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HomeMy WebLinkAboutR-1991-134 r RESOLUTION NO. 134-91 A RESOLUTION OF THE CITY OF DANIA, FLORIDA, APPROVING THAT CERTAIN WAIVER OF RIGHT OF FIRST REFUSAL BETWEEN THE MUNICIPALITIES OF DANIA, HALLANDALE, PEMBROKE PINES AND POMPANO BEACH AND REUTER RECYCLING OF FLORIDA, INC. ; AND PROVIDING FOR AN EFFECTIVE DATE. BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF DANIA, FLORIDA: Section 1 . That that certain Waiver of Right of First Refusal between the municipalities of Dania, Hallandale, Pembroke .�} Pines and Pompano Beach and Reuter Recycling of Florida, Inc. , a copy of which is attached hereto as Exhibit "A" , be and the same is hereby approved, and the appropriate city officials are hereby directed to execute same. k Section 2. That this resolution shall be in force and take J effect immediately upon its passage and adoption. PASSED and ADOPTED this 12th November 1991.day of � MAYOR - COMMISSIONER ATTEST: CITY CLERK - AUDITOR APPROVED AS TO FORM AND CORRECTNESS: e. e� FRANK C. ADLER, City Attorney 134-91 Resolution No. i i h 4i 1 WAIVER OF RIGHT OF FIRST REFUSAL THIS WAIVER AGREEMENT is executed as of this _ day of 1991, by the municipalities of Dania, Hallandale, Pembroke Pines and Pompano Beach, each of which is an existing municipal corporation organized under the laws of the State of Florida(collectively the "Cities" or individually a "City'), in favor of Reuter Recycling of Florida, Inc., a Florida corporation ("RRF"). Recitals: A. RRF and the Cities have entered in to a Solid Waste Disposal Agreement, dated August 19, 1988, as amended (the "Disposal Agreement") providing for the disposal of the Cities' municipal solid waste at a non-bum resource recovery and composting facility being developed by RRF (the "Facility"). B. Section 9.4 of the Disposal Agreement provides that in the event RRF desires to sell the Facility to a third party, it shall first offer the Cities the option to buy the Facility on 1. '. the terms and conditions offered by the third party. C. RRF has been negotiating a financing transaction with several entities for the purpose of infusing additional equity into the Facility and into Reuter, Inc., the parent company of RRF. In structuring this transaction, RRF and have proposed forming a new partnership to own and operate the Facility, which partnership would be owned 55% by and 45% by RRF. In connection with this transaction, RRF and propose to transfer and assign to the Partnership ownership of the Facility and all rights and r 'a obligations under the Disposal Agreement. D. RRF has requested that the Cities waive their right of first refusal under Section 9.4 of the Disposal Agreement to the extent it may apply to the proposed transaction with _ and the Cities are willing to provide the requested waiver, subject to the terms and conditions hereof. E. Section 3.4 of the Disposal Agreement provides that RRF shall, as part of its resource recovery system, operate one transfer station within the City of Pompano Beach ("Transfer Station") which will accept waste for transfer to the Facility in Pembroke Pines, Florida. As of the date hereof RRF has not constructed or leased a Transfer Station and proposes that the Cities consent to an alternative method of providing for the transfer and hauling of municipal solid waste ("MSW") from the City of Pompano Beach. The Cities are willing to grant such consent, subject to the terms and conditions hereof. F. On August 19, 1988, Reuter, Inc. and RRF executed the Capital Cost and Operating Support Agreement, (the "Support Agreement"), pursuant to which Reuter, Inc. agreed to (i) pay any capital and financing costs incurred by RRF in the initial financing and 1 EXHIBIT "A" y _ 4% construction of the Facility in excess of the amount of financing available to RRF, and (ii) support the operation of the Facility by making available to RRF up to $2,000,000 in working capital to fund any operating deficits. Reuter proposes to have the Cities acknowledge that consummation of the proposed transaction with of Reuter, Inc. under the Support Agreement, and the Cities are t willing sfies to obligations acknowledgement, subject to the terms and conditions hereof, give such an NOW, THEREFORE, the parties hereto agree as follows: SECTION 1 WAIVER OF RIGHT OF FIRST REFUSAL (a) Waiver of Right of First Refusal. Based on the representations by RRF regarding the proposed transaction with this Agreement, each of the Cities he as more particularly described in the Recitals to reby waives any rights it may have to buy the Facility on the same terms and conditions as are proposed by pursuant to the right of first refusal contained in Section 9.4 of the Disposal Agreement. The Cities understand that said terms and conditions involve an $8,000,000 investment by in exchane for a fifty-five percent (55%) interest in the Facility and the Disposal Agreement. The Cities further agree that the waiver described herein