1
Exhibit 10.0
SHARE PURCHASE AGREEMENT
BETWEEN
ALLIED WASTE INDUSTRIES, INC.
AND
ALLIED WASTE HOLDINGS (CANADA) LTD.
AND
XXXXXXX WASTE SYSTEMS, INC.
AND
USA WASTE SERVICES, INC.
AND
CANADIAN WASTE SERVICES INC.
JANUARY 15, 1997
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TABLE OF CONTENTS
PAGE NO.
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions........................................3
1.2 Interpretation....................................11
1.3 Knowledge.........................................11
1.4 Exhibits and Schedules............................12
ARTICLE II
THE ACQUISITION
2.1 Sale and Purchase of Shares.......................13
2.2 Consideration for Shares..........................13
2.3 Allocation of Purchase Price......................13
2.4 Post-Closing Adjustment of Working Capital........13
ARTICLE III
THE CLOSING AND RELATED MATTERS
3.1 The Closing.......................................15
3.2 Other Actions at the Closing......................15
3.3 Actions in Contemplation of Closing...............16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE VENDORS
4.1 Organization of the Vendors.......................17
4.2 Authority Relative to this Agreement..............17
4.3 No Violations.....................................17
4.4 Consents and Approvals............................18
4.5 Acquired Subsidiaries.............................18
4.6 No Other Subsidiaries.............................19
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4.7 Conduct of Solid Waste Business...................19
4.8 Financial Statements..............................19
4.9 Absence of Certain Changes........................20
4.10 No Undisclosed Liabilities........................20
4.11 Acquired Subsidiary Properties....................20
4.12 Landfills.........................................20
4.13 Taxes and Tax Returns.............................20
4.14 Litigation........................................21
4.15 Environmental Matters.............................22
4.16 Governmental Licences and Permits; Compliance
with Laws............................... .........23
4.17 Labour Matters....................................23
4.18 Employee Benefit Plans............................23
4.19 Material Contracts................................25
4.20 Bank Accounts.....................................26
4.21 Officers and Directors............................27
4.22 Brokers...........................................27
4.23 Intercompany Indebtedness.........................27
4.24 Residency of Allied...............................27
4.25 Aggregation.......................................27
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
5.1 Organization of Purchaser.........................27
5.2 Authority Relative to this Agreement..............27
5.3 No Violations.....................................28
5.4 Consents and Approval.............................28
5.5 Financing.........................................29
5.6 Brokers...........................................29
5.7 Securities Act Compliance.........................29
ARTICLE VI
VENDORS' AGREEMENTS PENDING CLOSING
6.1 Conduct of Business...............................29
6.2 Forbearance by the Acquired Subsidiaries of
Purchaser................................. .......30
6.3 Access and Information............................32
6.4 Access to Environmental Report....................33
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6.5 Consummation of Acquisition.......................33
ARTICLE VII
PURCHASER COVENANTS PENDING CLOSING
7.1 Certain Notifications.............................33
7.2 Confidentiality...................................34
7.3 Consummation of Acquisition.......................34
ARTICLE VIII
MUTUAL CONDITIONS
8.1 No Adverse Proceedings............................34
8.2 Competition Act Matters...........................34
8.3 Investment Canada Act Matters.....................34
8.4 Section 116 Certificate...........................34
ARTICLE IX
CONDITIONS TO PURCHASER'S OBLIGATIONS
9.1 Representations True at Closing...................35
9.2 No Adverse Changes................................35
9.3 Ancillary Agreements..............................35
9.4 Discharge of Liens................................35
9.5 Intercompany Agreements and Indebtedness..........35
9.6 Opinion of Vendors' Counsel.......................36
ARTICLE X
CONDITIONS TO THE VENDORS' OBLIGATIONS
10.1 Representations True at Closing...................36
10.2 Ancillary Agreements..............................36
10.3 Opinion of Purchaser's Counsel....................36
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ARTICLE XI
ADDITIONAL AGREEMENTS
11.1 Competition Act Filings...........................36
11.2 Investment Canada Act Filings.....................37
11.3 Other Consents and Approvals......................37
11.4 Publicity.........................................37
11.5 Expenses..........................................37
11.6 Use of Xxxxxxx Name...............................37
11.7 Allied Guarantees.................................38
11.8 Allied Parent Guarantee...........................39
11.9 USA Waste Guarantee...............................40
11.10 Respective Releases of Non-Competition Agreements.40
ARTICLE XII
TAX MATTERS
12.1 Future Tax Returns................................40
12.2 Tax Covenants.....................................41
12.3 Other Tax Matters, Post-Closing Cooperation.......42
12.4 Tax Controversies.................................43
12.5 Certain Pending Tax Controversies.................45
ARTICLE XIII
NATURE AND SURVIVAL
OF REPRESENTATIONS AND WARRANTIES
13.1 Nature of Statements..............................46
13.2 Survival of Representations and Warranties........46
ARTICLE XIV
INDEMNIFICATION
14.1 Indemnification by the Vendors....................46
14.2 Indemnification by Purchaser......................49
14.3 Exclusivity of Indemnification Rights.............49
14.4 Third Party Claims................................50
14.5 Claims Between the Parties........................51
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14.6 Arbitration.......................................51
14.7 Payment...........................................52
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment.........................................52
15.2 Waiver............................................52
15.3 Termination.......................................53
15.4 Consequences of Termination.......................53
ARTICLE XVI
INTERPRETATION AND MISCELLANEOUS
16.1 Non-Business Days.................................53
16.2 Notices...........................................53
16.3 Entire Agreement..................................55
16.4 Further Assurances................................55
16.5 Assignment: Binding Effect.......................55
16.6 Counterparts......................................55
16.7 Governing Law: Jurisdiction......................55
16.8 Severability of Provisions........................55
16.9 Specific Performance..............................55
16.10 Joint Drafting....................................56
16.11 Captions..........................................56
16.12 No Third-Party Beneficiaries......................56
LIST OF EXHIBITS
Exhibit A - Principal Terms of Allied Transition
Agreement
Exhibit B - Principal Provisions of Opinion of
Vendors' Counsel
Exhibit C - Principal Provisions of Opinion of
Purchaser's Counsel
Exhibit D - Form of Environmental Permit
Direction Agreement
Exhibit E - Form of Allied Non-Competition
Agreement
Exhibit F - Form of Allied Release
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SCHEDULES
Identification of Resource Recycling Assets
Vendor Disclosure Schedule
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SHARE PURCHASE AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 15th day of January,
1997.
B E T W E E N:
ALLIED WASTE INDUSTRIES, INC.,
a corporation existing under the
laws of the State of Delaware,
(hereinafter referred to as "Allied Parent"),
OF THE FIRST PART,
- and -
ALLIED WASTE HOLDINGS (CANADA) LTD., a
corporation existing under the Canada Business
Corporations Act,
(hereinafter referred to as "Allied"),
OF THE SECOND PART,
- and -
XXXXXXX WASTE SYSTEMS, INC.,
a corporation existing under the
laws of the State of Delaware,
(hereinafter referred to as "LWSI"),
OF THE THIRD PART,
- and -
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USA WASTE SERVICES, INC.,
a corporation existing under the
laws of the State of Delaware,
(hereinafter referred to as "USA Waste"),
OF THE FOURTH PART,
- and -
CANADIAN WASTE SERVICES INC.,
a corporation existing under the
laws of the Province of Ontario,
(hereinafter referred to as the "Purchaser"),
OF THE FIFTH PART.
WHEREAS on December 30, 1996, Allied acquired, pursuant to a
Stock Purchase Agreement (the "SPA") made as of September 17, 1996 between
Allied, Allied Waste North America, Inc. ("Allied NA"), Allied Parent, Xxxxxxx
Inc., Xxxxxxx Transportation, Inc., Xxxxxxx Waste Systems, Inc., Xxxxxxx Waste
Systems (Canada) Ltd. and Xxxxxxx Medical Services Ltd. (the latter five parties
being sometimes hereinafter collectively referred to as "Xxxxxxx"), among other
assets, the shares of a number of direct and indirect subsidiaries of Xxxxxxx
Inc., including shares in the capital of Xxxxxxx Waste Systems (Canada) Ltd.;
AND WHEREAS LWSI holds, among other assets, shares in the
capital of Xxxxxxx Waste Systems Ltd.;
AND WHEREAS Allied and LWSI are sometimes hereinafter
collectively referred to as the "Vendors", and individually as a "Vendor";
AND WHEREAS the Vendors wish to sell to the Purchaser and the
Purchaser wishes to purchase all of the issued and outstanding shares in the
capital of certain of such subsidiaries for the consideration and on the terms
and subject to the conditions set forth in this Agreement;
AND WHEREAS the Acquired Subsidiaries (as hereinafter defined)
carry on all of the Solid Waste Business (as hereinafter defined) that is
carried on in Canada by Allied Parent and its Subsidiaries;
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AND WHEREAS the Vendors and the Purchaser (collectively, the
"Parties") have agreed that the representations, warranties and covenants
regarding such subsidiaries with respect to all periods prior to December 31,
1996 made by the Vendors to the Purchaser herein are derived from and shall be
limited by the representations, warranties and covenants made by Xxxxxxx to the
Vendors in the SPA;
NOW THEREFORE in consideration of the respective
representations, warranties and covenants of the Parties hereinafter contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each of the Parties, the Parties hereby agree
as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions. In this Agreement:
"ACQUIRED SUBSIDIARIES" means Xxxxxxx Waste Systems (Canada) Ltd.,
Xxxxxxx Waste Systems Ltd., Xxxxxxx Energy Technologies Ltd., Xxxxxxx
Waste Systems (Richmond) Ltd., Xxxxxxx Waste Systems (Storrington)
Ltd., Xxxxxxx Waste Systems (Ottawa) Ltd., 3240720 Canada Inc., 635952
Ontario Inc., Xxxxxxx Waste Systems (Durham) Ltd., Xxxxxxx Waste
Systems (Warwick) Ltd., 2686848 Canada Inc., Bestan Inc., Gestion de
Rebuts Xxxxxxx Quebec Ltee., Centre de Tri Transit (1) Inc./Transit
Sorting Center (1) Inc., Location Sanico Ltee, Dechex Ltee and Endwaste
Inc.
"ACQUISITION" means the acquisition of the Shares by the Purchaser.
"AFFILIATE" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with such Person, with the
terms "CONTROL" and "CONTROLLED" meaning for purposes of this
definition the power to direct the management and policies of a Person,
directly or indirectly, whether through the ownership of voting
securities or partnership or other ownership interests, or by contract
or otherwise.
"ALLIED EMPLOYEE PLANS" has the meaning ascribed thereto in Section
4.18.
"ALLIED GROUP" means, at any date, the Vendors and all of the Acquired
Subsidiaries, and "MEMBER OF THE ALLIED GROUP" refers to either Vendor
or any such Acquired Subsidiary.
"ALLIED GROUP FINANCIAL STATEMENTS" means the financial statements of
the Acquired Subsidiaries delivered to the Purchaser under Section
4.8(a).
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"ALLIED GROUP INCOME TAXES" means all Taxes, including United States
and Canadian federal, state, provincial and local Taxes for which any
Acquired Subsidiary is or may be directly or indirectly liable (and
including interest and penalties thereon), based on or measured by the
income or profits of any Acquired Subsidiary.
"ALLIED GROUP LANDFILL" means any landfill owned, occupied, leased or
operated by, or under the management or control of, an Acquired
Subsidiary as set forth in Section 4.12 of the Vendor Disclosure
Schedule.
"ALLIED GUARANTEE" means any guarantee, performance guarantee, bond,
performance bond, suretyship arrangement, surety bond, credit, letter
of credit, reimbursement agreement or other undertaking, deposit
commitment or arrangement by which any member of the Allied Group or
Allied Parent (or any Subsidiary of Allied Parent) or Xxxxxxx Inc. (or
any Subsidiary of Xxxxxxx Inc.) is or may be primarily, secondarily,
contingently or conditionally liable for or in respect of (or which
creates, constitutes or evidences a Lien on any of the assets or
properties of any member of the Allied Group or Allied Parent (or any
Subsidiary of Allied Parent) or Xxxxxxx Inc. (or any Subsidiary of
Xxxxxxx Inc.) which secures the payment or performance of) any present
or future liability or obligation of any Acquired Subsidiary as set
forth on in Section 4.19(h) of the Vendor Disclosure Schedule.
"ALLIED ISSUER BANK" means any bank or other financial institution
which is the issuer of a letter of credit which is an Allied Guarantee.
"ALLIED NON-COMPETITION AGREEMENT" means the agreement to be entered
into at Closing between Allied Parent and the Purchaser that is to
govern the matters described in Exhibit E.
"ALLIED PENSION PLAN" has the meaning ascribed thereto in Section 4.18.
"ALLIED RELEASE" means the agreement to be executed by Allied Parent,
Allied NA and the Vendors on the day prior to the Closing Date in
favour of the Acquired Subsidiaries that is to govern the matters
described in Exhibit F.
"ALLIED SETTLEMENT STATEMENT" has the meaning set forth in Section 2.4.
"ALLIED TRANSITION AGREEMENT" means the agreement to be entered into at
Closing between Allied Parent (and, as necessary, certain of its
Subsidiaries), the Acquired Subsidiaries, the Purchaser and USA Waste
that is to govern the matters described in Exhibit A.
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"ANCILLARY AGREEMENTS" means, collectively, the Allied Transition
Agreement, the Allied Release, the Allied Non-Competition Agreement and
the Environmental Permit Direction Agreement.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on
which banks located in Toronto, Ontario or New York, New York are
authorized or obligated to close.
"C$" refers to the lawful currency of Canada.
"CLOSING" has the meaning specified in Section 3.1.
"CLOSING DATE" means (a) February 28, 1997, which date shall be
extendible to any Business Day up to and including March 31, 1997 by
written notice given by either the Vendors or the Purchaser not later
than February 26, 1997 in the event that one or more of the conditions
of Closing set forth herein in favour of the Vendors or the Purchaser,
as the case may be, are not satisfied or waived on or before February
26, 1997, or (b) such other date as to which the Parties may agree.
"CLOSING DATE WORKING CAPITAL" means the positive or negative amount
obtained by subtracting (a) the amount which would be reflected as
current liabilities on a combined balance sheet of the Acquired
Subsidiaries dated as of the Closing Date and prepared in accordance
with GAAP on a consistent basis with the Allied Group Financial
Statements from (b) the amount which would be reflected on such a
balance sheet as current assets.
"COMPETITION ACT" means the Competition Act (Canada), R.S.C. 1985, c.
C-34, as amended.
"COMPETITION ACT DIRECTOR" means the Director of Investigation and
Research appointed under the Competition Act.
"CONFIDENTIALITY AGREEMENT" means the confidentiality agreement made as
of December 13, 1996 between Allied Waste Industries, Inc. and USA
Waste Services, Inc., as amended from time to time.
"DAMAGES" means all obligations, claims, liabilities, damages,
penalties, deficiencies, losses, investigations, proceedings,
judgments, fines, and reasonable costs and expenses (including, but not
limited to, reasonable costs and expenses incurred in connection with
the performance of obligations, interest, bonding and court costs and
attorneys', accountants', engineers', consultants' and investigators'
fees and disbursements) and disbursements incurred in connection with
any investigation or defence of any of the foregoing.
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"ENVIRONMENTAL CLAIM" means any claim by a Person alleging or imposing
actual or potential liability (including potential liability for any
investigatory cost, containment or oversight cost, control cost,
prevention cost, remediation cost, cleanup cost, governmental response
cost, natural resources damage, toxic tort claim, property damage,
personal injury, or penalty) arising out of, based on, resulting from
or relating to (a) the presence, storage, transport, disposal, use,
discharge, release or threatened release of any Hazardous Substance at
any location, whether or not owned by the Person against which the
claim is made, or (b) circumstances forming the basis for any liability
under, or any violation or alleged violation of, any Environmental Law.
