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EXHIBIT 2.6
MERGER AGREEMENT
This Merger Agreement (this "Agreement") is entered into as of
February 4, 1997 by and among REPUBLIC INDUSTRIES, INC., a Delaware corporation
("Republic"); REPUBLIC WASTE COMPANIES HOLDING CO., a Delaware corporation and
wholly-owned subsidiary of Republic ("Republic Holding"); and RI/YWD MERGER
CORP. ("RI/YWD"), a Pennsylvania corporation and wholly-owned subsidiary of
Republic Holding (sometimes hereinafter referred to as the "Republic Merger
Sub," and together with Republic and Republic Holding, the "Republic
Companies"); YORK WASTE DISPOSAL, INC. (the "Company"), a Pennsylvania
corporation; and XXXXX X. XXXXXX, XXXXXX X. XXXXXXX, XXXXXXX X. XXXXXXX,
XXXXXXXX X. XXXXXXX, XXXXXXXXXXX X. XXXXXXX, XXXXXXX X. XXXXXXX and XXXXXX
XXXXXXX XXXXXXX, each a resident of the State of Pennsylvania; who together
constitute all of the shareholders of the Company (together, the
"Shareholders"). Certain other capitalized terms used herein are defined in
Article X and throughout this Agreement.
RECITALS
The Boards of Directors of Republic and the Company have determined
that it is in the best interests of their respective shareholders for Republic
to acquire through Republic Holding the Company upon the terms and subject to
the conditions set forth in this Agreement. In order to effectuate the
transaction, Republic has organized the Republic Merger Sub as a wholly-owned
subsidiary of Republic Holding, and the parties have agreed, subject to the
terms and conditions set forth in this Agreement, to merge the Republic Merger
Sub with and into the Company so that the Company continues as the surviving
corporation. As a result, the Company will become a wholly-owned subsidiary of
Republic Holding, and each of the Shareholders will be issued certain shares of
common stock of Republic.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement and in accordance with the Business Corporations Law of 1988 of the
Commonwealth of Pennsylvania (the "Corporations Code"), at the Effective Time
(as defined below) Republic Merger Sub shall be merged with and into the
Company (the "Merger") pursuant to the terms and conditions set forth in
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the Plan of Merger annexed hereto as Exhibit A (the "Plan of Merger"). The
terms and conditions of the Plan of Merger are incorporated herein by reference
as if fully set forth herein. As a result of the Merger, the separate
corporate existence of Republic Merger Sub shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation").
1.2 THE CLOSING. Subject to the terms and conditions of this
Agreement, the consummation of the Merger (the "Closing") shall take place as
promptly as practicable (and in any event within five (5) business days) after
satisfaction or waiver of the conditions set forth in Articles VI and VII, at
the offices of Republic's counsel, Akerman, Senterfitt & Xxxxxx, P.A., Miami,
Florida, or such other time and place as the parties may otherwise agree.
1.3 PLAN OF MERGER. Pursuant to the Plan of Merger, an aggregate
of 1,131,579 shares of common stock, $0.01 par value per share, of Republic
("Republic Common Stock") (the "Purchase Price") will be issued in the Merger
in exchange for all of the issued and outstanding shares of capital stock of
the Company. Notwithstanding the foregoing, the Purchase Price shall be
reduced by (i) all Indebtedness (as defined below) of the Company in excess of
$9,000,000.00, and (ii) the amount, if any, by which the Working Capital (as
defined below) of the Company is less than Zero Dollars ($0) (collectively
items (i) and (ii) are referred to herein as the "Purchase Price Adjustment,"
which amount shall be calculated as of the Effective Date). The amount of the
Purchase Price Adjustment shall be divided by $38.00, and the quotient so
calculated shall be deducted from the number of shares of Republic Common Stock
based on the Purchase Price to be issued hereunder as of the Effective Date.
