AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

Exhibit 2.2

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

dated as of April 1, 2009

by and among

REPUBLIC SERVICES, INC.,

WASTE CONNECTIONS, INC.

and

THE OTHER ENTITIES PARTY HERETO

 

 

TABLE OF CONTENTS

 

 

 

 

Exhibits

 

Schedule 1.1(f) - Computer Hardware

Schedule 6.19 - Performance Bonds

 

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT

This AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (the “ Agreement ”) is executed and delivered effective as of April 1, 2009, by and among WASTE CONNECTIONS, INC., a Delaware corporation (“ WCN ”), and those other entities set forth as Buyers on Exhibit A , as such Exhibit may be amended from time to time by WCN prior to the Closing Date (each a “ Buyer ” and together, the “ Buyers ”), on the one hand, and REPUBLIC SERVICES, INC., a Delaware corporation (“ RSG ”), those other entities set forth as Sellers on Exhibit B (each a “ Seller ” and together, the “ Sellers ”) and those other entities set forth as Equity Sellers on Exhibit B (each an “ Equity Seller ” and together, the “ Equity Sellers ”), on the other hand, and amends and restates that certain Asset Purchase Agreement executed and delivered effective as of February 6, 2009 (the “ Original Agreement ”), by and among WCN, RSG and the other signatories thereto.  All capitalized terms used in this Agreement shall have the meanings ascribed to them in Article XI of this Agreement.

 

RECITALS

 

WHEREAS, Buyers desire to purchase and acquire (i) certain designated Assets principally used or held for use by Sellers and (ii) the Equity Interests owned by Equity Sellers in connection with the Equity Sellers’ solid waste collection and disposal business in the geographic markets listed and otherwise described on Exhibit C (the “ Markets ”), subject to and in accordance with the terms and conditions set forth in this Agreement;

 

WHEREAS, Sellers desire to sell the Assets to Buyers, subject to and in accordance with the terms and conditions set forth in this Agreement; and

 

WHEREAS, WCN and the Equity Sellers are entering into the Equity Purchase Agreements simultaneously herewith;

 

NOW, THEREFORE, in consideration of the mutual promises and covenants in this Agreement and other good and valuable consideration, received to the full satisfaction of each of the parties, the parties agree as follows:

 

ARTICLE I

 

PURCHASE AND SALE OF ASSETS

1.1       Assets .  On the terms and subject to the conditions set forth in this Agreement (including Section 1.7 ), at the Closing, Sellers shall (and shall cause any Additional Vehicle Sellers to) grant, convey, sell, transfer, deliver and assign to Buyers, and Buyers shall purchase from Sellers, all of the right, title and interest that Sellers possess and have the right to transfer in and to the following assets, as the same shall exist on the Closing Date as contemplated by the final paragraph of this Section 1.1 (collectively, the “ Assets ”), but excluding the Excluded Assets, free and clear of all Encumbrances, except Permitted Encumbrances and Blanket Liens (which Blanket Liens shall be released by Sellers in accordance with Section 6.18 ):

(a)      The real property, improvements and fixtures owned by Sellers, and Sellers' leasehold interests in certain real property and improvements, in each case which are listed on Schedule 1.1(a) (such owned and leased assets of Sellers are referred to as the “ Owned Real Property ” and the “ Leased Real Property ,” respectively, and collectively as the “ Real Property ”);

 

(b)     The following tangible personal property owned or leased by Sellers as of the Closing: (i) the automobiles, trucks, fork lifts, construction vehicles and other motor vehicles listed on Schedule 1.1(b)(i) , together with all attachments and accessions thereto (collectively, the “ Rolling Stock ”) to the extent registered with any Governmental Authority (collectively, the “ Registered Rolling Stock ”); (ii) the number of containers and compactors located on-site with a customer that relate to a Collection Account or Peachland/Angleton Account and listed on Schedule 1.1(b)(ii) ; (iii) that number of additional containers and compactors stored on the Real Property and listed on Schedule 1.1(b)(iii) (collectively, together with the containers and compactors listed on Schedule 1.1(b)(ii), the “ Containers ”); and (iv) all of the furniture and office equipment listed on Schedule 1.1(b)(iv) (collectively, the “ Office Equipment ”), all inventory of supplies, fuel, parts, shop tools, nuts, bolts, tires and maintenance accessories (collectively, the (“ Inventory ”) and other tangible assets listed on Schedule 1.1(b)(iv) ;

 

(c)     Subject to Section 1.7 , the following Contracts:

 

 

 

 

 

     (vi)     The leases relating to the Rolling Stock listed on Schedule 1.1(c)(vi) (collectively, the “ Rolling Stock Leases ”);

 

 

     (viii)         The leases relating to the Office Equipment listed on Schedule 1.1(c)(viii) (collectively, the “Office Equipment Leases”);

 

 

     (x)      The employment agreements listed on Schedule 1.1(c)(x) (collectively, the “Employment Contracts”); and

 

 

(d)     All accounts receivable of Sellers arising from the Collection Accounts, the Peachland/Angleton Accounts and the Disposal Accounts which will be listed on Schedule 1.1(d) (collectively, the “ Accounts Receivable ”), which schedule will be delivered by Sellers to Buyers within 5 Business Days following the Closing Date, provided , however , that Accounts Receivable shall exclude any inter-company accounts receivable and accounts receivable of Sellers related to any National Accounts;

 

(e)     All of the (i) operating records, customer records, maintenance files, engineering studies, plans and specifications of Sellers to the extent related to any Assets (in whatever format they exist, whether in hard copy or electronic format) and (ii) to the extent transferable under Applicable Law, human resources records, employee personnel files (including all employee benefit files and employee investigation files, if applicable) and related files (collectively, the “ Employee Records ”) related to employees of any Seller or any Affiliate of any Seller hired by Buyers in connection with the Transactions, but excluding any such files, documents, books and records that constitute Excluded Assets pursuant to Section 1.2 and excluding past e-mails that are not part of such files, documents, books and records and that instead may be stored on servers or networks of Sellers or otherwise included in the Excluded Assets (collectively, the “ Records ”); provided , however , that Sellers may retain copies of (A) all Employee Records and (B) all Records transferred to Buyers pursuant to this Section 1.1(e) needed to comply with any regulations, investigations, audits, or inquiries or for ongoing matters relating to the Excluded Assets;

 

(f)      The computer hardware of Sellers that is listed and described on Schedule 1.1(f) ;

 

(g)     All of the IP Rights listed on Schedule 1.1(g) ;

 

(h)     The credits, deferred charges, prepaid expenses, deposits and other prepaid assets, other than those related to Taxes (except for any prepaid sales Taxes and property Taxes relating to the fixed assets included within the Assets), of Sellers principally related to the Assets and listed and described on Schedule 1.1(h) , which schedule will be attached by Sellers hereto at Closing (collectively, the “ Prepaid Assets ”);

 

(i)      All goodwill relating to the Assets;

 

(j)      All right, title and interest in and to the dedicated telephone and fax numbers, post office boxes and telephone listings of Sellers listed on Schedule 1.1(j) ; and

 

(k)     All Permits related to the ownership, operation, management or use of the Assets that are owned by, issued to, or held by or otherwise benefiting any Seller and transferable by their respective terms to any Buyer.

