HomeMy WebLinkAboutSolid Wastes Systems, Inc. 2021-08-18 Transfer Station CROSS REF COU No. 2122-089
ASSIGNMENT AND CONSENT TRANSFER
STATION CONTRACT AND LEASE
THIS ASSIGNMENT AND CONSENT (the "Agreement") is made thisday of
August, 2021, by and between the City of Ukiah, a municipal corporation("City"), C&S Group
Holdings, Inc., aNevada corporation("Assignor"), Waste Connections US, Inc., a Delaware
corporation("Waste Connections" or "Assignee"), and Solid Wastes Systems, Inc., a
California corporation ("SWS"), collectively, "the Parties," with reference to the following:
A. City and SWS are parties to that certain Second Amended and Restated Transfer
StationAgreement dated October 7, 2015, as amended by that certain First Addendum to
Transfer Station Agreement effective September 21, 2016, and that certain Second Addendum
to Transfer Station Agreement effective December 20, 2017 (the "Contract").
B. City and SWS are parties to that certain Transfer Station Lease dated as of
January 1,2017 (the "Lease").
C. Assignor owns all the outstanding shares of capital stock in SWS (the"SWS
Shares").
D. Assignor,Assignee and other parties have entered a Securities Purchase
Agreement,dated July 7, 2021 ("Purchase Agreement").
E. At a closing (the "Closing")to be held under the Purchase Agreement on or
about September 1, 2021, in accordance with the Purchase Agreement,Assignor will sell all the
shares in C&SGroup Holdings, Inc. ("C & S Shares")to Assignee, which will result in a
change in majority control of SWS from the current owners of Assignor.
F. Under Section 11.1 of the Contract:
"Contractor shall not directly or indirectly, voluntarily or involuntarily assign, mortgage,
pledge or encumber any interest in all or a part of this Agreement without the prior written
consent of City. TheCity Council shall have the right to determine in its sole discretion whether
to approve, conditionally approve or deny any request by Contractor for approval under this
Section. Any action requiring City Council approval under this Section that occurs without such
approval shall give City the right to terminate this Agreement without prior notice to Contractor
or its successors or assigns. For purposes ofthis Section, any transaction involving the transfer,
sale or exchange of stock which results in a change inmajority control of Contractor from its
owners as of the date hereof(excluding transfers between such owners and transfers by any such
owners to revocable living trusts for the benefit of their families) shall be an assignment subject
to City review and approval."
G. The Parties wish to document the terms and conditions upon which the City
relies in consenting to the sale of the C& S Shares from Assignor to Assignee (the
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"'Assignment"), and to confirmthe status of the Contract and the Lease, on the terms herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants hereinafter set forth and other consideration the receipt and adequacy of which are
hereby acknowledged,the Parties hereby agree as follows:
1. Assignment. From and after the Closing, SWS shall continue to possess all of its
right,title and interest in the Contract and the Lease. SWS hereby agrees to keep,perform, fulfill
and be boundby all of the terms, covenants and conditions required to be kept, performed,
and/or fulfilled under the Contract and the Lease,respectively, from and after the Closing.
2. As a condition of the City's approval of the Assignment, Waste Connections,
SWS andCity agree as follows.
2.1 Assignee's Acquisition Costs. Assignee agrees that amounts it pays to
Assignor underthe Purchase Agreement, or any other costs incurred by Assignor,
Assignee, SWS,UWS, Pacific Recycling Solutions ("PRS") or Mendocino Leasing
Company in acquiring or selling stock or real property under the Purchase Agreement
shall not, in calculating rates or adjustments to rates, be considered as an expense or
otherwise affect rates charged by SWS at the transfer station pursuant to the Contract.
2.2 Implementation of Sections 10.2.2 in the Contract.
a. By no later than thirty calendar days after the Closing, Assignee shall
provideCity with an inventory of trucks and equipment used by SWS in
performing under the Contract("Transfer Station Equipment").
b. In the event the City terminates the Contract based on a Material
Default as defined in Section 10.2.2 and elects to assume possession of all or part
of the Transfer Station Equipment in accordance with said section, Waste
Connections shall compel anyleasing company owned by Assignor or Waste
Connections leasing Transfer Station Equipment to SWS to lease that equipment
to City for its use as provided in said section.The leasing company shall offer to
assign the Transfer Station Equipment leases to the City and SWS hereby
consents to such assignment, provided that the rent charged under the lease shall
not exceed fair rental value. SWS agrees that if it leases any Transfer Station
Equipment in the future from a lessor not owned or controlled by Waste
Connections, the lease shall provide that it is assignable to the City. Any dispute
regarding the lease of Transfer Station Equipment shall not delay or prevent the
City from assuming immediate possession and use thereof as provided in Section
10.2.2.
c. The parties acknowledge and agree that the Contract currently
provides, in connection with the termination of the Contract for any reason, the
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City has the ability topurchase the Transfer Station Equipment on the terms
provided in the second paragraph of Section 10.2.2; provided that, the parties
acknowledge and agree that from and after the Closing, such purchase right shall
only be triggered in connection with a Material Default and shall not be available
in the event of a termination for any other reason.