"ENVIRONMENTAL LAWS" means all applicable U.S. or Canadian federal,
state, provincial, local and other foreign Laws, including common Laws
and administrative or judicial interpretations of those Laws by any
Governmental Entity, and published non-legally binding policies and
guidelines of any Canadian Governmental Entity, relating to the
preservation of natural resources, pollution or the protection of human
health and safety from the effects of pollution or the environment
(which includes its ambient air, surface water, ground water, land
surface or subsurface strata), including Laws relating to emissions,
discharges, releases or threatened releases of Hazardous Substances, or
otherwise relating to the manufacture, processing, distribution, use,
existence, treatment, storage, disposal, transport, recycling,
reporting or handling of Hazardous Substances, but not including zoning
and land use Laws.
"ENVIRONMENTAL PERMIT DIRECTION AGREEMENT" means the agreement to be
entered into at Closing by Allied Parent, the Vendors and the Purchaser
in the form of and substantially on the terms and conditions set out in
Exhibit D.
"ENVIRONMENTAL PERMITS" means all permits, licences, registrations,
certifications, exemptions, approvals and other authorizations of or by
any Governmental Entity required under any Environmental Law for any
Acquired Subsidiary to conduct its operations as presently conducted.
"ENVIRONMENTAL REPORT" means the environmental report prepared by Emcon
Environmental Services, Inc. reflecting its findings and
recommendations concerning the Phase I and II environmental assessments
of each parcel of real property owned, or under the management or
control of, or operated, leased, or occupied by, an Acquired
Subsidiary, a copy of which has been delivered to the Purchaser.
"GAAP" means United States generally accepted accounting principles
consistently applied throughout the specified period.
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"GOVERNMENTAL ENTITY" means any U.S., Canadian, state, territorial,
federal, provincial, local or foreign court, executive office,
legislature, governmental agency or ministry, commission, or
administrative, regulatory or self-regulatory authority or
instrumentality.
"HAZARDOUS SUBSTANCES" means chemicals, pollutants, contaminants,
wastes (including ambient wastes, hazardous wastes and liquid
industrial wastes), or other substances (including toxic, deleterious
or hazardous substances), as defined, listed or regulated pursuant to
Environmental Laws, including, asbestos or asbestos-containing
materials, polychlorinated biphenyls, pesticides and oils, and
petroleum and petroleum products (as those exemplary terms are defined
in or regulated under the United States National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R Sections 300.1 et
seq. and other Environmental Laws).
"ICA MINISTER" means the Minister responsible for administering the
Investment Canada Act.
"INCOME TAX ACT" means the Income Tax Act (Canada), R.S.C. 1985, c. 1,
as amended.
"INDEBTEDNESS" means with respect to any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture, letter of
credit or similar instrument, (c) all obligations of such Person with
respect to guarantees, (d) all obligations of such Person under leases
of property which are required to be capitalized under GAAP, (e) all
obligations of such Person in respect of acceptances issued or created
for the account of such Person (other than endorsements in the ordinary
course of business), (f) all obligations in respect of interest rate
swaps or other interest rate hedging products or foreign currency
exchange agreements or exchange rate hedging arrangements, (g) all
obligations in respect of reimbursement obligations under letters of
credit, and (h) all liabilities of the type referred to in clauses (a)
through (g) above that are secured by any lien, charge, security
interest or encumbrance on any property owned by such Person even
though such Person has not assumed or otherwise become liable for the
payment thereof.
"INTERCOMPANY AGREEMENTS" means all contracts, agreements, policies,
practices and understandings, whether written or oral, between any one
or more of the Acquired Subsidiaries, on the one hand, and either
Vendor or any other Affiliate of either Vendor (other than the Acquired
Subsidiaries), on the other hand, relating to any sharing or allocation
of expenses, personnel, services or facilities.
"INTERCOMPANY INDEBTEDNESS" means, at any date, all amounts owed on
that date by an Acquired Subsidiary, or any obligation of an Acquired
Subsidiary, contingent or
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otherwise on that date, to Allied Parent or any Subsidiary of Allied
Parent (other than the Acquired Subsidiaries), including under any
Intercompany Agreement.
"INVESTMENT CANADA ACT" means the Investment Canada Act (Canada),
R.S.C. 1985, c. C-28, as amended.
"XXXXXXX EMPLOYEE STOCK OPTION PLAN" has the meaning in this Agreement
that it has in the SPA.
"XXXXXXX SELLERS" has the meaning ascribed thereto in the SPA.
"LAW" means a law, statute, ordinance, rule, code or regulation enacted
or promulgated, or order, directive, instruction or other legally
binding guideline or policy issued or rendered by, any Governmental
Entity.
"LIEN" means a lien, mortgage, deed of trust, deed to secure debt,
pledge, hypothecation, assignment, deposit arrangement, easement,
preference, priority, assessment, security interest, lease, sublease,
charge, claim, adverse claim, levy, interest of other Persons, or other
encumbrance of any kind (including any conditional sale or other title
retention agreement having the same economic effect as any of the
foregoing).
"MATERIAL ADVERSE EFFECT" means (a) when used with reference to the
Acquired Subsidiaries, a material adverse effect on the financial
condition, business, assets, prospects or results of operations of the
Acquired Subsidiaries taken as a whole, (b) when used with reference to
the Vendors or Allied Parent, a material adverse effect on their
ability to perform their obligations under this Agreement or any
Ancillary Agreement to which either of them is a party, and (c) when
used with reference to the Purchaser, a material adverse effect on its
ability to perform its obligations under this Agreement or any
Ancillary Agreement to which it is a party.
"PERMITTED LIENS" means (a) those Liens set forth in Section 4.11 of
the Vendor Disclosure Schedule (other than in part 1 on pages 1 and 2
of such Section ), (b) any servitude, easement, restriction, right of
way, reservation or other similar right in real property or any
interest therein owned or occupied under lease by an Acquired
Subsidiary, provided the same is not of such nature as to materially
adversely affect the use by such Acquired Subsidiary of the real
property subject thereto, (c) Liens for water, electricity and sewer
charges and current taxes not yet due and payable or being contested in
good faith, (d) inchoate Liens and statutory Liens claimed or held by
any Governmental Entity that have not been filed or registered against
the title to the real property owned or occupied under lease by an
Acquired Subsidiary or served upon Allied Parent or any of its
Subsidiaries, and (e) other Liens (including, mechanics', couriers',
workers', repairers', materialmen's, warehousemen's and other similar
Liens) arising in the ordinary course of
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business as would not in the aggregate materially adversely affect the
value of, or materially adversely interfere with the use of, the
property subject thereto.
"PERSON" means an individual, corporation, partnership, association,
joint stock company, limited liability company, Governmental Entity,
business trust, unincorporated organization, or other legal entity.
"POST-CLOSING TAX PERIOD" means any Tax period (or portion thereof)
beginning at or after 12:00 a.m. (Toronto time) on the Closing Date.
"PRE-CLOSING ALLIED INSURANCE CLAIMS" means any U.S. liability,
personal injury, property damage, workers compensation or other similar
claim (other than health and welfare insurance claims) made against any
Acquired Subsidiary by any Person with respect to a loss, damage,
claim, incident or occurrence which occurred before December 30, 1996,
including any such matter which was incurred but not reported before
December 30, 1996.
"PRE-CLOSING TAX PERIOD" means any Tax period (or portion thereof)
ending at or before 11:59 p.m. (Toronto time) on the day prior to the
Closing Date.
"PURCHASE PRICE" has the meaning specified in Section 2.2.
"RESOURCE RECYCLING ASSETS" means those assets identified as such in
the Resource Recycling Schedule.
"RESOURCE RECYCLING SCHEDULE" means the schedule so entitled and signed
for identification purposes only by the President or Secretary of
either Vendor, which the Vendors have delivered to the Purchaser on or
before the date of this Agreement, and which identifies certain assets
and liabilities of the Acquired Subsidiaries that are intended to be
conveyed by them to another corporation, which is not an Acquired
Subsidiary, at or prior to Closing.
"REVENUE CANADA" means Revenue Canada, Customs, Excise and Taxation,
the Canadian federal Taxing Authority.
"SFAS 109" means the United States standard on accounting for income
taxes effective September 1, 1993 promulgated by the Financial
Accounting Standards Board.
"SHARES" means the 1,197 common shares in the capital of Xxxxxxx Waste
Systems Ltd. registered in the name of LWSI and the 31,851 common
shares in the capital of Xxxxxxx Waste Systems (Canada) Ltd. registered
in the name of Allied.
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"SOLID WASTE" means any waste which can be lawfully disposed of in a
landfill regulated under Subtitle D of the Resource Conservation and
Recovery Act of 1976, as amended.
"SOLID WASTE BUSINESS" means (a) the collection, compaction,
transportation, resource recovery, storage, recycling or disposal of
Solid Waste, and (b) the methane gas collection and electricity
generation and distribution operations related to the disposal of Solid
Waste.
"SUBSIDIARY" of a Party means an Affiliate of that Party more than 50%
of the aggregate voting power (or of any other form of voting equity
interest in the case of a Person that is not a corporation) of which is
beneficially held by that Party directly, or indirectly through one or
more other Persons.
"SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN" has the same meaning in this
Agreement that it has in the SPA.
"TAX" means any tax of any kind, however denominated, including any
interest, penalties, fines or other additions to tax that may become
payable in respect thereof or in respect of a failure to comply with
any requirement relating to any Tax Return, imposed by any United
States or Canadian federal, territorial, state, provincial, local or
non-United States or non-Canadian Governmental Entity, including all
income, gross income, gross receipts, profits, goods and services,
social security, health, old age security, Canada Pension Plan, Quebec
Pension Plan, sales and use, ad valorem, excise, custom, franchise,
business licence, property, occupation, real property gains, payroll
and employee withholding, unemployment or employment insurance, real
and personal property, stamp, environmental, transfer, workers'
compensation, payroll, severance, alternative minimum, windfall, and
capital taxes, premiums, surtaxes, charges, levies, assessments,
reassessments, and other obligations of the same or a similar nature to
any of the foregoing.
"TAX RETURNS" means all tax returns, declarations, reports, estimates,
information returns and statements required to be filed with any Taxing
Authority, or provided to any partner shareholder, joint venturer or
member under U.S. or Canadian federal, state, provincial, local or
foreign Laws (including reports with respect to backup withholding and
payments to Persons other than Taxing Authorities), and annual tax
returns or information returns on behalf of employee benefit plans
sponsored by an Acquired Subsidiary.
"TAXING AUTHORITY" means any Governmental Entity responsible for the
imposition, assessment, enforcement or collection of any Tax.
"TIME OF CLOSING" has the meaning ascribed thereto in Section 3.1.
"$" or "U.S. DOLLARS" refers to lawful currency of the United States.
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"XXXXXX XXXXXXXXXX XXXXXXXX" means the schedule so entitled and signed
for identification purposes only by the President or another senior
officer of Allied Parent, which the Vendors have delivered to the
Purchaser on or before the date of this Agreement, and which contains
information relevant to the representations and warranties made by the
Vendors in Article IV.
"WASTE SERVICES MANAGEMENT AGREEMENT" means the agreement so entitled
and made as of December 30, 1996 between Xxxxxxx Inc., Xxxxxxx
Environmental Services Ltd., Xxxxxxx Environmental Services, Inc., and
Allied Parent.
1.2 Interpretation. Capitalized terms defined in this Agreement are equally
applicable to both their singular and plural forms. References to a designated
"Article" or "Section " refer to an Article or Section of this Agreement, unless
otherwise specifically indicated. In this Agreement, "including" is used only to
indicate examples, without limitation to the indicated examples, and without
limiting any generality which precedes it.
1.3 Knowledge. When a representation and warranty in Article IV or Article V is
made to the "knowledge" of a Party, it means receipt of notice by, or actual
knowledge of, any of the following officers of:
(a) with respect to the Vendors (other than with respect to their
knowledge as to those matters referred to in Section 1.3(b)),
the Chief Executive Officer, Chief Financial Officer,
Vice-President-Legal, Chief Compliance Officer for
environmental matters or the Director of Human Resources of
Allied Parent; and
(b) with respect to the Vendors' knowledge as to matters relating
to the Acquired Subsidiaries on or prior to December 30, 1996:
(i) the Chief Executive Officer, Chief Financial Officer,
General Counsel, or Secretary of Xxxxxxx Inc.,
Xxxxxxx Transportation, Inc. and Xxxxxxx Waste
Systems, Inc., the Chief Compliance Officer for
environmental matters or the Director of Human
Resources of Xxxxxxx Inc., or the Chief Executive
Officer or Chief Financial Officer of Xxxxxxx Waste
Systems (Canada) Ltd, in each case as at December 30,
1996; or
(ii) the Chief Executive Officer, Chief Financial Officer,
Vice-President-Legal, Chief Compliance Officer for
environmental matters or the Director of Human
Resources of Allied Parent but only if and to the
extent that the same has been communicated to such
individuals:
(A) by any individual referred to in Section
1.3(b)(i); or
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(B) by any third party auditor, engineer,
environmental consultant, financial advisor,
or other consultant engaged by Allied Parent
or any of its Subsidiaries, the Xxxxxxx
Sellers or the Acquired Subsidiaries
(including in any documents or reports of
such Persons that have been delivered to the
individuals referred to in the first four
lines of Section 1.3(b)(ii)); and
(c) with respect to the Purchaser, the Chief Executive Officer,
Chief Financial Officer, Vice-President-Legal, or Secretary of
the Purchaser or USA Waste.
Notwithstanding the generality of the foregoing (but subject to Section
1.3(b)(ii)), the Purchaser acknowledges that all representations and warranties
made by the Vendors relating to the Acquired Subsidiaries with respect to
periods preceding December 31, 1996, including those relating to the business,
assets, liabilities, capital, affairs, undertaking, prospects, licences, permits
and other attributes of the Acquired Subsidiaries prior to such date, and
including representations and warranties made to the knowledge of the Vendors,
are based solely on and are limited in scope, content, meaning and extent to the
representations and warranties made to Allied by the Xxxxxxx Sellers pursuant to
the SPA. No representation or warranty made by a Party may be limited by
reference to the knowledge of such Party unless due inquiry has actually been
made by the above-referenced officers of such Party.
1.4 Exhibits and Schedules. The following Exhibits and Schedules are attached to
and form part of this Agreement:
EXHIBITS
Exhibit A - Principal Terms of Allied Transition
Agreement
Exhibit B - Principal Provisions of Opinion of
Vendors' Counsel
Exhibit C - Principal Provisions of Opinion of
Purchaser's Counsel
Exhibit D - Form of Environmental Permit
Direction Agreement
Exhibit E - Form of Allied Non-Competition
Agreement
Exhibit F - Form of Allied Release
SCHEDULES
Identification of Resource Recycling Assets
Vendor Disclosure Schedule
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ARTICLE II
THE ACQUISITION
2.1 Sale and Purchase of Shares. On the terms and subject to the conditions of
this Agreement, the Vendors agree to sell, free of all Liens, and the Purchaser
agrees to purchase the Shares.
2.2 Consideration for Shares. The consideration payable by the Purchaser for the
Shares shall be $518,000,000 (the "Purchase Price"), as the same may be adjusted
after Closing in accordance with Section 2.4 and Article XII, which amount of
$518,000,000 shall be payable in full at the Time of Closing.
2.3 Allocation of Purchase Price. The Purchase Price shall be allocated between
the Shares that are shares in the capital of Xxxxxxx Waste Systems (Canada) Ltd.
and the Shares that are shares in the capital of Xxxxxxx Waste Systems Ltd. in
the manner determined by the Vendors, acting reasonably, in consultation with
the Purchaser, and confirmed in a written notice to be delivered by the Vendors
to the Purchaser at the Time of Closing.
2.4 Post-Closing Adjustment of Working Capital. The Purchase Price shall be
subject to adjustment after the Closing as provided in this Section 2.4. On or
before the 20th Business Day following the Closing, the Vendors shall calculate
and deliver to the Purchaser a written statement (the "Allied Settlement
Statement") setting forth the amount of the Closing Date Working Capital.