 

Notwithstanding anything in this Agreement to the contrary, and subject to Article V and Section 6.9 , Buyers agree that Sellers may acquire or dispose of (or, in the case of Collection Accounts, experience additions to or attrition of) Assets in the ordinary course of business between the date hereof and the Closing Date and that such acquisitions or dispositions (or, in the case of Collection Accounts, additions or attritions) shall not in any manner modify or limit Buyers’ obligations hereunder to purchase the Assets; provided , however , that such acquisitions, dispositions, additions or attritions shall not, individually or in the aggregate, have a Sellers’ Material Adverse Effect.  Each of the Schedules provided for in this Section 1.1 shall specify the applicable Seller and Buyer for each Asset, provided that, to the extent any Registered Rolling Stock is owned other than as set forth on Schedule 1.1(b)(i) , Sellers may at their option cause such Registered Rolling Stock to be sold to the applicable Buyers at Closing by the entities holding title thereto (collectively, the “ Additional Vehicle Sellers ”) and the specification of a different Seller thereof on Schedule 1.1(b)(i) shall not be deemed to violate any representation, warranty or covenant in this Agreement.

 

1.2       Excluded Assets .  Notwithstanding anything to the contrary in Section 1.1 , but subject to Section 1.7 , the parties agree that the Assets shall exclude any assets of Sellers that are not expressly designated as Assets pursuant to Section 1.1 , which excluded assets of Sellers shall remain the property of Sellers and shall not be sold to Buyers at the Closing (collectively, the “ Excluded Assets ”), including the following Excluded Assets:

 

(a)      The Purchase Price to be paid by Buyers to Sellers pursuant to Section 2.1 and Sellers’ other rights under this Agreement or any Ancillary Agreement;

 

(b)     All cash or cash equivalents on hand or held in any account of any Seller (including all checking, savings, depository or other accounts), and all bank accounts and escrow accounts of any Seller;

 

(c)     All accounts receivable and notes receivable of any Seller related to or arising out of transactions between any Seller, on the one hand, and any other Seller or any subsidiary or Affiliate of any Seller (any such subsidiaries or Affiliates of Sellers are collectively referred to as the “ Seller Companies ”), on the other hand;

 

(d)     All stock, membership interests, partnership interests or other ownership interests in Sellers or any Seller Companies (it being understood that the Equity Interests are being conveyed pursuant to the Equity Purchase Agreements);

 

(e)     Except as otherwise provided in Section 1.1(e) , all corporate or other entity-level Records of Sellers or any Seller Companies, including corporate charters, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, Tax Records, blank stock certificates and other documents relating to the organization, maintenance and existence of Sellers or any Seller Companies other than the Purchased Companies;

 

(f)      Except as otherwise provided in Section 1.1(e) , any Records of Sellers to the extent related to any Excluded Assets (other than the Equity Interests) or Excluded Liabilities (including files relating to Taxes and personnel files);

 

(g)     All rights of Sellers with respect to any Proceedings, causes of action and claims of every nature, kind and description relating to any Excluded Assets (other than the Equity Interests) and not to any of the Assets, including all rights, claims, liens, rights of setoff, offset or recoupment, defenses, lawsuits, judgments and other claims or demands of any nature against third parties whether liquidated or unliquidated, fixed or contingent or otherwise;

 

(h)     All rights under any insurance policies of Sellers or any Seller Companies, including any cash surrender value under any such insurance policies;

 

(i)      All claims for any refunds of Taxes and other governmental charges attributable to any period ending on or before the Closing Date;

 

(j)      All assets held under any employee benefit plans maintained by or for the benefit of Sellers or the Equity Sellers;

 

(k)     All prior title insurance policies and commitments, deeds and surveys covering any Real Property issued to, on behalf of or for the benefit of Seller or any Seller Companies (including the Equity Sellers);

 

(l)      Any computer hardware and software owned or leased by, or licensed to, any Seller that is not listed on Schedule 1.1(f) (including all billing, route management and other software programs other than basic operating systems);

 

(m)     All rights, title and interest in any financial responsibility, financial assurance or similar mechanisms; and

 

(n)     Such other assets of Sellers that are listed on Schedule 1.2(n) .

 

Notwithstanding anything to the contrary set forth above, for purposes of Article IX, the Equity Interests shall not constitute Excluded Assets.

 

1.3       Assumed Liabilities .  At the Closing, subject to Article IX , Buyers shall jointly and severally assume from Sellers, and shall agree to pay, perform and discharge when due, the following Liabilities of Sellers (the “ Assumed Liabilities ”):

 

(a)      All Liabilities arising under or pursuant to the Assumed Contracts, the Collection Accounts, the Peachland/Angleton Accounts, the Disposal Accounts and the Real Property;

 

(b)     All Liabilities for the customer deposits (the “ Customer Deposits ”) and deferred revenue obligations (the “ Deferred Revenue ”) listed on Schedule 1.3(b) , which schedule will be attached by Sellers hereto at Closing;

 

(c)      Any and all Liabilities relating to the Assets with respect to Environmental Laws and Permits whether such Liabilities relate to periods preceding or following the Closing, including all closure/post-closure Liabilities with respect to the Assets (including such Permits) and all obligations under Applicable Laws (including Environmental Laws) to establish accruals for such Liabilities;

 

(d)     All Liabilities for Taxes relating to the Assets accruing on or after the Closing Date, including Taxes relating to the Real Property (subject to the terms of Section 6.4 );

 

(e)     All Assumed Severance and Retention Bonus Liabilities, in accordance with the terms of Section 6.10(b) of this Agreement;

 

(f)      All Liabilities listed on Schedule 1.3(f);

 

(g)     All other Liabilities which Buyers expressly agree to assume pursuant to this Agreement;

 

(h)     All “ Anderson Company Liabilities ” as defined in Section 1.5 of the Anderson Purchase Agreement, all “ Chiquita Company Liabilities ” as defined in Section 1.5 of the Chiquita Purchase Agreement and all “ Chambers Company Liabilities ” as defined in Section 1.5 of the Stock Purchase Agreement; and

 

(i)      Any other Liabilities (other than Excluded Liabilities) of any nature whatsoever, whether legal or equitable, or matured or contingent, arising out of or in connection with or related to the ownership, lease, operation, performance or use of the Assets after the Closing Date.

 

1.4       Excluded Liabilities .  At the Closing, subject to Article IX , Buyers shall not, by the execution and performance of this Agreement or otherwise, assume, become responsible for or incur the following Liabilities of Sellers (collectively, the “ Excluded Liabilities ”):

 

(a)     Except as provided in Section 6.6 , and except if taken into account in the calculation of the Actual True-Up Amount, any Liabilities of Sellers or any Seller Companies for Taxes, whether or not accrued, assessed or currently due and payable, including any Taxes arising from the ownership, operation or use of the Assets for any Pre-Closing Period;

 

(b)     Subject to the terms of Section 6.6 , any Liabilities of Sellers for expenses incurred in connection with the sale of the Assets pursuant to this Agreement;

 

(c)     Any inter-company payables or receivables between Sellers and any Seller Companies;

 

(d)     All Liabilities for accounts payable and other current liabilities owed or accruing (as determined in accordance with GAAP) prior to the Closing Date that do not constitute Assumed Liabilities (the “ Accounts Payable ”);

 

(e)     Any Proceeding against any Seller or any Seller Company related to the ownership, operation or use of any of the Assets arising on or prior to the Closing Date (including any Proceeding set forth on Schedule 3.9 or Schedule 3.12 as of the date hereof and litigation which has been filed and with respect to which any Seller has received service of process as of the date hereof but excluding Proceedings relating to the Assumed Liabilities);