2.3 City recourse to address concerns. In addition to the City's rights and remedies
under the Contract, if the City is dissatisfied with the response of SWS
management to concernsor issues raised by the City, the City shall have initial
recourse to Waste Connections local manager(currently Glen Long) living in
Santa Rosa and working in Ukiah following Closing: Telephone: 760-934-
220lx64100 (Mammoth Office) or 760-872- 6561x63004 (Bishop Office); Email:
Glen.Long@WasteConnections.com; Street Address: 3515 Taylor Dr., Ukiah, CA
95482. If he or his successor fails to resolve the dispute or address the concern to
the City's satisfaction,the City may refer the matter to
the Waste Connections' Division Vice President, currently Sue VanDelinder:
Telephone:916-801-0200. Email: Susan.VanDelinder@wasteconnections.com;
Street Address: 4100Throwita Way, Placerville, CA 95667or her successor. At
the City's option it may include Ron Mittelstaedt,the Chairman of Waste
Connections' Board of Directors: Telephone: 916-931-0028; Email:
Ronald.Mittelstaedt@WasteConnections.com or his successor. Waste
Connections shall use its good faith best efforts to resolve the City's concern to
the City's satisfaction. Waste Connections shall provide written notice to Cityin
accordance with Section 15 in the Contract whenever names,job titles or contact
information for the above positions change.
2.4 4. By no later than 45 calendar days following the Closing, Waste
Connections or SWS shall provide to the City an updated maintenance schedule for all
Transfer Station improvements used in the transfer station operations, including,but not
limited to, the repair or replacement of said facilities, taking into account their age,
useful life and condition. By no laterthan 5 years following the Closing, SWS shall
replace the tipping floor. These repair and replacement costs shall not affect or be
considered in setting gate fees and other rates or fees forservices provided at the
Transfer Station.
3. Consent to Assignment. City hereby consents to the Assignment.
4. Contract and Lease in Effect. Each of the Contract and the Lease is in full force
and effect and, except as provided herein, has not been modified, altered or amended in any
respect and contains the entire agreement between City and SWS with respect to the respective
subject matter thereof.
5. No Default. As used in this Agreement"to its or their knowledge"means actually
knownwithout any duty of inquiry or any investigation.
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(a) SWS warrants and represents that it is not, nor, to its knowledge, is the City in any
respect in default in the performance of the terms and provisions of the Contract or the Lease,nor,
to its knowledge,is there any fact or condition which, with notice or lapse of time or both, will
become such a default.
(b) City warrants and represents that it is not in default in the performance of the terms
and provisions of the Contract or the Lease, nor to its knowledge, is there any fact or condition
which, with notice or lapse of time or both, will become such a default. Further, the City states
that to its knowledge SWS is not in default in the performance of the terms and conditions of the
Contract or the Lease nor to its knowledge, is there any fact or condition which,with notice or
lapse of time or both,will become sucha default.
6. No Offsets. To their knowledge, neither SWS nor City has any claim, charge,
defenseor offset under the Contract, the Lease or otherwise, against charges due or to become
due thereunder, nor has either such Party asserted any such claim, charge, defense or offset.
7. Governing Law. This Agreement shall be governed by, and interpreted and
enforced under, the laws of the State of California, without giving effect to conflict of laws
principles.
8. Counterparts. This Agreement may be signed in four (4) or more
counterparts, each of which shall be deemed an original but when taken together shall
constitute one and the same instrument. Counterparts may be sent for signature by email.
Signatures on PDF copies thereof shall be deemedoriginal signatures for all purposes and
such PDF copies shall be admissible as evidence of the agreement in any and all
administrative or judicial proceedings.
9. No Third-Party Beneficiaries. The Parties intend this Agreement for the sole
benefit of the Parties and do not intend to confer any rights under this Agreement or any right to
enforce this Agreement on any person or entity who is not one of the Parties.
IN WITNESS WHEREOF,the Parties have executed this Agreement effective as of the
day andyear first above written.
CITY OF UKIAH
By.
Sage Sangiacomo
Its: City Manager
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C&S GROUP HOLDINGS,INC.
By: 0*4ihG &-44
David M. Carroll
Its: President
WASTE CONNECTIONS US,INC.
By:Y
Worthing F. Jackman
Its: President and Chief Executive Officer
SOLID WASTES SYSTEMS,INC.
By: awz
nmrla�_
David M. Carroll
Its: President
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