The Allied Settlement Statement shall be calculated by the
Vendors and certified in writing by the Chief Financial Officer of Allied
Parent. In preparing the Allied Settlement Statement, the Vendors shall use
GAAP, consistent with the Allied Group Financial Statements in all respects. The
Purchaser will grant to the Vendors reasonable access to the books and records
of the Acquired Subsidiaries after the Closing for the purpose of preparing the
Allied Settlement Statement.
The Allied Settlement Statement shall be final and binding on
the Purchaser unless, within 30 Business Days following the date of delivery to
it of the Allied Settlement Statement, the Purchaser notifies the Vendors in
writing (a "Notice of Objection") that the Purchaser does not accept as correct
the amount of any calculation reflected in the Allied Settlement Statement. If
the Purchaser timely delivers a Notice of Objection to the Vendors, then the
Vendors and the Purchaser shall respectively instruct Xxxxxx Xxxxxxxx L.L.P. and
Coopers & Xxxxxxx to attempt to reach mutual agreement as to each disputed
calculation made in the Allied Settlement Statement. If, within ten Business
Days after the matter has been referred to such accounting firms, they have not
reached agreement as to all disputed calculations, then Xxxxxx Xxxxxxxx L.L.P.
and Coopers & Xxxxxxx shall be promptly instructed by the Vendors and the
Purchaser, respectively, to designate a third accounting firm of internationally
recognized standing, which (acting as experts and not as arbitrators) shall be
instructed to make, as soon as
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practicable after the matter is referred to such firm, all calculations which
are in dispute, and the determination of such third accounting firm in the
matter shall be final and binding on all Parties.
Once all amounts required to be calculated under the preceding
provisions of this Section 2.4 have been finally determined under this Section
2.4:
(a) if the Closing Date Working Capital is a deficit, then the
Vendors shall pay to the Purchaser in the manner described
below the amount of such deficit, which payment shall be
accounted for, as a reduction of the Purchaser Price; and
(b) if the Closing Date Working Capital is a surplus, then the
Purchaser shall pay to the Vendors (in accordance with the
allocation described below) in the manner described below the
amount of such surplus, which payment shall be accounted for,
as an increase in the Purchaser Price.
Any reduction of or increase in the Purchase Price determined under this Section
2.4 shall be allocated between the Shares that are shares in the capital of
Xxxxxxx Waste Systems Ltd. and the Shares that are shares in the capital of
Xxxxxxx Waste Systems (Canada) Ltd. as the Vendors deem appropriate. The
payments required by this Section 2.4 shall be made in cash, within two Business
Days after the amount or amounts of the adjustment or adjustments have been
finally determined as provided in this Section 2.4, by wire transfers to the
Purchaser or the Vendors (as the case may be) (to accounts designated by the
recipient(s) in writing at least one Business Day before the day on which the
transfer is required to be made), of U.S. dollar immediately available funds.
The fees of all accounting firms engaged to make any calculations under this
Section 2.4 shall be paid by (i) the Vendors if the effect of all disputed
calculations made by such accounting firms results in adjustments in favour of
the Purchaser by $250,000 or more in comparison to the adjustments which would
have been made had the Purchaser accepted the Allied Settlement Statement or
(ii) in all other cases.
ARTICLE III
THE CLOSING AND RELATED MATTERS
3.1 The Closing. The sale and purchase of the Shares (the "Closing") shall take
place concurrently at the offices of Blake, Xxxxxxx & Xxxxxxx (or such other
place as to which the Parties may agree) at 10:00 a.m. local time (the "Time of
Closing") on the Closing Date. At the Closing, the Vendors shall deliver to the
Purchaser the certificates evidencing the Shares, duly endorsed in blank or
accompanied by duly executed share transfer powers, and in proper form for
registration in the name of the Purchaser, against payment by the Purchaser of
the Purchase Price. The Purchase Price shall be paid by wire transfer in
immediately available funds to an account designated in writing by a senior
officer of either Vendor at least two Business Days before the Closing Date, in
U.S. dollars.
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3.2 Other Actions at the Closing. In addition to the consummation of the
Acquisition, the following actions shall take place at the Closing:
(a) the Vendors shall deliver:
(i) the minute books (including true and correct copies
of the charter and bylaws (or similar organizational
documents) of each Acquired Subsidiary) and share
certificate books of each of the Acquired
Subsidiaries;
(ii) the certificate described in Section 9.1;
(iii) a copy of the certificate referred to in Section 8.4;
(iv) resignations and releases of the officers and
directors of each of the Acquired Subsidiaries;
(v) the legal opinions referred to in Section 9.6 and
copies of any certificates referred to therein;
(vi) the Ancillary Agreements to which Allied Parent
and/or either of the Vendors is a party;
(vii) documents effecting the termination of any
Intercompany Agreements that remain in effect at the
Time of Closing; and
(viii) such other documents as may be required by the
Purchaser, acting reasonably, to complete the
Acquisition; and
(b) the Purchaser shall deliver:
(i) the certificate described in Section 10.1;
(ii) the legal opinion referred to in Section 10.3 and
copies of any certificates referred to therein;
(iii) the Ancillary Agreements to which the Purchaser or
USA Waste is a party; and
(iv) such other documents as may be required by the
Vendors, acting reasonably, to complete the
Acquisition.
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3.3 Actions in Contemplation of Closing. On or before the Closing Date, and in
any event not later than the Time of Closing, the Vendors and the Acquired
Subsidiaries shall, and shall be permitted to, take the following actions (and
such actions as may be necessary, incidental and/or advisable in connection
therewith):
(a) the Acquired Subsidiaries shall convey and/or distribute to a
Person that is not an Acquired Subsidiary all of the Resource
Recycling Assets, and such Person shall assume all of the
obligations of the Acquired Subsidiaries relating to the
Resource Recycling Assets;
(b) the obligations of the Acquired Subsidiaries under all
Intercompany Agreements shall be terminated without any
further liability thereunder on the part of any Acquired
Subsidiary;
(c) the Liens described under paragraphs 1(a), (b) and (c) on
pages 1 and 2 of Section 4.11 of the Vendor Disclosure
Schedule, and all other Liens not described in Section 4.11 of
the Vendor Disclosure Schedule, shall be discharged insofar as
they relate to the Shares or the assets of the Acquired
Subsidiaries;
(d) the obligations of the Acquired Subsidiaries under the
documents described under the heading "Financing Agreements"
in Section 4.9 of the Vendor Disclosure Schedule shall be
terminated without any further liability thereunder on the
part of any Acquired Subsidiary.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The Vendors jointly and severally represent and warrant to the
Purchaser that:
4.1 Organization of the Vendors. Allied is a corporation duly organized and
validly existing under the federal Laws of Canada. LWSI is a corporation duly
organized and validly existing under the Laws of the State of Delaware.
4.2 Authority Relative to this Agreement. Each of the Vendors has the requisite
corporate power to enter into and perform its obligations under this Agreement
and each Ancillary Agreement to which it will be a party. The execution and
delivery of this Agreement and each Ancillary Agreement to which each Vendor
will be a party, the consummation of the Acquisition and the other transactions
contemplated in Articles II and III have been duly authorized by the board of
directors or sole shareholder of such Vendor, and no other corporate proceedings
on the part of such Vendor, including any approval by the sole shareholder or
board of directors of such Vendor, are necessary to authorize this Agreement,
any Ancillary Agreement to which such Vendor will be a party, the consummation
of the Acquisition, or the other
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transactions contemplated in Articles II and III. This Agreement has been duly
executed and delivered by each Vendor. Each Ancillary Agreement required to be
executed and delivered by either Vendor at the Closing will be, upon its
execution and delivery as provided in Section 3.2 or elsewhere in this
Agreement, duly executed and delivered by such Vendor. At the Time of Closing,
all necessary corporate action will have been taken by Xxxxxxx Waste Systems
Ltd. and Xxxxxxx Waste Systems (Canada) Ltd. to consent to or authorize the
transfer of the Shares to the Purchaser as contemplated hereby. Assuming the
valid authorization, execution and delivery of this Agreement (and each
Ancillary Agreement to which the Purchaser will be a party) by the Purchaser,
this Agreement is, and each Ancillary Agreement to which either Vendor will be a
party and to which the Purchaser is the other party, will be, upon its execution
and delivery at the Closing as provided in Section 3.2 or elsewhere in this
Agreement, a valid and binding obligation of such Vendor, enforceable against
such Vendor by the Purchaser in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting creditors' rights generally or
by equitable principles.
4.3 No Violations. The execution, delivery and performance of this Agreement and
the applicable Ancillary Agreements by the Vendors and the consummation of the
Acquisition and the other transactions contemplated in Articles II and III will
not:
(a) constitute a breach or violation of or default under the
charter or by-laws (or similar organizational documents) or
internal rules or regulations governing the conduct of
corporate actions of either Vendor or any Acquired Subsidiary
or any Law applicable to either Vendor or any Acquired
Subsidiary; or
(b) violate or conflict with, or result in a breach of, or
constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required
by, or result in a right of termination under, or result in
the creation of any Lien upon the Shares, or any of the assets
or properties of any Acquired Subsidiary under, any contract,
indenture, loan document, licence, permit, order, decree or
instrument to which either Vendor or any Acquired Subsidiary
is a party or by any of them or their assets or properties are
bound.
4.4 Consents and Approvals. No consent, order, approval, waiver or authorization
of, or registration, application, declaration or filing with, any Governmental
Entity or other Person is required with respect to either Vendor or any Acquired
Subsidiary in connection with the execution and delivery of this Agreement or
any Ancillary Agreement, the consummation of the Acquisition, or the other
transactions contemplated in Articles II and III, except for:
(a) any filings or approvals that may be required under the
Competition Act or Investment Canada Act; and
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(b) other cases, considered individually and in the aggregate, in
which any failure to make any such registration, application,
declaration or filing or obtain any such consent, order,
approval, waiver or other authorization could not have a
Material Adverse Effect on the Acquired Subsidiaries or the
Vendors.
4.5 Acquired Subsidiaries. Section 4.5 of the Vendor Disclosure Schedule sets
forth with respect to each Acquired Subsidiary (a) its jurisdiction of
incorporation, (b) each jurisdiction in which it is qualified to do business as
a foreign or extra-provincial corporation, (c) the authorized, issued and
outstanding shares of its capital stock, and (d) the holder or holders of all of
the issued and outstanding shares of its capital stock. Each Acquired Subsidiary
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has full authority and corporate
power to conduct its business as it is currently being conducted. Each Acquired
Subsidiary is duly qualified to do business, and is in good standing, in each
jurisdiction where the nature of its properties or business requires such
qualification, except for failures to be so qualified which could not,
individually or in the aggregate, have a Material Adverse Effect on the Acquired
Subsidiaries.
All of the issued and outstanding shares of capital stock of
each Acquired Subsidiary are validly issued, fully paid and non-assessable, and
are owned of record and beneficially, and free of any Liens, by the Vendors or
another Acquired Subsidiary (as reflected in Section 4.5 of the Vendor
Disclosure Schedule and subject to any Liens therein noted). There are no
preemptive rights or outstanding subscriptions, options, warrants, calls,
rights, convertible securities, obligations to make capital contributions or
advances, voting trust arrangements, shareholders' agreements or other
agreements, commitments or understandings relating to the capital stock of any
Acquired Subsidiary.
Each of Xxxxxxx Waste Systems (Canada) Ltd. and Xxxxxxx Waste
Systems Ltd. is a "private company" within the meaning of the Securities Act
(Ontario).
4.6 No Other Subsidiaries. No Acquired Subsidiary has any Subsidiary which is
not another Acquired Subsidiary. Except as described in Section 4.6 of the
Vendor Disclosure Schedule, and except for other Acquired Subsidiaries, no
Acquired Subsidiary owns or is obligated to acquire any investment in any other
corporation, partnership, joint venture or other business entity.
4.7 Conduct of Solid Waste Business. Allied Parent and its Subsidiaries are
engaged in the Solid Waste Business in Canada only through the Acquired
Subsidiaries and neither Allied Parent nor any of its Subsidiaries conducts any
operations associated with, or owns any assets or properties used in, or holds
any permits or licences used in, the Solid Waste Business, except for operations
that, after the Closing Date, will be conducted only as permitted under the
Allied Transition Agreement. None of the Acquired Subsidiaries is or has been
engaged in any business other than the Solid Waste Business or owns or has owned
any assets or properties which are used in any business other than the Solid
Waste Business.
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4.8 Financial Statements. The Vendors have delivered (or will have, as soon as
reasonably practicable, and, in any event, prior to February 21, 1997 have
delivered) to the Purchaser:
(a) the audited combined balance sheets of the Acquired
Subsidiaries (prepared as a separate combined group of
corporations for financial reporting purposes) at August 31,
1995 and August 31, 1996, and the related audited combined
statements of operations, stockholders' equity and cash flows
(similarly prepared) for the respective years ended August 31,
1995 and 1996; and
(b) the unaudited combined balance sheets of the Acquired
Subsidiaries (prepared as a separate combined group of
corporations for financial reporting purposes) at November 30,
1995 and November 30, 1996, and the related unaudited combined
statements of operations, stockholders' equity and cash flows
(similarly prepared) for the three-month periods ended on
November 30, 1995 and November 30, 1996.
The foregoing financial statements are stated in U.S. dollars.
The Allied Group Financial Statements have been prepared by combining the
relevant financial statements of the Acquired Subsidiaries in accordance with
GAAP applicable to the preparation of combined financial statements.
The Allied Group Financial Statements fairly present in all
material respects the combined financial position of the Acquired Subsidiaries
as at their respective dates and, as applicable, their combined results of
operations, stockholders' equity and cash flows for the financial years ended on
their respective dates as indicated therein, in accordance with GAAP, except for
compliance with SFAS 109.
4.9 Absence of Certain Changes. Except as set forth in Section 4.9 of the Vendor
Disclosure Schedule, since August 31, 1996, the Acquired Subsidiaries have
conducted their businesses only in the ordinary course, consistent with past
practice, and there has not occurred a Material Adverse Effect with respect to
the Acquired Subsidiaries or any event that could result in a Material Adverse
Effect with respect to the Acquired Subsidiaries. Since December 30, 1996, no
Acquired Subsidiary has undertaken or effected any corporate amalgamation,
winding-up or continuance.
4.10 No Undisclosed Liabilities. Except as disclosed in the Allied Group
Financial Statements or as set forth in Sections 4.10 and 4.14 of the Vendor
Disclosure Schedule, no Acquired Subsidiary has any liabilities or obligations,
known or unknown, fixed or contingent, other than (a) those liabilities and
obligations (other than for borrowed money) arising since August 31, 1996 in the
ordinary course of its business and consistent with its past practice, (b) those
liabilities and obligations arising after the date of this Agreement without
violation of
27
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Sections 6.1 and 6.2, or (c) liabilities and obligations that, individually or
in the aggregate, could not result in a Material Adverse Effect on the Acquired
Subsidiaries.
4.11 Acquired Subsidiary Properties. The Acquired Subsidiaries have good and
marketable title to their respective properties and assets, including those
reflected in the Allied Group Financial Statements (other than properties and
assets disposed of in the ordinary course of business since August 31, 1996,
which in the aggregate are not material), free of all Liens except Permitted
Liens and Liens disclosed in Section 4.11 of the Vendor Disclosure Schedule.
4.12 Landfills. Section 4.12 of the Vendor Disclosure Schedule lists each Allied
Group Landfill and accurately describes each such landfill by its city and
province of location, total acreage, permitted acreage, estimated remaining
permitted capacity in tons, estimated or mandated closure date, and estimated
closure, post-closure and reclamation liability at its projected or mandated
closure date (computed at the closure date with and without discount to present
value) and any other recorded or unrecorded accruals, contingent or otherwise,
or reserves related to landfill liabilities of any type. Section 4.12 of the
Vendor Disclosure Schedule also lists each landfill not owned or operated by an
Acquired Subsidiary, but to which any Acquired Subsidiary hauls solid waste.