 

(f)      Except for any Assumed Contracts and Assumed Severance and Retention Bonus Liabilities, any Liabilities arising from or related to (i) any employee wages or other benefits due to or required to be contributed in respect of any employees, directors or consultants of any Seller relating to any Assets on or prior to the Closing Date or (ii)  funding, contributions, benefits, payment obligations, fees or expenses, including “withdrawal liability,” arising from or relating to any Benefit Plans sponsored, made available, maintained, contributed to or required to be contributed to by Sellers or any Seller Company for the benefit of any current or former employee of Sellers or any Seller Company, it being expressly understood that, except for any Assumed Contracts and the Assumed Severance and Retention Bonus Liabilities, Buyers are not assuming any Benefit Plans of Sellers, and Buyers shall not be deemed a successor employer with respect to any of Sellers’ Benefit Plans;

 

(g)     Subject to Section 6.4 , any Encumbrances (other than Permitted Encumbrances) relating to the Assets; and/or

 

(h)     All “ Excluded Liabilities ” as defined in Section 1.6 of each of the Equity Purchase Agreements;

 

(i)      All Liabilities listed on Schedule 1.4(i); and

 

(j)      Subject to Section 1.3 , any other Liabilities of any nature whatsoever, whether legal or equitable, or matured or contingent, arising out of or in connection with or related to the ownership, lease, operation, performance or use of the Assets on or prior to the Closing Date that do not constitute Assumed Liabilities.

 

1.5       Non-Assignment of Certain Contracts .   Notwithstanding anything to the contrary in this Agreement, to the extent that the assignment hereunder of any Assumed Contract shall require the consent of any third party, neither this Agreement nor any action taken pursuant to its provisions shall constitute an assignment or an agreement to assign if such assignment or agreement to assign would constitute a breach of such Assumed Contract or result in the loss or material diminution thereof, provided , however , that Sellers shall, at the request of the applicable Buyer, use commercially reasonable efforts to obtain the consent of the other party to such Assumed Contract to an assignment thereof in favor of the applicable Buyer; further provided , however , that if any Assumed Contract requires consent for assignment in favor of such Buyer and such consent is not obtained at or prior to Closing, the applicable Seller shall, to the extent contractually permitted, enter into an operating agreement with the applicable Buyer affording such Buyer the rights, benefits and obligations under such Assumed Contract as if such consent to assignment had been obtained (each, an “ Operating Agreement ”).  In the event that the consent to assign such Assumed Contract is obtained, such Assumed Contract thereupon shall be reasonably promptly assigned from the applicable Seller to the applicable Buyer.  Notwithstanding the foregoing, subject to Section 1.7 , if such accommodation to the applicable Seller under an Operating Agreement is not contractually permitted, Sellers shall not have any obligations to provide Buyers with the rights, benefits and obligations under such Assumed Contract following the Closing.  Notwithstanding anything in this Agreement to the contrary, in no event shall Sellers be obligated to pay any fees, commissions or other compensation to obtain the consent of a third party for the assignment hereunder of any Assumed Contract.

 

1.6       Allocation of Purchase Price .  The Purchase Price (including any liabilities that are considered to be an increase to the Purchase Price for federal income tax purposes) shall be allocated among the Assets in accordance with the allocation set forth on Schedule 1.6 . to be attached hereto at Closing, which allocation has been determined in accordance with the requirements of Code Section 1060 and based on the fair market value of the Assets as determined by arm’s length negotiations.  Within 45 days after the Actual True-Up Amount is finally determined pursuant to Section 2.2 , RSG will make any adjustments to the Purchase Price allocation necessary to reflect such Actual True-Up Amount.  The parties agree to file (or cause to be filed) (i) all required federal Forms 8594, Asset Acquisition Statement under Section 1060, and (ii) all other Tax Returns (including amended Tax Returns and claims for refund) in a manner consistent with such allocation of the Purchase Price described in this Section 1.6 .  The parties agree to refrain from taking any position that is inconsistent with such allocation, and to use their commercially reasonable efforts to sustain such allocation in any subsequent Tax audit or Tax dispute.

 

1.7       Certain Customer Issues and Asset Reconciliations .

 

(a)     Notwithstanding anything to the contrary in this Agreement, following the date of this Agreement, RSG will use its commercially reasonable efforts to identify any customer overlap issues with respect to the Customer Accounts where such customers are both serviced on a route to be divested pursuant to the Republic/Allied Consent Decree and also are serviced on routes not being divested, as well as any customer issues relating to National Accounts (collectively, “ Customer Issues ”).  RSG and WCN agree to mutually cooperate in good faith to take any actions reasonably necessary to resolve all Customer Issues prior to the Closing in a manner that results in the receipt by Buyers of a reasonably like-kind and amount of customers and revenue relating to the Customer Accounts as is contemplated by this Agreement and the Republic/Allied Consent Decree.

 

(b)     If, at any time after the Closing Date, either RSG or WCN determines in good faith that any Contract (whether or not an Assumed Contract, and including any Contract right related to a Collection Account, a Peachland/Angleton Account or a Disposal Account) relates both to the Assets and to assets, facilities or customers that are not included in the Assets, the parties will use their good faith efforts to enter into arrangements, including subcontracting arrangements, bifurcation arrangements, operating agreements and/or modifications of the applicable Contract, to allocate reasonably and fairly the benefits and burdens thereof based on the relationship of such Contract to the Assets and such assets, facilities or customers.  If, at any time prior to or after the Closing Date, either RSG or WCN identifies any tangible personal property (whether or not listed on the schedules hereto), Contract right or other asset that RSG or WCN, as the case may be, reasonably concludes in good faith (i) was included in the conveyances hereunder by Sellers to Buyers, (ii) was not used or held in connection with the ownership or operation of the Assets during the Hold Separate Period, and (iii) was inadvertently conveyed in error by Sellers to Buyers, the parties will use good faith efforts to cause such tangible personal property, Contract right or other asset to be reconveyed to a Seller or, if such conveyance is not reasonably practicable, to enter into other arrangements affording such Seller the benefit of such tangible personal property or Contract right.  If, at any time after the Closing Date, RSG or WCN identifies any tangible personal property, Contract right (whether or not listed on the schedules hereto) or other asset that that RSG or WCN, as the case may be, reasonably concludes in good faith (i) was not included in the conveyances hereunder by Sellers to Buyers, (ii) was used or held in connection with the ownership or operation of the Assets during the Hold Separate Period, and (iii) was inadvertently omitted in error from the conveyances hereunder by Sellers to Buyers, the parties will use good faith efforts to cause such tangible personal property, Contract right or other asset to be conveyed to a Buyer or, if such conveyance is not reasonably practicable, to enter into other arrangements affording such Buyer the benefit of such tangible personal property or Contract right.  Unless otherwise agreed, neither Buyers nor Sellers shall be entitled to any additional compensation for any conveyances made pursuant to this Section 1.7(b) .

 

ARTICLE II

 

PURCHASE PRICE AND CLOSING

 

2.1       Purchase Price .  Subject to adjustment as provided in this Article II and Section 9.7 , at the Closing, Buyers shall pay to Sellers the aggregate amount (the “ Closing Purchase Price ”) of $313,160,000 (Three Hundred and Thirteen Million One Hundred and Sixty Thousand Dollars) by wire transfer of immediately available funds, plus or minus an amount equal to the estimated net aggregate sum of the following items as of the Closing Date as determined under Section 2.2(b) (collectively, the “ Estimated True-Up Amount ”): (a) the estimated A/R Value as of the Closing Date; plus (b) the estimated total amount of Prepaid Assets as of the Closing Date; minus (c) the estimated total amount of Deferred Revenue as of the Closing Date; and minus (d) the estimated total amount of Customer Deposits as of the Closing Date. The Closing Purchase Price, as adjusted pursuant to this Article II and Section 9.7 , is referred to herein as the “ Purchase Price .”

