company to continue to be a party thereto and
be bound thereby (“Excluded Contracts”) and the parties shall execute an
amendment to this Agreement to include a Schedule 5.2 setting forth all Excluded
Contracts. If Buyer or its agents, employees, consultants and contractors shall
in any material manner cause any damage or alteration to the Assets, including
the Properties in conducting any testing or other due diligence investigation of
Assets, including the Properties, Buyer shall, at its sole cost and expense,
promptly and fully repair and restore any such damage or alteration caused by
Buyer or its agents, employees, consultants and contractors to the condition
same was in immediately prior to the commencement of Buyer’s testing or due
diligence of the Assets, including the Properties. If the parties do not proceed
with the Closing, Buyer shall promptly return to Seller all written material
pertaining to or reflecting any information provided to Buyer by Seller or
Seller’s agents and will not retain any copies, extracts or other reproductions
in whole or in part of such written material, and all documents, memoranda,
notes and other writings whatsoever prepared by Buyer or its advisors based on
the information provided to Buyer by Seller or Seller’s agents shall be
destroyed. Prior to Closing and following the termination of this Agreement if
Closing does not occur, Buyer agrees not to disclose to any third party any
non-public information provided to Buyer by Seller or generated by Buyer through
its inspections, except to Buyer’s agents, contractors, accountants, engineers,
consultants, attorneys or lenders, to the extent necessary for the purposes of
this transaction, or as may be required by law or by court order. Buyer agrees
to indemnify Seller and the Companies, together with Seller’s Affiliated Group,
and the successors, assigns, employees, officers, directors, trustees,
shareholders, attorneys, representatives and agents of Seller and the Companies
(collectively, the “Seller Indemnified Parties”) against and to defend and hold
the Seller Indemnified Parties harmless from and against all costs, claims,
injuries, damages, liabilities, accidents, losses arising out of, caused by or
created in connection with (i) death, personal injury, and/or property damage
resulting from Buyer’s and its agents’ and representatives’ entry upon, or
inspections or tests of, the Properties, or (ii) mechanic’s liens or claims that
may be filed against the Properties and/or adjacent land by contractors,
subcontractors or materialmen performing such work for Buyer, other than as may
be caused by the negligence or willful misconduct of Seller.
 
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5.3 Intentionally Omitted.
5.4 Transition. Seller and its Related Persons will not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
vendor, customer, supplier, or other business associate of the Companies from
maintaining the same business relationships with the Companies after the Closing
as it maintained with the Companies or Seller prior to the Closing. The Parties
will cooperate to provide each other with reasonable information systems support
to permit a smooth transfer of business operations between the Parties. In such
regard, Seller will provide Buyer with all information and systems support in
connection with the operation of the Companies and the Businesses. Such
assistance shall include electronic, computer and other system assistance.
Seller will refer all customer inquiries relating to the Businesses of the
Companies to Buyer from and after the Closing.
5.5 Confidentiality.
(a) Seller hereby acknowledges and agrees that, through its ownership or
operation of the Companies, it has occupied positions of trust and confidence
with respect to the Companies and the Businesses up to the date hereof and has
had access to, and has become familiar with, the confidential and non-public
information of the Companies and the Businesses any and all other confidential
or proprietary information concerning the affairs or conduct of the Companies
and the Businesses prior to the date hereof, whether prepared by or on behalf of
the Seller or the Companies (collectively, the “Confidential Information”).
(b) Seller hereby acknowledges and agrees that the protection of the
Confidential Information of the Companies is necessary to protect and preserve
the value of the Companies and the Businesses and Assets of the Companies, and
that without such protection, Buyer would not have entered into this Agreement
and consummated the Contemplated Transactions. Accordingly, subject to the
provisions of Section 5.5(c), Seller hereby covenants and agrees, for itself,
its Representatives and Related Persons and its and their successors and
permitted assigns, that, without the prior written Consent of Buyer (which
Consent will be at the Buyer’s absolute discretion to give or withhold), Seller
will not, nor will Seller cause or permit any of its Representatives or Related
Persons to, at any time on or after the Closing Date, directly or indirectly,
disclose to any Person or use for its own account or benefit or for the account
or benefit of any other Person any Confidential Information.
(c) The provisions of Section 5.5(b) will not apply to any Confidential
Information (i) that the Seller can demonstrate with documentary evidence is
generally known to, and available for use by, the public other than as a result
of the Breach of this Agreement or, to the Knowledge of Seller, any other
agreement pursuant to which any Person (including Seller or any Representative
or Related Person thereof) owes any duty of confidentiality to the other Party
or previously owed any duty of confidentiality to Buyer; (ii) that is required
to be disclosed pursuant to Legal Requirement or an Order, or (iii) that the
Seller can reasonably determine is necessary to be disclosed to a Representative
of Seller in order for Seller to perform its covenants and obligations, or to
enforce its rights against Buyer, under this Agreement or any related agreement
(and then only to the extent necessary to perform such covenants and obligations
or to enforce such rights). If Seller (including any Representative or Related
Person thereof) becomes compelled by a Legal Requirement or any order to
disclose any Confidential Information, Seller will provide Buyer with prompt
written notice of such requirement so that Buyer may seek a protective order or
other remedy in respect of such compelled disclosure. If such a protective order
or other remedy is not obtained by or is not available to Buyer, then Seller
will use reasonable efforts to ensure that only the minimum portion of such
Confidential Information that is legally required to be disclosed is so
disclosed, and Seller will use all reasonable efforts to obtain assurances that
confidential treatment will be given to such Confidential Information. Seller
acknowledge its responsibility to ensure that its Representatives and agents who
are given, or now have, access to the Confidential Information will comply with
the terms of this Section 5.5. Seller shall be liable for any Breach of this
Agreement caused by its Representatives and agents.
5.6 Injunctive Relief. The Parties acknowledge and agree that (a) each of the
provisions of Sections 5.1, 5.4, 5.5, 5.8, 5.9, and 5.10 are reasonable and
necessary to protect the legitimate business interests of the Parties and their
Related Persons, (b) any violation of any such covenant contained in Sections
5.1, 5.4, 5.5, 5.8, 5.9, and 5.10 would result in irreparable injury to the
Parties and their Related Persons, the exact amount of which would be difficult,
if not impossible, to ascertain or estimate, and (c) the remedies at law for any
such violation would not be reasonable or adequate compensation to the Parties
and their Related Persons for such a violation. Accordingly, notwithstanding any
other provision of this Agreement, if either Party, directly or indirectly,
violates any of its covenants or obligations under Sections 5.1, 5.4, 5.5, 5.8,
5.9, or 5.10 then, in addition to any other remedy which may be available to the
other Party or any Related Person thereof, at law or in equity, the Parties and
their Related Persons will be entitled to seek injunctive relief against the
other Party, without posting bond or other security, and without the necessity
of proving actual or threatened injury or damage.
 
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5.7 Employees. Subject to any employment agreements with employees of the
Companies set forth in Schedule 5.7, Buyer shall, in its sole and absolute
discretion, determine those employees that the Companies shall retain after
Closing. Buyer shall be under no obligation to cause the Companies to retain any
such employees on any terms or conditions other than such terms or conditions
determined by Buyer, or to continue employment benefits or compensation other
than as determined in the sole discretion of Buyer. Any employment will be at
base salary or wage rates determined in the sole and absolute discretion of
Buyer. The provision of any other compensation or employee benefits, including,
without limitation, bonuses, commissions, health benefits or compensation plans,
will be at Buyer’s sole discretion.
5.8 Public Announcements. The Parties will keep the existence of this Agreement,
the terms and conditions hereof and the Contemplated Transactions confidential,
and the Parties will not, nor will they cause or permit any Related Person or
Representative to, make any public announcement in respect of this Agreement or
the Contemplated Transactions without the prior written Consent of the other
Party, which Consent may be given or withheld in any Party’s sole discretion;
provided, however that the foregoing confidentiality and non-disclosure
obligations will not apply to: (1) Buyer if at Closing, if Buyer determines to
issue a press release announcing the fact of the acquisition of the Companies,
and (2) the Parties to the extent that (a) disclosure of such information is
reasonably necessary to consummate the Contemplated Transactions, (b) disclosure
of such information is required pursuant to Legal Requirement (including the
Securities Exchange Act of 1934, as amended, and the rules of any national stock
exchange or automated dealer quotation system) or an Order, (c) disclosure of
such information is reasonably necessary for the Parties to enforce their rights
under this Agreement, or (d) such information is already in the public domain
other than as a result of a breach of this Section 5.8 or Section 5.5 or any
other confidentiality or non-disclosure obligation owed to a Party by any Person
(including the other Party). To the extent that any public announcement of this
Agreement, any of the provisions hereof or the Contemplated Transactions is
required of the Parties by Legal Requirement or Order, the Parties will
cooperate reasonably with respect to reaching agreement on the contents and
timing of such announcement. Prior to any public announcement of this Agreement
or the consummation of the transactions contemplated hereby, Robert W. Guidry
shall reasonably approve the contents and timing of such announcement. Any
Consent required from Seller pursuant to this Section 5.8 or Section 5.5 shall
require the Consent of Robert W. Guidry.  
5.9 Use of Name. Seller hereby agrees that from and after the Closing Date,
Seller and its Related Persons shall not, directly or indirectly, use the name
“The CFS Group,” “The CFS Group Disposal & Recycling,” “RWG5,” or any derivation
or variation thereof in any manner. Seller also hereby agrees that from and
after the Closing Date, Seller and its Related Persons shall not, directly or
indirectly, use the trade name/s “Container First Services”, “CFS”, “Tri-City
Regional Landfill”, “TCR”, “Petersburg Landfill”, “Disposal & Recycling Services
of Lunenburg”, “Lunenburg Landfill” and “Arena Trucking”.
5.10 Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the Effective Date and the Closing or earlier termination of this
Agreement:
(a) Seller will not engage, and will not cause or permit the Companies, to
engage, in any practice, take any action, or enter into any transaction outside
the Ordinary Course of Business with respect to the Assets, including the
Properties, the Businesses or the Companies. Neither Seller nor the Companies
will sell, lease, transfer or assign any of the Membership Interests or the
Assets, including the Properties, outside the Ordinary Course of Business and
will not impose any Liens upon any of the Membership Interests or the Assets,
including the Properties. Seller will not and will not cause or permit the
Companies to, without Buyer’s prior Consent, cancel, compromise, waive or
release any right or claim under, in or to the Membership Interests or the
Assets, including the Properties.
 
