PURCHASE AGREEMENT
dated as of April 1,
2009
by and among
REPUBLIC SERVICES,
INC.,
ANDERSON REGIONAL LANDFILL,
LLC,
ALLIED WASTE NORTH AMERICA,
INC.,
ALLIED WASTE LANDFILL HOLDINGS,
INC.
WASTE CONNECTIONS,
INC.
and
ANDERSON COUNTY LANDFILL,
INC.
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this “
Agreement ”) is executed and delivered effective as of
April 1, 2009, by and among REPUBLIC SERVICES, INC., a Delaware
corporation (“ RSG ”), ALLIED WASTE LANDFILL
HOLDINGS, INC. (“AWLF”), a Delaware corporation, ALLIED
WASTE NORTH AMERICA, INC., a Delaware corporation (“
AWNA ,” and together with AWLF , the “
Sellers ”), ANDERSON REGIONAL LANDFILL, LLC, a
Delaware limited liability company (the “ Company
”) (RSG, AWLF, AWNA and the Company are sometimes referred to
herein individually as a “ Seller Party ” and
collectively as the “ Seller Parties ”), WASTE
CONNECTIONS, INC., a Delaware corporation (“ WCN
”), and ANDERSON COUNTY LANDFILL, INC., a Delaware
corporation (“ Buyer ”)(Buyer and WCN are
sometimes referred to herein individually as a “ Buyer
Party ” and collectively as the “ Buyer
Parties ”).
RECITALS
WHEREAS, WCN, RSG and certain affiliates of WCN
and RSG are parties to that certain Amended and Restated Asset
Purchase Agreement, dated as of April 1, 2009 (the “ Asset
Purchase Agreement ”), which amends and restates that
certain Asset Purchase Agreement executed and delivered effective
as of February 6, 2009, by and among WCN, RSG and the other
signatories thereto (capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the
Asset Purchase Agreement);
WHEREAS, the Company owns and operates (i) the
Anderson Landfill located at 203 Landfill Road, Anderson, SC 29627
(the “ Landfill ”) and (ii) the solid waste
disposal business conducted at the Landfill (the “
Business ”); and
WHEREAS, Sellers desire to sell to Buyer, and
Buyer desires to purchase from Sellers, all of the issued and
outstanding membership interests of the Company (the “
Interests ”), on the terms and subject to the
conditions set forth in this Agreement.
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 INTERESTS;
ANDERSON COMPANY ASSETS
1.1 Purchase
and Sale of the Interests . On the terms and subject
to the conditions set forth in this Agreement and the Asset
Purchase Agreement, at the Closing, Buyer shall purchase from
Sellers, and Sellers shall sell and deliver to Buyer, all of the
Interests, free and clear of all Encumbrances.
1.2 Anderson
Company Assets . The Company’s right, title
and interest that it possesses in and to the following assets, as
the same shall exist as of the Closing Date, are referred to herein
as the “ Anderson Company Assets ”:
(a)
The real property, improvements and fixtures owned by the
Company, and the Company’s leasehold interests in certain
real property and improvements, in each case which are listed on
Schedule 1.2(a) (such owned and leased assets of the Company
are referred to as the “ Owned Real Property ”
and the “ Leased Real Property ,” respectively,
and collectively as the “ Real Property
”);
(b)
The
tangible personal property, including vehicles (“ Rolling
Stock ”), owned or leased by the Company as of the
Closing that is listed on Schedule 1.2(b) ;
(c)
Subject to Section 1.7 :
(i) all
Contracts and other rights to provide disposal services to the
active customers identified on Schedule 1.2(c)(i) at the
Landfill (the accounts to service such customers at such disposal
facilities are collectively referred to herein as the “
Anderson Disposal Accounts ,” and the Contracts or
other rights to service the Anderson Disposal Accounts are
collectively referred to herein as the “ Anderson Disposal
Contracts ”); Schedule 1.2(c)(i) : (i) identifies
such Anderson Disposal Accounts by customer number, disposal
volume, rate, type of waste stream and revenue as of the most
recent month ended prior to the date hereof; (ii) will be updated
within 5 Business Days prior to the Closing Date to identify the
Anderson Disposal Accounts with respect to the Anderson Disposal
Contracts as of such date by customer name, billing address,
number, zip code, disposal volume, rate, type of waste stream and
revenue as of the most recent month ended prior to the Closing
Date; and (iii) will be updated within 5 Business Days following
the Closing Date to identify all customer information relating to
the final Anderson Disposal Accounts transferred as of the Closing
Date, including customer name, billing address, number, zip code,
disposal volume, rate, type of waste stream and revenue as of the
most recent month ended prior to the Closing Date;
(ii) The leases
relating to the machinery, heavy equipment and materials handling
equipment (in each case, other than Rolling Stock) (collectively,
the “ Equipment ”) listed on Schedule
1.2(c)(ii) (collectively, the “ Equipment Leases
”);
(iii) The real
property-related leases, occupancy agreements, licenses or similar
agreements, and any amendments thereto, listed on Schedule
1.2(c)(iii) (collectively, the “Real Estate Leases
”);
(iv) The additional
Contracts listed on Schedule 1.2(c)(iv) (together with the
Contracts listed on Schedules 1.2(c)(i) through
(iii) , the “ Specified Anderson Company
Contracts ”); and
(v) The IP
Rights listed on Schedule 1.2(c)(v) .