 

2.2       Pre-Closing Adjustment .

 

(a)     The following capitalized terms used in this Agreement shall have the following meanings:

 

 

 

 

 

(b)     During the 30-day period immediately following the date of this Agreement (the “ EBITDA Due Diligence Period ”), RSG shall furnish WCN with all reasonably available information related to the calculation of the RSG Baseline EBITDA Amount, and provide WCN with access to the Assets to the extent reasonably relevant to the calculation of the RSG Baseline EBITDA Amount.  As promptly as practicable and in any event prior to the end of the EBITDA Due Diligence Period, WCN shall, subject to and in accordance with the terms of Section 2.2(e) and Schedule 2.2(e) , provide RSG in writing with its own good faith determination as to the Baseline EBITDA Amount (the “ WCN Baseline EBITDA Amount ”) allocable to each collection, transfer station and landfill Asset, including the EBITDA allocable to the Gulf Coast Disposal Authority Contract (the “ Gulf Coast EBITDA ”), together with a reasonably detailed statement of how WCN determined such WCN Baseline EBITDA Amount (the “ WCN Baseline EBITDA Statement ”).  The WCN Baseline EBITDA Statement shall separately set forth the following (the “ Pre-Closing Adjustment Calculations ”):

 

 

 

 

(c)     The WCN Baseline EBITDA Statement shall be deemed accepted by RSG, unless RSG establishes that WCN did not satisfy the requirements of Section 2.2(b) and Schedule 2.2(e) in any material respect and notifies WCN thereof, within 10 Business Days after receiving the WCN Baseline EBITDA Statement.  Such notice shall include a reasonably detailed description of how RSG determined that the WCN EBITDA Statement did not satisfy the requirements of Section 2.2(b) and Schedule 2.2(e) .  RSG and WCN shall thereafter negotiate in good faith and attempt to resolve their disagreement relating to the WCN Baseline EBITDA Statement.  Should such negotiations not result in an agreement within 10 Business Days after delivery of RSG’s notice, the issues remaining in dispute shall be submitted to an industry expert knowledgeable in such matters and mutually agreeable to RSG and WCN (the “ Expert ”).  The Expert shall resolve the Parties disagreements relating to the WCN Baseline EBITDA Statement and adjust the Pre-Closing Adjustment Calculations to reflect such resolution; provided, however, that the Expert’s determination shall not result in an EBITDA determination (with respect to any collection, transfer station or landfill Asset) outside of the EBITDA range for any such collection, transfer station or landfill Asset established by RSG’s and WCN’s respective EBITDA determinations.  The Expert’s determination shall include a worksheet setting forth all material calculations used in arriving at such determination and shall be based solely on information provided to the Expert by RSG and WCN or their respective Affiliates) of the disputed items, including the WCN Baseline EBITDA Amount, the Pre-Closing Adjustment Calculations and the related calculations set forth in the WCN Baseline EBITDA Statement.  The Expert shall deliver his written determination within 30 days of receipt of the matter, and the Expert’s determination shall be final, binding and conclusive on the parties.  RSG and WCN shall furnish or cause to be furnished to the Expert such work papers and other documents and information relating to the disputed issues as they may deem necessary or appropriate or as the Expert may request and that are available to that Party or its agents.  Further, RSG and WCN shall be afforded the opportunity to present to the Expert any material relating to the disputed issues and to discuss the issues with the Expert, provided , however , that no Party shall have any discussions with the Expert without first providing the other parties with notice of such discussions and a reasonable opportunity to attend, observe or otherwise participate in such discussions.  All fees and expenses relating to the work, if any, performed by the Expert will be borne equally by RSG and WCN.

 

(d)     If the EBITDA Adjustment Amount is a Positive EBITDA Amount, then the Purchase Price payable by Buyers to Sellers at Closing shall be increased by the amount of the net aggregate Purchase Price adjustments set forth in the Pre-Closing Adjustment Calculations.  If the EBITDA Adjustment Amount is a Negative EBITDA Amount, then the Purchase Price payable by Buyers to Sellers at Closing shall be decreased by the amount of the net aggregate Purchase Price adjustments set forth in the Pre-Closing Adjustment Calculations.  

(e)     Notwithstanding anything to the contrary in this Agreement, (i) there shall be no adjustment to the Purchase Price pursuant to Section 2.2(d) if the WCN Baseline EBITDA Amount is not more than $1,500,000 greater than or $1,500,000 less than the RSG Baseline EBITDA Amount, (ii) in no event shall the Closing Purchase Price as adjusted by this Section 2.2 and Sections 2.3(e) and (f) be less than $290,000,000, and (iii) RSG and WCN agree that all calculations, computations and determinations with respect to the WCN EBITDA Baseline Amount pursuant to this Section 2.2 shall be made strictly in accordance with the terms of Schedule 2.2(e) hereto.

 

(f)      Solely for purposes of this Section 2.2 and Section 2.3 , the Assets shall be deemed to include the Purchased Company Assets.

 

2.3       Post-Closing Adjustments .

 

(a)     The following capitalized terms used in this Agreement shall have the following meanings:

 

 

 

 

 

(b)     At least 5 Business Days prior to the Closing Date, Sellers shall deliver to Buyers a worksheet setting forth their good faith estimate of the Estimated True-Up Amount as of the Closing Date.  If the Estimated True-Up Amount is a positive number, as contemplated by Section 2.2 , the amount payable by Buyers to Sellers at Closing shall be increased in an amount equal to the positive Estimated True-Up Amount.  If the Estimated True-up Amount is a negative number, as contemplated by Section 2.2 , the amount payable by Buyers to Sellers at Closing shall be decreased in an amount equal to the negative Estimated True-Up Amount. Buyers and Sellers agree that, solely for purposes of determining the Estimated True-Up Amount and the Actual True-Up Amount, (i) Accounts Receivable shall be deemed to include “Accounts Receivable” as defined in each of the Equity Purchase Agreements, (ii) Prepaid Assets shall be deemed to include “Prepaid Assets” as defined in each of the Equity Purchase Agreements, (iii) Deferred Revenue shall be deemed to include “Deferred Revenue” as defined in each of the Equity Purchase Agreements and (iv) Customer Deposits shall be deemed to include “Customer Deposits” as defined in each of the Equity Purchase Agreements.