4.13 Taxes and Tax Returns. Except as described in Section 4.13 of the Vendor
Disclosure Schedule:
(a) all Tax Returns required to be filed with any Taxing
Authorities with respect to any Pre-Closing Tax Period by or
on behalf of the Acquired Subsidiaries have been duly filed on
a timely basis in accordance with all applicable Laws, or will
be timely filed in accordance with Section 12.1;
(b) at the time of their filings all such Tax Returns were or will
be complete and correct;
(c) there are no Liens for Taxes upon any assets of any Acquired
Subsidiary, except Liens for Taxes not yet due for any
Pre-Closing Tax Periods;
(d) there are no outstanding deficiencies, assessments or written
proposals for the assessment of Taxes relating to any
Pre-Closing Tax Period proposed, asserted or assessed against
any Acquired Subsidiary, or for which any Acquired Subsidiary
could be directly or indirectly liable and there is no basis
for any additional assessment or reassessment for any Taxes
relating to any Pre-Closing Tax Period for which adequate
provision has not been made in the books and records of the
Acquired Subsidiaries;
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(e) no extension of the statute of limitations or waiver of normal
reassessment periods on the assessment of any Taxes relating
to any Pre-Closing Tax Period has been granted to or on behalf
of any Acquired Subsidiary; and
(f) no Acquired Subsidiary has had a permanent establishment or
income effectively connected with the conduct of a trade or
business in the United States.
4.14 Litigation. Except as disclosed in Section 4.14 of the Vendor Disclosure
Schedule, there is no suit, action, investigation or proceeding pending or, to
the knowledge of the Vendors, threatened against any of the Acquired
Subsidiaries at law or in equity before or by any Governmental Entity or before
any arbitrator or mediator of any kind, that could have a Material Adverse
Effect on the Acquired Subsidiaries, and there is no judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator or mediator
to which any Acquired Subsidiary (or any of its assets or properties) is subject
that could have a Material Adverse Effect on the Acquired Subsidiaries. There is
no suit, action, investigation or proceeding pending or, to the knowledge of the
Vendors, threatened against either Vendor or Allied Parent at law or in equity
before or by any Governmental Entity or before any arbitrator or mediator of any
kind, that could have a Material Adverse Effect on the Vendors or Allied Parent,
and there is no judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator or mediator to which either Vendor is subject that could
have a Material Adverse Effect on the Vendors or Allied Parent. Neither Vendor
has knowledge of any grounds on which any suit, action, investigation or
proceeding of the nature referred to in this Section 4.14 might be commenced
with any reasonable likelihood of success.
4.15 Environmental Matters. Except as described in Section 4.15 of the Vendor
Disclosure Schedule, and except to the extent that the inaccuracy of any of the
following, individually or in the aggregate, could not have a Material Adverse
Effect on the Acquired Subsidiaries:
(a) the Acquired Subsidiaries hold (or the Purchaser will be
entitled hereby and by the Environmental Permit Direction
Agreement to have transferred to the Acquired Subsidiaries),
and are in compliance with and have been in compliance with,
all Environmental Permits, are otherwise in compliance and
have been in compliance with, all applicable Environmental
Laws, and there is no condition that could prevent or
interfere with compliance by the Acquired Subsidiaries with
all Environmental Laws;
(b) no modification, revocation, reissuance, alteration, transfer
or amendment of any Environmental Permit, or any review by, or
approval of, any Governmental Entity or other Person of any
Environmental Permit is required in connection with the
execution or delivery of this Agreement or any Ancillary
Agreement (except as contemplated by the Allied Transition
Agreement), the consummation of the
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Acquisition, or the operation of the business of the Acquired
Subsidiaries immediately after the Closing;
(c) no Acquired Subsidiary has received any Environmental Claim,
nor has any Environmental Claim been threatened against any
Acquired Subsidiary;
(d) no Acquired Subsidiary has entered into, agreed to or is
subject to any outstanding judgment, decree, order or other
directive issued by, or consent arrangement with, any
Governmental Entity under any Environmental Law, including any
such judgment, decree, order or other directive relating to
compliance with any Environmental Law or to the investigation,
cleanup, remediation or removal of Hazardous Substances;
(e) to the knowledge of the Vendors, there are no circumstances
that could give rise to liability under any agreement with any
Person or by operation of law by or under which any Acquired
Subsidiary would be required to defend, indemnify, hold
harmless, or otherwise be responsible for any violation by or
other liability or expense of such Person, or alleged
violation by or other liability or expense of such Person,
arising under any Environmental Law;
(f) to the knowledge of the Vendors, there are no other
circumstances or conditions that could give rise to liability
or obligation of any Acquired Subsidiary under any
Environmental Law; and
(g) the liabilities and reserves reflected on the Allied Group
Financial Statements adequately provide for, in accordance
with GAAP (x) all future claims and costs for closure,
intermediate capping, post-closure monitoring, investigation
and maintenance, reclamation, remediation, restoration and
cleanup of all Allied Group Landfills (or any landfill or
other facility previously owned, occupied, leased or operated
by, or previously under the management or control of, any
Acquired Subsidiary or any landfill to which an Acquired
Subsidiary has transported waste), and (y) all Environmental
Claims against the Acquired Subsidiaries.
4.16 Governmental Licences and Permits; Compliance with Laws. No Acquired
Subsidiary has received any notice of any revocation or modification or any
licence, certification, tariff, permit, registration, exemption, approval or
other authorization by any Governmental Entity, the revocation or modification
of which has had or is reasonably likely to have a Material Adverse Effect on
the Acquired Subsidiaries. The business of each Acquired Subsidiary complies and
has been conducted in compliance with all applicable Laws, except for violations
or failure to comply, if any, that, individually or in the aggregate, could not
have a Material Adverse Effect on the Acquired Subsidiaries.
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4.17 Labour Matters. Section 4.17 of the Vendor Disclosure Schedule lists and
describes each collective bargaining agreement covering employees of any
Acquired Subsidiary. Except as disclosed in Section 4.17 of the Vendor
Disclosure Schedule, (a) no Acquired Subsidiary is a party to or bound by any
collective bargaining or similar agreement with any labour organization
applicable to employees of any Acquired Subsidiary, (b) there is no labour
strike, dispute, slowdown, work stoppage, unresolved material labour union
grievance or labour arbitration proceedings pending or, to the knowledge of the
Vendors, threatened against any Acquired Subsidiary, and (c) to the knowledge of
the Vendors, there are no current union organizing activities among employees of
any Acquired Subsidiary. No Acquired Subsidiary has been affected by any
transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of subsection 57(2) of the Employment Standards
Act (Ontario) or of the Regulation made in connection therewith (R.R.O. 1990,
Reg. 327, as amended) or any similar Canadian federal, provincial or local Law.
4.18 Employee Benefit Plans. Section 4.18 of the Vendor Disclosure Schedule sets
forth each retirement, pension, bonus, stock purchase, profit sharing, stock
option, deferred compensation, severance or termination pay, insurance, medical,
hospital, dental, vision care, drug, sick leave, disability, salary
continuation, legal benefits, unemployment benefits, vacation, incentive or
other compensation plan or arrangement or other employee benefit which is
maintained, or otherwise contributed to or required to be contributed to, by any
of the Acquired Subsidiaries for the benefit of employees or former employees
and directors or former directors of any of the Acquired Subsidiaries and their
spouses, dependents or beneficiaries (the "Allied Employee Plans"). True and
correct copies of each of the Allied Employee Plans have been made available to
the Purchaser, along with the most recent annual report for the Plan, any trust
agreement relating to the Plan and the most recent summary plan description,
actuarial report and determination letter for the Plan. Each of the Acquired
Subsidiaries has complied, and currently is in compliance, both as to form and
operation, in all material respects, with each Law or regulation imposed or
administered by any Governmental Entity with respect to each of the Allied
Employee Plans. All Allied Employee Plans providing pension or retirement
benefits or obligations to current or former employees or their spouses,
dependents and beneficiaries are referred to collectively as "Allied Pension
Plan" and identified on Section 4.18 of the Vendor Disclosure Schedule. Except
as set forth in Section 4.18 of the Vendor Disclosure Schedule, no provision
concerning the Allied Pension Plan is contained in any collective bargaining
agreement affecting any current or former employees of any Acquired Subsidiary.
The Allied Pension Plan is registered under, and is in material compliance with,
applicable Law. All contributions to, and payments from, each Allied Employee
Plan which may have been required to be made in accordance with the terms of any
such Allied Employee Plan and, where applicable, the Laws which govern such
Allied Employee Plan, have been made in a timely manner and each Allied Employee
Plan has otherwise at all time been administered in accordance with its terms
and applicable Law in all material respects. All material reports, Tax Returns
and similar documents with respect to any Allied Employee Plan required to be
filed with any Governmental Entity or distributed to any Allied Employee Plan
participant have been duly filed on a timely basis or distributed. There are no
pending investigations by any Governmental Entity involving or
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relating to an Allied Employee Plan, no threatened or pending claims (except for
claims for benefits payable in the normal operation of the Allied Employee
Plans), suits or proceedings against any Allied Employee Plan or asserting any
rights or claims to benefits under any Allied Employee Plan which could give
rise to a liability nor, to the knowledge of the Vendors, are there any facts
that could give rise to any liability in the event of any such investigation,
claim, suit or proceeding. No notice has been received by either Vendor or any
of the Acquired Subsidiaries of any complaints or other proceedings of any kind
involving any of the Acquired Subsidiaries or any of the employees of any of the
Acquired Subsidiaries or other potential claimants before any Governmental
Entity relating to any Allied Employee Plan or to any of the Acquired
Subsidiaries and to the knowledge of the Vendors, there is no basis for any such
claims. Except as set forth in Section 4.18 of the Vendor Disclosure Schedule,
the assets of each Allied Employee Plan are at least equal to the liabilities,
contingent or otherwise, of such Allied Employee Plan on a plan termination
basis, and each Allied Pension Plan is fully funded on a going concern and
solvency basis in accordance with its terms, applicable actuarial
recommendations and applicable Law. No event has occurred and, to the knowledge
of the Vendors, there exists no condition or set of circumstances in connection
with which the Purchaser, USA Waste, any of their Affiliates or the Acquired
Subsidiaries would be subject to any liability under the terms of each Allied
Employee Plan or under any applicable Law of any Governmental Entity, other than
any condition or set of circumstances that could not have a Material Adverse
Effect on the Acquired Subsidiaries or that relate to the Purchaser, USA Waste
or their Affiliates and not to the Acquired Subsidiaries. Except as is to be
provided for in the Allied Transition Agreement with respect to employees of
Xxxxxxx Medical Services Ltd. and those individuals to be offered employment by
the Person that succeeds to the Resource Recycling Assets, the beneficiaries
under all Allied Employee Plans shall consist only of employees or former
employees and directors or former directors of any of the Acquired Subsidiaries
and their spouses, dependents or beneficiaries. No Acquired Subsidiary shall
have any liability under the Xxxxxxx Employee Stock Option Plan. The amount to
fund the Supplemental Executive Retirement Plan shall not exceed $300,000.00.
4.19 Material Contracts. Section 4.19 of the Vendor Disclosure Schedule lists
all of the following written or oral contracts, agreements and commitments
(collectively, the "Allied Group Contracts"):
(a) all employment, consulting or personal services agreements or
contracts with any present or former officer, director or
employee of any Acquired Subsidiary who has an annual salary
of $125,000 or more (determined by using the currency in which
they are paid);
(b) all solid waste management agreements and contracts (including
those relating to the receipt, transport, disposal or other
management of waste) between any Acquired Subsidiary and any
municipality or other Governmental Entity or Person which call
for annual payments to or by any Acquired Subsidiary of
$1,000,000 or more, which list includes the term of such
agreements or contracts:
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(c) all contracts, agreements, agreements in principle, letters of
intent and memoranda of understanding which call for or
contemplate the future disposition (including restrictions on
transfer and rights of first offer or refusal) or acquisition
of (or right to acquire) any interest in any business
enterprise by any Acquired Subsidiary, and all contracts,
agreements and commitments relating to the future disposition
of a material portion of the assets and properties, of any
Acquired Subsidiary other than in the ordinary course of
business;
(d) all contracts, agreements with, or commitments to, any Person
containing any provision or covenant relating to the
indemnification or holding harmless by any Acquired Subsidiary
of any Person which could result in a liability to an Acquired
Subsidiary of $500,000 or more;
(e) all leases or subleases of real property used in the conduct
of business of any Acquired Subsidiary providing for annual
rental payments to be paid by or on behalf of an Acquired
Subsidiary of more than $500,000 in each case;
(f) all contracts or agreements committing any Acquired Subsidiary
to make a capital expenditure in excess of $500,000;
(g) all guarantees or other commitments or undertakings under
which any Acquired Subsidiary may be primarily, secondarily,
contingently or conditionally liable for or in respect of (or
which creates, constitutes or evidences a Lien on any of the
assets or properties of any Acquired Subsidiary which secures
the payment or performance of) any present or future liability
or obligation of or to any member of the Allied Group or any
officer or director of the Allied Group;
(h) all Allied Guarantees;
(i) all contracts, agreements and undertakings with any
Governmental Entity or other Person which contain any
provision or covenant limiting (x) the ability of any Acquired
Subsidiary to engage in any line of business, to compete with
any Person, to do business with any Person or in any location
or to employ any Person or (y) the ability of any Person to
compete with or obtain products or services from any Acquired
Subsidiary;
(j) all outstanding proxies, powers of attorney or similar
delegations of authority granted by any Acquired Subsidiary to
any member of the Allied Group or any other Person; and
(k) all Intercompany Agreements and the terms and conditions
thereof.
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The Vendors shall make available to the Purchaser within 15
days of the execution and delivery of this Agreement a true and correct copy of
each Allied Group Contract, other than those referred to in paragraph (b) above,
which shall be delivered immediately after the Closing. Each of the Allied Group
Contracts is in full force and effect and constitutes a legal, valid and binding
obligation of the Acquired Subsidiary which is a party to it, and, to the
knowledge of the Vendors, of each other Person that is a party to it. Except as
set forth in Section 4.19 of the Vendor Disclosure Schedule, no Acquired
Subsidiary is, and, to the knowledge of the Vendors, no other party to any
Allied Group Contract is, in violation, breach or default of such Allied Group
Contract or, with or without notice or lapse of time or both, would be in
violation, breach or default of any such Allied Group Contract, except for any
violation, breach or default which, individually or in the aggregate, could not
result in a Material Adverse Effect on the Acquired Subsidiaries. Except as set
forth in Section 4.19 of the Vendor Disclosure Schedule, no Allied Group
Contract provides that any party thereto other than an Acquired Subsidiary may
terminate such Allied Group Contract by reason of the execution of this
Agreement or the consummation of the Acquisition.
4.20 Bank Accounts. Section 4.20 of the Vendor Disclosure Schedule lists each
bank, trust company or similar institution with which any Acquired Subsidiary
maintains an account or safe deposit box, and accurately identifies each such
account or safe deposit box by its number or other identification and the names
of all individuals authorized to draw thereon or have access thereto.
4.21 Officers and Directors. Section 4.21 of the Vendor Disclosure Schedule
accurately lists by name and title all officers and directors of each Acquired
Subsidiary.
4.22 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission from the Purchaser or any
Acquired Subsidiary in connection with this Agreement or the Acquisition based
upon arrangements made by or on behalf of the Vendors.
4.23 Intercompany Indebtedness. Except under the Indemnity, Subrogation and
Contribution Agreements described in Section 4.9 of the Vendor Disclosure
Schedule, there is not any, and at the Time of Closing there will not be any,
Intercompany Indebtedness. There will not be, at the Time of Closing, any
Indebtedness owed by any Acquired Subsidiary to Xxxxxxx Inc. or its Affiliates.
4.24 Residency of Allied. Allied is not, and on Closing will not be, a
non-resident of Canada for purposes of the Income Tax Act.