shall apply either to a transaction that involves the creation of a new general partnership between RRF and may be transferred (the "Partnership"), or a direct investment n�� into which the Facilrtn exchange for a 55% stock interest therein. (b) Limitations on Waiver. i• The waiver set forth in paragraph 1 (a) shall be limited to the proposed transaction between RRF and acknowledges and agrees that the Cities' right as Section 9.4 of R he Disposal Agreement shall continue as to any and all other proposed sales of the Facility, including a sale of the Facility at a price materially different from that described herein. ii. The waiver by the Cities described herein shall be deemed to have expired unless RRF executes a definitive agreement with before , 1991, providing for an investment in the Facility on terms consistent with those described herein. (c) Consent to Assi nmgnt of Dis osal A reement. The Cities hereby gre acknowledge that RRF intends to assign to the Partnership its interest in the Disposal Aement and the Cities hereby consent to such assignment to the extent required by Section 7.2 of the Disposal Agreement. 2 i 6. SECTION 2 TRANSFER STATION (a) Consent to Alternative Hauling and Disposal Method. RRF has advised the Cities that it has negotiated an agreement with Waste Management, Inc. ("WMI") for the transfer and hauling to the Facility of MSW generated within Pompano Beach, which agreement would eliminate the need for RRF to operate a Transfer Station within Pompano Beach. The Cities hereby consent to RRF's execution of said agreement with WMI and waive the requirement in the Disposal Agreement that RRF operate a Transfer Station within the City of Pompano Beach. SECTION 3 CAPITAL COST AND OPERATING SUPPORT AGREEMENT (a) Section 1 of the Support Agreement obligates Reuter, Inc. to advance to RRF all funds required to pay capital and financing costs associated wiht the initial acquisitions, construction and financing of the Facility to the extent sirh costs exceed the financing available to RRF for such purposes. Such advances are to be treated as loans from Reuter, Inc. to RRF, the repayment of which is prohibited until there is established a $4,000,000 reserve fund (the "Reserve Fund"). Section 2 of the Support Agreement obligates Reuter, Inc. to make "advances" to RRF from time to time, in the maximum aggregate amount of$2,000,000, to the extent required to enable RRF to operate the Facility in accordance with the Disposal Agreement. Those 41 "advances" also are to be treated as loans to RRF, the repayment of which is prohibited until Z the Reserve Fund is established. j Through the proposed transaction with_ , Reuter, Inc. and RRF agree that t they will make available to the Facility a minimum of $3,000,000 in permanent equity capital in order to fund construction cost overruns, if any, and to provide working capital necessary to fund all expenses associated with the start up of the Facility. Subject to Reuter, Inc.'s and RRF's compliance with the foregoing covenant, the Cities hereby agree as follows: li i. Reuter, Inc. shall have no further obligations under Section 2 of the Disposal Agreement, which obligations shall be deemed to have been satisfied through the contribution to the Partnership of minimum of $3,000,000 in permanent equity capital; and I Due to the fact that Reuter, Inc. and RRF are making available to the Facility funds in the nature of permanent equity capital, instead of interest bearing loans, RRF shall not be required to create the Reserve Fund, as described in Section 1.3 and 2.2 of the Support Agreement. (b) Nothing in this Agreement shall affect the obligations of Reuter, Inc. under Section 1 of the Support Agreement to make available to RRF funds sufficient to pay all capital and financing cost incurred in the initial acquisitions, construction and financing of the Facility to the extent such costs exceed the financing available therefor. 3 Ml SECTION 4 MISCELLANEOUS (a) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute but one and the same instrument. (b) Governing Laws Successors and Assiens. This Agreement shall be govemed by and construed in accordance with the laws of the state of Florida and shall be binding on , and inure to the benefit of, RRF, the Cities, US West Financial Services, Inc. (as assignee of the Disposal Agreement) and their respective successors and assigns. REUTER RECYCLING OF FLORIDA, INC. By: Its: CITY OF DANIA r By: By: 1 i Its: City Manager Its: Mayor ) Approved as to form and correctness Attest: City Clerk City Attorney j CITY OF HALLANDALE i By: Its: City Manger Approved as to form and execution Attest: City Clerk City Attorney 4 i t CITY OF PEMBROKE PINES By: Its: Mayor By: Its: City Manager By: Its: Finance Director Approved as to form and Attest: execution City Clerk City Attorney CITY OF POMPANO BEACH .5 By: Its: Mayor i ' By: Its: City Manger Approved as to form and correctness Attest: City Clerk City Attorney 5 l�1 I I V