 

(c)     Within 90 days after the Closing, RSG shall prepare a computation of the Actual True-Up Amount and the Adjustment Amount as of the Closing Date and deliver such computation to WCN.  If within 30 days following delivery of such computation, WCN does not deliver a written objection thereto to RSG, then the Actual True-Up Amount and the Adjustment Amount shall be deemed to be agreed-to between the parties as reflected on the computation provided pursuant to the preceding sentence.  If WCN object in writing to the computation within 30 days following the delivery of such computation, then RSG and WCN shall negotiate in good faith and attempt to resolve their disagreement.  Should such negotiations not result in an agreement within 30 days after delivery of such written objection, the issues remaining in dispute shall be submitted to a neutral auditor mutually agreeable to RSG and WCN (the “ Neutral Auditor ”).  RSG and WCN shall furnish or cause to be furnished to the Neutral Auditor such work papers and other documents and information relating to the disputed issues as they may deem necessary or appropriate or as the Neutral Auditor may request and that are available to that Party or its agents.  Further, RSG and WCN shall be afforded the opportunity to present to the Neutral Auditor any material relating to the disputed issues and to discuss the issues with the Neutral Auditor, provided , however , that no Party shall have any discussions with the Neutral Auditor without first providing the other parties with notice of such discussions and a reasonable opportunity to attend, observe or otherwise participate in such discussions.  All fees and expenses relating to the work, if any, performed by the Neutral Auditor will be borne equally by WCN and RSG.  The Neutral Auditor will deliver to WCN and RSG a written determination (which determination shall include a worksheet setting forth all material calculations used in arriving at such determination and shall be based solely on information provided to the Neutral Auditor by WCN and RSG or their respective Affiliates) of the disputed items, including the Actual True-Up Amount and the Adjustment Amount, within 30 days of receipt of the disputed items, which determination will be final, binding and conclusive on the parties.

 

(d)     Promptly following agreement on, or delivery of the final, binding and conclusive computation setting forth, the Actual True-Up Amount and the Adjustment Amount, Buyers and Sellers shall account to each other as provided for in this Section 2.3(d) .  If the Adjustment Amount is a positive number, then Buyers shall pay Sellers a cash payment equal to such difference as an increase in the Purchase Price.  If the Adjustment Amount is a negative number, then Sellers shall pay Buyers a cash payment equal to such difference as decrease in the Purchase Price.  Any such payment shall be due and payable within 10 days after the final determination of the Adjustment Amount pursuant to Section 2.3(c) and shall be paid in immediately available funds by wire transfer to an account designated by Buyers or Sellers, as applicable.

 

(e)     In the event that (i) the Purchase Price is reduced pursuant to Section 2.2(d) and (ii) some or all of such reduction is caused by a shortfall in EBITDA generated by transfer station and landfill Assets, as reflected on the applicable Specific EBITDA Allocation contained in the final WCN Baseline EBITDA Statement, then RSG and WCN agree that they shall determine the actual EBITDA (“ Post-Closing Disposal EBITDA ”) related to such assets.  Within 45 days following the expiration of the Post-Closing Measurement Period (as defined below), the Post-Closing Disposal EBITDA shall be calculated, in accordance with the terms of this Section 2.3(e) and Schedule 2.3(e) , for the 12-month period commencing on the first day of the month immediately following the Closing Date and ending on the first anniversary thereof (the “ Post-Closing Measurement Period ”).  In the event that the Post-Closing Disposal EBITDA for any transfer station or landfill Asset is greater than the Disposal EBITDA for such transfer station or landfill Asset, Buyers shall pay Sellers a cash payment equal to the aggregate of the amount of each such increase in EBITDA multiplied by the Ordinary Multiple or Special Multiple, as applicable.  Any such payment shall be due and payable within 10 business days after the final determination of Post-Closing Disposal EBITDA pursuant to this Section 2.3(e) .  WCN shall, on a quarterly basis during the Post-Closing Measurement Period, provide RSG with interim statements of Post-Closing Disposal EBITDA as of such dates, together with a reasonably detailed description of how such Post-Closing Disposal EBITDA was calculated, including any adjustments from actual historical financial statements.  For the avoidance of doubt, there shall only be upward adjustments to the Purchase Price, if any, pursuant to this Section 2.3(e) .

 

(f)     Post-Closing Seabreeze/Gulf Coast EBITDA Adjustment .  The Parties acknowledge and agree that if, as of the Closing Date or during the 12-month period following immediately thereafter, the Buyers have not entered into (or become the beneficiary of) a new disposal agreement (or extension of the existing disposal agreement) with the Gulf Coast Disposal Authority for a minimum of 12 months following the Closing Date, then the Parties agree that they shall determine the actual EBITDA of the Seabreeze Landfill (the “ Post-Closing Seabreeze EBITDA ”).  Within 45 days following the expiration of the Post-Closing Measurement Period, the Post-Closing Seabreeze EBITDA shall be calculated, in accordance with the terms of this Section 2.3(f) and Schedule 2.3(e) , for the Post-Closing Measurement Period.  In the event that the Post-Closing Seabreeze EBITDA is greater than the Seabreeze EBITDA included in the WCN Baseline EBITDA Statement, Buyers shall pay Sellers a cash payment equal to the aggregate of the amount of such increase in EBITDA multiplied by the Ordinary Multiple or Special Multiple, as applicable; provided, however, that appropriate adjustment shall be made so that the foregoing increase in EBITDA (and any payment made pursuant to this Section 2.3(f) in respect thereof) shall not be counted twice for purposes of the EBITDA calculation (and payment in respect thereof) to be made pursuant to Section 2.3(e) .  In the event that the Post-Closing Seabreeze EBITDA is less than the Seabreeze EBITDA included in the WCN Baseline EBITDA Statement, Sellers shall pay Buyers a cash payment equal to the aggregate of the amount of such decrease in EBITDA multiplied by 4; provided, however, that the amount of such decrease in EBITDA, for purposes of this Section 2.3(f) , shall not exceed the amount of the Prorated Gulf Coast EBITDA Loss.  “ Prorated Gulf Coast EBITDA Loss ” means the Gulf Coast EBITDA reflected in the WCN Baseline EBITDA Statement multiplied by a fraction, the numerator of which is the number of days during the 12-month period following the Closing Date for which any Buyer was not a party to, or beneficiary of, the Gulf Coast Contract, and the denominator of which is 365.  Any such payment shall be due and payable within 10 Business Days after the final determination of Post-Closing Seabreeze EBITDA for the Post-Closing Measurement Period pursuant to this Section 2.3(f) .  Any payment due from Sellers to Buyers pursuant to this Section shall be netted against any payment due from Buyers to Sellers pursuant to Section 2.3(e).   WCN shall, on a quarterly basis during the Post-Closing Measurement Period, provide RSG with interim statements of Post-Closing Seabreeze EBITDA as of such dates, together with a reasonably detailed description of how such Post-Closing Seabreeze EBITDA was calculated, including any adjustments from actual historical financial statements.  Notwithstanding anything to the contrary contained in this Agreement, including this Section 2.3(f) , in no event shall Sellers be required to make any payments pursuant to this Section 2.3(f) that would result in a Purchase Price of less than $290,000,000.

 

(g)     In furtherance of Sections 2.3(e) and 2.3(f) , WCN covenants and agrees that, during the Post-Closing Measurement Period, it shall cause Buyers and the Purchased Companies to (A) conduct business in a commercially reasonable manner in order to maximize Post-Closing Disposal EBITDA, including, without limitation, Post-Closing Seabreeze EBITDA, (B) not divert landfill volumes or discount disposal rates other than in the ordinary course of business or (C) otherwise take or fail to take any action outside the ordinary course of business which is reasonably likely to reduce Post-Closing Disposal EBITDA, including, without limitation, Post-Closing Seabreeze EBITDA, below the amount it would otherwise be but for having taken or failed to take such action.  