(d)
All
accounts receivable of the Company arising from the Anderson
Disposal Accounts which will be listed on Schedule 1.2(d)
(collectively, the “ Accounts Receivable ”),
which schedule will be delivered by Sellers to Buyer within 5
Business Days following the Closing Date, provided ,
however , that Accounts Receivable shall exclude any
inter-company accounts receivable and accounts receivable of the
Company related to any National Accounts;
(e)
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 the Company principally related to
the Assets and listed and described on Schedule 1.2(e) ,
which schedule will be attached by Sellers hereto at Closing
(collectively, the “ Prepaid Assets
”);
(f)
The computer hardware of the Company that is listed and
described on Schedule 1.2(f) ;
(g)
Subject to Section 1.4(e) , all Records;
(h)
All
goodwill relating to the Business and the Anderson Company
Assets;
(i)
All right, title and interest in and to the dedicated
telephone and fax numbers, post office boxes and telephone listings
of the Company listed on Schedule 1.2(i) ; and
(j)
All
Permits related to the ownership, operation, management or use of
the Anderson Company Assets that are owned by, issued to, or held
by or otherwise benefiting the Company.
1.3 Certain
Dispositions of the Company’s Assets
. Notwithstanding anything in this Agreement to the
contrary, and subject to Article V and Section 6.9 of
the Asset Purchase Agreement, Buyer agrees that the Company may
acquire, dispose of (or, in the case of Anderson Disposal Accounts,
experience additions to or attrition of) the Company’s 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 Anderson Disposal Accounts, additions or attritions) shall
not in any manner modify or limit Buyer’s obligations
hereunder to purchase the Interests; provided ,
however , that such acquisitions, dispositions, additions or
attritions shall not breach or violate the Republic/Allied Consent
Decree or, individually or in the aggregate, have a Sellers’
Material Adverse Effect.
1.4 Excluded
Assets . Notwithstanding anything to the contrary
set forth in this Agreement, the parties agree that the
Company’s assets shall exclude all assets other than the
Anderson Company Assets (right, title and interest to which shall
be transferred by the Company to Sellers or their designee, on an
“AS-IS,” “WHERE-IS,” AND “WITH ALL
FAULTS” basis, at or prior to Closing or, to the extent such
transfer cannot reasonably be accomplished prior to Closing, as
promptly as practicable following the Closing) (collectively, the
“ Excluded Assets ”), including without
limitation the following.
(a)
All
cash or cash equivalents on hand or held in any account of the
Company (including all checking, savings, depository or other
accounts);
(b)
All
accounts receivable and notes receivable of the Company related to
or arising out of transactions between the Company, on the one
hand, and any Seller Companies, on the other hand;
(c)
All
stock, membership interests, partnership interests or other
ownership interests in any Seller Companies;
(e)
Any
Records to the extent related to the Excluded Assets or the
Excluded Liabilities (including files relating to Taxes
and personnel files);
(f)
All
rights of the Company with respect to any Proceedings, causes of
action and claims of every nature, kind and description relating to
any Excluded Assets and not to any of the Anderson Company 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;
(g)
All
rights under any insurance policies of any Seller, any Seller
Companies or the Company, including any cash surrender value under
any such insurance policies;
(h)
All
claims for any refunds of Taxes and other governmental charges
attributable to any period ending on or before the Closing
Date;
(i)
All assets held under any employee benefit plans maintained by or
for the benefit of the Company;
(j)
All prior title insurance policies and commitments, deeds and
surveys covering any Real Property issued to, on behalf of or for
the benefit of any Seller, any Seller Companies or the
Company;
(k)
Any
computer hardware and software owned or leased by, or licensed to,
the Company that is not listed on Schedule 1.2(f) (including
all billing, route management and other software programs other
than basic operating systems);
(l)
All rights, title and interest in any financial responsibility,
financial assurance or similar mechanisms; and
(m)
Such
other assets of the Company that are listed on Schedule
1.4(m) .