4.25 Aggregation. The imperfections, defects, orders, actions, defaults,
liabilities, inaccuracies and other items omitted from disclosure in connection
with the representations and warranties made in sections 4.1 through 4.24 on
grounds of immateriality, lack of knowledge or
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failure to have a Material Adverse Effect do not and could not, taken as a
whole, constitute a Material Adverse Effect on the Vendors or the Acquired
Subsidiaries.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser represents and warrants to the Vendors that:
5.1 Organization of Purchaser. The Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the Province of Ontario.
The Purchaser has full corporate power and authority to conduct its business as
it is currently being conducted and as to be conducted following consummation of
the Acquisition. The Purchaser is duly qualified to carry on business, and is in
good standing, in each jurisdiction where the nature of its properties or
business requires such qualification.
5.2 Authority Relative to this Agreement. The Purchaser has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement and each Ancillary Agreement to which it will be a party. The
execution and delivery of this Agreement and each Ancillary Agreement to which
the Purchaser will be a party, the consummation of the Acquisition, and the
other transactions contemplated in Articles II and III have been duly authorized
by the Board of Directors of the Purchaser, and no other corporate proceedings
on the part of the Purchaser are necessary to authorize this Agreement, any
Ancillary Agreement to which the Purchaser will be a party, the consummation of
the Acquisition, or the other transactions contemplated in Articles II and III.
This Agreement has been duly executed and delivered by the Purchaser. Each
Ancillary Agreement required to be executed and delivered by the Purchaser at
the Closing will be, upon its or their execution and delivery as provided in
Section 3.2, duly executed and delivered by the Purchaser. Assuming the valid
authorization, execution and delivery of this Agreement (and each Ancillary
Agreement to which either Vendor will be a party) by the applicable Vendor or
Vendors, this Agreement is, and upon its execution and delivery by the
applicable Vendor or Vendors, each Ancillary Agreement to which the Purchaser is
a party will be, valid and binding obligations of the Purchaser, enforceable in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other law relating to or
affecting creditors' rights generally or by equitable principles.
5.3 No Violations. The execution, delivery and performance of this Agreement and
the applicable Ancillary Agreements by the Purchaser and the consummation of the
Acquisition and the other transactions contemplated in Articles II and III will
not:
(a) constitute a breach or violation of or default under the
charter or by-laws (or similar organizational documents) or
internal rules or regulations governing the
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conduct of corporate actions of the Purchaser or any Law
applicable to the Purchaser; or
(b) violate or conflict with or result in a breach of, or
constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under or result
in the termination of, or accelerate the performance by, or
result in a right of termination under, or result in the
creation of any Lien upon the assets or properties of the
Purchaser under, any contract, indenture, loan document,
licence, permit, order, decree or instrument to which the
Purchaser is a party or by which the Purchaser or its assets
or properties are bound.
5.4 Consents and Approval. No consent, order, approval, waiver, authorization
of, or registration, application, declaration or filing with, any Person is
required with respect to the Purchaser in connection with the execution and
delivery of this Agreement, the consummation of the Acquisition, and the other
transactions contemplated in Articles II and III, except for:
(a) any filings or approvals that may be required under the
Competition Act or Investment Canada Act; and
(b) other cases, considered individually and in the aggregate, in
which any failure to make such registration, application,
declaration or filing or to obtain any such consent, order,
approval, waiver or other authorization could not have a
Material Adverse Effect on the Purchaser.
5.5 Financing. The Purchaser has delivered to the Vendors a copy of the bank
commitment letter that has been obtained by the Purchaser in connection with the
Acquisition. The funds committed to be made available to the Purchaser under
such commitment letter, together with the funds of the Purchaser and funds
otherwise available to the Purchaser, are sufficient to pay the Purchase Price
in full.
5.6 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with this Agreement
or the Acquisition based upon arrangements made by or on behalf of the
Purchaser.
5.7 Securities Act Compliance. The Purchaser is acquiring the Shares hereunder
as principal and not as any agent or in any similar capacity.
ARTICLE VI
VENDORS' AGREEMENTS PENDING CLOSING
The Vendors jointly and severally agree that pending the
Closing, without the prior written consent of the Purchaser:
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6.1 Conduct of Business. Except as otherwise required hereby (including under
Section 3.3) or by any Ancillary Agreement, each Acquired Subsidiary shall
conduct its operations according to its ordinary and usual course of business,
comply with applicable Laws, comply with the terms of Allied Employee Plans
(including by making all contributions required by the terms of the Allied
Pension Plan, applicable actuarial recommendations and applicable Law), pay all
Taxes as they become due (except for such Taxes that are being contested in good
faith and for which adequate provision is made in the financial statements
delivered to the Purchaser under Section 4.8 hereof) and use its commercially
reasonable efforts to preserve intact its business organization, keep available
the services of its officers and employees and maintain normal business
relationships with customers, suppliers and others having business relationships
with it. The Vendors shall confer on a regular and frequent basis with one or
more designated representatives of the Purchaser to report on operational
matters of materiality and to report the general status of on-going operations
of the Acquired Subsidiaries. The Vendors shall notify the Purchaser of:
(a) any material emergency or other material change in the normal
course of business or in the operation of the properties of
the Acquired Subsidiaries;
(b) the instigation of or any significant development in any
regulatory proceedings, governmental complaints,
investigations or hearings (or communications indicating that
any may be contemplated) involving either of the Vendors or
any Acquired Subsidiary, which instigation or development
could have a Material Adverse Effect on the Vendors or the
Acquired Subsidiaries;
(c) proposed budgets, capital expenditures, acquisitions and
dispositions of assets and other decisions involving material
properties of the Acquired Subsidiaries; and
(d) any matter or event which comes to the knowledge of the
Vendors and which makes or could make any representation and
warranty made by the Vendors in Article IV untrue or
inaccurate.
The Vendors shall keep the Purchaser fully informed of such
events and permit the Purchaser's representatives access to all materials
prepared in connection with such events, except to the extent that Xxxxxx, Xxxx
& Xxxx, counsel to the Vendors, advises that the provision to the Purchaser of
access to any such materials may be construed as anti-competitive under
applicable Laws or may be in violation of any contractual or statutory
requirement.
The Vendors agree to advance to the Acquired Subsidiaries
during the period from the date of this Agreement through the Closing Date funds
sufficient to allow the Acquired Subsidiaries to maintain their working capital
at levels sufficient to support their continued operations in the ordinary
course of their business and consistent with past practices. The Vendors further
agree, without limiting the generality of the preceding sentence, to (i)
maintain
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and continue their customer billing, receivable collection and payables payment
practices in a manner consistent with past practices and in the ordinary course
of business, and (ii) make the capital expenditures at the times and in the
amounts included in the schedule of capital expenditures included in Section 6.2
of the Vendor Disclosure Schedule.
6.2 Forbearance by the Acquired Subsidiaries of Purchaser. Except with the prior
consent of the Purchaser or as required by Section 3.3, the Vendors shall not
cause or permit any Acquired Subsidiary to:
(a) amend its charter or by-laws (or other similar organizational
documents);
(b) issue, sell, pledge, dispose of or encumber any shares of its
capital stock or securities convertible into any such shares,
or enter into any agreement or commitment with respect to the
issuance or purchase of any such shares or securities;
(c) pay any dividend or other distribution in respect of the
Shares or other securities issued by any of the Acquired
Subsidiaries, or redeem, purchase or acquire any Shares or
other such securities or make any other payments on or under
any other securities issued by any of the Acquired
Subsidiaries, except, in each case, in an amount that will not
result in the Closing Date Working Capital being a negative
amount;
(d) incur any indebtedness for borrowed money other than
Intercompany Indebtedness incurred for working capital
purposes (including under Section 6.1) and that is to be
repaid or otherwise settled at or prior to the Time of
Closing;
(e) make or commit to make any capital investment, capital
expenditure, capital addition or capital improvement, except
to the extent that any single capital expenditure made or
committed to be made by any Acquired Subsidiary and all
capital expenditures made or committed to be made by all
Acquired Subsidiaries do not exceed the amounts set forth in
the budget of capital expenditures included in Section 6.2 of
the Vendor Disclosure Schedule;
(f) except in the ordinary course of business, and except for
settlements made by insurers, enter into any compromise or
settlement of any litigation, proceeding or governmental
investigation relating to such Acquired Subsidiary or its
respective properties which requires such Acquired Subsidiary
to make a payment in excess of $200,000 or which would result
in the imposition of any restriction upon the operations of
such Acquired Subsidiary, or the disposition of any of its
properties, except for restrictions or dispositions which
could not have a Material Adverse Effect on the Acquired
Subsidiaries;
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(g) sell real property or any interest in or improvement upon real
property or any other capital asset the book value or sales
price of which is more than $70,000;
(h) amend the Allied Pension Plan or Allied Employee Plans or make
any statement relating to any anticipated or proposed increase
in benefits under the Allied Pension Plan or Allied Employee
Plans for current, future or former employees of any of the
Acquired Subsidiaries other than strictly in accordance with
the terms of the Allied Pension Plan or Allied Employee Plans
as currently constituted or as contemplated by the Allied
Transition Agreement;
(i) enter into any material agreement or material contract other
than in the ordinary course of business or as otherwise
required or permitted hereunder or under the Ancillary
Agreements;
(j) cancel or permit to expire any insurance contract covering the
property, assets or undertaking of the Acquired Subsidiaries
except (i) in the ordinary course of business, (ii) with
respect to property or assets that are disposed of in
accordance with this Agreement, or (iii) with respect to
insured risks in respect of which comparable insurance is
obtained substantially concurrently with the cancellation or
expiry of the first-mentioned insurance contract;
(k) transfer, license, lease, sell, dispose, mortgage or encumber
any assets or properties other than in the ordinary course of
business;
(l) increase compensation, benefits or severance for employees of
any Acquired Subsidiary except as required by any collective
bargaining agreements entered into by the Acquired
Subsidiaries as in effect on the date of this Agreement, and
except as set forth in Section 6.2 of the Vendor Disclosure
Schedule;
(m) enter into any Intercompany Agreement or any transaction with
Allied Parent or any of its Subsidiaries (other than the
Acquired Subsidiaries), except (i) as otherwise required or
permitted hereunder or under the Ancillary Agreements or (ii)
with respect to Xxxxxxx Medical Services Ltd. and the Person
that succeeds to the Resource Recycling Assets, on terms
acceptable to the Purchaser, acting reasonably; or
(n) undertake or effect any corporate amalgamation, winding-up or
continuance.
6.3 Access and Information. Except to the extent that Xxxxxx, Xxxx & Xxxx,
counsel to the Vendors, advises that to do so may be in violation of any
contractual or statutory requirement, the Vendors shall:
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(a) give to the Purchaser and its representatives (including its
lenders, underwriters and their representatives) full access
during normal business hours and on reasonable notice to all
the properties, books, contracts, commitments, records, Tax
Returns, personnel and advisors of the Acquired Subsidiaries
(including copies of all filings and correspondence with
Governmental Entities in Canada relating to the acquisition of
the Acquired Subsidiaries by Allied Parent and its
Subsidiaries from the Xxxxxxx Sellers) so that the Purchaser
may have full opportunity to make such investigation of the
Acquired Subsidiaries as it shall reasonably request in
advance;
(b) cause Xxxxxx Xxxxxxxx L.L.P. to permit the Purchaser and its
auditors to review and examine the work papers of Xxxxxx
Xxxxxxxx L.L.P. relating to the Acquired Subsidiaries;
(c) promptly furnish to the Purchaser all information with respect
to the Acquired Subsidiaries which the Purchaser may
reasonably request, including, without limitation, officers'
representation letters to the auditors of the Acquired
Subsidiaries that are in the possession or under the control
of the Vendors; and
(d) furnish to the Purchaser all information concerning the
Acquired Subsidiaries required for inclusion in any
application, filing statement or notice to be made by the
Purchaser to, or filed or joined in by the Purchaser with, any
Governmental Entity in connection with this Agreement or the
Acquisition.
6.4 Access to Environmental Report. The Vendors shall provide to the Purchaser a
copy of the Environmental Report.
6.5 Consummation of Acquisition. Allied Parent and the Vendors shall use their
commercially reasonable efforts (a) to perform and fulfill, and (b) to cause the
Acquired Subsidiaries to perform and fulfill, all conditions and obligations on
their part to be performed and fulfilled under this Agreement, to the end that
the Acquisition shall be consummated. Allied Parent shall execute and deliver at
the Closing (or on the day prior to the Closing Date, in respect of the Allied
Release) the Ancillary Agreements to which it is a party.
ARTICLE VII
PURCHASER COVENANTS PENDING CLOSING
The Purchaser agrees that pending the Closing, without the
prior written consent of the Vendors:
7.1 Certain Notifications. The Purchaser shall notify the Vendors of:
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(a) the instigation of or any significant development in any
regulatory proceedings, governmental complaints,
investigations or hearings (or communication indicating that
any may be contemplated) involving the Purchaser and its
Subsidiaries, which instigation or development could have a
Material Adverse Effect on the Purchaser; and
(b) any matter or event which comes to the knowledge of the
Purchaser and which makes or could make any representation and
warranty made by the Purchaser in Article V untrue or
inaccurate or which could make the Purchaser unable to perform
its obligations under this Agreement.
The Purchaser shall keep the Vendors fully informed of such
events and permit the Vendors' representatives access to all materials prepared
in connection with such events, except to the extent that Blake, Xxxxxxx &
Xxxxxxx, counsel to the Purchaser, advises that the provision to the Vendors of
access to any such materials may be construed as anti-competitive under
applicable Laws or may be in violation of any contractual or statutory
requirement.
7.2 Confidentiality. All information and data furnished by the Vendors to the
Purchaser under Section 6.3 or any other provision of this Agreement shall be
received, held, treated and, if applicable, returned to the Vendors, in
accordance and compliance with the Confidentiality Agreement.
7.3 Consummation of Acquisition. USA Waste and the Purchaser shall use their
commercially reasonable efforts to perform and fulfill all conditions and
obligations on their part to be performed and fulfilled under this Agreement, to
the end that the Acquisition shall be consummated.
ARTICLE VIII
MUTUAL CONDITIONS
The respective obligations of each Party to consummate the
Acquisition and to take the other actions called for under Articles II and III
are subject to the fulfilment or waiver by that Party of each of the following
conditions on or before the Closing Date:
8.1 No Adverse Proceedings. No order entered or Law promulgated or enacted by
any Governmental Entity shall be in effect which would prevent consummation of
the Acquisition, and no proceeding brought by a Governmental Entity or any other
Person shall have been commenced and be pending which seeks to restrain, enjoin,
prevent or materially delay or restructure the Acquisition.
8.2 Competition Act Matters. The applicable waiting period under the Competition
Act shall have expired.
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8.3 Investment Canada Act Matters. The Purchaser shall have received from the
ICA Minister a notice, satisfactory in form and substance to the Parties, under
subsection 21(1) of the Investment Canada Act, stating that the Acquisition is
likely to be of net benefit to Canada, or the ICA Minister shall have been
deemed, under section 21(2) of the Investment Canada Act, to be satisfied that
the Acquisition is likely to be of net benefit to Canada and the Parties shall
have received a notice from the ICA Minister to that effect.
8.4 Section 116 Certificate. The Vendors and the Purchaser shall have received
from Revenue Canada in respect of the Acquisition a certificate under section
116 of the Income Tax Act, with a certificate limit (as referred to therein)
equal to not less than the portion of the Purchase Price allocated pursuant to
Section 2.3 to the Shares to be sold by LWSI.
ARTICLE IX
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of the Purchaser and USA Waste to consummate
the Acquisition and to take the other actions called for under Articles II, III
and XI are subject to the fulfilment or waiver by the Purchaser and USA Waste of
each of the following conditions on or before the Closing Date:
9.1 Representations True at Closing. The Vendors shall have performed and
complied in all material respects with all obligations and agreements required
to be performed or complied with by them under this Agreement at or prior to the
Closing, and the representations and warranties of the Vendors contained in this
Agreement shall be true and correct when made and at and as of the Closing as if
made at and as of such date and time, and the Purchaser shall have received a
certificate, dated the Closing Date, of the President or a Vice President of
Allied Parent, to the effect set forth in this Section 9.1.
9.2 No Adverse Changes. Since the date of this Agreement, no event or series of
events taken in the aggregate shall have occurred which could have a Material
Adverse Effect on the Acquired Subsidiaries.