 

2.4       Closing .  The closing of the Transactions (the “ Closing ”) shall take place at the offices of Akerman Senterfitt & Eidson, P.A., One Southeast Third Avenue, Suite 2500, Miami, Florida 33131 at 10:00 a.m., local time, as promptly as practicable (but in any event within 10 Business Days) following the date on which the last of the conditions set forth in Article VII are fulfilled, satisfied or waived or at such other time or place as RSG and WCN shall agree in writing.  The date on which the Closing occurs is referred to as the “ Closing Date .”  All proceedings to be taken and all documents to be executed and delivered by all parties at the Closing will be deemed to have been taken, executed and delivered simultaneously and no proceedings will be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered; provided , however , that, for financial reporting purposes only, the Closing shall be deemed to have occurred effective as of 12:01 a.m. on the Closing Date.

 

2.5       Closing Deliveries by Sellers .  At the Closing, Sellers and the Equity Sellers shall deliver or cause to be delivered to Buyers, all duly and properly executed (where applicable):

 

(a)     For each parcel of Owned Real Property, a Deed from the applicable Seller conveying to the applicable Buyer indefeasible, fee simple title to such parcel subject only to the Permitted Encumbrances, in form and substance reasonably satisfactory to Buyers;

 

(b)     Bills of Sale from each Seller to each Buyer, as applicable, in the form attached as Exhibit D (the “ Bills of Sale ”);

 

(c)     Affidavit of Non-Foreign Status from each Seller of Owned Real Property and each Purchased Company to each Buyer, as applicable, in form and substance reasonably satisfactory to Buyers;

 

(d)     For each parcel of Owned Real Property and each parcel of real property included in the Purchased Company Assets, an owner’s affidavit from the applicable Seller or Equity Seller, as applicable, and any other documents reasonably required by the Title Company or as otherwise specified in the Title Commitments  in order for the Title Company to delete the Title Requirements (excluding any Specified Title Requirements or any Title Requirements that are (i) an obligation of a Buyer or (ii) Assumed Liabilities) in order to issue the corresponding Title Policies, which Title Commitments have been reviewed, approved and   accepted in full by Buyers on or prior to the date hereof;  

 

(e)     Assignment and assumption agreements executed by RSG or the applicable Seller Affiliate thereof, in the form attached as Exhibit E , for all of the Assumed Contracts other than the Real Estate Leases (the “ Assignment and Assumption Agreements ”);

 

(f)      (i) An assignment and assumption agreement executed by RSG or the applicable Seller Affiliate thereof, substantially in the form attached as Exhibit F , for each parcel of Leased Real Property of all of the applicable Seller’s rights, title and interest under each Real Estate Lease with respect thereto, together with the consent of the landlord to such assignment and assumption if required by the applicable Real Estate Lease or by Applicable Laws and the agreement by the applicable Buyer to assume and pay, perform and discharge when due the obligations of the lessee under such Real Estate Lease to the extent arising from and after the Closing Date (the “ Assignment, Assumption and Consent to Leased Real Property ”), and (ii) to the extent reasonably available or required to be issued by the landlord under the applicable lease, an Estoppel Certificate (which may be included within the Assignment, Assumption and Consent to Leased Real Property) for each parcel of Leased Real Property, substantially in the form attached as Exhibit G ;

 

(g)     A letter from Sellers’ (or their Affiliate’s or Affiliates’) lenders confirming that all Blanket Liens on the Assets or the Purchased Company Assets will be released concurrently with the Closing and that evidence thereof shall be delivered within 60 days following the Closing Date and evidence reasonably satisfactory to Buyers of satisfaction of all Encumbrances encumbering the Assets or the Purchased Company Assets other than Permitted Encumbrances;

 

(h)     A Houston disposal agreement in accordance with the terms of the Republic/Allied Consent Decree, in the form attached as Exhibit H (the “ Houston Disposal Agreement ”);

 

(i)      The Transition Disposal Agreements, executed by RSG or the applicable Seller Company;

 

(j)      A transition services agreement in the form of Exhibit I (the “ Transition Services Agreement ”);

 

(k)     A legal opinion of Akerman Senterfitt, as counsel to the Sellers, in the form attached hereto as Exhibit J ;

 

(l)      The Anderson Purchase Agreement and an assignment of the Anderson Membership Interests;

 

(m)     The Chiquita Purchase Agreement and an assignment of the RSCI Membership Interests;

 

(n)     The Stock Purchase Agreement and (i) a stock certificate for the Chambers Stock, duly endorsed to WCN or accompanied by a stock power endorsed to WCN or (ii) an affidavit of lost stock certificate accompanied by a stock power endorsed to WCN; and

 

(o)     Resignations of each director of Chambers and documents sufficient to effect the removal of all managers and officers of each of the Purchased Companies, in each case effective as of the Closing Date.

 

2.6       Closing Deliveries by Buyers .  At the Closing, Buyers shall deliver or cause to be delivered to Sellers and the Equity Sellers, all duly and properly executed (where applicable):

 

(a)      The Closing Purchase Price by wire transfer of immediately available funds to the account specified by Sellers and the Equity Sellers;

 

(b)     The Assignment and Assumption Agreements executed by WCN or the applicable Buyer Affiliate thereof;

 

(c)      For each parcel of Leased Real Property, the Assignment, Assumption and Consent to Leased Real Property executed by WCN or the applicable Buyer;

 

(d)     The Houston Disposal Agreement executed by WCN or the applicable Buyer;

 

(e)      Subject to Section 2.7 , the Transition Disposal Agreement executed by WCN or the applicable Seller Affiliate thereof;

 

(f)      The Equity Purchase Agreements; and

 

(g)     The Transition Services Agreement executed by WCN.

 

2.7       Unsecured Consents from Governmental Authorities under Environmental Laws .  If, despite the parties’ commercially reasonable efforts, upon the satisfaction or waiver of all of the closing conditions set forth in Article VII , the consent from a Governmental Authority necessary to transfer or re-issue one or more Environmental Permits to the applicable Buyer has not been obtained, then, subject to the approval of such Governmental Authority, (a) the parties shall consummate the Closing, and (b) the applicable Buyers and Sellers shall execute and deliver a transition agreement substantially in the form attached hereto as Exhibit K (the “ Transition Disposal Agreement ”) with respect to the Assets affected by any such Environmental Permits at Closing.  In the event that the execution and delivery of any Transition Disposal Agreements are required pursuant to this Section 2.7 , Buyers and Sellers shall use their commercially reasonable efforts to obtain the necessary consents from any such Governmental Authority as soon as reasonably practicable following the Closing in order to transfer or re-issue one or more of the Environmental Permits to the applicable Buyers.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Except as set forth in the Sellers’ Disclosure Schedules, Sellers, jointly and severally, make the following representations and warranties to Buyers.  For the purposes of this Article III and any other representations and warranties herein, (i) matters reflected in the Sellers’ Disclosure Schedules are not necessarily limited to matters required by the Agreement to be reflected in the Sellers’ Disclosure Schedules, any additional matters are set forth in the Sellers’ Disclosure Schedules for informational purposes, and other matters of a similar nature are not necessarily included, (ii) any item or matter disclosed by Sellers in any section or subsection of the Sellers’ Disclosure Schedules will also be deemed to be disclosed in any other sections or subsections of the Sellers’ Disclosure Schedules to the extent that it is reasonably apparent from the face of such disclosure that such item or matter is applicable or relates to such other sections or subsections and (iii) the Sellers’ Disclosure Schedules are qualified in their entirety by reference to specific provisions of this Agreement.  It is understood and agreed that the inclusion of any specific item in the Sellers’ Disclosure Schedules is not intended to imply that such items so included or other items are or are not material.