1.5 Anderson
Company Liabilities . Subject to Article IX
of the Asset Purchase Agreement, from and after the Closing, the
Company shall pay, perform and discharge when due, the following
Liabilities of the Company (the “ Anderson Company
Liabilities ”):
(a)
All
Liabilities arising under or pursuant to the Anderson Company
Contracts, the Anderson 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 1.5(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 (the “ Landfill Liabilities
”);
(d)
All
Liabilities for Taxes relating to the Anderson Company Assets
accruing on or after the Closing Date, including Taxes relating to
the Real Property (subject to the terms of Section 6.4 of
the Asset Purchase Agreement and Section 6.19(c) of this
Agreement);
(e)
All
Assumed Severance and Retention Bonus Liabilities, in accordance
with the terms of Section 6.13(b) of this
Agreement;
(f)
All Liabilities listed on Schedule 1.5(f) ;
(g)
All
other Liabilities which Buyer expressly agrees to cause the Company
assume or otherwise pay, perform or discharge pursuant to this
Agreement;
(h)
All
payment and performance obligations due, payable or outstanding as
of the Closing Date to the extent taken into account in the
calculation of the Actual True-Up Amount under the Asset Purchase
Agreement; and/or
(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 Anderson
Company Assets after the Closing Date or the operation of the
Business after the Closing Date.
1.6 Excluded
Liabilities . At the Closing, subject to Article
IX of the Asset Purchase Agreement, neither the Company nor any
Buyer Parties shall, by the execution and performance of this
Agreement or otherwise, assume, become responsible for or incur the
following Liabilities of the Company (except to the extent such
Liabilities constitute Anderson Company Liabilities), which Sellers
shall assume at the Closing and shall agree to pay, perform and
discharge when due (collectively, the “ Excluded
Liabilities ”):
(a)
Except
as provided in Section 6.5 , and except if taken into
account in the calculation of the Actual True-Up Amount under the
Asset Purchase Agreement, any Liabilities of any
Seller or any Seller Companies for Taxes for any Pre-Closing
Period, whether or not assessed or currently due and payable,
including any Taxes arising from the Business or the ownership,
operation or use of the Landfill or the Company’s other
assets;
(b)
Subject to the terms of Section 6.5 , any Liabilities of
Sellers for expenses incurred in connection with the sale of the
Interests pursuant to this Agreement;
(c)
Any
inter-company payables between the Company and any Seller
Company;
(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 Anderson Company
Liabilities;
(e)
Any
Proceeding against any Seller Party or any subsidiary or Affiliate
of any Seller Party (any such subsidiaries or Affiliates of Seller
Parties are collectively referred to as the “ Seller
Companies ”) related to the Business or the ownership,
operation or use of any of the Company’s 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 the
Company or any Seller Company has received service of process as of
the date hereof but excluding Proceedings relating to the Anderson
Company Liabilities);
(f)
Subject to Section 6.4 , any Encumbrances (other than
Permitted Encumbrances) relating to the Business or the Anderson
Company Assets;
(g)
Except
for any Material Anderson Disposal 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 the Company 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 any Seller Party or any Seller Company for
the benefit of any current or former employee of any Seller Party
or any Seller Company, it being expressly understood that, except
for any Material Anderson Disposal Contracts and the Assumed
Severance and Retention Bonus Liabilities, neither the Company nor
any of the Buyer Parties are assuming any Benefit Plans of the
Company or any other Seller Party; and
(h)
Subject to Section 1.5 (including without limitation
Section 1.5(e) ), 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 Company, the
Business, the ownership, lease, operation, performance or use of
the Landfill and the Company’s other assets or the employment
of or compensation or provision of benefits to employees of the
Company on or prior to the Closing Date that do not constitute
Anderson Company Liabilities.