9.3 Ancillary Agreements. Allied Parent and the Vendors shall have executed and
delivered the Allied Transition Agreement, the Allied Non-Competition Agreement,
the Allied Release and the Environmental Permit Direction.
9.4 Discharge of Liens. All guarantees and Liens granted by or in respect of
each Acquired Subsidiary (except (a) those disclosed in Section 4.11 of the
Vendor Disclosure Schedule, but not excepting those in part 1 on pages 1 and 2
of such Section, which include (i) the senior secured credit facilities of
Allied NA and Allied Parent under the Credit Agreement made as of December 30,
1996 between Allied NA, Allied Parent and the lenders and their
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agents and the subsidiary guarantors identified therein or thereafter becoming
party to or bound by the same, as amended, and (ii) the trust indenture made as
of December 1, 1996 between Allied NA and First Bank National Association, as
trustee, and the notes issued thereunder, as amended and supplemented, and (b)
those Liens granted by or in respect of each Acquired Subsidiary in the ordinary
course of its business, consistent with past practices or that do not have a
Material Adverse Effect on any Acquired Subsidiary) shall have been terminated
and (with respect to such Liens) discharged.
9.5 Intercompany Agreements and Indebtedness. All Intercompany Agreements shall
have been terminated, and all Intercompany Indebtedness shall have been repaid
or otherwise settled, and the Purchaser shall have received a certificate, dated
the Closing Date, of the President or a Vice President of Allied Parent, to the
effect set forth in this Section 9.5.
9.6 Opinion of Vendors' Counsel. The Purchaser shall have received an opinion,
dated the Closing Date, of Xxxxxx, Xxxx & Xxxx, counsel to the Vendors, covering
the matters set forth in Exhibit B to this Agreement, and an opinion of counsel
in the United States as to the corporate existence of LWSI and Allied Parent,
the corporate power and capacity of LWSI and Allied Parent to execute and
deliver, and to perform its obligations under, this Agreement, and the due
authorization and execution of this Agreement by LWSI and Allied Parent.
ARTICLE X
CONDITIONS TO THE VENDORS' OBLIGATIONS
The obligations of the Vendors and Allied Parent to consummate
the Acquisition and to take the other actions called for under Articles II, III
and XI are subject to the fulfilment or waiver by the Vendors and Allied Parent
of each of the following conditions on or before the Closing Date:
10.1 Representations True at Closing. The Purchaser shall have performed and
complied in all material respects with all obligations and agreements required
to be performed or complied with by it under this Agreement at or prior to the
Closing and the representations and warranties of the Purchaser contained in
this Agreement shall be true and correct when made and at and as of the Closing
as if made at and as of such date and time, and the Vendors shall have received
a certificate, dated the Closing Date, of the President or Vice President of the
Purchaser, to the effect set forth in this Section 10.1.
10.2 Ancillary Agreements. The Purchaser and USA Waste shall have executed and
delivered the Allied Transition Agreement.
10.3 Opinion of Purchaser's Counsel. The Vendors shall have received an opinion,
dated the Closing Date, of Blake, Xxxxxxx & Xxxxxxx, counsel to the Purchaser,
covering the matters set forth in Exhibit C to this Agreement.
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ARTICLE XI
ADDITIONAL AGREEMENTS
11.1 Competition Act Filings. The Purchaser shall, with respect to the required
information relating to the Purchaser, and the Vendors shall, with respect to
the required information relating to the Acquired Subsidiaries, file with the
Competition Act Director, as soon as reasonably practicable after the date of
this Agreement, the information set out in Section 121 of the Competition Act
relating to the Acquisition, certified in accordance with Section 118 of the
Competition Act. If the Competition Act Director, before the expiration of seven
days after the date of filing of such information, requires the information set
out in Section 122 of the Competition Act, the Purchaser shall file the required
information with the Competition Act Director as soon as reasonably practicable
after the date the information is required by her. Each Party agrees to
cooperate fully with the other Parties in connection with such filings and to
provide such information and make such of its officers and directors available
on a reasonable basis in connection therewith as the other Parties may request,
acting reasonably.
11.2 Investment Canada Act Filings. The Purchaser agrees to prepare and file
with the ICA Minister, as soon as reasonably practicable after the date of this
Agreement, an application for review under the Investment Canada Act in
connection with the Acquisition, and Allied Parent and the Vendors agree to
cooperate fully with the Purchaser in connection with such application and to
provide such information and make such of their officers and directors available
on a reasonable basis in connection therewith as the Purchaser may request,
acting reasonably.
11.3 Other Consents and Approvals. All Parties shall use their commercially
reasonable efforts to obtain before the Closing, in addition to the approvals
and consents referred to in Section 8.2 and 8.3, all other consents and
approvals listed and disclosed in Section 4.19 of the Vendor Disclosure
Schedule.
11.4 Publicity. The Parties shall consult with each other concerning any press
release or public announcement pertaining to the Acquisition and shall use their
commercially reasonable efforts to agree on its text before its public
dissemination and before making any filings with any Governmental Entity or
securities exchange with respect to any such press release or public
announcement. In cases where the Parties are unable to agree on a press release
or public announcement, the Party proposing it will not issue or make it unless
the proposing Party is required to do so by Law, in which case the Party so
obligated shall use its reasonable efforts to provide a copy of the press
release or public announcement to the other Party before its filing or public
dissemination.
11.5 Expenses. Except as otherwise provided in Article XII, each Party shall pay
its own costs and expenses incurred in connection with the Acquisition, whether
or not the
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Acquisition is consummated. For greater certainty, the Acquired Subsidiaries
shall not bear any portion of the Vendors' or Allied Parent's costs and expenses
relating to the Acquisition, including the costs and expenses of the Vendors and
Allied Parent relating to their counsel, financial advisors and accountants.
11.6 Use of Xxxxxxx Name. The Vendors shall not take any action to restrict or
limit any rights that any Acquired Subsidiary may have with respect to the
"Xxxxxxx" name, and related corporate names, logos and trademarks, under section
11.9 of the SPA.
11.7 Allied Guarantees. The Purchaser agrees to use all commercially reasonable
efforts, and to cause all Acquired Subsidiaries to use all commercially
reasonable efforts, to cause each member of the Allied Group and/or Allied
Parent and/or Xxxxxxx Inc. and/or their respective Subsidiaries to be fully and
finally released and discharged from all further liability or obligation in
respect of all Allied Guarantees in respect of which such member of the Allied
Group and/or Allied Parent and/or Xxxxxxx Inc. and/or their respective
Subsidiaries is an obligated party, within six months following the Closing
Date. To that end, the Purchaser agrees to use all commercially reasonable
efforts to:
(a) cause all liabilities and obligations of each Acquired
Subsidiary which are guaranteed or secured by an Allied
Guarantee to be fully and faithfully performed on a timely
basis and in accordance with their terms;
(b) secure the surrender of and the return to each Allied Issuer
Bank of each letter of credit which is an Allied Guarantee
which is outstanding at the Closing Date, without draw thereon
by any beneficiary thereof;
(c) secure the cancellation and return to Allied Parent, Xxxxxxx
or to the issuer thereof, as appropriate, without payment
thereunder, of all Allied Guarantees which are performance,
suretyship or other bonds; and
(d) cause to be delivered to the respective members of the Allied
Group, Allied Parent, Xxxxxxx Inc. or their respective
Subsidiaries written releases, duly executed by all necessary
releasing parties, evidencing the full and final release of
each member of the Allied Group and/or Allied Parent and/or
Xxxxxxx and/or their respective Subsidiaries liable thereon or
thereunder, from all liabilities and obligations under each
Allied Guarantee which is a guarantee or other direct
undertaking or commitment on the part of such member of the
Allied Group and/or Allied Parent and/or Xxxxxxx and/or their
respective Subsidiaries.
For purposes of this Section 11.7, "all commercially
reasonable efforts" on the part of the Purchaser includes:
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(i) the offering of a substitution of a like guarantee of
the Purchaser for any Allied Guarantee which is a
guarantee of either Vendor and/or Allied Parent
and/or Xxxxxxx Inc. and/or their respective
Subsidiaries; and
(ii) the offering to the beneficiary or beneficiaries of
any letter of credit which is an Allied Guarantee a
substitute letter of credit having an expiry date no
earlier than the expiry date of such Allied Guarantee
and issued by a bank having credit ratings by each of
Standard & Poors Rating Group and Xxxxx'x Investor
Service, Inc. which are at least as high as the
credit ratings given by such credit rating
organizations for the Allied Issuer Bank which is the
issuer of such Allied Guarantee.
If at the end of six months following the Closing Date any
Allied Guarantee remains outstanding, then no later than the fifth Business Day
following the expiration of such six-month period, the Purchaser shall cause to
be delivered to the Vendors a letter of credit which shall:
(i) name Allied NA as the beneficiary thereof;
(ii) be in an amount at least equal to the aggregate
outstanding and undrawn balances of all such
outstanding Allied Guarantees;
(iii) be issued by a bank having credit ratings by each of
Standard & Poors Rating Group and Xxxxx'x Investor
Service, Inc. which are at least as high as the
credit ratings given by such credit rating
organizations for the Allied Issuer Banks;
(iv) have an expiry date no earlier than the expiry date
of the last to expire of the Allied Guarantees;
provided, however, that if the letter of credit to be
obtained by the Purchaser for the benefit of Allied
NA pursuant hereto is to be issued with respect to
more than one Allied Guarantee, the amount of such
letter of credit will reduce automatically and
without any action by any party upon the expiring
date of each Allied Guarantee by the amount thereof
or upon the acceptance by the beneficiary of such
Allied Guarantee of a substitute letter of credit
provided by the Purchaser; and
(v) be payable at sight to Allied NA upon presentation of
a written, sworn affidavit of an officer of Allied NA
stating that the Allied Reclamation Credit issued by
such Allied Issuer Bank has been drawn upon by the
beneficiary thereof in an amount not less than the
draw being made by Allied NA on such letter of
credit.
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11.8 Allied Parent Guarantee. Allied Parent shall take all such actions as may
be necessary to cause the Vendors to perform all of their obligations under this
Agreement and the Ancillary Agreements to which they are party, including the
payment of all amounts payable by them under this Agreement and the Ancillary
Agreements to which they are party and shall cause the Vendors to comply with
the terms hereof relating to all such payments, and if the Vendors shall at any
time fail to make any such payments as and when required hereby, Allied Parent
shall itself make such payments forthwith upon demand therefor by the Purchaser.
The foregoing covenant of Allied Parent is absolute, unconditional, present and
continuing and is in no way conditional or contingent upon any event or
circumstance, action or omission that might in any way discharge a guarantor or
surety.
11.9 USA Waste Guarantee. USA Waste shall take all such actions as may be
necessary to cause the Purchaser to perform all of its obligations under this
Agreement and the Ancillary Agreements to which it is a party, including the
payment of all amounts payable by it under this Agreement and the Ancillary
Agreements to which it is a party and shall cause the Purchaser to comply with
the terms hereof relating to all such payments, and if the Purchaser shall at
any time fail to make any such payments as and when required hereby, USA Waste
shall itself make such payments forthwith upon demand therefor by the Vendors.
The foregoing covenant of USA Waste is absolute, unconditional, present and
continuing and is in no way conditional or contingent upon any event or
circumstance, action or omission that might in any way discharge a guarantor or
surety.
11.10 Respective Releases of Non-Competition Agreements. Allied Parent and USA
Waste shall each release, or cause their respective Affiliates to release, all
non-competition covenants currently in effect between them and/or their
respective Affiliates, except for those non-competition covenants delivered
under or contemplated by this Agreement.
ARTICLE XII
TAX MATTERS
12.1 Future Tax Returns.
(a) Allied Parent shall not waive, and shall not permit its
Subsidiaries to waive, any obligation of the Xxxxxxx Sellers
under Section 12.2(ii) of the SPA.
(b) The Purchaser shall timely prepare and file, or cause the
Acquired Subsidiaries to timely prepare and file, all Tax
Returns for Allied Group Income Taxes for taxable periods
ending subsequent to December 29, 1996, including any such
taxable periods which commenced on or prior to the Closing
Date.
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(c) The Acquired Subsidiaries shall pay or cause to be paid any
and all Taxes (and applicable penalties and interest, if any)
due as a result of the Tax Returns required to be filed
pursuant to the preceding clause (b), except that any and all
Taxes due as a result of any such Tax Returns for Pre-Closing
Tax Periods shall be paid or caused to be paid by the Vendors,
with such payments constituting a reduction of the Purchase
Price.
(d) The Purchaser shall provide to the Vendors a copy of the Tax
Returns in respect of Pre-Closing Tax Periods prepared
pursuant to Section 12.1(b), and the documentation related
thereto, 30 days prior to the prescribed deadline for filing
such Tax Returns, and no such Tax Return shall be filed
without the prior written consent of the Vendors.
(e) Tax Returns shall be prepared on a basis reasonably consistent
with prior Tax Returns of the Acquired Subsidiaries.
(f) With respect to all taxable periods, including any Pre-Closing
Tax Period, the Vendors, the Purchaser, and the Acquired
Subsidiaries will make all computations, allocations,
determinations and elections affecting the Vendors and the
Acquired Subsidiaries in accordance with the provisions of the
provisions of the Income Tax Act and state, provincial and
local income tax rules in a fair and reasonable manner.
12.2 Tax Covenants.
(a) Without the prior written consent of the Purchaser, neither
the Vendors (nor their designated agent) shall, in the
exercise of their rights under Section 12.4, to the extent it
may affect or relate to any of the Acquired Subsidiaries, make
or change any tax election, change any annual tax accounting
period, adopt or change any method of tax accounting, file any
amended Tax Return, enter into any closing agreement, settle
any Tax claim, assessment or proposed assessment, surrender
any right to claim a Tax refund, consent to any extension or
waiver of the limitation period applicable to any Tax claim or
assessment or take or omit to take any other action, in each
case with respect to the Tax Returns of any Acquired
Subsidiary, if any such action or omission would have the
effect of increasing any post-Closing Tax liability of any
Acquired Subsidiary, the Purchaser or any Affiliate of the
Purchaser.
(b) Without the prior written consent of the Vendors, neither the
Purchaser nor its Affiliates shall, to the extent it may
affect or relate to any of the Acquired Subsidiaries, make or
change any tax election, file any amended Tax Return, enter
into any agreement, settle any Tax claim, assessment or
proposed assessment, surrender any right to claim a Tax
refund, consent to any extension or waiver of
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the limitation period applicable to any Tax claim or
assessment or take or omit to take any other action, if any
such action or omission would affect a Pre-Closing Tax Period.
(c) The Purchaser and the Vendors agree that so long as any books,
records and files retained by the Vendors and their Affiliates
relating to the business of the Acquired Subsidiaries, or the
books, records and files delivered to the control of the
Purchaser pursuant to this Agreement to the extent they relate
to the operations of the Acquired Subsidiaries prior to the
Closing Date, remain in existence and available, each party
(at its own expense) shall have the right upon prior notice to
inspect and to make copies of the same at any time during
business hours for any proper purpose. The Purchaser and the
Vendors and their respective Affiliates shall use reasonable
efforts not to destroy or allow the destruction of any such
books, records and files without first providing 60 days'
written notice of intention to destroy to the other. and
allowing such other party to take possession of such records.
(d) The Purchaser will make its personnel or that of the Acquired
Subsidiaries available to answer requests related to Tax
Proceedings as defined in Section 12.4(b). The Purchaser will
either provide documents needed to respond to federal, state
and provincial information requests or queries for such
proceedings within 30 days or allow the Vendors to take
possession of records necessary to answer such requests.
12.3 Other Tax Matters, Post-Closing Cooperation.
(a) If the Purchaser or any Acquired Subsidiary receives any Tax
Refund (including interest and penalties refunded) for a
Pre-Closing Tax Period of an Acquired Subsidiary, other than
any such Tax Refund arising from the application of a loss or
Tax credit arising in a Post-Closing Tax Period, then the
Purchaser shall pay to the Vendors, as an increase in the
Purchase Price, the actual amount of such Tax Refund as and
when received, on an after-tax basis.