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(b) Seller will not, and will not cause or permit the Companies to, without
Buyer’s prior Consent, voluntarily incur any obligation outside the Ordinary
Course of Business or enter into any material transaction, contract, capital
expenditure or commitment for which Buyer may have responsibility or obligation
after Closing outside the Ordinary Course of Business.
(c) Seller will, and will cause the Companies to, keep the Assets, including the
Properties, of the Companies substantially intact and will maintain all of the
Assets, including the Properties, of the Companies in a state of condition that
complies with all Legal Requirements and is consistent with the Ordinary Course
of Business of Seller and the Companies.
(d) Seller will, and will cause the Companies to, comply with all applicable
Legal Requirements of each Governmental Body having jurisdiction over the
Companies, the Properties, the Assets and the Businesses.
(e) Seller will not (a) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of the Membership
Interests or any portion of the Assets, including the Properties, of the
Companies (including any acquisition structured as a merger, consolidation, or
share exchange) or (b) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. Seller will not vote the equity interests in the Companies in favor
of any such acquisition.
(f) Seller will not cause or permit, and will not permit the Companies to
commit, any waste of the Assets, including the Properties, of the Companies.
(g) Seller will not, and will not cause or permit the Companies to, without
prior written consent of Buyer, enter into any compromise or settlement of any
litigation, including any Current Litigation, Proceeding or investigation by any
Governmental Body relating to the Companies, the Businesses, or the Companies’
Assets, including the Properties.
(h) Seller will not, and will not cause or permit the Companies to, take any
action, or knowingly omit to take any action, that would or would reasonably be
expected to result in (i) any representation or warranty of Seller set forth in
Section 3 and 4 becoming untrue or (ii) any of the conditions to the obligations
of Seller set forth in this Agreement not being fully satisfied. Seller will
give prompt written notice to Buyer of any material adverse development causing
any of the representations and warranties in Sections 3 or 4 to become
inaccurate or untrue. No disclosure pursuant to this Section 5.10(h), however,
shall be deemed to cure any misrepresentation, breach of warranty, or breach of
covenant.
(i) Seller shall not perform, nor shall it authorize or allow any of its
Representatives, officers, employees or agents to perform, any acts or omissions
to manipulate the price of Buyer’s Common Stock.
(j) Buyer shall not perform, nor shall it authorize or allow any of its
representatives, officers, directors, employees, or agents, or any of its
shareholders owning more than five percent (5%) of the outstanding stock in
Buyer, to perform, any acts or omissions to manipulate the price of Buyer’s
common stock.
The Parties will do all other acts that may be reasonably necessary or desirable
in the reasonable opinion of the Parties to consummate the Contemplated
Transactions, all without further consideration.
5.11 Termination of this Agreement. The Parties may terminate this Agreement as
provided below:
 
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(a) Buyer and Seller may terminate this Agreement by mutual written Consent at
any time prior to the Closing Date;
(b) Buyer may terminate this Agreement by giving written notice to Seller at any
time prior to the expiration of the Inspection Period if Buyer is not satisfied,
in its sole discretion, with the results of its continuing business, legal,
environmental, and accounting due diligence regarding the Properties, the
Companies, the Businesses or any Governmental Authorization, Permit, Consent,
license, Contract, Company Contract, or any other permit or approval related to
any of the foregoing, or if the Parties fail to execute an amendment to this
Agreement setting forth the Excluded Contracts. If such notice is given, this
Agreement and all rights, duties and obligations of Buyer and Seller hereunder,
except any which expressly survive termination, shall terminate. If such notice
is not given, this Agreement and all rights, duties and obligations of Buyer and
Seller hereunder (including without limitation their respective obligations to
close the transaction), shall become fully binding; provided however,
notwithstanding anything to the contrary herein, Buyer shall have no duty or
obligation to consummate the Contemplated Transactions until such time as Seller
has fulfilled all of its obligations set forth in Section 6.1.
(c) Buyer may terminate this Agreement by giving written notice to Seller at any
time prior to the Closing if Buyer determines that (i) any Governmental
Authorizations, Permit, Consent, Approvals, licenses, Contracts, Company
Contracts, or any other permits or approvals contemplated by this Agreement are
not in existence, have not been obtained by the Companies, or the Companies
either do not have full right, title and interest in and to such Governmental
Authorizations, Permits, Consents, Approvals, licenses, Contracts, Company
Contracts, or any other permits or approvals; or such Governmental
Authorizations, Permits, Approvals, Consents, licenses, Contracts, Company
Contracts, or any other permits or approvals cannot be transferred to or issued
directly to and in the name of the Companies; and/or (ii) such Governmental
Authorizations, Permits, Approvals, Consents, licenses, Contracts, Company
Contracts, or any other permits or approvals cannot be issued, conveyed,
assigned or transferred to the Companies.
(d) Buyer may terminate this Agreement by giving written notice to Seller at any
time prior to the Closing (i) in the event Seller has Breached any
representation, warranty, or covenant contained in this Agreement in any
respect, Buyer has notified Seller of the Breach, and the Breach has continued
without cure for a period of ten (10) days after the notice of Breach;
(e) Seller may terminate this Agreement by giving written notice to Buyer at any
time prior to the Closing (i) in the event Buyer has Breached any
representation, warranty, or covenant contained in this Agreement in any
respect, Seller has notified Buyer of the Breach, and the Breach has continued
without cure for a period of ten (10) days after the notice of Breach; and
(f) In the event that Closing has not been completed by January 6, 2017, Buyer
or Seller, so long as such Party is not then in material breach of any provision
of this Agreement or has undertaken any actions or inactions which shall have
delayed the Closing, may terminate this Agreement upon five (5) Business Days
written notice to the other Party.
If any Party terminates this Agreement pursuant to this Section 5.11, all rights
and obligations of the Parties hereunder shall terminate without any liability
of any Party to any other Party (except for (i) any liability of any Party then
in Breach, (ii) the obligations of the Parties pursuant to Section 5.5, and
(iii) the obligations of Buyer pursuant to Section 5.2).
5.12            Seller Releases. Save and except for any rights of Seller under
this Agreement and the other Transaction Documents (defined below), effective as
of the Closing Date, Seller, for itself, and its Related Parties, sole member,
managers, officers, directors, successors, assigns, agents and Representatives
(collectively, the “Seller Releasing Parties”), hereby finally, unconditionally,
irrevocably and absolutely fully releases, acquits, remises and forever
discharges the Companies and Buyer and any of their Related Persons, and their
respective officers, directors, members, managers, employees, parent companies,
subsidiaries, predecessors, successors, assigns, agents and Representatives,
from any and all actions, suits, debts, sums of money, interest owed, accounts,
contribution obligations, reckonings, bonds, bills, covenants, controversies,
agreements, guaranties, promises, undertakings, variances, trespasses, credit
memoranda, charges, damages, judgments, executions, obligations, costs,
expenses, fees (including attorneys’ fees and court costs), counterclaims,
claims, demands, causes of action and Liabilities (the “Seller Claims”) existing
as of the Closing Date accruing to Seller and the Seller Releasing Parties in
any capacity whatsoever, including, without limitation, (i) related to or
resulting from all of Seller’s and Seller Releasing Parties’ capacities with the
Companies; (ii) arising under or by virtue of the Organizational Documents or
Company Documents; (iii) relating to or resulting from the negotiation,
preparation, and consummation of this Agreement and the Contemplated
Transactions; or (iv) the valuation of the Membership Interests or determination
of the Purchase Price, except in the case of fraud or intentional misconduct by
any of Buyer and any of its Related Persons. This Section 5.12 shall survive
Closing.
 
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5.13 Guaranty. Waste Services Industries Holdings, LLC, a Delaware limited
liability company (the “Guarantor”), joins in the execution of this Agreement
for the purpose of guaranteeing the duties and obligations of Seller pursuant to
this Agreement, including without limitations the obligations of Seller pursuant
to Sections 7 and 8 of this Agreement, in each case subject to the terms of the
applicable Section of this Agreement (collectively, the provisions of this
Section 5.13 are referred to as the “Guaranty”): Without limiting the forgoing:
(a) The Guarantor does hereby absolutely, unconditionally and irrevocably
guarantee to Buyer and the Companies the full payment by Seller of charges,
fees, claims, costs, expenses, damages, Adverse Consequences, Seller Claims,
Current Seller Liabilities, Current Litigation Matters, the Retained
Liabilities, and all other amounts required to be paid by Seller under this
Agreement. Guarantor’s obligations hereunder shall be primary and not secondary
and are independent of the obligations of Seller. This Section 5.13 shall
survive Closing and any termination or expiration of this Agreement.
(b) A separate action or actions may be brought and prosecuted against
Guarantor, whether or not an action is first brought against Seller or whether
Seller shall be joined in any such action or actions. At Buyer’s option, or any
Company if applicable, Guarantor may be joined in any action or Proceeding
commenced by Buyer, or any Company, against Seller in connection with and based
upon any covenants and obligations of this Agreement, and Guarantor hereby
waives any demand by Buyer, or the Companies, and/or prior action by Buyer, or
the Companies, of any nature whatsoever against Seller. The Guarantor Consents
to forbearance, indulgences and extensions of time on the part of Buyer, or the
Companies, being afforded by Seller, and/or the waiver from time to time by
Buyer, or the Companies, of any right or remedy on its part as against Seller.
(c) This Guaranty shall remain and continue in full force and effect,
notwithstanding (i) any alteration of this Agreement by Buyer and Seller,
whether prior or subsequent to the execution thereof; and/or (ii) any renewal,
extension, modification, amendment or assignment of this Agreement. The
Guarantor does hereby waive notice of any of the foregoing and agrees that the
liability of the Guarantor hereunder shall be based upon the obligations set
forth in this Agreement as the same may be altered, renewed, extended, modified,
amended or assigned. Guarantor further waives all notice of the acceptance of
this Guaranty and notice of breach, default or nonperformance by Seller of its
obligations under this Agreement. The Guarantor’s obligations hereunder shall
remain fully binding although Buyer, or any Company as applicable, may have
waived one or more defaults by Seller, extended the time of performance by
Seller, released, returned, or misapplied other collateral given later as
additional security (including other guaranties) and released Seller from the
performance of its obligations under this Agreement. This Guaranty shall remain
in full force and effect notwithstanding the institution by or against Seller of
bankruptcy, reorganization, readjustment, receivership or insolvency proceedings
of any nature, or the disaffirmance of this Lease in any such proceedings or
otherwise.
5.14 Buyer and Seller agree and acknowledge that the Purchase Price Shares may
not be sold or transferred unless  (i) such shares are sold pursuant to an
effective registration statement under the Securities Act, or (ii) the Buyer or
its transfer agent shall have been furnished with an opinion of  counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the shares to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration or (iii) such shares are sold or transferred pursuant to Rule 144
under the Securities Act (or a successor rule) (“Rule 144”) or (iv) such shares
are transferred to an “affiliate” (as defined in Rule 144) of the Seller who
agrees to sell or otherwise transfer the shares only in accordance with this
Section 5.14 and who is an Accredited Investor (as defined in the Securities
Act).  Until such time as the Purchase Price Shares have been registered under
the Securities Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then
be immediately sold, each certificate for shares of Common Stock of Buyer that
has not been so included in an effective registration statement or that has not
been sold pursuant to an effective registration statement or an exemption that
permits removal of the legend, shall bear a legend substantially in the
following form, as appropriate:
 
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“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
The legend set forth above shall be removed and the Buyer shall issue to the
Seller a new certificate for the Purchase Price Shares free of any transfer
legend upon the request of the Seller if the Buyer or its transfer agent shall
have received an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that the one (1)
year holding period under Rule 144 has expired, or that a public sale or
transfer of the Purchase Price Shares otherwise may be made without registration
under the Securities Act, which opinion shall be reasonably accepted by the
Buyer so that the sale or transfer is effected. Any request as described in this
paragraph shall be accompanied by the certificate or certificates representing
the Purchase Price Shares.
For so long after Closing as such action remains a condition to the Seller’s
ability to sell the Purchase Price Shares, Buyer shall remain current in its
periodic reports and filings under the Exchange Act.
5.15 Seller’s Right to Pursue Certain Litigation. Seller shall have the right to
pursue, on its own behalf (including suits brought as the assignee of claims),
litigation to recover damages in the litigation matter filed in the Circuit
Court for the City of Petersburg, Virginia, Case No.  CL16-207 (the “Adenauer
Litigation”). At the request of Seller, Buyer will cause the Companies to assign
to Seller all causes of action to recover damages due to the Adenauer
Litigation. All expenses of any such litigation shall be borne solely by Seller
and not by the Companies or Buyer.
SECTION 6                                 
CONDITIONS TO OBLIGATION TO CLOSE
6.1 Conditions to Obligation of Buyer to Close. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) The representations and warranties of Seller set forth in Sections 3 and 4
shall be true and correct in all material respects at and as of the Closing
Date, except to the extent that such representations and warranties are
qualified by terms such as “material” and “Material Adverse Effect,” in which
case such representations and warranties shall be true and correct in all
respects at and as of the Closing Date. Without limiting generality of the
forgoing, all of the Assets, including all Tangible Personal Property, shall be
collectively in substantially similar condition, use, operation and repair as of
the date of any inspection by Buyer of such Assets and Tangible Personal
Property, normal wear and tear excepted;
 