1.7 Asset
Allocations . 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 Anderson Disposal Account) relates both to the
Anderson Company Assets and to assets, facilities or customers that
are not included in the Anderson Company 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 Anderson Company
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 owned by the
Company that RSG or WCN, as the case may be, reasonably concludes
in good faith (i) was not used or held in connection with the
ownership or operation of the Anderson Company Assets during the
Hold Separate Period and (ii) was inadvertently retained by the
Company in error at the time the Interests were conveyed by Sellers
to Buyer, the parties will use good faith efforts to cause such
tangible personal property, Contract right or other asset to be
conveyed to Sellers or an Affiliate of Sellers or, if such
conveyance is not reasonably practicable, to enter into other
arrangements affording Sellers or such Affiliate 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 not owned by the Company
that that RSG or WCN, as the case may be, reasonably concludes in
good faith (i) was used or held in connection with the ownership or
operation of the Anderson Company Assets during the Hold Separate
Period, and (ii) was inadvertently not transferred to the Company
in error prior to the time the Interests were
conveyed by Sellers to Buyer, 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 an Affiliate of
Buyer or, if such conveyance is not reasonably practicable, to
enter into other arrangements affording Buyer or such Affiliate the
benefit of such tangible personal property or Contract
right. Unless otherwise agreed, neither Buyer nor
Sellers shall be entitled to any additional compensation for any
conveyances made pursuant to this Section 1.7 .
ARTICLE II
PURCHASE PRICE AND
CLOSING
2.1 Purchase
Price . At the Closing, the portion of the Purchase
Price allocated to the Interests pursuant to Section 1.6 of
the Asset Purchase Agreement (and subject to adjustment as provided
therein), shall be deemed to have been paid to Sellers in
consideration for the Interests.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
SELLER
Except as set forth in the
disclosure schedules attached hereto (the “ Anderson
Company Disclosure Schedules ”), subject to Section 6.9
of the Asset Purchase Agreement, the Seller Parties, jointly and
severally, make the following representations and warranties to the
Buyer Parties. For the purposes of this Article III
and any other representations and warranties herein, (i) matters
reflected in the Anderson Company Disclosure Schedules are not
necessarily limited to matters required by the Agreement to be
reflected in the Anderson Company Disclosure Schedules, any
additional matters are set forth in the Anderson Company 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
Anderson Company Disclosure Schedules will also be deemed to be
disclosed in any other sections or subsections of the Anderson
Company 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 Anderson Company 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 Anderson Company 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; Authority; Binding Effect .
(a)
Each
Seller Party is duly organized, validly existing and in good
standing under the laws of the state of its organization or
formation. Each Seller Party 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. The Company has full power
and authority to own or lease its assets, as applicable, and to
carry on the Business as now conducted.
(b)
Each
Seller Party 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.
(c)
The
execution, delivery and performance of this Agreement and the
Ancillary Agreements by the Seller Parties are within their
respective corporate rights, powers and authority and such actions
have been approved by each Seller Party’s board of directors,
and no other proceedings on the part of the Seller Parties will be
necessary to authorize the execution and delivery of this Agreement
and the Ancillary Agreements or the consummation by the Seller
Parties 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 Seller Parties are parties when
executed and delivered will be, duly and validly executed and
delivered by the Seller Parties. This Agreement is, and
the Ancillary Agreements to which the Seller Parties are parties
when executed and delivered will be (assuming the due
authorization, execution and delivery of each of the Buyer
Parties), the valid and legally binding agreement of each Seller
Party, enforceable against such Seller Party 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.
3.2 Capitalization;
Ownership of Interests; Subsidiaries .
(a)
The
Interests constitute 100% of the outstanding membership interests
in the Company. Allied Waste North America, Inc. owns
99% of the Interests and Allied Waste Landfill Holdings, Inc. owns
1% of the Interests. All of the Interests are validly
issued, fully paid and nonassessable and were not issued in
violation of the Company’s Organizational Documents, any
preemptive or similar rights, or Applicable Law.