For purposes of determining the Purchase Price Adjustment, (i) "Indebtedness"
shall include the aggregate amount of all liabilities and indebtedness for
borrowed money, whether owed to a bank or any other Person, and any interest
which has accrued but remains unpaid thereon, and remaining payments on
capitalized equipment leases and operating equipment leases; (ii) "Working
Capital" shall mean the difference, if any, between the Current Assets and the
Current Liabilities of the Company; (iii) "Current Assets" shall mean all
current assets determined in accordance with GAAP; and (iv) "Current
Liabilities" shall mean the sum of (a) current liabilities (excluding the
current portion of long-term indebtedness) determined in accordance with GAAP
and (b) any consulting, accounting, legal or other similar fees and expenses
paid or payable by the Company to any Person relating to the transactions
contemplated by this Agreement.
1.4 FILING OF ARTICLES OF MERGER. At the time of the Closing, the
parties shall cause the Merger to be consummated by filing duly executed
Articles of Merger (with the completed Plan of Merger annexed thereto) with the
Secretary of State of the Commonwealth of Pennsylvania, in such form as
Republic determines is required by and is in accordance with the relevant
provisions of the Corporations Code (the date and time of such filing is
referred to herein as the "Effective Date" or "Effective Time").
1.5 ISSUANCE OF REPUBLIC SHARES; DELIVERY OF CERTIFICATES. At the
Effective Time, each of the Shareholders shall deliver the certificates
representing all issued and outstanding shares of Company Common Stock to
Republic for cancellation; and Republic shall issue to each Shareholder
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the shares of Republic Common Stock issuable pursuant to Section 1.3 (the
shares of Republic Common Stock, including the Held Back Shares, issuable by
Republic in the Merger are sometimes referred to herein as the "Republic
Shares"), registered in the name of such Shareholder based on the number of
shares of Company Common Stock owned by such Shareholder on the Effective Date
as set forth on Schedule 3.5 and shall deliver such shares in the following
manner: (i) Republic shall set aside and hold in accordance with Article VIII
certificates evidencing an aggregate of 113,158 shares of Republic Common Stock
(the "Held Back Shares"); and (ii) Republic shall deliver to each such
Shareholder one or more certificates evidencing an aggregate of 1,018,421
shares of Republic Common Stock.
1.6 PURCHASE PRICE ADJUSTMENT. At least two days prior to the
Closing Date, the Company and Republic shall estimate by mutual agreement the
amount of the Purchase Price Adjustment, if any, as of the Effective Date for
purposes of determining the number of Republic Shares to be delivered by
Republic to the Shareholders at the Closing (which estimated amount is referred
to herein as the "Estimated Amount"). Within 30 days after the Closing Date,
Republic shall prepare and deliver to the Shareholders (in accordance with
Section 12.1) a determination (the "Determination") of the actual amount of the
Purchase Price Adjustment as of the Effective Date (which actual value is
referred to herein as the "Actual Amount"). If, within 30 days after the date
on which a Determination is delivered to the Shareholders, the Shareholders
shall not have given written notice to Republic setting forth in detail any
objection of the Shareholders to such Determination, then such Determination
shall be final and binding on the parties hereto. In the event the
Shareholders give written notice of any objection to such Determination within
the 30-day period, Republic and the Shareholders shall use all reasonable
efforts to resolve the dispute within the 30-day period following the delivery
of the written notice. If the parties are unable to reach an agreement within
such 30-day period, the matter shall be submitted to Xxxxxx Xxxxxxxx LLP for
determination of the Actual Amount which shall be final and binding upon
Republic and the Shareholders. Republic and the Shareholders shall contribute
equally to costs (including fees and expenses charged by Xxxxxx Xxxxxxxx LLP in
connection with the resolution of any such dispute). If the Actual Amount is
greater than the Estimated Amount, such amount shall be deemed to be
Indemnifiable Damages under Article VIII hereof and Republic may set off
against the Held Back Shares the difference between the Actual Amount and the
Estimated Amount (assuming a value per share for purposes of such calculation
equal to the Closing Sale Price); provided, that any and all such Indemnifiable
Damages shall not be applied against or subject to the Indemnification
Threshold (as such term is defined in Article VIII hereof).