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(b) Seller shall have performed and complied with all of its covenants hereunder
in all material respects through the Closing, except to the extent that such
covenants are qualified by terms such as “material” and “Material Adverse
Effect,” in which case Seller shall have performed and complied with all of such
covenants in all respects through the Closing;
(c) The Companies and/or Seller shall have procured all of the third-party
Consents specified in Schedule 3.1(d) and 4.3(b);
(d) No action, suit, or proceeding shall be pending or threatened before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (i) prevent
consummation of any of the transactions contemplated by this Agreement, (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (iii) affect adversely the right of Buyer to own the
Membership Interests and to control the Companies, or (iv) affect adversely the
right of the Companies to own their Assets, including the Properties, and to
operate their Businesses (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);
(e) There has not been made or threatened by any Person a claim asserting that
such Person (i) is the holder of record or the beneficial owner of, or has the
right to acquire or to obtain beneficial ownership of, any Membership Interests
or other interest of the Companies, or any other voting, equity or ownership
interest, in or to the Companies, (ii) is entitled to all or any portion of the
Purchase Price payable for the Membership Interests as contemplated by this
Agreement or (iii) is entitled to acquire any of the Assets, including the
Properties, owned by the Companies;
(f) The Companies shall have received, acquired and obtained all nonappealable
and unrestricted Governmental Authorizations, Consents, Permits, Approvals,
licenses, and other permits and approvals, and all pending applications therefor
or renewals thereof, required or necessary for the ownership, construction,
development and operation of Businesses on the Properties by the Companies and
Buyer, including local zoning approval, any required special use or conditional
use permits, local approval that the operation of the Business and the
Properties is consistent with the local solid waste management plan, if any, and
all permits issued by the Commonwealth of Virginia, Department of Environmental
Quality, for the ownership, operation, development and construction of the
Businesses on the Properties, such Consents, licenses, Governmental
Authorizations, permits and approvals to be in accordance with all Legal
Requirements and satisfactory to Buyer in its sole discretion, with respect to
airspace requirements, operating conditions, and any other restrictions or
requirements;
(g) Seller shall have caused the Companies to terminate, without liability to
such Company or Buyer, all Excluded Contracts, or assign all Excluded Contracts
to Seller or any third party;
(h) On or before the Closing, Seller shall file for and obtain in the name of
the applicable Company all the necessary Governmental Authorizations from any
Governmental Body (collectively the “Approvals”) having jurisdiction over the
Properties, or the Businesses, in order for the Permits to be issued to the
Company. Seller covenants to use good faith and due diligence to actively pursue
the Approvals. Seller shall execute any additional agent authorization
documentation and any other document, instrument or certificate specifically
required by any Governmental Body to permit the Companies to obtain the Permits
and Approvals;
(i) Seller shall have delivered to Buyer a certificate to the effect that each
of the conditions specified above in Section 6.1(a)-(h) is satisfied in all
respects;
 
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(j) Seller shall have delivered to Buyer a Closing Statement and accompanying
loan payoff statements showing any and all Current Seller Liabilities which such
Current Seller Liabilities shall be paid and satisfied at or before Closing in
accordance with Section 2.4 (the “Closing Statement”), and shall have delivered
to Buyer the list of all current Accounts Receivables as contemplated by Section
4.11(c);
(k) Buyer shall have received the resignations, effective as of the Closing, of
each officer, director, employee, independent contractor, manager or member of
the Companies whom Buyer shall have specified in writing five (5) Business Days
prior to Closing;
(l) Seller, Guarantor and certain Related Persons of Seller, including Robert W.
Guidry, Charles A. Wilcox, Timothy Webb, and Jeff Kraus shall have executed and
delivered to Buyer a non-competition, non-solicitation, and confidentiality
agreements that, among other things, prevents Seller, certain of its Related
Persons, including Robert W. Guidry, Charles A. Wilcox, Timothy Webb, and Jeff
Kraus, and Guarantor from competing with the Buyer and the Companies or the
Businesses of the Companies and the business of Buyer within a 100 mile radius
of each of the Properties or soliciting customers of the Companies for a period
of five (5) years following the Closing Date or from disclosing confidential
information regarding the Companies for a period of eight (8) years from the
Closing Date. Such agreements shall be substantially in the forms attached
hereto as Schedules 6.1(l)(i), 6.1(l)(ii) and 6.1(iii) respectively (the
“Restrictive Covenants Agreements”);
(m) If applicable, Seller shall have delivered to Buyer a non-foreign affidavit
dated as of the Closing Date, sworn under penalty of perjury and in form and
substance required under the Treasury Regulations issued pursuant to Code
Section 1445, stating that Seller is not a “Foreign Person” as defined in Code
Section 1445;
(n) Seller shall have delivered to Buyer (i) a copy of the articles of
organization of the Companies certified on or soon before the Closing Date by
the Clerk of the Virginia State Corporation Commission (or comparable officer),
(ii) a certificate of fact for the Companies issued on or soon before the
Closing Date by the Clerk of the Virginia State Corporation Commission (or
comparable officer) and the Secretary of State (or comparable officer) of each
jurisdiction in which the Companies are qualified to do business, (iii) limited
liability company records of the Companies and (iv) all other Organizational
Documents;
(o) Seller shall have delivered to Buyer a certificate of the secretary or an
assistant secretary of the Companies, dated the Closing Date, in form and
substance reasonably satisfactory to Buyer, certifying as to (i) no amendments
to the articles of organization or other Organizational Documents of the
Companies since Effective Date; and (ii) any resolutions of the members of the
Companies relating to this Agreement and the Contemplated Transactions;
(p) Buyer and Robert W. Guidry shall have executed and delivered an Employment
Agreement substantially in the form attached hereto as Schedule 6.1(p) (the
“Employment Agreement”);
(q) Buyer shall have received a commitment for financing in the form and
substance satisfactory to Buyer in its sole discretion;
(r) Seller shall have executed and delivered to Buyer an Assignment of the
Membership Interests in the form of Exhibit 6.1(r);
(s) Seller shall have executed and delivered to Buyer a certificate from Seller
that the representations and warranties of Seller set forth herein are true and
correct as of Closing;
(t) Seller shall have delivered to Buyer an executed landlord’s consent
acceptable to Buyer with respect to each lease agreement identified on Schedule
6.1(t); and
 
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(u) all actions to be taken by Seller in connection with Contemplated
Transactions and all certificates, opinions, instruments, and other documents
required to effect the Contemplated Transaction shall be reasonably satisfactory
in form and substance to Buyer.
Buyer may waive any condition specified in this Section 6.1 if it executes a
writing so stating at or prior to the Closing.
(v) Seller shall have delivered to Buyer a certificate of the Manager of Seller,
dated the Closing Date, in form and substance reasonably satisfactory to Buyer,
certifying as to any resolutions of the Members and Manager of the Seller
relating to this Agreement and the Contemplated Transactions.
(w) Seller shall have delivered to Buyer a complete list of the recurring
customers of the Businesses, whether or not such recurring customers are bound
by a written contract or agreement with the Companies.
(x) CFS Disposal shall have obtained complete and full release from all claims
asserted against it in the Andenaur Case (as defined in Schedule 4.20) and an
order dismissing all claims against CFS Disposal endorsed by all parties to the
Andenaur Case shall have been filed with the Court at Closing.
6.2 Conditions to Obligation of Seller to Close. The obligation of Seller to
consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(a) the representations and warranties of Buyer set forth in Section 3.2 shall
be true and correct in all material respects at and as of the Closing Date,
except to the extent that such representations and warranties are qualified by
terms such as “material” and “Material Adverse Effect,” in which case such
representations and warranties shall be true and correct in all respects at and
as of the Closing Date;
(b) Buyer shall have performed and complied with all of its covenants hereunder
in all material respects through the Closing, except to the extent that such
covenants are qualified by terms such as “material” and “Material Adverse
Effect,” in which case Buyer shall have performed and complied with all of such
covenants in all respects through the Closing;
(c) no action, suit, or proceeding shall be pending before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent consummation of any
of the transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(d) Buyer shall have delivered to Seller a certificate to the effect that each
of the conditions specified above in Section 6.2(a)-(c) is satisfied in all
respects;
(e) Buyer shall have executed and delivered the Restrictive Covenants Agreement;
(f) Buyer shall have delivered to Seller (i) a copy of the articles of
incorporation of the Buyer certified on or soon before the Closing Date by the
Secretary of State (or comparable officer) of the State of New York, and (ii) a
certificate of good standing for Buyer issued on or soon before the Closing Date
by the Secretary of State (or comparable officer) of the State of New York;
(g) Buyer shall have delivered to Seller a certificate of the secretary or an
assistant secretary of Buyer, dated the Closing Date, in form and substance
reasonably satisfactory to Seller, certifying as to any resolutions of the Board
of Directors of the Buyer relating to this Agreement and the Contemplated
Transactions;
 
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(h) Buyer shall have executed and delivered to Seller a certificate from Buyer
that the representations and warranties of Buyer set forth herein are true and
correct as of Closing;
(i) Seller shall have been able to obtain an executed landlord’s consent and
releases of all guarantees of Seller, Seller’s Related Persons or any other
person in effect on the Effective Date with respect to each lease agreement
identified on Schedule 6.1(t);
(j) Buyer and Robert W. Guidry shall have executed and delivered the Employment
Agreement;
(k) Seller shall have been able to obtain releases of all bond and similar
surety obligation guarantees of Seller, Seller’s Related Persons or any other
person in effect on the Effective Date with respect to the Properties and the
Businesses; and
(l) all actions to be taken by Buyer in connection with consummation of the
Contemplated Transactions and all certificates, opinions, instruments, and other
documents required to effect the Contemplated Transactions will be reasonably
satisfactory in form and substance to Seller.
Seller may waive any condition specified in this Section 6.2 if Seller executes
a writing so stating at or prior to the Closing.
SECTION 7                                 
INDEMNIFICATION
7.1 Survival. Subject to the provisions of this Section 7 and Section 8, all
representations, warranties, covenants and obligations of the Parties contained
in this Agreement and in the agreements, instruments and other documents
delivered pursuant to this Agreement will survive the Closing and the
consummation of the Contemplated Transactions.
7.2 Indemnification by Buyer. Buyer hereby covenants and agrees that, to the
fullest extent permitted by Legal Requirement, it will defend, indemnify and
hold harmless Seller and its Related Persons and Representatives, and their
respective officers, directors, members, managers, employees, agents, and
Representatives, and all successors and assigns of the foregoing (collectively,
the “Seller Indemnified Persons”), for, from and against any Adverse
Consequences, arising from or in connection with:
(a) any breach of, or any inaccuracy in, any representation or warranty made by
Buyer (i) in this Agreement, (ii) the Schedules, (iii) the certificates
delivered pursuant to Section 6 of this Agreement, or (iv) any other document,
writing or instrument delivered by Buyer pursuant to Section 6 of this
Agreement;
(b) any breach of, or failure to perform or comply with, any covenant,
obligation or agreement of Buyer in this Agreement or in any other certificate,
document, writing or instrument delivered by Seller pursuant to Section 6 of
this Agreement; or
(c) any claim by any Person for any brokerage or finder’s fee, commission or
similar payment based upon any agreement or understanding made, or alleged to
have been made, by any Person with Buyer in connection with this Agreement or
any of the Contemplated Transactions.
7.3 Indemnification by Seller.
(a) Seller hereby covenants and agrees that, to the fullest extent permitted by
Legal Requirement, it will defend, indemnify and hold harmless Buyer, and its
Related Persons and Representatives, and their respective officers, directors,
members, managers, employees, agents, and Representatives, and all successors
and assigns of the foregoing (collectively, the “Buyer Indemnified Persons”),
for, from and against any Adverse Consequences arising from or in connection
with:
 