(b) If the Purchaser or any Acquired Subsidiary realizes any Tax
Benefit in a PostClosing Tax Period arising from the
application of a loss incurred or Tax credit earned by an
Acquired Subsidiary in a Pre-Closing Tax Period, then the
Purchaser shall pay to the Vendors, as an increase to the
Purchase Price, the actual amount of such Tax Benefit
realized, such payment to be made 183 days following the end
of the particular Post-Closing Tax Period during which such
Tax Benefit was realized, on an after-tax basis.
(c) All transfer, documentary, sales, use, stamp, registration,
goods and services, value added and other such Taxes and fees
(including any penalties and interest)
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incurred in connection with the sale of the Shares, or
otherwise in connection with the transactions effected
pursuant to this Agreement (collectively, the "Transfer
Taxes") shall be borne and paid by the Vendors. To the extent
permissible under Tax law or regulations, the Vendors shall
undertake all actions and file such Tax Returns or other forms
or instruments as may be necessary to make payment of any
Transfer Taxes due prior to or on the Closing Date, and
present evidence of such payment at the Closing Date to the
Purchaser.
(d) Any payment to be made to any party under Article XII shall be
made within 15 days of demand (or receipt in the event of a
refund of any overpayment). Payment after that time shall bear
interest at the rate of interest prescribed for the applicable
periods by Revenue Canada.
(e) The Acquired Subsidiaries shall have made all appropriate
withholdings under Part XIII and Regulation 105 of the Income
Tax Act and remittances to Revenue Canada on or before payment
is required under the Income Tax Act in respect of any amounts
paid or credited by the Acquired Subsidiaries during the
period from December 30, 1996 to the Time of Closing to Allied
Parent and/or any one or more of its Subsidiaries that are
non-residents. The Vendors shall pay to the Purchaser on
Closing any such withholding tax, including applicable
interest and penalties that may be imposed under the Income
Tax Act and that have not been withheld by the Acquired
Subsidiary from such payments or otherwise remitted by the
recipient to Revenue Canada, and the Vendors shall remain
liable for such Tax after Closing to the extent such payment
is not made on Closing.
(f) USA Waste and the Purchaser agree not to, and not to permit
any Acquired Subsidiary to, make any election under the Income
Tax Act to have subsection 256(9) thereof apply in respect of
the transactions or events contemplated by this Agreement or
the SPA.
12.4 Tax Controversies.
(a) The Purchaser and the Vendors shall each use reasonable
efforts to keep the other advised as to the status of Tax
audits and litigation involving any direct, indirect or
contingent Taxes which could give rise to a liability of the
Vendors to the Purchaser under this Agreement for any
Pre-Closing Tax Period (a "Tax Liability Issue"). Such efforts
shall include attorney comfort letters provided to the
Purchaser's independent auditors and discussions with the
Vendors' attorneys representing the Acquired Subsidiaries as
requested by the Purchaser. The Vendors agree to timely notify
the Purchaser regarding any proposed written communication
(i.e., communications not relating to inquiries or requests
for information) by the Vendors to any such Taxing Authority
with respect to a Tax Liability Issue to the extent that the
issue would impact a Post-Closing Tax Period
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of the Purchaser or the Acquired Subsidiaries. The Purchaser
shall have the right to consult with the Vendors regarding any
response to such communications.
(b) The Vendors (or their designated agent) shall have full
responsibility for and discretion in handling any tax
controversy including, without limitation, an audit, an
objection to Revenue Canada or any provincial tax authority,
and litigation in the Tax Court of Canada or any other court
of competent jurisdiction for any Pre-Closing Tax Period (a
"Tax Proceeding"). The Purchaser or the Acquired Subsidiaries
shall give the Vendors (and their designated agent) the
ability to handle any tax controversy or Tax Proceeding
whether by power of attorney or as otherwise required by the
Taxing Authority. Unless the Vendors tender payment of any tax
owed (which shall be deemed to be a reduction of the Purchase
Price by the amount tendered), with penalty and interest, to
the Purchaser or the Tax Authority, final settlement of any
Tax Proceeding will require the written consent of the
Purchaser. However, upon request by the Purchaser and with the
written consent of the Vendors, the Purchaser at its own
expense shall have full responsibility and discretion in
handling any Tax Proceeding for any Pre-Closing Tax Period.
(c) In the event that any one of the Acquired Subsidiaries is
required or elects (with the prior written consent of the
Vendors) to pay any Tax, file any bond or deposit any amount
in connection with a Tax Proceeding (or, with the prior
written consent of the Vendors, elect to pay any Canadian Tax
in respect of a Pre-Closing Tax Period to which it may decide
to object or otherwise contest), either Vendor shall loan to
the Purchaser no later than two Business Days before such
payment is required to be made, without interest and until a
final determination with respect to such Tax has occurred, the
amount Xxxxxxx Inc. loans to Allied pursuant to Section
12.5(iii) of the SPA in connection therewith, as and when
received by Allied. Within two Business Days after the receipt
by the Purchaser or any Acquired Subsidiary of a refund of or
relating to any amount loaned to it by either Vendor
(including any interest received by the Purchaser), the
Purchaser shall pay (or shall cause such Acquired Subsidiary
to pay) such refunded amount to such Vendor, net of any Tax
cost incurred by the Purchaser or such Acquired Subsidiary as
a result of such refund.
(d) If the completion or settlement of any Tax Proceeding relating
to a Pre-Closing Tax Period, tax controversy or amended Tax
Return gives rise to a tax benefit for any Post-Closing Tax
Period to the Purchaser, the Acquired Subsidiaries or any
Affiliates, then the Purchaser shall pay to the Vendors (as an
increase in the Purchase Price) the actual amount of such tax
benefit realized by such persons as it relates to such
Pre-Closing Tax Period, as and when received and on an after
tax basis. No payment will be made under this paragraph for
less than $50,000 per period or for a period of more than ten
years. In this regard, Allied Parent agrees
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that neither it nor its applicable Subsidiaries shall waive
any rights they may have under Section 12.5(v) of the SPA.
(e) If the completion or settlement of any Tax Proceeding relating
to a Pre-Closing Tax Period, tax controversy or amended Tax
Return gives rise to a tax liability for any Post-Closing Tax
Period to the Purchaser, the Acquired Subsidiaries or any
Affiliates, then the Vendors shall pay (as a reduction of the
Purchase Price) to such persons the amount Xxxxxxx Inc. pays
to Allied or its Affiliates (excluding the Acquired
Subsidiaries) pursuant to Section 12.5(v) of the SPA, as and
when paid, and on a after-tax basis. In this regard, Allied
Parent agrees that neither it nor its applicable Subsidiaries
shall waive any rights they may have under Section 12.5(v) of
the SPA.
(f) By written notice to the Vendors, the Purchaser shall have the
right to instruct the Vendors to forego proceedings with
respect to one or more items for which the Vendors may be
liable to indemnify the Purchaser. Such notice shall
constitute a waiver of the right of the Purchaser to
indemnification for any Taxes arising out of such item for the
period or periods involved, but shall not otherwise waive any
rights of the Vendors to any refund of a deposit under Section
12.4(c).
12.5 Certain Pending Tax Controversies.
(a) C$27,421,816 is on deposit with Revenue Canada and the provincial
tax authorities with respect to the Canlea controversy. Such deposit shall be
treated as a loan made to Xxxxxxx Waste Systems Ltd. made pursuant to Section
12.4(c) and returned to the Vendors in accordance with that provision.
(b) The Purchaser and its Subsidiaries shall not cause the debt payable
by Xxxxxxx Waste Systems Ltd. to 635952 Ontario Inc. (a wholly-owned Subsidiary
of Xxxxxxx Waste Systems Ltd. and an Acquired Subsidiary) in the amount of
C$37,847,056, to be settled or extinguished by way of payment in whole or in
part, cancelled, settled by way of corporate reorganization, converted or
exchanged for some other property, or do any such thing (or fail to do any such
thing) which would cause the debt to be unenforceable in law, without the
written consent of the Vendors (which shall not be withheld or delayed if
Xxxxxxx Inc. has given a corresponding consent in writing pursuant to Section
12.6(ii) of the SPA).
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ARTICLE XIII
NATURE AND SURVIVAL
OF REPRESENTATIONS AND WARRANTIES
13.1 Nature of Statements. All, but only those, statements contained in this
Agreement or the Vendor Disclosure Schedule or any certificate delivered or by
on behalf of a Party under this Agreement shall be deemed representations and
warranties made by that Party in connection with the transactions contemplated
by this Agreement.
13.2 Survival of Representations and Warranties. Regardless of any investigation
made at any time by or on behalf of any Party or of any information any Party
may have as a result of any such investigation, all representations and
warranties made in or pursuant to this Agreement (including in the Vendor
Disclosure Schedule or certificate delivered under this Agreement) shall, except
as otherwise provided in this Section 13.2, survive the Closing (and shall not
merge on the Closing) and shall continue in effect indefinitely thereafter
unless and until terminated as provided in this Section 13.2. The
representations and warranties made by the Vendors in Article IV (other than in
Sections 4.2, 4.3, 4.4, 4.5, 4.11, 4.13 and 4.15 of Article IV) and the
representations and warranties made by the Purchaser in Article V (other than in
Sections 5.2, 5.3 and 5.4 of Article V) shall terminate on June 30, 1998. The
representations and warranties made by the Vendors in Sections 4.2, 4.3, 4.4,
4.5 and 4.11 and the representations and warranties made by the Purchaser in
Sections 5.2, 5.3 and 5.4 shall survive the Closing indefinitely. The
representations and warranties made by the Vendors in Section 4.13, and the
covenants, obligations and agreements set forth in Article XII shall terminate
on the date the statute of limitations and times for assessment (giving effect
to any waiver, mitigation or extension thereof) with respect to any Tax
liability in question have run in favour of all of the Acquired Subsidiaries,
or, as applicable, the Purchaser, against the Canadian federal, provincial or
local government, as the case may be. The representations and warranties of the
Vendors in Section 4.15 shall terminate on December 30, 1999. If a bona fide
claim is asserted before the expiration of the survival period of a
representation or warranty, covenant, obligation or agreement, such
representation, warranty, covenant, obligation or agreement shall continue in
effect until the claim is settled, adjudicated or otherwise resolved.
ARTICLE XIV
INDEMNIFICATION
The respective indemnification obligations of the Vendors and
the Purchaser are as follows:
14.1 Indemnification by the Vendors. The Vendors jointly and severally agree to
pay and to indemnify and hold harmless the Purchaser and each Acquired
Subsidiary and their respective Affiliates (but, in the case of the Acquired
Subsidiaries, only their respective Affiliates
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after the Closing), successors and assigns from and against any and all Damages
suffered by the Purchaser or the Acquired Subsidiaries which are caused by,
arising out of or in respect of:
(a) all Allied Group Income Taxes attributable to any Pre-Closing
Tax Period (including any transaction consummated in such
Pre-Closing Tax Period);
(b) any Tax attributable to a tax period ending on or before
December 29, 1996 resulting from or attributable to the
distribution of the Retained Subsidiaries and the Retained
Land (as such terms are defined in the SPA);
(c) any Tax attributable to a tax period ending on or before
December 29, 1996 on or attributable to the elimination,
reversal, release, satisfaction, distribution, or discharge of
Intercompany Indebtedness of the Acquired Subsidiaries
(including any intercompany items solely between the Acquired
Subsidiaries, as well as items between Xxxxxxx Inc. and the
other Affiliates of Xxxxxxx), and any other reorganization
steps or other actions taken by Xxxxxxx and its Affiliates in
placing the Acquired Subsidiaries in the condition required
for Closing (as defined in the SPA), (including, without
limitation, the actions set forth in Section 3.2 of the SPA);
(d) any obligation of the Purchaser or the Acquired Subsidiaries
to contribute to the payment of any Allied Group Income Taxes
determined on a consolidated, combined or unitary basis
allocable to any Pre-Closing Period with respect to a group of
corporations that includes or included the Acquired
Subsidiaries;
(e) any (x) Pre-Closing Allied Insurance Claims, and (y) liability
(including any Environmental Claim relating to any
Environmental Law) arising out of the activities, business,
assets or operations of the Allied Group, including their
predecessors, affiliates, successors and assigns;
(f) any claim by Allied Parent or any of its Subsidiaries (other
than any Acquired Subsidiary) against any Acquired Subsidiary
based on any event occurring or condition existing on or
before the Closing Date;
(g) any breach or default in the performance by either Vendor of
any covenant or agreement made by that Vendor in this
Agreement or in any Ancillary Agreement to which that Vendor
is a party;
(h) any breach of warranty or inaccurate or erroneous
representation made by either Vendor in Article IV of this
Agreement (other than the representations and warranties set
forth in Sections 4.2, 4.3, 4.4, 4.5, 4.11, 4.13 and 4.15 of
this Agreement) or in the Vendor Disclosure Schedule or in any
certificate delivered by or on behalf of the Vendors under or
concerning the representations and
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warranties made in Article IV of this Agreement (other than
the representations and warranties set forth in Sections 4.2,
4.3, 4.4, 4.5, 4.11, 4.13 and 4.15);
(i) any breach of warranty or inaccurate or erroneous
representation made by either Vendor in Sections 4.2, 4.3,
4.4, 4.5, 4.11 and 4.13 of this Agreement or in the Vendor
Disclosure Schedule related to such representations and
warranties or in any certificate delivered by or on behalf of
the Vendors under or concerning such representations and
warranties; and
(j) any breach of warranty or inaccurate or erroneous
representation made by either Vendor in Section 4.15 of this
Agreement or in the Vendor Disclosure Schedule related to such
representation and warranty or in any certificate delivered by
or on behalf of the Vendors under or concerning such
representation and warranty, but only to the extent any such
warranty or representation survives the Closing pursuant to
Section 13.2 of this Agreement,
provided, however, that the amount of any Damages in respect of which the
Vendors shall be required to indemnify the Purchaser under clauses (g) and (h)
above (but not under clauses (a) through (f), clause (g) (to the extent such
clause relates to performance by the Vendors of the covenants and agreements
contained in clause (ii) of the final paragraph of Section 6.1) inclusive, and
clauses (i) and (j) of this Section 14.1) shall be limited to the amount by
which the aggregate of all such Damages exceeds $10,000,000; and provided
further that no claim for Damages against either of the Vendors under clauses
(a) through (f), inclusive, and clauses (i) and (j) of this Section 14.1 shall
be reduced, modified or impaired by virtue of the fact that any representation
and warranty made by the Vendors in Sections 4.2, 4.3, 4.4, 4.5, 4.11, 4.13 and
4.15 shall have been breached or inaccurate or erroneous in any respect. The
amount of any Damages in respect of which the Vendors shall be required to
indemnify the Purchaser under clause (j) above will be limited to the amount by
which the aggregate of all such Damages exceeds $400,000. For purposes of this
Section 14.1, the representations and warranties shall be read as if references
therein to the materiality to the Vendors and the Acquired Subsidiaries or any
of them of any condition, fact, statement, event or act (including all
references to "Material Adverse Effects" and "in all material respects") were
deleted and the effect of any such references were deleted altogether. Thus, for
example: (i) any representation that a statement is true and correct in all
material respects shall be read as a representation that the statement is true
and correct; (ii) any representation that a condition exists except to the
extent that its failure to exist would not have a Material Adverse Effect on the
Vendors or the Acquired Subsidiaries, as the case may be, shall be read as a
representation that such condition exists; and (iii) any representation that no
incidents of a specific nature have occurred that would have a Material Adverse
Effect on the Vendors or the Acquired Subsidiaries, as the case may be, shall be
read as a representation that no incidents of such nature have occurred. For
purposes of this Section 14.1, the representations and warranties shall be read
as if references therein to the "knowledge of the Vendors" were deleted in their
entirety.