(b)
Neither of the Sellers nor the Company is a party to, nor is any of
the Interests subject to, any option, warrant, purchase right,
right of first refusal, co-sale right or other written or oral
contract, note, bond, mortgage, instrument, lien, security
interest, restriction, pledge or other Encumbrance, agreement or
commitment of any kind (other than this Agreement) relating to the
Interests in any way. No option, warrant, call,
conversion or other right or commitment of any kind (including any
of the foregoing created in connection with any indebtedness of the
Company) exists that obligates the Company to issue any equity
interest or that obligates either of the Sellers to transfer any of
the Company’s membership interests to any
Person. Neither of the Sellers nor the Company is a
party to, nor are the Interests subject to, any operating
agreement, voting trust, proxy or other agreement or understanding
with respect to the voting of any of the Interests.
(c)
The
Company does not own any equity interest in, or control, directly
or indirectly, any Person.
(d)
The
Company has not granted any power of attorney (except routine
powers of attorney relating to representation before governmental
agencies) or entered into any agency or similar agreement whereby a
third party may bind or commit the Company in any
manner.
(e)
The
corporate minute books of the Company (i) have been made available
to Buyer Parties and their agents; and (ii) are materially accurate
and complete.
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 the Seller Parties 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 any of the
Company’s assets;
(c)
except
for any notices, consents or approvals required under the HSR Act
or Environmental Permits, (i) require the Seller Parties to 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 the Company is entitled under, any Specified
Anderson Company Contract; or
(d) conflict with,
violate or result in a breach of or default under any Applicable
Law to which the Seller Parties are bound or to which the
Company’s 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 Company and the Business are
operating, and the Company’s assets are being maintained and
operated, in compliance with all Applicable Laws, (ii) the Seller
Parties are not involved in any Proceeding relating to the
Company’s assets or the Business 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 the Company 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 the Company, the Company’s assets or the Business
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 the Company to own and use the
Company’s assets and conduct the Business as currently
conducted. Except as set forth on Schedule 3.4(b)
, the Company is 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 Anderson
Company Assets; Personal Property . Except for such
matters that would not reasonably be expected to have a
Sellers’ Material Adverse Condition: (a) the Anderson Company
Assets are either owned or leased by the Company; (b) at the
Closing, upon the consummation of the Transactions, the Company
shall have good and marketable title to or valid leasehold
interests in the personal property Anderson Company Assets, free
and clear of all Encumbrances (other than Encumbrances created by
either of the Buyer Parties, Permitted Encumbrances and the Blanket
Liens that will be released as provided in Section 6.11 );
(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.
(a)
Except
for the Permitted Encumbrances, as set forth on Schedule
3.6(a) , or the requirements listed in the Title Commitment,
the Company has 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, free and clear of all Encumbrances, subject
to Encumbrances by any Buyer Party.
(b) Except
for the Permitted Encumbrances, the Blanket Liens that will be
released as provided in Section 6.11 , as set forth on
Schedule 3.6(b) :
(i) Except
for matters that would not reasonably be expected to have a
Sellers’ Material Adverse Condition, there are no Proceedings
pending and brought by or, to Sellers’ Knowledge, threatened
by, any third party which would reasonably be expected to result in
a material change in the allowable uses of the Real
Property;
(ii) The Company
has not leased or otherwise granted a present or future right to
possession or occupancy or use of all or any part of the Owned Real
Property;
(iii) There are no
outstanding options, rights of first offer or rights of first
refusal to purchase, right to acquire or right to lease the Owned
Real Property or, to Sellers’ Knowledge, the Leased Real
Property or any portion thereof;
(iv) Except for matters
that would not reasonably be expected to have a Sellers’
Material Adverse Condition, Sellers have delivered to the Buyer
Parties true and complete copies of all Real Estate Leases, and in
case of any oral Real Estate Lease, a summary of the material terms
of such Real Estate Lease. Neither the Company nor, to
Sellers’ Knowledge, the landlords, are in material breach or
default under any Real Estate Lease that has not been cured, and no
event has occurred or circumstance exists that, with the delivery
of notice, the passage of time or both, would constitute such a
breach or default or would permit the termination, modification or
acceleration of rent under such Real Estate Lease;
(v) Except for matters
that would not reasonably be expected to have a Sellers’
Material Adverse Condition, there are no Proceedings (including
condemnation or eminent domain proceedings) pending or, to
Sellers’ Knowledge, threatened against all or any part of the
Real Property;
(vi) Except for matters
that would not reasonably be expected to have a Sellers’
Material Adverse Condition, the Company has not received any
written notice of (A) any material violation of any applicable
zoning ordinance, building code, use or occupancy restriction,
covenant, condition or restriction of record or any other violation
of Applicable Law relating to the Real Property or the improvements
thereon or (B) any material pending special assessments affecting
all or any part of the Real Property (except as shown on the Title
Commitment); and
(vii) To Sellers’
Knowledge, there are no unrecorded material contracts, leases,
easements or other agreements, rights or claims of third parties
affecting the use, title, access to, occupancy or development of
the Owned Real Property.