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(i)           any breach of, or any inaccuracy in, any representation or
warranty made by Seller in (A) this Agreement, (B) the Schedules, (C) the
certificates delivered pursuant to this Agreement, (D) any transfer instrument
delivered by Seller pursuant to Section 6 of this Agreement, or (E) any other
certificate, document, writing or instrument delivered by Seller pursuant to
Section 6 of this Agreement;
(ii)         any breach of, or failure to perform or comply with, any covenant,
obligation or agreement of Seller in this Agreement or in any other certificate,
document, writing or instrument delivered by Seller pursuant to Section 6 of
this Agreement;
(iii)                   all Current Seller Liabilities;
(iv)           all Current Litigation Matters;
 
(v) any Liability of the Companies resulting from, caused by, or arising in
connection with the termination or assignment of any Excluded Contract;
(vi) any claim by any Person for any brokerage or finder’s fee, commission or
similar payment based upon any agreement or understanding alleged to have been
made by such Person with any Seller in connection with this Agreement or any of
the Contemplated Transactions;
(vii) The Retained Liabilities;
(viii) any Indebtedness of the Companies outstanding on the Closing Date and not
reflected on Schedule 2.4; and,
 
(ix)           Adverse Consequences (including costs of cleanup, containment or
other Remedial Action) arising out of acts or negligence occurring or conditions
existing at or before Closing from or in connection with:
(1) any Environmental, Health and Safety Liabilities arising out of or relating
to (A) the conduct of any activity by Seller, the Companies, or their Related
Persons, or any employee, contractor, agent or Representative thereof, or
relating to the Businesses and Assets, including the Properties, of the
Companies; or (B) any Hazardous Materials or other contaminants that were
present on the Properties or Assets at any time on or prior to the Closing Date;
or
(2) any bodily injury (including illness, disability or death, regardless of
when such bodily injury occurred, was incurred or manifested itself), personal
injury, property damage (including trespass, nuisance, wrongful eviction and
deprivation of the use of real property) or other damage of or to any Person or
any Asset, including the Properties, in any way arising from or allegedly
arising from (A) any Hazardous Activity conducted by Seller, the Companies or
their Related Persons or any employee, contractor, agent or Representative
thereof; or (B) from any Hazardous Material that was (1) present on or before
the Closing Date on or at the Properties (or present on any other property, if
such Hazardous Material emanated from any Property and was present on any
Property, on or prior to the Closing Date) or (2) Released by Seller, the
Companies or their Related Persons, or any Person, on or at any of the
Properties or Assets at any time on or prior to the Closing Date;
provided, however, that Seller shall not be liable to Buyer under this Section
7.3(ix) if (i) such Hazardous Activity or Hazardous Material for which the
indemnity claim arises from was not present on any Property on or prior to the
Closing Date; and (ii) that Buyer did not materially contribute, directly or
indirectly, to the presence of such Hazardous Activity or Hazardous Material on
any Property. For purposes of this Section 7.3(viii) only, the burden and
expense in obtaining the proof necessary to show the Hazardous Activity or
Hazardous Material was present on any Property on or prior to the Closing Date
shall be borne by the Buyer.
 
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Buyer, either directly or through the Companies, will be entitled to control any
Remedial Action, any Proceeding relating to a claim that any Environmental Law
has been violated and any other Proceeding with respect to which indemnity may
be sought under this Section 7.3(viii).
 
 
7.4 Time Limitations.
(a) Subject to the limitations and other provisions of this Agreement, a Buyer
Indemnified Person may only assert a claim for indemnification under Section 7.3
during the applicable period of time (the “Buyer Claims Period”) specified as
follows:
(i) with respect to any claim arising out of (A) any breach of, or any
inaccuracy in, any representation or warranty contained in Sections 3.1(a),
3.1(b), 3.1(f), 3.1(g), 4.1, 4.2, 4.4 or 4.6 of this Agreement, (B) fraud,
willful misrepresentation or willful misconduct, (C) any Current Seller
Liability, Retained Liability or any Indebtedness of the Companies outstanding
on the Closing Date and not reflected on Schedule 2.4, (D) any Liability for any
Current Litigation Matter, or (E) any Liability of the Companies resulting from,
caused by, or arising in connection with any Excluded Contracts, the Buyer
Claims Period will commence on the date of this Agreement and continue
indefinitely;
(ii) with respect to any claim arising out of any breach of, or any inaccuracy
in, any representation or warranty contained in Sections 4.22 or 4.24, the Buyer
Claims Period will commence on the date of this Agreement and continue for the
full period of all applicable statutes of limitations (giving effect to any
waiver, mitigation or extension thereof) plus 60 days; and
(iii) with respect to any other indemnification claim (other than any breach of,
or failure to perform or comply with, any covenant, obligation or agreement of
Seller contained in Section 8, which are subject only to Section 8) made under
Section 7.3, the Buyer Claims Period will commence on the date of this Agreement
and continue until the date that is eighteen (18) months after the Closing Date;
provided, however, that with respect to any such indemnification claim made
under Section 7.3(a)(ii) regarding Seller’s breach of, or failure to perform or
comply with, any obligation hereunder or under any related agreement that is
intended to survive and continue after the Closing, the Buyer Claims Period will
continue for as long as such obligation is outstanding (other than any breach
of, or failure to perform or comply with, any covenant, obligation or agreement
of Seller contained in Section 8, which are subject to Section 8).
(b) Subject to the limitations and other provisions of this Agreement, a Seller
Indemnified Person may only assert a claim for indemnification under Section 7.2
during the applicable period of time (the “Seller Claims Period”) specified as
follows:
(i) with respect to any claim arising out of (A) any breach of, or any
inaccuracy in, any representation or warranty contained in Sections 3.2(a),
3.2(b), 3.1(e), 3.2(g), 3.2(j) or 3.2(k) of this Agreement, or (B) fraud,
willful misrepresentation or willful misconduct, the Seller Claims Period will
commence on the date of this Agreement and continue indefinitely;
(ii) with respect to any claim arising out of any breach of, or any inaccuracy
in, any representation or warranty contained in Section 3.2(h), or 3.2(i), the
Seller Claims Period will commence on the date of this Agreement and continue
for the full period of all applicable statutes of limitations (giving effect to
any waiver, mitigation or extension thereof) plus 60 days; and
(iii) with respect to any other indemnification claim (other than any breach of,
or failure to perform or comply with, any covenant, obligation or agreement of
Seller contained in Section 8, which are subject only to Section 8) made under
Section 7.2, the Seller Claims Period will commence on the date of this
Agreement and continue until the date that is eighteen (18) months after the
Closing Date;
 
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provided, however, that with respect to any such indemnification claim made
under Section 7.2(b) regarding Buyer’s breach of, or failure to perform or
comply with, any obligation hereunder or under any related agreement that is
intended to survive and continue after the Closing, the Seller Claims Period
will continue for as long as such obligation is outstanding (other than any
breach of, or failure to perform or comply with, any covenant, obligation or
agreement of Buyer contained in Section 8, which are subject to Section 8).
Notwithstanding anything to the contrary in this Section 7.4, if before 5:00
p.m. (eastern time) on the last day of the applicable Buyer Claims Period or
Seller Claims Period, any Party against which an indemnification claim has been
made hereunder has been properly notified in writing of such claim for indemnity
hereunder and the basis thereof, including with reasonable supporting details
for such claim (to the extent then known), and such claim has not been finally
resolved or disposed of as of such date, then such claim will continue to
survive and will remain a basis for indemnity hereunder until such claim is
finally resolved or disposed of in accordance with the terms of this Agreement.
7.5 Certain Limitations for Indemnity Claims. Neither Buyer nor Seller shall be
liable for any claim for indemnification under Section 7.2(a) or Section 7.3(a)
until the claiming party has incurred Adverse Consequences totaling Two Hundred
Fifty Thousand and 00/100 Dollars ($250,000.00), whereupon the indemnifying
party shall remain liable for all Adverse Consequences incurred by the claiming
party up to and including an amount equal to ten percent (10.0%) of the Purchase
Price (the “Indemnification Cap”). The Indemnification Cap shall not apply to
any claim for Adverse Consequences relating to any of the following:
(a) Seller’s breach of its representations and warranties set forth Sections
3.1(a), 3.1(b), 3.1(f), 3.1(g), 4.1, 4.2, 4.4, 4.6, 4.22 or 4.24;
(b) Buyer’s breach of its representations and warranties set forth Sections
3.2(a), 3.2(b), 3.1(e), 3.2(g), 3.2(h), 3.2(i), 3.2(j) or 3.2(k); or
(c) Adverse Consequences resulting from acts of fraud.
7.6 Payment of Claims. Once an Adverse Consequence is agreed to by the
indemnifying Party or finally adjudicated to be payable pursuant to this Section
7, the indemnifying Party shall satisfy its obligations within 15 Business Days
of the date of such agreement or the date of such final, non-appealable
adjudication by wire transfer of immediately available funds.
7.7 Third-Party Claims.
(a) No later than ten (10) Business Days after receipt by a Person entitled to
indemnity under Section 7.2 or 7.3 (an “Indemnified Person”) of notice of the
assertion of a Third-Party Claim against it, such Indemnified Person shall give
notice to the Person obligated to indemnify under such section (an “Indemnifying
Person”) of the assertion of such Third-Party Claim and a copy of any writing by
which, such Third-Party assertion is made. Such notice by the Indemnified Person
shall describe the Third Party Claim in reasonable detail, shall include copies
of all material written evidence thereof and shall indicate the estimated
amount, if reasonably practicable, of the Adverse Consequence that has been or
may be sustained by the Indemnified Person. The failure to notify the
Indemnifying Person will only relieve the Indemnifying Person of any liability
that it may have to any Indemnified Person to the extent that the Indemnifying
Person demonstrates that the defense of such Third-Party Claim is materially
prejudiced by the Indemnified Person’s failure to give such notice.
(b) If an Indemnified Person gives notice to the Indemnifying Person pursuant to
Section 7.7(a) of the assertion of a Third-Party Claim, the Indemnifying Person
shall be entitled to participate in the defense of such Third-Party Claim and,
to the extent that it wishes (unless (i) the Indemnifying Person is also a
Person against whom the Third-Party Claim is made and the Indemnified Person
determines in good faith that joint representation would be inappropriate or
(ii) the Indemnifying Person fails to provide reasonable assurance to the
Indemnified Person of its financial capacity to defend such Third-Party Claim
and provide indemnification with respect to such Third-Party Claim), to assume
the defense of such Third-Party Claim with counsel reasonably satisfactory to
the Indemnified Person (provided, such counsel has appropriate experience in the
subject matter relating to the claim). After notice from the Indemnifying Person
to the Indemnified Person of its election to assume the defense of such
Third-Party Claim, the Indemnifying Person shall not, so long as it diligently
conducts such defense, be liable to the Indemnified Person under this Section
7.7(b) for any fees of other counsel or any other expenses with respect to the
defense of such Third-Party Claim, in each case subsequently incurred by the
Indemnified Person in connection with the defense of such Third-Party Claim. If
the Indemnifying Person assumes the defense of a Third-Party Claim, no
compromise or settlement of such Third-Party Claims may be effected by the
Indemnifying Person without the Indemnified Person’s Consent unless: (A) there
is no finding or admission of any violation of Legal Requirement or any
violation of the rights of any Person; (B) the sole relief provided is monetary
damages that are paid in full by the Indemnifying Person; and (C) the
Indemnified Person shall have no liability with respect to any compromise or
settlement of such Third-Party Claims effected without its Consent. If notice is
given to an Indemnifying Person of the assertion of any Third-Party Claim and
the Indemnifying Person does not, within ten (10) days after the Indemnified
Person’s notice is given, give notice to the Indemnified Person of its election
to assume the defense of such Third-Party Claim, or thereafter fails to
diligently prosecute the defense of such Third-Party Claim, the Indemnifying
Person will be bound by any determination made in such Third-Party Claim or any
compromise or settlement effected by the Indemnified Person.
 
