PURCHASE AGREEMENT

PURCHASE AGREEMENT

dated as of April 1, 2009

by and among

REPUBLIC SERVICES, INC.,

REPUBLIC SERVICES OF CALIFORNIA I, LLC,

REPUBLIC SERVICES OF CALIFORNIA HOLDING COMPANY, INC.

WASTE CONNECTIONS, INC.

and

CHIQUITA CANYON, INC.

 

PURCHASE AGREEMENT

RECITALS

ARTICLE I

PURCHASE AND SALE OF INTERESTS; CHIQUITA 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 Seller, and Seller shall sell and deliver to Buyer, all of the Interests, free and clear of all Encumbrances.

 

1.2     Chiquita 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 " Chiquita 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) ;

 

 

 

 

(d)     All accounts receivable of the Company arising from the Chiquita Disposal Accounts which will be listed on Schedule 1.2(d) (collectively, the “ Accounts Receivable ”), which schedule will be delivered by Seller 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 Seller 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 Chiquita 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 Chiquita 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 Chiquita 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 Chiquita 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 Chiquita Company Assets (right, title and interest to which shall be transferred by the Company to Seller or its 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;

 

(d)      The Retained IP;

 

(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 Chiquita 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 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 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     Chiquita 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 “ Chiquita Company Liabilities ”):

 

(a)      All Liabilities arising under or pursuant to the Chiquita Company Contracts, the Chiquita 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 Seller 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 Chiquita 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 Chiquita 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 Chiquita Company Liabilities), which Seller 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 Seller or any Seller Companies for Taxes (i) 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 or (ii) arising from making a §338(h)(10) Election;

 

(b)      Subject to the terms of Section 6.5 , any Liabilities of Seller 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 Chiquita 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 Chiquita Company Liabilities);

 

(f)      Subject to Section 6.4 , any Encumbrances (other than Permitted Encumbrances) relating to the Business or the Chiquita Company Assets;

 

(g)      Except for any Material Chiquita 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 Chiquita 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 Chiquita 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 Chiquita Disposal Account) relates both to the Chiquita Company Assets and to assets, facilities or customers that are not included in the Chiquita 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 Chiquita 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 Chiquita 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 Seller to Buyer, the parties will use good faith efforts to cause such tangible personal property, Contract right or other asset to be conveyed to Seller or an Affiliate of Seller or, if such conveyance is not reasonably practicable, to enter into other arrangements affording Seller 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 Chiquita 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 Seller to Buyer, the parties will use good faith efforts to cause such tangible personal property, Contract right or other asset to be conveyed to 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 Seller 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 Seller in consideration for the Interests.

 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as set forth in the disclosure schedules attached hereto (the " Chiquita 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 Chiquita Company Disclosure Schedules are not necessarily limited to matters required by the Agreement to be reflected in the Chiquita Company Disclosure Schedules, any additional matters are set forth in the Chiquita Company Disclosure Schedules for informational purposes, and other matters of a similar nature are not necessarily included, (ii) any item or matter disclosed by Seller in any section or subsection of the Chiquita Company Disclosure Schedules will also be deemed to be disclosed in any other sections or subsections of the Chiquita 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 Chiquita 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 Chiquita 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.  Seller owns 100% 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 Seller 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 Seller to transfer any of the Company’s membership interests to any Person.  Neither Seller 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 Chiquita 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 Seller’s 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 Seller's 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 Seller's 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 Seller's 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     Chiquita Company Assets; Personal Property .  Except for such matters that would not reasonably be expected to have a Sellers' Material Adverse Condition: (a) the Chiquita 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 Chiquita 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.

 

 

     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 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) :

 

 

 

 

 

 

 

 

 

                   (c)           Neither 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 (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.

 

     3.7     Contracts .

 

                  (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 Chiquita Disposal Contracts ").

 

                  (b)      The Company is in compliance with all Material Chiquita Disposal Contracts, except where the failure to comply would not reasonably be expected to result in a Sellers' Material Adverse Condition, and, to Seller's Knowledge, all Material Chiquita 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 Chiquita 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 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 Seller's 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 Seller, 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 Seller’s 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 Seller’s Knowledge, are there any such orders, judgments or decrees threatened, and (c) there are no Proceedings pending or, to Seller’s 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:

 

 

 

 

 

                  (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 Seller’s 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 Seller (or any Seller 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 Seller 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 Seller’s Knowledge, threatened, (ii) there is no labor strike, dispute, request for representation, slowdown or stoppage actually pending or, to Seller’s Knowledge, threatened against or affecting the Company, (iii) no question concerning labor representation has been raised to the Company or, to Seller’s 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 Seller’s 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 Seller’s 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 Seller's 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:

 

 

                                               (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.

 

  3.14     Benefit Plans .

 

                    (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 (