 

3.1       Organization and Qualification .  Each Seller is duly organized, validly existing and in good standing under the laws of the state of its organization or formation.  Each Seller is duly authorized, qualified and licensed under all Applicable Laws to carry on its business in the places and in the manner in which its business is presently conducted, except for where the failure to be so authorized, qualified or licensed would not have a Sellers’ Material Adverse Condition.  Each Seller has full power and authority to own or lease the Assets, as applicable.

 

3.2       Authority; Binding Effect .

 

(a)     Each Seller has full power and, subject to obtaining any consents required hereunder, authority (including full corporate or other entity power and authority) to enter into this Agreement and the Ancillary Agreements to which it is a party, to consummate the Transactions and to perform its obligations under this Agreement and the Ancillary Agreements to which it is a party.

 

(b)     The execution, delivery and performance of this Agreement and the Ancillary Agreements by Sellers are within their respective corporate, limited liability company or partnership rights, powers and authority and such actions have been approved by each Seller’s board of directors, managers or general partners (as the case may be), and no other proceedings on the part of Sellers will be necessary to authorize the execution and delivery of this Agreement and the Ancillary Agreements or the consummation by Sellers of the Transactions and the performance of their obligations under this Agreement and the Ancillary Agreements to which they are parties.  This Agreement has been, and the Ancillary Agreements to which the Sellers are parties when executed and delivered will be, duly and validly executed and delivered by the Sellers.  This Agreement is, and the Ancillary Agreements to which the Sellers are parties when executed and delivered will be (assuming the due authorization, execution and delivery of each by Buyers), the valid and legally binding agreement of each Seller, enforceable against such Seller in accordance with their respective terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and the effects of general principles of equity.

 

3.3       Consents and Approvals; No Violation .  Except (a) as set forth in Schedule 3.3 , (b) for the terms of the Republic/Allied Consent Decree, and (c) for such matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition, the execution, delivery and performance of this Agreement and the Ancillary Agreements, the consummation of the Transactions and the fulfillment of the terms of this Agreement and the Ancillary Agreements by Sellers do not and will not, after the giving of notice or lapse of time or otherwise:

 

(a)     conflict with, or result in a breach or violation of, their Organizational Documents;

 

(b)     result in the creation or imposition of any Encumbrance on the Assets;

 

(c)     except for any notices, consents or approvals required under the HSR Act or with respect to host community agreements listed on Schedule 1.1(c)(iv) , or Environmental Permits, (i) require Sellers obtain the consent or approval of, any Governmental Authority or other third Person (including, with respect to the transfer of any Permits), or (ii) conflict with, result in a material breach of or default under or give rise to any material right of termination, cancellation or acceleration of, or to a material loss of any benefit to which a Seller is entitled under, such Assumed Contract; or

 

(d)     conflict with, violate or result in a breach of or default under any Applicable Law to which Sellers are bound or to which the Assets are subject.

 

3.4       Compliance with Laws; Permits .  

 

(a)     Except as set forth in Schedule 3.4(a) and except for such matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition, (i) the Assets are being maintained and operated in compliance with all Applicable Laws, (ii) Sellers are not involved in any Proceeding relating to the Assets seeking to impose fines or penalties or seeking injunctive relief for violation of any Applicable Laws and Permits, nor has any Person asserted in writing that any Seller has violated or is in violation of Applicable Laws, and (iii) there is no pending or, to Sellers’ Knowledge, threatened Proceeding or other form of material review relating to Sellers or the Assets with respect to any Applicable Law or Permit.

 

(b)     To Sellers’ Knowledge, the Permits listed on Schedule 3.4(b) comprise all material Permits (excluding Environmental Permits) necessary to enable Sellers to own and use the Assets and conduct the Assets as currently conducted.  Except as set forth on Schedule 3.4(b) , Sellers are in compliance with the terms and conditions of all such Permits, except for such failures which would not reasonably be expected to have a Sellers’ Material Adverse Condition, and no Proceedings are pending or, to Sellers’ Knowledge, threatened that may result in the revocation, cancellation, suspension, limitation or adverse modification of any of the same.  Except for matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition, there are no defects in any of such Permits.  All of the Permits are currently valid, in good standing and in full force and effect in all material respects, except for such failures which would not reasonably be expected to have a Sellers’ Material Adverse Condition.  To Sellers’ Knowledge, there are no material defects in any of the Permits, except for such defects which would not reasonably be expected to have a Sellers’ Material Adverse Condition.

 

3.5       Assets; Personal Property .  Except as set forth in Schedule 3.5 , the Assets and the Purchased Company Assets include all of the assets required to be divested by the Sellers with respect to the Markets pursuant to the Republic/Allied Consent Decree.  Except for such matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition: (a) all of the Assets are either owned by Sellers or leased by Sellers under an Assumed Contract; (b) at the Closing, upon the consummation of the Transactions, the applicable Sellers shall convey to the applicable Buyers good and marketable title to or valid leasehold interests in the personal property Assets, free and clear of all Encumbrances (other than Encumbrances created by any Buyer, Permitted Encumbrances and the Blanket Liens that will be released as provided in Section 6.18 ); (c) except as set forth in Schedule 3.5(c) , the Equipment is in operating condition in all material respects, ordinary wear and tear excepted; and (d) except as set forth in Schedule 3.5(d) , the automobiles, trucks, fork lifts, construction vehicles and other motor vehicles and the attachments, accessories and materials handling equipment comprising the Rolling Stock are in operating condition in all material respects, ordinary wear and tear excepted.

 

3.6       Real Property .

 

(a)     Except for the Permitted Encumbrances, as set forth on Schedule 3.6(a) , or the requirements listed in the Title Commitments, (i) Sellers have good and marketable indefeasible fee simple title to the Owned Real Property and, to Sellers’ Knowledge, a legal, valid, binding and enforceable leasehold interest in the Leased Real Property, and (ii) assuming that an Assignment, Assumption and Consent to Leased Real Property is received by Sellers with respect to each parcel of Leased Real Property in accordance with Section 2.5(d) , at Closing, all of Sellers’ right, title and interest to the Owned Real Property and leasehold interest in the Leased Real Property shall be conveyed to Buyers, free and clear of all Encumbrances, subject to Encumbrances by any Buyer.

 

(b)     Except for the Permitted Encumbrances, the Blanket Liens that will be released as provided in Section 6.18 , as set forth on Schedule 3.6(b) :

 

 

 

 

 

 

 

(c)     Neither any Seller nor any Seller Company (directly or indirectly) owns or has any interest in or any rights to acquire, lease or otherwise use any land or other real property that (a) (i) is situated within a one (1) mile radius of any landfill Asset and (ii) would be reasonably expected to interfere with any Buyer’s prospective ownership, use, operation or expansion of such Asset, or (b) is adjacent to any transfer station or hauling Asset.

 

(d)     Sellers have completed the capping of approximately 69 acres of the Chiquita Canyon Landfill.  Such capping has been performed and completed in accordance with all Applicable Laws.

 

3.7       Contracts .

 

(a)     Listed on Schedule 3.7(a) is a complete and accurate list of each Material Collection Contract and each Material Disposal Contract.