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(c) Notwithstanding the foregoing, if an Indemnified Person determines in good
faith that there is a reasonable probability that a Third-Party Claim may
adversely affect it or its Related Persons other than as a result of monetary
damages for which it would be entitled to indemnification under this Agreement,
the Indemnified Person may, by notice to the Indemnifying Person, assume the
exclusive right to defend, compromise or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of any Third-Party
Claim so defended for the purposes of this Agreement or any compromise or
settlement effected without its Consent (which may not be unreasonably
withheld).
(d) With respect to any Third-Party Claim subject to indemnification under this
Section 7: (i) both the Indemnified Person and the Indemnifying Person, as the
case may be, shall keep the other Person fully informed of the status of such
Third-Party Claim and any related Proceedings at all stages thereof where such
Person is not represented by its own counsel; and (ii) the parties agree (each
at its own expense) to render to each other such assistance as they may
reasonably require of each other and to cooperate in good faith with each other
in order to ensure the proper and adequate defense of any Third-Party Claim.
(e) With respect to any Third-Party Claim subject to indemnification under this
Section 7, the parties agree to cooperate in such a manner as to preserve in
full (to the extent possible) the confidentiality of all Confidential
Information and the attorney-client and work-product privileges. In connection
therewith, each Party agrees that: (i) it will use its best efforts, in respect
of any Third-Party Claim in which it has assumed or participated in the defense,
to avoid production of Confidential Information (consistent with applicable law
and rules of procedure); and (ii) all communications between any Party hereto
and counsel responsible for or participating in the defense of any Third-Party
Claim shall, to the extent possible, be made so as to preserve any applicable
attorney-client or work-product privilege.
7.8 Tax Claims. Notwithstanding any other provision of this Agreement, the
control of any claim, assertion, event or proceeding in respect of Taxes
(including, but not limited to, any such claim in respect of a breach of the
representations and warranties in Section 3.2(e) or 4.15 hereof or any breach or
violation of or failure to fully perform any covenant, agreement, undertaking or
obligation in Section 8 hereof) shall be governed exclusively by Section 8
hereof.
7.9 Tax Treatment of Indemnification Payments. All indemnification payments made
under this Agreement shall be treated by the Parties as an adjustment to the
Purchase Price for Tax purposes, unless otherwise required by Legal Requirement.
7.10 Mitigation. Each of the Parties hereto agrees to take all reasonable steps
to mitigate their respective Adverse Consequences upon and after becoming aware
of any event or condition which could reasonably be expected to give rise to any
Adverse Consequences that are indemnifiable hereunder.
 
39

 
7.11 Subrogation. Upon making any payment to the Indemnified Person for any
indemnification claim pursuant to Section 7, the Indemnifying Person shall be
subrogated, to the extent of such payment, to any rights which the Indemnified
Person may have against any third parties with respect to the subject matter
underlying such indemnification claim and the Indemnified Person shall assign
any such rights to the Indemnifying Person.
7.12 Escrow. In order to provide a ready fund for the payment to Buyer of
amount(s) due from Seller pursuant to this Section 7, the parties hereto hereby
agree that $600,000 of the Purchase Price (the “Escrow Amount”) described in
Section 2.2(i) shall be placed in escrow at Closing with a national or state
bank with trust powers to be mutually agreed upon by Buyer and the Seller prior
to Closing (the “Escrow Agent”), which escrow shall be subject to the terms and
conditions substantially in the form of the escrow agreement attached hereto and
made a part hereof as Exhibit 7.12 (the “Escrow Agreement”). One Hundred
Thousand and no/100ths Dollars ($100,000.00) of the Escrow Amount (the
“Litigation Escrow”) shall be held by the Escrow Agent and used solely for the
purpose of (i) defending against or prosecuting any of the Current Litigation
Matters, including payment of attorneys’ fees or other expenses of litigation,
or (ii) settling any Current Litigation matter or paying any judgment which may
arise under the Current Litigation Matters as more particularly described in the
Escrow Agreement. Upon the final resolution of all Current Litigation Matters,
any remaining funds making up the Litigation Escrow, if any, shall be promptly
paid to Seller in accordance with the terms of the Escrow Agreement.
7.13 Exclusive Remedies. Subject to Section 5.6 and Section 9.11 the Parties
acknowledge and agree that their sole and exclusive remedy with respect to any
and all claims (other than claims arising from fraud on the part of a Party
hereto in connection with the transactions contemplated by this Agreement) for
any breach of any representation, warranty, covenant, agreement or obligation
set forth herein or otherwise relating to the subject matter of this Agreement,
shall be pursuant to the indemnification provisions set forth in this Section 7
and in Section 8. In furtherance of the foregoing, each Party hereby waives, to
the fullest extent permitted under law, any and all rights, claims and causes of
action for any breach of any representation, warranty, covenant, agreement or
obligation set forth herein or otherwise relating to the subject matter of this
Agreement it may have against the other Parties hereto and their Affiliated
Groups and each of their respective Representatives arising under or based upon
any Legal Requirement, except pursuant to the indemnification provisions set
forth in this Section 7 and in Section 8. Nothing in this Section 7.13 shall
limit any Person’s right to seek and obtain any equitable relief to which any
Person shall be entitled or to seek any remedy on account of any Party’s fraud.
SECTION 8                                 
TAX MATTERS
The following provisions shall govern the allocation of responsibility as
between Buyer and Seller for certain tax matters following the Closing Date:

8.1           Tax Indemnification. Seller shall indemnify the Companies, Buyer,
and each Related Person of Buyer and hold them harmless from and against,
without duplication, any loss, claim, liability, expense, or other damage
attributable to (a) any breach of, or any inaccuracy in, any representation or
warranty contained in Sections 4.15, (b) all Taxes (or the non-payment thereof)
of the Companies for all Taxable periods ending on or before the Closing Date
and the portion of any Straddle Period (as defined below) through the end of the
Closing Date (“Pre-Closing Tax Period”), and (c) any and all Taxes of any Person
(other than the Company) imposed on the Companies as a transferee or successor,
by contract or pursuant to any law, rule, or regulation, which Taxes relate to
an event or transaction occurring before the Closing. Notwithstanding the
forgoing, Seller shall not be responsible for indemnification of any loss,
claim, liability, expense, or other damage attributable to a filing, settlement
or other action taken by Buyer without the written Consent of Seller. Seller
shall reimburse Buyer for any Taxes of the Companies which are the
responsibility of Seller or the Companies pursuant to this Section 8.1 within
fifteen (15) business days after payment of such Taxes by Buyer or the
applicable Company. Buyer shall indemnify Seller and hold it harmless from and
against any loss, claim, liability, expense or other damage attributable to
Buyer’s failure to timely file complete and accurate Tax Returns pursuant to
Section 8.3. Buyer and the Companies shall indemnify Seller, and each Related
Person of Seller and hold them harmless from and against, without duplication,
any loss, claim, liability, expense, or other damage attributable to (a) any
breach of, or any inaccuracy in, any representation or warranty contained in
Sections 3.2(e), (b) all Taxes (or the non-payment thereof) of the Companies for
all Taxable periods ending after the Closing Date and the portion of any
Straddle Period following the Closing Date, and (c) any and all Taxes of any
Person (other than the Company) imposed on the Companies as a transferee or
successor, by contract or pursuant to any law, rule, or regulation, which Taxes
relate to an event or transaction occurring after the Closing.
 
40

 

8.2           Straddle Period. In the case of any Taxable period that includes
(but does not end on) the Closing Date (a “Straddle Period”), the amount of any
Taxes based on or measured by income or receipts of the applicable Company for
the Pre-Closing Tax Period shall be determined based on an interim closing of
the books as of the close of business on the Closing Date and the amount of
other Taxes of the applicable Company for a Straddle Period which relate to the
Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the
entire Taxable period multiplied by a fraction the numerator of which is the
number of days in the Taxable period ending on the Closing Date and the
denominator of which is the number of days in such Straddle Period.

8.3           Responsibility for Filing Tax Returns. Seller shall prepare or
cause to be prepared at Seller’s cost and file or cause to be filed the income
Tax Returns related to a Pre-Closing Tax Period other than a Straddle Period,
but shall provide a copy of such return to Buyer at least ten (10) days prior to
the filing deadline and give Buyer an opportunity to provide comments with
respect to such Tax Returns. Buyer shall prepare or caused to be prepared at
Buyer’s cost and file or cause to be filed all other Tax Returns for the
Companies which are filed after the Closing Date. With respect to Straddle
Period returns, Buyer shall provide Seller a copy in advance of the filing
deadline and give Seller an opportunity to provide comments to such return.

8.4           Cooperation on Tax Matters.
(a)           Buyer and its Related Persons and Seller and its Related Persons
shall cooperate fully, as and to the extent reasonably requested by the other
Party, in connection with the filing of Tax Returns pursuant to Section 8.3 and
any audit, litigation or other proceeding with respect to Taxes. Such
cooperation shall include the retention and (upon the other Party’s request) the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Buyer (and Buyer shall cause the Companies) and
Seller agree (i) to retain all books and records with respect to Tax matters
pertinent to the Companies relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Buyer or Seller, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (ii) to give the other Party reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if the other Party so requests, Seller and Buyer shall cause the
Companies to, as the case may be, and shall allow the other Party to take
possession of such books and records.
(b)           Buyer and Seller further agree, upon request, to use their
reasonable efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).

8.5           Time Limitation. Notwithstanding anything in this Agreement to the
contrary, the provisions contained in Section 3.2(e), 4.15 and this Section 8
shall survive for the full period of all applicable statutes of limitation
(giving effect to any waiver, mitigation or extension thereof) plus 60 days.

8.6           Certain Taxes and Fees. Except as otherwise provided in this
Agreement, all transfer, documentary, sales, use, stamp, and registration Taxes,
and all conveyance fees, recording charges and other fees and charges (including
any penalties and interest) incurred in connection with consummation of the
transactions contemplated by this Agreement shall be paid by Seller when due,
and Seller will, at Seller’s own expense, file all necessary Tax Returns and
other documentation with respect to all such Taxes, fees and charges, and, if
required by applicable law, Buyer will, and will cause its Related Persons to,
join in the execution of any such Tax Returns and other documentation.
 