(c) Neither
of the Sellers 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 (i) is situated within a
1-mile radius of the Landfill and (ii) would be reasonably expected
to interfere with the Company’s or Buyer’s prospective
ownership, use, operation or expansion of the Landfill.
(a) Listed
on Schedule 3.7(a) is a complete and accurate list of each
disposal agreement under which the Company billed revenues for the
12 months ended December 31, 2008 equal to or greater than $500,000
(the “ Material Anderson Disposal Contracts
”).
(b) The
Company is in compliance with all Material Anderson 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 Anderson
Disposal Contracts are in full force and effect in all material
respects and are valid, binding and enforceable against the Company
in accordance with their respective provisions. The
Company has not received any written notice that any Person intends
or desires to modify, waive, amend, rescind, release, cancel or
terminate any Material Anderson Disposal Contracts.
3.8 Taxes
. Except as set forth on Schedule 3.8 or for
matters that would not, individually or in the aggregate,
reasonably be expected to have a Sellers’ Material Adverse
Condition:
(a)
The
Company, either separately or as a member of an Affiliated Group,
(i) has completed and timely filed all Tax Returns required to be
filed with any Tax authority for any Pre-Closing Period and
(ii) has paid (or has had paid on its behalf) all Taxes shown
as due and payable by the Company thereon. Such Tax
Returns accurately reflect all Taxes due and payable with respect
to the periods covered by them. There are no
Encumbrances for Taxes 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 the Company that may result in a material Encumbrance
against the Company.
(c)
The
Company has withheld or paid, with respect to its employees, all
federal and state income Taxes, Taxes pursuant to the Federal
Insurance Contribution Act, Taxes pursuant to the Federal
Unemployment Tax Act and other Taxes required to be
withheld.
(d)
The
Company is not party to or has any obligation under any
tax-sharing, tax indemnity or tax allocation agreement or
arrangement (other than such agreements existing as of the date
hereof between current members of the Company’s Affiliated
Group, which such agreements shall be terminated immediately prior
to the Closing insofar as they relate to the Company).
(e)
To
the Knowledge of the Sellers, the Company is in full compliance
with all terms and conditions of any Tax exemptions, Tax holiday or
other Tax reduction agreement or order of a territorial or foreign
government and the consummation of this Agreement will not have any
material adverse effect on the continued validity and effectiveness
of any such Tax exemptions, Tax holiday or other Tax reduction
agreement or order.
(f)
The
Company has not with respect to any open taxable period applied for
and been granted permission to adopt a change in its method of
accounting requiring adjustments under Section 481 of the Code or
comparable state or foreign law.
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 Company, the Interests, the Business or the
Company’s 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 the Company, the Business,
or any of the Company’s 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 the Company 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 Company has operated the Business and
the Company’s 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:
(i) To
Sellers’ Knowledge, the Company, its assets, including the
Landfill, and the Business are being operated in compliance with
all Environmental Laws and Environmental Permits;
(ii) To Sellers’
Knowledge, during the period that the Company has operated the
Anderson Company Assets, there have been no Releases of any
Hazardous Materials into the environment or onto or under any Owned
Real Property or Leased Real Property in connection with the
ownership or operation of the Business or the Company’s
assets, except in compliance with all Environmental
Laws;
(iii) No portion of the
Owned Real Property is on a CERCLA, CERCLIS or RCRIS list or the
National Priorities List of Hazardous Waste Sites or any similar
list or database maintained by the State of North Carolina, and the
Company is not listed as, nor has it been notified that it is a
“potentially responsible person” with respect to the
Landfill, the operation of the Business or the Company’s
other assets; and
(iv) No Encumbrances with
respect to a Release have been imposed against or on any of the
Anderson Company Assets under CERCLA, any comparable state statute
or other Applicable Law.
(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 Company’s assets, (i)
the Company has not 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
the Company, (ii) there is no Proceeding pending or, to
Sellers’ Knowledge, threatened against either the Company or
any of its 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 the Company from
continuing to operate the Business as presently conducted and
operate and use the Company’s assets for their intended
purposes.