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14.2 Indemnification by Purchaser. The Purchaser agrees to pay and to indemnify
and hold harmless and defend the Vendors and their Affiliates (but not any
Acquired Subsidiary after the Closing), and their respective successors and
assigns from and against any and all Damages suffered by either Vendor which are
caused by or arising out of or in respect of:
(a) the Allied Guarantees which are listed and identified in
Section 4.19 of the Vendor Disclosure Schedule;
(b) any breach or default in the performance by the Purchaser of
any covenant or agreement of the Purchaser contained in this
Agreement or any Ancillary Agreement to which the Purchaser is
a party; and
(c) any breach of warranty or inaccurate or erroneous
representation made by the Purchaser in Article V of this
Agreement or in any certificate delivered by or on behalf of
the Purchaser under, or concerning the representations and
warranties in Article V of this Agreement;
provided, however, that the amount of any Damages in respect of which the
Purchaser shall be required to indemnify the Vendors under clause (b) of this
Section 14.2 (but not under clauses (a) and (c) of this Section 14.2) shall be
limited to the amount by which the aggregate of all such Damages exceeds
$10,000,000. For purposes of this Section 14.2, the representations and
warranties shall be read as if references therein to the materiality to the
Purchaser of any condition, fact, statement, event or act (including all
references to "Material Adverse Effects" and "in all material respects") were
deleted and the effect of any such references were deleted altogether. Thus, for
example: (i) any representation that a statement is true and correct in all
material respects shall be read as a representation that the statement is true
and correct; (ii) any representation that a condition exists except to the
extent that its failure to exist would not have a Material Adverse Effect on the
Purchaser shall be read as a representation that such condition exists; and
(iii) any representation that no incidents of a specific nature have occurred
that would have a Material Adverse Effect on the Purchaser shall be read as a
representation that no incidents of such nature have occurred. For purposes of
this Section 14.2, the covenants, representations and warranties shall be read
as if references therein to the "knowledge of the Purchaser" were deleted in
their entirety.
14.3 Exclusivity of Indemnification Rights. Notwithstanding any other provision
of this Agreement, the sole right or remedy of either Party to this Agreement
after the Closing with respect to a breach hereof (other than a breach of this
Article XIV) shall be to exercise its rights under Section 14.1 or 14.2.
14.4 Third Party Claims. If any Party (for purposes of this Section 14.4, an
"Indemnified Party") becomes aware of a fact, circumstance, claim, situation,
demand or other matter for which it or any other Indemnified Party has been
indemnified under this Article XIV and which has resulted or could result in a
liability owed by the Indemnified Party to a third party
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or a claim otherwise advanced by a third party against the Indemnified Party
(any such item being herein called a "Third Party Claim"), the Indemnified
Party, shall give prompt written notice of the Third Party Claim to the Party
obligated to provide indemnity with respect to such Third Party Claim (for
purposes of this Section 14.4, the "Indemnifying Party"), requesting
indemnification therefor, specifying the nature of and specific basis for the
Third Party Claim and the amount or estimated amount thereof to the extent then
feasible; provided, however, a failure to give such notice will not waive any
rights of the Indemnified Party except to the extent the rights of the
Indemnifying Party are actually materially prejudiced by such failure. The
Indemnifying Party shall have the right to assume the defence or investigation
of such Third Party Claim and to retain counsel and other experts to represent
the Indemnified Party and shall pay the fees and disbursements of such counsel
and other experts. If within 30 days after receipt of the request (or five days
if litigation is pending), the Indemnifying Party fails to give notice to the
Indemnified Party that the Indemnifying Party assumes the defence or
investigation of the Third Party Claim, an Indemnified Party may retain counsel
and other experts (whose fees and disbursements shall be at the expense of the
Indemnifying Party) to file any motion, answer or other pleading and take such
other action which the Indemnified Party reasonably deems necessary to protect
its interests or those of the Indemnifying Party until the date on which the
Indemnified Party receives such notice from the Indemnifying Party. If an
Indemnifying Party assumes the defence or investigation and retains such counsel
and other experts, any Indemnified Party shall have the right to retain its own
counsel and other experts, but the fees and expenses of such counsel and other
experts shall be at the expense of the Indemnified Party unless (a) the
Indemnifying Party and the Indemnified Party mutually agree to the retention of
such counsel and other experts or (b) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel would,
in the opinion of counsel retained by the Indemnifying Party, be inappropriate
due to actual or potential differ in interests between them.
If requested by the Indemnifying Party, the Indemnified Party
agrees to cooperate with the indemnifying Party and its counsel in contesting
any Third Party Claim which the Indemnifying Party defends, or, if appropriate
and related to the Third Party Claim in question, in making any counterclaim
against the person asserting the Third Party Claim, or any cross-complaint
against any person. No Third Party Claim may be settled by the Indemnified Party
without the consent of the Indemnifying Party, which consent will not be
unreasonably withheld. Unless the Indemnifying Party agrees in writing that the
Damages to the Indemnified Party resulting from such settlement are fully
covered by the indemnities provided herein and that such Damages are fully
compensable in money, no Third Party Claim may be settled without the consent of
the Indemnified Party, which consent will not be unreasonably withheld. Except
with respect to settlements entered without the Indemnified Party's consent
pursuant to the immediately preceding sentence, to the extent it is determined
that the Indemnified Party has no right under this Article XIV to be indemnified
by the Indemnifying Party, the Indemnified Party shall promptly pay to the
Indemnifying Party any amounts previously paid or advanced by the Indemnifying
Party with respect to such matters pursuant to this Article XIV.
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After the delivery of a notice of a Third Party Claim
hereunder, at the reasonable request of the Indemnifying Party the Indemnified
Party shall grant the Indemnifying Party and its representatives full and
complete access to the books, records and properties of the Indemnified Party to
the extent reasonably related to the matters to which the notice relates. The
Indemnifying Party will not disclose to any third person (except its
representatives) any information obtained pursuant to the preceding sentence
which is designated as confidential by the Indemnified Party and which is not
otherwise generally available to the public, except as may be required by
applicable law. The Indemnifying Party shall request its representatives not to
disclose any such information (except as may be required by applicable law). All
such access shall be subject to the normal safety regulations of the Indemnified
Party, and shall be granted under conditions which will not unreasonably
interfere with the business and operations of the Indemnified Party.
14.5 Claims Between the Parties. If any Party (for purposes of this Section
14.5, an "Indemnified Party") becomes aware of a fact, circumstance, claim,
situation, demand or other matter (other than an Third Party Claim) for which it
or any other Indemnified Party has been indemnified under this Article XIV and
which has resulted or could result in a liability (any such items being herein
called a "Claim") being owed to the Indemnified Party by another Party (the
"Indemnifying Party"), the Indemnified Party shall give prompt written notice to
the Indemnifying Party of the Claim, stating the nature and basis of the Claim
and the amount claimed thereunder, together with supporting information to the
Claim, if any. If the Indemnifying Party does not notify the Indemnified Party
within 30 days from the date such Claim notice is given that it disputes the
Claim, the amount of the Claim shall conclusively be deemed to be a liability of
the Indemnifying Party hereunder.
14.6 Arbitration. If an Indemnified Party and an Indemnifying Party cannot reach
agreement with respect to the validity or amount of any Third Party Claim or a
Claim within 60 days after notice thereof is first given, the validity and
amount thereof, as the case may be, shall be finally settled by arbitration in
Chicago, Illinois in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (or any organization successor thereto) then in
effect (to the extent such rules do not conflict with the terms hereof), by a
panel consisting of three arbitrators, each being qualified to make evaluations
of the kind under dispute. Each of the Parties (with the Vendors being
considered to be a single Party for such purpose) to such arbitration shall
appoint one arbitrator and the two arbitrators so appointed shall select the
third neutral arbitrator within 30 days after their appointment. If the
arbitrators appointed by the Parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be selected by the American Arbitration
Association. Each arbitrator shall be unaffiliated with each of the Parties
hereto. The Parties agree to be bound by whatever procedural and evidentiary
rules are established by the panel of arbitrators. The arbitrators shall render
their written decision and award, upon the concurrence of at least two of their
members, within 90 days of the appointment of the third arbitrator. The decision
of the arbitrators shall be binding on the Parties, final and non-appealable.
Any arbitration award may be enforced in any court having jurisdiction over the
Party against which enforcement is sought. The Party designated by the
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arbitrators as the unsuccessful Party shall pay the fees and expenses (including
attorneys' fees) incurred in connection with the arbitration by all Parties
thereto; provided that if the arbitrators do not designate either Party as the
unsuccessful Party, the Purchaser shall bear 50% and the Vendors shall bear 50%
of such fees and expenses.
The Parties agree to permit any arbitration under the SPA to
be conducted as part of or in conjunction with any arbitration under this
Agreement in order to facilitate the determination of liability and the payment
of indemnity claims under this Agreement and the SPA.
14.7 Payment. Payments of all amounts owing hereunder with respect to any Third
Party Claim shall be made within 30 days after (a) the settlement of the Third
Party Claim, or (b) if arbitration has been commenced pursuant to Section 14.6,
the final resolution of such arbitration. Payments of all amounts owing
hereunder with respect to any Claim shall be made within ten days after (i) the
expiration of the 60-day Claim notice period without delivery of a notice of
dispute, (ii) if arbitration has been commenced pursuant to Section 14.6, the
final resolution of such arbitration, or (iii) if arbitration has been commenced
pursuant to Section 14.6 and the subject matter of such arbitration is
arbitrated pursuant to Section 14.5 of the SPA, the later of (x) the date that
such arbitration is finally resolved and (y) the date that is the earlier of (A)
the date that is six months after the date that such arbitration is finally
resolved, and (B) the date that the analogous arbitration pursuant to Section
14.5 of the SPA is finally resolved.
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment. This Agreement may be amended only by a written instrument
executed by the Parties.
15.2 Waiver. At any time on or before the Closing Date, each of the Parties may
(a) extend the time for the performance of any of the obligations or other act
of the other Party, (b) waive any inaccuracies in the representations and
warranties made in this Agreement or in the Vendor Disclosure Schedule, (c)
waive compliance with any of the agreements or conditions of this Agreement
which may be legally waived, and (d) grant consents under this Agreement. Any
such extension, waiver or grant shall be valid only if evidenced by a written
instrument executed by the Party giving it.
15.3 Termination. This Agreement may be terminated at any time before the
Closing by:
(a) the mutual consent of the Boards of Directors of the Vendors
and the Purchaser; or
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(b) by either the Purchaser or the Vendors if the Acquisition has
not been consummated on or before March 31, 1997 or any later
date which may be agreed to by the mutual written consent of
the Purchaser and the Vendors; provided, however, that such
right to terminate this Agreement shall not be available to
any Party that has breached in any material respect its
obligations under this Agreement in any manner that has
proximately contributed to the failure of the Acquisition to
occur on or before such date.
15.4 Consequences of Termination. If this Agreement is terminated as provided in
Section 15.3, it shall forthwith become void and, except as otherwise provided
in this Section 15.4, there shall be no liability or obligation on the part of
any Party or their respective officers or directors. Notwithstanding the
foregoing, the Confidentiality Agreement shall also survive such a termination.
Nothing in this Section 15.4 shall, however, relieve any Party from any
liability for any breach of this Agreement.
ARTICLE XVI
INTERPRETATION AND MISCELLANEOUS
16.1 Non-Business Days. If the date on which any action (including the delivery
of notices) to be taken under this Agreement is to occur falls on a day which is
not a Business Day, such action will be deemed timely taken if taken on the
first Business Day following.
16.2 Notices. All notices or other communications which are required or may be
given under this Agreement shall be in writing and shall be deemed to have been
duly given when delivered in person or transmitted by telecopier (with receipt
confirmed) to a Party at the address or telecopy number, as applicable, set
forth below (as any such address or telecopier number may be changed from time
to time by notice similarly given):
(a) if to the Vendors or either of them or to Allied Parent, to
such party (c/o, if applicable) at:
Allied Waste Industries, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxx
1 First Canadian Place
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P.O. Box 63
Toronto, Ontario Canada
M5X lB1
Attention: Xxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(b) if to the Purchaser or USA Waste, to such party (c/o, if with
respect to the Purchaser) at:
USA Waste Services, Inc.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Blake, Xxxxxxx & Xxxxxxx
Xxx 00, Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
16.3 Entire Agreement. This Agreement, its Exhibits, the Vendor Disclosure
Schedule, the Resource Recycling Schedule, all documents delivered under this
Agreement and the Confidentiality Agreement constitute, and together with the
Ancillary Agreements upon their execution and delivery as herein provided will
constitute, the entire agreement, and supersede all of the prior agreements and
undertakings, both written and oral, between the Parties, with respect to the
subject matter of this Agreement.
16.4 Further Assurances. Each Party covenants and agrees that, from time to time
subsequent to the Closing Date, such Party will, at the request and expense of
the requesting Party, execute and deliver all such documents, including, without
limitation, all such additional conveyances, transfers, consents and other
assurances and do all such other acts and things as any other Party hereto,
acting reasonably, may from time to time request be executed or done in order to
better evidence or perfect or effectuate any provision of this Agreement or of
any Ancillary Agreement or any of the respective obligations intended to be
created hereby or thereby.
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16.5 Assignment: Binding Effect. This Agreement may not be assigned by any
Party, except that the Purchaser may assign the benefit of this Agreement to any
corporation that is a direct or indirect wholly-owned Subsidiary of USA Waste,
provided that no such assignment shall release the assignor from its obligations
hereunder. Subject to the preceding sentence, this Agreement shall be binding
upon the Parties and their respective successors and assigns.
16.6 Counterparts. This Agreement may be executed in counterparts which together
shall constitute a single agreement.
16.7 Governing Law: Jurisdiction. This Agreement and the rights and obligations
of the parties created hereby shall be governed by the internal Laws of the
Province of Ontario without regard to its conflict of law rules. The Parties
irrevocably consent and attorn to the non-exclusive jurisdiction of the courts
of the Province of Ontario and all courts competent to hear appeals therefrom in
connection with any dispute between or among them arising under this Agreement
or any Ancillary Agreement.
16.8 Severability of Provisions. If a provision of this Agreement or its
application to any Person or circumstance, is held invalid or unenforceable in
any jurisdiction, to the extent permitted by law, such provision or the
application of such provision to Persons or circumstances other than those as to
which it is held invalid or unenforceable and in other jurisdictions, and the
remaining provisions of this Agreement, shall not be affected.
16.9 Specific Performance. Each Party agrees that the other Party would be
irreparably damaged if any provision of this Agreement to be performed at or
prior to Closing were not performed at or prior to Closing in accordance with
its specific terms or was otherwise breached. Therefore, the Parties agree that
each Party shall be entitled to an injunction or injunctions to prevent breaches
of any such provision of this Agreement and to specifically enforce such
provisions of this Agreement in any action instituted in any court of the United
States or Canada or any state or province thereof having subject matter
jurisdiction, in addition to any other remedy to which a Party may be entitled,
at law or in equity.
16.10 Joint Drafting. This Agreement and its Exhibits have been jointly drafted
by the Parties and their counsel. Neither this Agreement nor any of its Exhibits
shall be construed against any Party based on its authorship.
16.11 Captions. The article and section headings in this Agreement are for
convenience only, and shall not affect the meaning or interpretation of this
Agreement.
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16.12 No Third-Party Beneficiaries. There are no third-party beneficiaries of
this Agreement, except that the respective Affiliates of the Parties are
entitled to the benefits of the respective indemnification obligations of the
Parties under Article XIV.
IN WITNESS WHEREOF this agreement as of the date first above
written has been executed by the parties hereto.
ALLIED WASTE INDUSTRIES, ALLIED WASTE HOLDINGS
INC. (CANADA) LTD.
by /s/ Xxxxxx X. Xxx Xxxxxxx by /s/ Xxxxx X. Xxxxxx
------------------------- -----------------------------
XXXXXXX WASTE SYSTEMS, INC.
by /s/ Xxxxxx X. Xxx Xxxxxxx
-------------------------
USA WASTE SERVICES, INC. CANADIAN WASTE SERVICES INC.
by /s/ Xxxx X. Xxxxx by /s/ Xxxx Xxxxxxxx
------------------------- -----------------------------