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8.7           Refunds and Tax Benefits. Any Tax refunds that are received by
Buyer or the Companies, and any amounts credited against Tax to which the Buyer
or the Companies become entitled, that relate to Pre-Closing Tax Periods shall
be for the account of the Seller, and, so long as no default or deficiency is
then due from Seller to Buyer under Section 7 and Section 8, Buyer shall pay
over to Seller any such refund or the amount of any such credit within fifteen
(15) days after receipt or entitlement thereto.
SECTION 9                                 
MISCELLANEOUS
9.1 Expenses. Each of Buyer and Seller will bear their own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the Contemplated Transaction, and Seller shall also bear the costs and
expenses of the Companies (including all of their legal fees and expenses) in
connection with this Agreement and the Contemplated Transactions. Seller shall
also bear the costs and expenses incurred solely in connection with the transfer
of the Membership Interests to Buyer, if any. Seller shall be responsible for
all federal and state income or similar taxes imposed on Seller as a result of
the Contemplated Transaction hereby.
9.2 Notices. All notices, requests, demands, claims and other communications
permitted or required to be given hereunder must be in writing and will be
deemed duly given and received (i) if personally delivered, when so delivered,
(ii) if mailed, three (3) Business Days after having been sent by registered or
certified mail, return receipt requested, postage prepaid and addressed to the
intended recipient as set forth below, (iii) if sent by electronic facsimile,
once transmitted to the fax number specified below and the appropriate
telephonic confirmation is received, provided that a copy of such notice,
request, demand, claim or other communication is promptly thereafter sent in
accordance with the provisions of clause (ii) or (v) hereof, (iv) if sent by
Email, on the date sent if sent during normal business hours of the recipient,
and on the next Business Day if sent after normal business hours of the
recipient, or (v) if sent through an overnight delivery service in circumstances
to which such service guarantees next day delivery, the Business Day following
being so sent:
 
 
 
 
(a) To Buyer:
 
Meridian Waste Solutions, Inc.
12540 Broadwell Road, Suite 2104
Milton, Georgia 30004
Attn: Jeffrey Cosman
Email: jsc@jscosinc.com
Phone: (724) 799-4305
 
with a copy (which will not constitute valid delivery to Buyer) to:
Richard J. Dreger, Attorney at Law, P.C.
11660 Alpharetta Highway
Building 700, Suite 730
Roswell, Georgia 30076
Attn: Richard J. Dreger, Esq.
Email: Rick@rdregerlaw.com
Phone: (678) 566-6901
 
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(b) To Seller:
Waste Services Industries, LLC
c/o LeClairRyan, A Professional Corporation
919 East Main Street
24th Floor
Richmond, Virginia 23219
Attention: John C. Selbach, Esquire
Email: cwilcox@wsillc.com
Phone: (713) 502-7270
 
with a copy (which will not constitute valid delivery to Seller) to:
LeClairRyan, A Professional Corporation
919 East Main Street
24th Floor
Richmond, Virginia 23219
Attention: John C. Selbach, Esquire
Facsimile: (804) 916-7288
Email: john.selbach@leclairryan.com
and
Peter T. Roselle
800 East Grand Street
Elizabeth, NJ 07201
Email: ptroselle@regional-industries.com
Phone: (908) 436-1966
 
Either Party may give any notice, request, demand, claim or other communication
hereunder using any other means (including, without limitation, electronic
mail), but no such notice, request, demand, claim or other communication will be
deemed to have been duly given or received unless and until it actually is
received by the Party for which it is intended and the notifying Party can
provide evidence of such actual receipt. Either Party may change its address for
the receipt of notices, requests, demands, claims and other communications
hereunder by giving the other Party notice of such change in the manner herein
set forth.
9.3 Waiver. Neither any failure nor any delay by any Party in exercising any
right, power or privilege under this Agreement or any of the documents referred
to in this Agreement will operate as a waiver of such right, power or privilege,
and no single or partial exercise of any such right, power or privilege will
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. To the maximum extent permitted
by Legal Requirement: (a) no claim or right arising out of this Agreement or any
of the documents referred to in this Agreement can be discharged by one Party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by another Party; (b) no waiver that may be given by a Party will
be applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one Party will be deemed to be a waiver of any obligation
of that Party or of the right of the Party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
9.4 Entire Agreement and Modification. This Agreement (including the Schedules
and Exhibits hereto and the other agreements and instruments to be executed and
delivered by the Parties pursuant to Section 6 hereto) constitutes the entire
and final agreement among the Parties with respect to the subject matter hereof,
and supersedes and replaces all prior agreements, understandings, commitments,
communications and representations made among the Parties, whether written or
oral, with respect to the subject matter hereof. This Agreement may not be
amended, supplemented, or otherwise modified except by a written agreement
executed by the Parties.
9.5 Assignments; Successors; No Third-Party Rights. No Party may assign any of
its rights or delegate or cause to be assumed any of its obligations under this
Agreement without the prior written Consent of each other Party, except that
Buyer may assign any of its rights hereunder to, and cause all of its
obligations hereunder to be assumed by, any Related Person without the Consent
of Seller; provided, however, that in the event of such an assignment by Buyer,
Buyer shall remain responsible for all of its obligations hereunder. Subject to
the preceding sentence, this Agreement will apply to, be binding in all respects
upon and inure to the benefit of the successors and permitted assigns of the
Parties, including the Guarantors. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the Parties any legal
or equitable right, remedy or claim under or with respect to this Agreement or
any provision of this Agreement, except such rights as will inure to a successor
or permitted assignee pursuant to this Section 9.5. Notwithstanding anything to
the contrary in this Section 9.5 or otherwise, Buyer shall at all times have all
rights and remedies granted to Buyer pursuant to Section 5.13 and the Guarantors
shall at all times be bound by the provisions of Section 5.13.
 
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9.6 Severability. If any provision of this Agreement, or the application of any
such provision to any Person or circumstance, is held to be unenforceable or
invalid by any Governmental Body or arbitrator or under any Legal Requirement,
the Parties will negotiate an equitable adjustment to the provisions of this
Agreement with the view to effecting, to the greatest extent possible, the
original purpose, intent and commercial effect of such provision and of this
Agreement. In any event, the invalidity of any provision of this Agreement or
portion of a provision will not affect the validity of any other provision of
this Agreement or the remaining portion of the applicable provision.
9.7 Dates and Times. Dates and times set forth in this Agreement for the
performance of the Parties’ respective obligations hereunder or for the exercise
of their rights hereunder will be strictly construed, time being of the essence
of this Agreement. All provisions in this Agreement which specify or provide a
method to compute a number of days for the performance, delivery, completion or
observance by any Party of any action, covenant, agreement, obligation or notice
hereunder will mean and refer to calendar days, unless otherwise expressly
provided. Except as expressly provided herein, the time for performance of any
obligation or taking any action under this Agreement will be deemed to expire at
5:00 p.m. (eastern time) on the last day of the applicable time period provided
for herein. If the date specified or computed under this Agreement for the
performance, delivery, completion or observance of a covenant, agreement,
obligation or notice by any Party, or for the occurrence of any event provided
for herein, is a day other than a Business Day, then the date for such
performance, delivery, completion, observance or occurrence will automatically
be extended to the next Business Day following such date.
9.8 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the Commonwealth of Virginia without giving
effect to any choice or conflict of law provision or rule (whether of the
Commonwealth of Virginia or any other jurisdiction).
9.9 Dispute Resolution; Submission to Jurisdiction; Waiver of Jury Trial.
(a)           Any dispute or difference between or among any of the Parties
arising out of or in connection with this Agreement or the Contemplated
Transactions, including without limitation any dispute for indemnification under
Section 7 or 8, which such Parties are unable to resolve themselves shall be
submitted to and resolved by arbitration before a single arbitrator, for amounts
in dispute under Two Hundred Thousand and 00/100 Dollars ($200,000.00) and
otherwise before a panel of three (3) arbitrators, which arbitration shall be
governed by and enforceable under the Federal Arbitration Act, as supplemented
or modified by the provisions of this Section 9.9. The arbitrator(s) will
consider the dispute at issue in Richmond, Virginia within one hundred twenty
(120) days (or such other period as may be acceptable to the Parties to the
dispute) of the designation of the arbitrator. The arbitrator(s) will deliver a
written award, including written findings of fact and conclusions of law, with
respect to the dispute to each of the arbitrating Parties, who will promptly act
in accordance therewith. In no event will the arbitrator(s) have the power to
award damages in connection with any dispute in excess of actual compensatory
damages. In particular, the arbitrator(s) may not multiply actual damages or
award consequential, indirect, special or punitive damages, including, without
limitation, damages for lost profits or loss of business opportunity. Any award
of the arbitrator(s) will be final, conclusive and binding on the arbitrating
Parties; provided, however, that any such Party may seek the vacating,
modification or correction of the arbitrator(s)’ decision or award as provided
under Section 10 and Section 11 of the Federal Arbitration Act 9 U.S.C. §1-14.
Any Party to an arbitration proceeding may enforce any award rendered pursuant
to the arbitration provisions of this Section 9.9 by bringing suit in any court
of competent jurisdiction located in the City of Richmond, Virginia. All costs
and expenses attributable to the arbitrator(s) will be allocated between the
Parties to the arbitration in such manner as the arbitrator(s) determine to be
appropriate under the circumstances. Any Party may file a copy of this Section
9.9 with any arbitrator or court as written evidence of the knowing, voluntary
and bargained agreement among the Parties with respect to the subject matter of
this Section 9.9.
 
 
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(b)           SUBJECT TO SECTION 9.9(A) ABOVE, ANY LEGAL SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER DOCUMENTS
DELIVERED IN CONNECTION WITH CLOSING OF THE CONTEMPLATED TRANSACTIONS (THE
“TRANSACTION DOCUMENTS”) OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY
BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN
THE CITY OF RICHMOND, VIRGINIA OR THE COURTS OF THE COMMONWEALTH OF VIRGINIA
LOCATED IN THE CITY OF RICHMOND, VIRGINIA, AND EACH PARTY IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO
SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR
ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF
ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS, OR ANY ARBITRATION PROCEEDING
CONDUCTED IN THE CITY OF RICHMOND, VIRGINIA, AND IRREVOCABLY WAIVE AND AGREE NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT OR ARBITRATION PROCEEDING THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT, OR IN THE CITY OF RICHMOND
IN THE CASE OF AN ARBITRATION PROCEEDING, HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
 
(c)           EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF
A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,
(C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.9(c).

9.10 Execution of Agreement. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy and all of
which, when taken together, will be deemed to constitute one and the same
agreement. The exchange of copies of this Agreement and of signature pages by
facsimile transmission or electronic mail in PDF format will constitute
effective execution and delivery of this Agreement as to the Parties and may be
used in lieu of the original Agreement for all purposes. Signatures of the
Parties transmitted by facsimile or by electronic mail in PDF format will be
deemed to be their original signatures for all purposes.
9.11 Specific Performance. Each Party acknowledges and agrees that each Party
would be damaged irreparably in the event any provision of this Agreement is not
performed in accordance with its specific terms or otherwise is breached, so
that each Party shall be entitled to injunctive relief to prevent breaches of
this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in addition to any other remedy to which a Party may be
entitled, at law or in equity. In particular, Seller acknowledge that the
Businesses of the Companies are unique and recognize and affirm that in the
event Seller Breaches this Agreement, money damages would be inadequate and
Buyer would have no adequate remedy at law, so that Buyer shall have the right,
in addition to any other rights and remedies existing in its favor, to enforce
its rights and obligations hereunder not only by action for damages but also by
action for specific performance, injunctive, and/or other equitable relief.
 
 
45

 
 
(See following page for execution signatures)
 
 
 
 
 

 

 
46

 
 
 
IN WITNESS WHEREOF, the Parties hereto have executed this Membership Interest
Purchase Agreement as of the Effective Date, intending to be legally bound.
 
MERIDIAN WASTE SOLUTIONS, INC., a New York corporation
 
By: /s/ Jeffrey S. Cosman
Name: Jeffrey S. Cosman
Title: Chief Executive Officer
 
WASTE SERVICES INDUSTRIES, LLC, a Delaware limited liability company
By: /s/ Charles A. Wilcox

Name: Charles A. Wilcox

Title: President

 
AGREED AND ACCEPTED AS TO SECTION 5.13:
WASTE SERVICES INDUSTRIES HOLDINGS, LLC, a Delaware limited
liability company
 
 
By: /s/ Charles A. Wilcox

Name: Charles A. Wilcox                                        

Title: Chief Executive Officer                                 

 
 [Signature Page to Membership Interest Purchase Agreement]
 
                                        

 

 
47

 
SCHEDULE 1.1(a)
DEFINED TERMS
“Accounts Receivable” means (i) all trade and other accounts receivable and
other rights to payment from past or present customers of the Companies, and the
full benefit of all security for such accounts or rights to payment, including
all trade and other accounts receivable representing amounts receivable in
respect of services rendered to customers of the Businesses, and (ii) any claim,
remedy or other right related to any of the foregoing.
“Accounts Payable” means all trade and other accounts payable to third parties
in connection with the Business that remain unpaid.
“Adverse Consequences” means all actions, suits, Proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement or claims, obligations, Taxes, Liens, losses, interest, expenses
(including court costs, reasonable costs of investigation and defense and
reasonable attorneys’ fees and expenses), whether or not involving a Third-Party
Claim. “Adverse Consequences” shall not include any incidental, special,
exemplary, multiple (whether of income or any other financial metric), punitive
or consequential damages (including diminutions in value or loss of profit or
revenue) or any equitable equivalent thereof or substitute therefor, except to
the extent actually awarded to a Governmental Authority or other third party.
“Affiliated Group” means any affiliated group within the meaning of Code Section
1504(a) or any similar group defined under a similar provision of state, local
or foreign law.
“Agreement” has the meaning set forth in the preface.
“Approvals” has the meaning set forth in Section 6.1(h).
“Assets” has the meaning set forth in Section 4.7.
“Basis” means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could reasonably be expected to
form the basis for any specified consequence.
“Breach” means any breach of, or any inaccuracy in, any representation or
warranty or any breach of, or failure to perform or comply with, any covenant,
obligation or agreement, in or of this Agreement or any other Contract,
agreement or instrument (whether or not related to this Agreement), or in or of
any corporate, Company or partnership organizational document or agreement, any
Governmental Authorization, Order or Legal Requirement, or any other breach of
any written instrument, or any event which with the passing of time or the
giving of notice, or both, would constitute such a breach, inaccuracy or
failure.
“Business” or “Businesses” has the meaning set forth in the Background Facts.
“Business Day” means any day other than a Saturday or Sunday or any other day on
which banks in the Commonwealth of Virginia are permitted or required by Legal
Requirement to be closed.
“Buyer” has the meaning set forth in the preface.
 