(c)
Schedule 3.11(c) contains a complete list
of all of the Company’s material Environmental Permits. Such
Environmental Permits comprise all of the Environmental Permits
required to operate the Business and the Company’s assets as
currently operated, and the Company 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
(or any Sellers under the Asset Purchase Agreement) as to the
Company with respect to environmental matters.
3.12
Employment and Labor Matters .
(a)
Schedule 3.12(a)
, when delivered by the Company to
Buyer within 20 Business Days before the Closing, will list all of
the Company’s employees, including any employees who are out
on leave (collectively, the “ Company Employees
”), 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, (iii) date of hire, and (iv)
contact information, tax identification number and driver’s
license number (for each driver of Company’s motor vehicles
only). Prior to Closing, the Company will deliver to
Buyer as Schedule 3.12 copies of all employment agreements
with such Company Employees .
(b)
Schedule 3.12(b) , when delivered by Sellers to Buyer
reasonably promptly following the Closing, will list, for each
Company Employee of the Company who is employed 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) , (i) the Company is not a
party to any collective bargaining agreement and (ii) within the
last 3 years, the Company has not experienced any material labor
disputes, union organization attempts or any work stoppage due to
labor disagreements. 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, the Company is
not 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, (i) there is no unfair labor practice
charge or complaint against the Company 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 the Company, (iii) no question concerning
labor representation has been raised to the Company or, to
Sellers’ Knowledge, is threatened respecting the Company
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 the Company 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) the Company has complied
with all applicable labor and employment laws, (vii) the Company is not liable for any arrears of
wages or any penalty for failure to comply with any of the
foregoing and is 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
Bank and Credit Card Accounts .
(a)
Schedule 3.13(a) is a complete and accurate list
of:
(i) the
name of each bank in which the Company has accounts or safe deposit
boxes;
(ii) the
name(s) in which the accounts or boxes are held;
(iii) the type of
account; and
(iv) the name of
each person authorized to draw thereon or have access
thereto.
(b)
Schedule 3.13(b) is a complete and accurate list
of:
(i) each
active credit card or other charge account issued to the Company;
and
(ii) the name
of each person to whom such credit cards or other charge accounts
have been issued.
(a)
Schedule 3.14(a) lists each employment, bonus, deferred
compensation, incentive compensation, equity purchase, equity
option, membership interest appreciation right or other
equity-based incentive, severance, change-in-control or termination
pay, hospitalization or other medical, disability, life or other
insurance, supplemental unemployment benefits, profit-sharing,
pension or retirement plan, program, agreement or arrangement and
each other employee benefit plan, program, agreement or
arrangement, sponsored, maintained or contributed to or required to
be contributed to by the Company, or by any trade or business,
whether or not incorporated (an “ ERISA Affiliate
“), that together with the Company would be deemed a
“single employer” within the meaning of Section
400l(b)(l) of the Employment Retirement Income Security Act of
1974, as amended (“ ERISA “), or treated as a
single employer under Section 414(b), (c) or (m) of the Code for
the benefit of any current or former employee, independent
contractor or director of the Company (the “ Plans
“). Schedule 3.14(a) identifies each of
the Plans that is an “employee welfare benefit plan,”
or “employee pension benefit plan” as such terms are
defined in Sections 3(1) and 3(2) of ERISA (the “ ERISA
Plans “). Except for amendments that are
required for the Plans to meet the requirements of applicable law,
tax-qualified status under Section 401(a) of the Code, or
regulatory guidance, neither the Company nor any ERISA Affiliate
has any formal plan or commitment, whether legally binding or not,
to create any additional Plan or modify or change any existing Plan
that would affect any current or former employee, independent
contractor or director of the Company.
(b)
With
respect to each of the Plans, true and complete copies of the most
recent Summary Plan Description (“ SPD ”),
together with all Summaries of Material Modification issued with
respect to such SPD, if required under ERISA, with respect to each
ERISA Plan, and all other material employee communications relating
to each ERISA Plan, and written descriptions of all other Plans
have been made available to Buyer.
(c)
Neither the Company nor any ERISA Affiliate has incurred any
liability under Title IV of ERISA that has not been satisfied in
full, and, to the Company’s Knowledge, no
condition exists that presents a material risk to the Company of
incurring any liability under such Title. This
representation applies to Sections 4064, 4069 or 4204 of Title IV
of ERISA, and it is made not only with respect to the ERISA Plans
but also with respect to any employee benefit plan, program,
agreement or arrangement subject to Title IV of ERISA to which the
Company or any current or former ERISA Affiliate made, or was
required to make, contributions during the past six (6)
years.