 

(b)     Except as set forth in Schedule 3.7(b) , Sellers are in compliance with all Material Collection Contracts and all Material Disposal Contracts, except where the failure to comply would not reasonably be expected to result in a Sellers’ Material Adverse Condition, and, to Sellers’ Knowledge, all Material Collection Contracts and Material Disposal Contracts are in full force and effect in all material respects and are valid, binding and enforceable against any Seller a party thereto in accordance with their respective provisions.  Sellers have not received any written notice that any Person intends or desires to modify, waive, amend, rescind, release, cancel or terminate any Material Collection Contracts or Material Disposal Contracts.

 

3.8       Taxes .  Except as set forth on Schedule 3.8 or for matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition, with respect to the Assets:

(a)     Sellers, either separately or as members of an Affiliated Group, (i) have completed and timely filed all Tax Returns required to be filed with any Tax authority for any Pre-Closing Period and (ii) have paid (or have had paid on their behalf) all Taxes shown as due and payable thereon.  Such Tax Returns accurately reflect in all material respects all Taxes due and payable with respect to the periods covered by them.  There is no Tax Return filed by Sellers either separately or as a member of an Affiliated Group, and there are no outstanding assessments or Taxes otherwise due, for any Pre-Closing Period, that will result, on or after the Closing Date, in any Taxes or other governmental charges upon the Assets or Buyers, whether as transferees of the transferred assets or otherwise.  There are no Encumbrances for Taxes on any of the Assets other than Encumbrances for Taxes not yet due and payable.

 

(b)     There is no actual, pending or, to Sellers’ Knowledge, threatened claim, audit, investigation, dispute or other proceeding concerning any Taxes of Sellers that may result in a material Encumbrance against any of the Assets after Closing.

 

3.9       Litigation .  Except as set forth on Schedule 3.9 and except for matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition, (a) there are no Proceedings pending or, to Sellers’ Knowledge, threatened against the Assets or against the Sellers relating to the Assets, at law or in equity, before any federal, state or local court or regulatory agency or other Governmental Authority, (b) there are no existing orders, judgments or decrees of any Governmental Authority affecting any of the Assets, nor, to Sellers’ Knowledge, are there any such orders, judgments or decrees threatened, and (c) there are no Proceedings pending or, to Sellers’ Knowledge, threatened, against Sellers that could result in an Encumbrance on any of the Real Property.

 

3.10     Conduct of Business Since December 4, 2008 .  Except for matters that would not reasonably be expected to result in a Sellers’ Material Adverse Condition, since December 4, 2008, the Sellers have operated the Assets in accordance with the Republic/Allied Consent Decree.

 

3.11     Environmental Compliance; Hazardous Materials .

 

(a)     Except as set forth in Schedule 3.11(a) or for matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition:

 

 

 

 

 

(b)     Except as set forth in Schedule 3.11(b) or for matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition, with respect to the Assets, (i) no   Seller has received any written notice or other written communication from any Governmental Authority or unaffiliated third Person alleging or relating to the investigation of any alleged (A) violation of Environmental Law or (B) liability or potential liability for any Release, other than, in each case, those that have been fully resolved without further liability or obligation to Sellers, (ii) there is no Proceeding pending or, to Sellers’ Knowledge, threatened against either the Sellers or the Assets relating to a violation or failure to comply with Environmental Law or involving remediation of any condition of any Real Property pursuant to any Environmental Law, and (iii) there are no matters, circumstances or violations of any Environmental Permits the effect of which would prevent Buyers from continuing to operate and use the Assets for their intended purposes.

 

(c)     Schedule 3.11(c)   contains a complete list of all of Seller’s material Environmental Permits. Such Environmental Permits comprise all of the Environmental Permits required to operate the Assets required as currently operated, and Seller is in compliance with each such Environmental Permit, except for where the failure to have, or be in compliance with, such Environmental Permits would not have a Sellers’ Material Adverse Condition.  

 

(d)     The representations and warranties made in this Section 3.11 are the sole and exclusive representations and warranties of Sellers with respect to environmental matters.

 

3.12     Employment and Labor Matters .

 

(a)     Schedule 3.12(a) , when delivered by Sellers to Buyers within 20 Business Days before the Closing, will list all of Sellers’ employees who are employed in connection with the operation of the Assets (including any employees who are out on leave), together with each such person’s (i) employment type or classification, (ii) compensation, including hourly or monthly base compensation and any bonus to which the employee is entitled and (iii) contact information, tax identification number and driver’s license number (for each driver of Seller’s motor vehicles only).  Prior to Closing, Sellers will deliver to Buyers as Schedule 3.12 copies of all employment agreements with such employees.

 

(b)     Schedule 3.12(b) , when delivered by Sellers to Buyers reasonably promptly following the Closing, will list, for each employee of any Seller who is employed in connection with the operation of any of the Assets as of the Closing, the following information for the period from January 1, 2009 through the end of the last pay period prior to the Closing: (i) gross earnings; (ii) federal income taxes withheld; (iii) state income taxes withheld; (iv) state unemployment and disability taxes withheld; (v) federal unemployment taxes withheld; (v) FICA taxes withheld; and (vi) 401(k) contributions withheld.

 

(c)     Except as set forth in Schedule 3.12(c) , with respect to each of the Assets, (i) no Seller is a party to any collective bargaining agreement and (ii) within the last 3 years, Sellers have not experienced any material labor disputes, union organization attempts or any work stoppage due to labor disagreements in connection with any of the Assets.  Except as set forth in Schedule 3.12(c) or for matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition , no Seller is a party to any agreement for the provision of consulting or other professional services which is not cancelable without penalty on less than 30 days’ notice.

 

(d)     Except to the extent set forth in Schedule 3.12(d) or for matters that would not reasonably be expected to have a Sellers’ Material Adverse Condition, with respect to the Assets, (i) there is no unfair labor practice charge or complaint against Sellers pending or, to Sellers’ Knowledge, threatened, (ii) there is no labor strike, dispute, request for representation, slowdown or stoppage actually pending or, to Sellers’ Knowledge, threatened against or affecting Sellers, (iii) no question concerning labor representation has been raised to Sellers or, to Sellers’ Knowledge, is threatened respecting the Offered Employees, (iv) no grievance, nor any arbitration proceedings arising out of or under collective bargaining agreements, is pending or, to Sellers’ Knowledge, threatened, (v) there are no administrative charges, court complaints or threatened complaints against Sellers concerning alleged employment discrimination or other employment related matters pending or, to Sellers’ Knowledge, threatened before the U.S. Equal Employment Opportunity Commission, the U.S. Department of Labor or any other Governmental Authority, (vi) Sellers have complied with all applicable labor and employment laws, (vii) Sellers are not liable for any arrears of wages or any penalty for failure to comply with any of the foregoing and are not liable for any payment to any trust or other fund or to any Governmental Authority, with respect to unemployment compensation benefits, social security or other benefits for employees (other than routine payments to be made in the normal course of business and consistent with past practice), and (viii) there are no pending or, to Sellers’ Knowledge, threatened charges, complaints, claims or grievances alleging wage and hour violations including allegations of unpaid hours worked, unpaid wages, unpaid overtime, or violations of meal periods or break period rules, regulations or statutes.

3.13     No Broker’s or Finder’s Fees .  Except as set forth on Schedule 3.13 , no agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any brokerage commissions, finder’s fees or similar compensation in connection with the Transactions based on any agreement, arrangement or understanding made by or on behalf of any Seller or any Affiliate thereof or to which any Seller or any Affiliate thereof is subject.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF BUYERS

 

Except as set forth in the Buyers’ Disclosure Schedules, Buyers, jointly and severally, make the following representations and warranties to Sellers.  Fo