48

 
“Buyer Claims Period” has the meaning set forth in Section 7.4(a).
“Buyer Indemnified Persons” has the meaning set forth in Section 7.3.
“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
“CFS Disposal” has the meaning set forth in the Background Facts.
“CFS Group” has the meaning set forth in the Background Facts.
 “Closing” and “Closing Date” has the meaning set forth in Section 2.3.
“Closing Statement” has the meaning set forth in Section 6.1(j).
“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Code Section 4980B and of any similar state law.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” or “Companies” has the meaning set forth in the Background Facts.
“Company Contracts” has the meaning set forth in Section 4.18(a).
“Company Documents” has the meaning set forth in Section 5.1.
“Confidential Information” has the meaning set forth in Section 5.5(a).
“Consent” means any approval, consent, ratification, waiver or other
authorization.
“Contemplated Transactions” means all of the transactions contemplated by this
Agreement.
“Contract” means any agreement, contract, license, lease, consensual obligation,
promise or undertaking (whether written or oral and whether express or implied),
whether or not legally binding.
“Current Litigation Matters” has the meaning set forth in Section 4.20.
“Current Seller Liabilities” or “Current Seller Liability” has the meaning set
forth in Section 2.4.
“Disclosure Schedule” has the meaning set forth in the introductory paragraph to
Section 4.
“DuPont Recycle Property” has the meaning set forth in the Background Facts.
“DuPont Recycling Business” has the meaning set forth in the Background Facts.
“Effective Date” has the meaning set forth in the preface.
“Employee Benefit Plan” means all “employee benefit plans” as defined by Section
3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”), all
specified fringe benefit plans as defined in Section 6039D of the Code, and all
other bonus, incentive-compensation, deferred-compensation, profit-sharing,
stock-option, stock-appreciation-right, stock-bonus, stock-purchase,
employee-stock-ownership, savings, severance, change-in-control,
supplemental-unemployment, layoff, salary-continuation, retirement, pension,
health, life-insurance, disability, accident, group-insurance, vacation,
holiday, sick-leave, fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice, commitment, contract
or understanding (whether qualified or nonqualified, currently effective or
terminated, written or unwritten) and any trust, escrow or other agreement
related thereto that (i) is maintained or contributed to by any Company or any
other corporation or trade or business controlled by, controlling or under
common control with Sellers (within the meaning of Section 414 of the Code or
Section 4001(a)(14) or 4001(b) of ERISA) (“ERISA Affiliate”) or has been
maintained or contributed to in the last six (6) years by any Company or any
ERISA Affiliate, or with respect to which any Company or any ERISA Affiliate has
or may have any liability, and (ii) provides benefits, or describes policies or
procedures applicable to any current or former director, officer, employee or
service provider of any Company or any ERISA Affiliate, or the dependents of any
thereof, regardless of how (or whether) liabilities for the provision of
benefits are accrued or assets are acquired or dedicated with respect to the
funding thereof.
 
49

 
“Employee Welfare Benefit Plan” has the meaning set forth in ERISA Section 3(1).
 “Environment” means soil, land surface or subsurface strata, surface waters,
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life and any other environmental medium or natural
resource.
“Environmental, Health and Safety Liabilities” means any and all costs, damages,
Adverse Consequences, expenses, Liabilities and/or other responsibility arising
from or under any Environmental Law or Occupational Safety and Health Law,
including those consisting of or relating to (i) any environmental, health or
safety matter or condition (including on-site or off-site contamination, and/or
occupational safety and health regulation of any chemical substance or product),
(ii) any fine, penalty, judgment, award, settlement, Proceeding, damages,
Adverse Consequence, loss, claim, demand or response, remedial or inspection
cost or expense arising under any Environmental Law or Occupational Safety and
Health Law, (iii) financial responsibility under any Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any cleanup, removal, containment or other remediation or response
actions (“Cleanup”) required by any Environmental Law or Occupational Safety and
Health Law (whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource damages,
and/or (iv) any other compliance, corrective or remedial measure required under
any Environmental Law or Occupational Safety and Health Law. For purposes of
this definition, the terms “removal,” “remedial” and “response action” include
the types of activities covered by the United States Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA).
“Environmental Law” means any Legal Requirement that requires or relates to (i)
advising appropriate Governmental Bodies, employees or the public of any
intended Release, actual Release or Threat of Release of pollutants or Hazardous
Materials, violations of discharge limits or other prohibitions and the
commencement of activities, such as resource extraction or construction, that
could have significant impact on the Environment, (ii) preventing or reducing to
acceptable levels the Release of pollutants or Hazardous Materials into the
Environment, (iii) reducing the quantities, preventing the Release or minimizing
the hazardous characteristics of wastes that are generated, (iv) assuring that
products are designed, formulated, packaged and used so that they do not present
unreasonable risks to human health or the Environment when used or disposed of,
(v) protecting resources, species or ecological amenities, (vi) reducing to
acceptable levels the risks inherent in the transportation of pollutants,
Hazardous Materials or other potentially harmful substances, (vii) cleaning up
pollutants that have been Released, preventing the Threat of Release or paying
the costs of such clean up or prevention, (viii) making responsible Persons pay
private parties, or groups of them, for damages done to their health or the
Environment or permitting self-appointed representatives of the public interest
to recover for injuries done to public assets; or (ix) governing or regulating
any Hazardous Activities.
 
50

 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means each entity that is treated as a single employer with
any Company for purposes of Code Section 414.
“Excluded Contracts” has the meaning set forth in Section 5.2.
“Financial Statements” has the meaning set forth in Section 4.11(a).
“GAAP” means generally accepted accounting principles as in effect in the United
States of America, as determined by the Financial Accounting Standards Board
from time to time, applied on a consistent basis as of the date of any
application thereof.
“Governmental Authorization” means any zoning approvals, permits (including the
Permits), franchise rights, rights-of-way, Consent, license, permission,
registration, permit or other right or approval issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement and all pending applications therefor or
renewals thereof.
“Governmental Body” means any (i) nation, state, county, city, town, borough,
village, district or other jurisdiction, (ii) federal, state, county, local,
municipal, foreign or other government, (iii) governmental or quasi-governmental
authority of any nature (including any agency, branch, department, board,
commission, court, tribunal or other entity exercising governmental or
quasi-governmental powers), (iv) body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power, (v) Indian tribal authority, (vi)
multinational organization or body, or (vii) official of any of the foregoing.
“Guarantor” has the meaning set forth in Section 5.13.
“Guaranty” has the meaning set forth in Section 5.13.
“Hauling Company Business” has the meaning set forth in the Background Facts.
“Hauling Company Property” has the meaning set forth in the Background Facts.
“Hazardous Activity” means, with respect to any Person (including any Party or
the Companies or their Related Persons), the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of Hazardous Material in, on, under,
about or from any Property or other facility or real property owned, leased,
operated or otherwise used by such Person or any of its contractors in
connection with the conduct of the business of such Person, or from any other
asset of such Person, into the Environment and any other act, business,
operation or thing that increases the danger, or risk of danger, or poses an
unreasonable risk of harm, to persons or property, whether on or off the
aforementioned Properties, facilities or other real property, beyond what is
authorized by any Environmental Law relating to the business of such Person.
“Hazardous Material” means any substance or material which is or will
foreseeably be regulated by any Governmental Body, including any material or
substance which is defined as a “hazardous waste,” “hazardous material,”
“hazardous substance,” “extremely hazardous waste,” “restricted hazardous
waste,” “toxic waste” or “toxic substance” under any provision of Environmental
Law, and including petroleum, petroleum products, asbestos, presumed
asbestos-containing material or asbestos-containing material, urea formaldehyde
and polychlorinated biphenyls.
 
51

 
“Improvements” means all buildings, structures, fixtures, building systems and
equipment, and all components thereof, including the roof, foundation,
load-bearing walls, and other structural elements thereof, heating, ventilation,
air conditioning, mechanical, electrical, plumbing and other building systems,
environmental control, remediation and abatement systems, sewer, storm, and
waste water systems, irrigation and other water distribution systems, parking
facilities, fire protection, security and surveillance systems, and
telecommunications, computer, wiring, and cable installations, all of which are
included in the Properties.
“Indebtedness” means (a) any indebtedness (including all accrued interest) for
borrowed money or issued in substitution for or exchange of indebtedness for
borrowed money, (b) any indebtedness evidenced by any note, bond, debenture or
other debt security, (c) any indebtedness for the deferred purchase price of
property or services with respect to any Company is liable, contingently or
otherwise, as obligor or otherwise, (d) any commitment by which any Company
assures a creditor against loss (including, without limitation, contingent
reimbursement obligations with respect to letters of credit), (e) any
indebtedness guaranteed in any manner by any Company (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(f) any obligations under capitalized leases with respect to which any Company
is liable, contingently or otherwise, as obligor, guarantor or otherwise, or
with respect to which obligations any Company assures a creditor against loss,
(g) any TRAC or synthetic leases; (h) any indebtedness secured by a Lien on the
Assets of any Company, (i) any unsatisfied obligation for “withdrawal liability”
to a “Multiemployer Plan” as such terms are defined under ERISA, (j) the deficit
or negative balance, if any, in any Company’s checking account and (k) any
credit card debt.
“Indemnified Person” has the meaning set forth in Section 7.6.
“Indemnifying Person” has the meaning set forth in Section 7.6.
“Insolvent” means being unable to pay debts as they mature, or as obligations
become due and payable.
“Insolvency Laws” means any bankruptcy, insolvency, reorganization, moratorium
or other similar Legal Requirement affecting the enforcement of creditors’
rights generally, and general principles of equity (regardless of whether
enforcement is considered in a proceeding in law or equity).
“IRS” means the United States Internal Revenue Service and, to the extent
relevant, the United States Department of the Treasury.
“Inspection Period” has the meaning set forth in Section 5.2.
“Insurance Policies” or “Insurance Policy” has the meaning set forth in Section
4.28.
“Intangible Personal Property” means all intangible property used or held for
use by any Company, of whatever type or description, including (a) the business
as a going concern (b) goodwill of any Company (c) all files, records and
correspondence (d) telephone numbers, telecopy numbers (e) all rights in
Internet web sites and Internet domain names presently used by Seller or the
Companies, and links; (f) all registered and unregistered copyrights in both
published works and unpublished works, (g) the “The CFS Group”, “The CFS Group
Disposal & Recycling Services”, “RWG5”, “Container First Services”, “CFS”,
“Tri-City Regional Landfill”, “TCR”, “Petersburg Landfill”, “Disposal &
Recycling Services of Lunenburg”, “Lunenburg Landfill” and “Arena Trucking”
names, all assumed fictional business names, trade names, registered and
unregistered trademarks, service marks and applications, and (h) all know-how,
trade secrets, confidential or proprietary information, customer lists,
software, technical information, data, process technology, plans, drawings and
blue prints; and (f) all right, title and interest in and to all Company
Documents, Company Contracts, and all Permits, Governmental Authorizations,
Approvals, Consents, licenses and other permits and approvals of the Companies.
 