(d)
To the
Company’s Knowledge, (i) the PBGC has not instituted
proceedings pursuant to Section 4042 of ERISA to terminate any of
the ERISA Plans subject to Title IV of ERISA, and (ii) no condition
exists that presents a material risk that such proceedings will be
instituted by the PBGC.
(e)
With
respect to each of the ERISA Plans that is subject to Title IV of
ERISA, the present value of accumulated benefit obligations under
such Plan, as determined by the Plan’s actuary based on the
actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such Plan’s actuary with respect
to such Plan, did not, as of its latest valuation date, exceed the
then current value of the assets of such Plan allocable to such
accumulated benefit obligations.
(f)
The
Company has not engaged in a transaction or taken or failed to take
any action in connection with which the Company could be subject to
any material liability for either a civil penalty assessed pursuant
to Section 409, 502(i) or 502(l) of ERISA, or a tax imposed
pursuant to Section 4975(a) or (b), 4976 or 4980B of the
Code.
(g)
All
contributions and premiums that the Company and each ERISA
Affiliate is required to pay under the terms of each of the ERISA
Plans and Section 412 of the Code, have, to the extent due, been
paid in full or properly recorded on the financial statements or
records of the Company, and none of the ERISA Plans or any trust
established thereunder has incurred any “accumulated funding
deficiency” (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, as of the last day of the
most recent fiscal year of each of the ERISA Plans ended prior to
the date of this Agreement. No lien has been imposed
under Section 412(n) of the Code or Section 302(f) of ERISA on the
assets of the Company or any ERISA Affiliate, and, to the
Company’s Knowledge, no event or circumstance has occurred
that is reasonably likely to result in the imposition of any such
lien on any such assets on account of any ERISA Plan.
(h)
With
respect to any ERISA Plan that is a “multi-employer
plan,” as such term is defined in Section 3(37) of ERISA, (i)
to the Company’s Knowledge, neither the Company nor any ERISA
Affiliate has, since September 26, 1980, made or suffered a
“complete withdrawal” or a “partial
withdrawal,” as such terms are respectively defined in
Sections 4203 and 4205 of ERISA, (ii) to the Company’s
Knowledge, no event has occurred that presents a material risk of a
complete or partial withdrawal, (iii) neither the Company nor any
ERISA Affiliate has any contingent liability under Section 4204 of
ERISA, and (iv) to the Company’s Knowledge, no circumstances
exist that present a material risk that any such multi-employer
plan will go into reorganization.
(i)
Each of the Plans has been operated and administered in all
material respects in accordance with its terms and applicable laws,
including but not limited to ERISA and the Code.
(j)
Each of the ERISA Plans that is intended to be
“qualified” within the meaning of Code section 401(a)
is so qualified.
(k)
No
amounts payable under any of the Plans or any other contract,
agreement or arrangement with respect to which the Company may have
any liability could fail to be deductible for federal income tax
purposes by virtue of Section 162(m) or Section 280G of the
Code.
(l)
No Plan provides benefits, including without limitation death
or medical benefits (whether or not insured), with respect to
current or former employees of the Company after retirement or
other termination of service (other than (i) coverage mandated by
applicable laws, (ii) death benefits or retirement benefits under
any “employee pension plan,” as that term is defined in
Section 3(2) of ERISA, (iii) deferred compensation benefits accrued
as liabilities on the books of the Company, or (iv) benefits, the
full direct cost of which is borne by the current or former
employee (or beneficiary thereof)).
(m)
Except
as specifically provided herein, the consummation of the
transactions contemplated by this Agreement will not, either alone
or in combination with any other event, (i) entitle any current or
former employee, officer or director of the Company to severance
pay, unemployment compensation or any other similar termination
payment, or (ii) accelerate the vesting, or increase the amount of
or otherwise enhance any benefit due any such employee, officer or
director.
(n)
There
are no pending or, to the Company’s or the
Shareholders’ knowledge, threatened or anticipated claims by
or on behalf of any Plan, by any current or former employee or
beneficiary under any such Plan or otherwise involving any such
Plan (other than routine claims for benefits).
(o)
All
equity options, equity