52

 
“Intellectual Property Assets” has the meaning set forth in Section 4.27.
“Knowledge” means
(i) when used to qualify a representation, warranty or other statement of Buyer,
the actual knowledge that management (consisting of Buyer’s officers and
directors) of the Buyer actually has with respect to the particular fact or
matter that is the subject of such representation, warranty or other statement,
and the knowledge that the management of the Buyer could reasonably be expected
to have after having conducted a reasonable inquiry or investigation with
respect to the fact or matter that is the subject of such representation,
warranty or other statement.
(ii) when used to qualify a representation, warranty or other statement of
Seller or any Company, the actual knowledge Robert W. Guidry, Charles A. Wilcox,
Timothy Webb or Kim Fairbanks has with respect to the particular fact or matter
that is the subject of such representation, warranty or other statement, and the
knowledge that such individuals could reasonably be expected to have after
having conducted a reasonable inquiry or investigation with respect to the fact
or matter that is the subject of such representation, warranty or other
statement.
“Legal Requirement” means any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle of
common law, code, regulation, statute or treaty.
“Liability” means with respect to any Person (including any Party), any
Indebtedness, liability, penalty, damage, loss, cost or expense, obligation,
claim, deficiency, or guaranty of such Person of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise, and whether or not the same is
required to be accrued on the financial statements of such Person, including any
liability for Taxes.
“Lien” means with respect to any Person, any mortgage, right of way, easement,
encroachment, any restriction on use, servitude, pledge, lien, charge,
hypothecation, security interest, encumbrance, adverse right, interest or claim,
community or other marital property interest, condition, equitable interest,
encumbrance, license, covenant, title defect, option, or right of first refusal
or offer or similar restriction, voting right, transfer, receipt of income or
exercise of any other attribute of ownership, except for any liens for taxes not
yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established and accrued on the
financial statements of such Person in accordance with GAAP.
“Lunenburg Landfill” has the meaning set forth in the Background Facts.
“Lunenburg Property” has the meaning set forth in the Background Facts.
 
53

 
“Material Adverse Effect” or “Material Adverse Change” means any effect or
change that would be materially adverse to the Businesses, Assets, condition
(financial or otherwise), operating results, or operations of the Companies,
taken as a whole, including the ability for the Companies to own, construct,
operate and develop the Assets and the, the transfer or issuance to any Company,
if applicable, of any Permit, Consent, Governmental Authorization, license or
other permit or approval contemplated by this Agreement, or on the ability of
Seller consummate timely the Contemplated Transactions (regardless of whether or
not such adverse effect or change can be or has been cured at any time or
whether Buyer has knowledge of such effect or change on the date hereof),
provided, however, that “Material Adverse Effect” shall not include any event,
occurrence, fact, condition or change, directly or indirectly, arising out of or
attributable to: (i) general economic or political conditions; (ii) conditions
generally affecting the industries in which any of the Companies operates; (iii)
any changes in financial or securities markets in general; (iv) acts of war
(whether or not declared), armed hostilities or terrorism, or the escalation or
worsening thereof; (v) any action required or permitted by this Agreement,
except pursuant to Section 3.5, Section 4.3 and Section 6.1; (vi) any changes in
applicable Legal Requirements or accounting rules, including GAAP; or (vii) the
public announcement, pendency or completion of the transactions contemplated by
this Agreement; provided further, however, that any event, occurrence, fact,
condition or change referred to in clauses (i) through (iv) immediately above
shall be taken into account in determining whether a Material Adverse Effect has
occurred or could reasonably be expected to occur to the extent that such event,
occurrence, fact, condition or change has a disproportionate effect on any
Company compared to other participants in the industries in which such Company
conducts its businesses.
“Membership Interests” has the meaning set forth in Section 2.1.
“Most Recent Financial Statements” has the meaning set forth in Section 4.11(a).
“Most Recent Fiscal Month End” has the meaning set forth in Section 4.11(a).
“Most Recent Fiscal Year End” has the meaning set forth in Section 4.11(a).
“Multiemployer Plan” has the meaning set forth in ERISA Section 3(37).
“Occupational Safety and Health Law” means any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, including the Occupational Safety and Health Act, and any
program, whether governmental or private (such as those promulgated or sponsored
by industry associations and insurance companies), designed to provide safe and
healthful working conditions.
 “Order” means any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.
“Ordinary Course of Business” means an action taken by a Person will be deemed
to have been taken in the ordinary course of business only if that action (i) is
consistent in nature, scope and magnitude with the past practices of such Person
and is taken in the ordinary course of the normal, day-to-day operations of such
Person, (ii) does not require authorization by the board of directors, owners,
shareholders, interest holders, members or managers of such Person (or by any
Person or group of Persons exercising similar authority) and does not require
any other separate or special authorization of any nature, and (iii) is similar
in nature, scope and magnitude to actions customarily taken, without any
separate or special authorization, in the ordinary course of the normal,
day-to-day operations of other Persons that are in the same line of business as
such Person).
 
54

 
“Organizational Documents” means: (i) with respect to a corporation, the
certificate or articles of incorporation and bylaws; (ii) with respect to any
other Person any charter or similar document adopted or filed in connection with
the creation, formation or organization of a Person; (iii) any operating
agreement, partnership agreement, shareholder agreement or similar agreement and
(iv) any amendment to any of the foregoing.
“Party” or “Parties” has the meaning set forth in the preface.
“Permits” has the meaning set forth in Section 4.12(a).
“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock holding company, a trust, a joint
venture, an unincorporated organization, any other business entity, joint
venture or other entity or Governmental Body (or any department, agency, or
political subdivision thereof).
“Petersburg Landfill” has the meaning set forth in the Background Facts.
“Petersburg Property” has the meaning set forth in the Background Facts.
“Pre-Closing Tax Period” has the meaning set forth in Section 8.1.
“Proceeding” means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or private) commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental Body, court, or arbitrator.
“Property” or “Properties” has the meaning set forth in the Background Facts
together with all buildings, structures, Improvements, and fixtures located
thereon, including all electrical, mechanical, plumbing and other building
systems, fire protection, security and surveillance systems, telecommunications,
computer, wiring, and cable installations, utility installations, water
distribution systems, and landscaping, together with all easements and other
rights and interests appurtenant thereto (including air, oil, gas, mineral, and
water rights together with all Permits).
“Purchase Price” has the meaning set forth in Section 2.2.
“Real Property Laws” has the meaning set forth in Section 4.16(c).
“Real Property Lease” means (i) any long-term lease of land in which most of the
rights and benefits comprising ownership of the land and the Improvements
thereon or to be constructed thereon, if any, are transferred to the tenant for
the term thereof or (ii) any lease or rental agreement pertaining to the
occupancy of any improved space on any real property.
“Related Person” means:
(i) with respect to a particular individual: (A) each other member of such
individual’s Family; (B) any Person that is directly or indirectly controlled by
any one or more members of such individual’s Family; (C) any Person in which
members of such individual’s Family hold (individually or in the aggregate) a
Material Interest; and (D) any Person with respect to which one or more members
of such individual’s Family serves as a director, officer, partner, executor or
trustee (or in a similar capacity); and
 
55

 
(ii) with respect to a specified Person other than an individual: (A) any Person
that directly or indirectly controls, is directly or indirectly controlled by or
is directly or indirectly under common control with such specified Person; (B)
any Person that holds a Material Interest in such specified Person; (C) each
Person that serves as a director or officer, partner, executor or trustee of
such specified Person (or in a similar capacity); (D) any Person in which such
specified Person holds a Material Interest; and (E) any Person with respect to
which such specified Person serves as a general partner or a trustee (or in a
similar capacity).
(iii) For purposes of this definition, (a) “control” (including “controlling,”
“controlled by,” and “under common control with”) means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is used in the rules
promulgated under the Securities Act; (b) the “Family” of an individual includes
(i) the individual, (ii) the individual’s spouse, (iii) any other natural person
who is related to the individual or the individual’s spouse within the second
degree and (iv) any other natural person who resides with such individual; and
(c) “Material Interest” means direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act of 1934) of voting securities or
other voting interests representing at least ten percent (10%) of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least ten percent (10%) of the outstanding equity
securities or equity interests in a Person.
“Release” means any release, spill, emission, leaking, pumping, pouring,
dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching
or migration on or into the Environment or into or out of any property.
 
“Remedial Action” means all actions, including any capital expenditures,
required or voluntarily undertaken (i) to clean up, remove, treat or in any
other way address any Hazardous Material or other substance, (ii) to prevent the
Release or Threat of Release or to minimize the further Release of any Hazardous
Material or other substance so it does not migrate or endanger or threaten to
endanger public health or welfare or the Environment, (iii) to perform
pre-remedial studies and investigations or post-remedial monitoring and care, or
(iv) to bring the Properties and the operations conducted (or to be conducted)
thereon into compliance with Environmental Laws and environmental Governmental
Authorizations.
“Representative” means with respect to a particular Person, any director,
officer, manager, employee, agent, consultant, advisor, accountant, financial
advisor, legal counsel or other representative of that Person.
“Restrictive Covenants Agreement” has the meaning set forth in Section 6.1(l).
“Retained Liabilities” has the meaning set forth in Section 2.4.
“RWG5” has the meaning set forth in the Background Facts.
“Securities Act” means the Securities Act of 1933, as amended.
“Seller” has the meanings set forth in the preface.
“Seller Claims” has the meaning set forth in Section 5.12
“Seller Claims Period” has the meanings set forth in Section 7.4(b).
 
56

 
“Seller Indemnified Persons” has the meaning set forth in Section 7.2.
“Seller Releasing Parties” has the meaning set forth in Section 5.12.
“Straddle Period” has the meaning set forth in Section 8.2.
“SWDA” has the meaning set forth in Section 4.25.
“Tangible Personal Property” means all tangible personal property used or useful
in the Businesses, including all machinery, equipment, scales, compactors,
containers, bailers, tools, spare parts, furniture, office equipment, computer
hardware, supplies, materials, vehicles, trade fixtures and other items of
tangible personal property of every kind owned or leased by the Companies
(wherever located and whether or not carried on the books of the Companies or
Seller), together with any express or implied warranty by the manufacturers or
lessors of any item or component part thereof and all maintenance records and
other documents relating thereto.
“Tax” means any income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental, windfall profit,
customs, vehicle, airplane, boat, vessel or other title or registration, capital
stock, franchise, employees’ income withholding, foreign or domestic
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative, add-on minimum and
other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever
and any interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any Governmental Body or
payable under any tax-sharing agreement or any other Contract, whether disputed
or not and including any obligations to indemnify or otherwise assume or succeed
to the Tax liability of any other Person.
“Tax Return” means any return (including any information return), report,
statement, schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to be filed with
or submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
“Third Party Claim” means any claim, issuance of any Order or the commencement
of any Proceeding by any Person who is not a Party to this Agreement, including
a Related Person of a Party, any domestic or foreign court, or Governmental
Body.
“Threat of Release” means a reasonable likelihood of a Release that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.
 
“Transfer Station” has the meaning set forth in the Background Facts.
 
“Transfer Station Property” has the meaning set forth in the Background Facts.
 
“WARN” has the meaning set forth in Section 4.21.
 
 
 
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