1.7 ACCOUNTING AND TAX TREATMENT. The parties hereto acknowledge
and agree that the transactions contemplated hereby shall be treated as a
purchase transaction by Republic for accounting purposes and as a tax-free
reorganization under Section 368 of the Code.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE REPUBLIC COMPANIES
As a material inducement to each of the Shareholders to enter into
this Agreement and to consummate the transactions contemplated hereby, each of
the Republic Companies jointly and severally makes the following
representations and warranties to the Shareholders:
2.1 CORPORATE STATUS. Each of Republic and Republic Holding is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Republic Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. The Republic Merger Sub is a wholly-owned
subsidiary of Republic Holding.
2.2 CORPORATE POWER AND AUTHORITY. Each of the Republic Companies
has the corporate power and authority to execute and deliver this Agreement, to
perform its respective obligations hereunder and to consummate the transactions
contemplated hereby. Each of the Republic Companies has taken all action
necessary to authorize its execution and delivery of this Agreement, the
performance of its respective obligations hereunder and the consummation of the
transactions contemplated hereby.
2.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by each of the Republic Companies and constitutes a legal, valid and
binding obligation of each of the Republic Companies, enforceable against each
of the Republic Companies in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
2.4 REPUBLIC COMMON STOCK. Upon consummation of the Merger and
the issuance and delivery of certificates representing the Republic Shares to
the Shareholders, the Republic Shares will be (i) validly issued, fully paid
and non-assessable shares of Republic Common Stock, (ii) registered under the
Securities Act and applicable Blue Sky Laws under effective registration
statements and (iii) listed on the NASDAQ Stock Market.
2.5 NO COMMISSIONS. None of the Republic Companies has incurred
any obligation for any finder's or broker's or agent's fees or commissions or
similar compensation in connection with the transactions contemplated hereby.
2.6 CAPITALIZATION. The authorized capital stock of Republic
consists of 500,000,000 shares of Republic Common Stock and 5,000,000 shares of
preferred stock. As of January 24, 1997, (i) 299,412,227 shares of Republic
Common Stock were validly issued and outstanding, fully paid and nonassessable
and not issued in violation of any preemptive right of any stockholder of
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Republic, and (ii) no shares of preferred stock were issued and outstanding.
The Republic Shares to be issued in the Merger will be "voting stock" within
the meaning of the Code.
2.7 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution
and delivery of this Agreement by Republic, nor the consummation by Republic of
the transactions contemplated hereby, nor compliance by Republic with any of
the provisions hereof, will (a) conflict with or result in any breach of any
provision of its First Amended and Restated Certificate of Incorporation, (b)
violate, conflict with, 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 or acceleration of, or result in the creation of any lien, upon
any of the properties or assets of Republic or any of its subsidiaries (the
"Republic Subsidiaries") under any of the terms, conditions or provisions of
any contract or lien, to which Republic or any Republic Subsidiary is a party
or to which they or any of their respective properties or assets may be
subject, except for such violations, conflicts, breaches, defaults,
terminations, accelerations or creations of liens or other encumbrances, which,
individually or in the aggregate, will not have a Material Adverse Effect on
Republic, (c) violate any judgment, ruling, order, writ, injunction, decree,
statute, rule or regulation applicable to Republic or any Republic Subsidiary
or any of their respective properties or assets, except for such violations
which, individually or in the aggregate, will not have a Material Adverse
Effect on Republic, or (d) require any consent, approval, authorization or
permit of or from, or filing with or notification to, any Governmental
Authority except (i) pursuant to the Exchange Act and the Securities Act, (ii)
filings required under the securities or blue sky laws of the various states,
(iii) filings required under the HSR, (iv) consents, approvals, authorizations,
permits, filings or notifications which have either been obtained or made prior
to the Closing or which, if not obtained or made, will neither individually or
in the aggregate, have a Material Adverse Effect on Republic nor restrict
Republic's legal authority to execute and deliver this Agreement and consummate
the transactions contemplated hereby, or (v) any filings required to be made by
the Company or the Shareholders.
2.8 REPORTS AND FINANCIAL STATEMENTS. Within the last three
years, except where failure to have done so did and would not have a Material
Adverse Effect on Republic, Republic has filed all reports, registrations and
statements, together with any required amendments thereto, that it was required
to file with the SEC, including, but not limited to Forms 10-K, Forms 10-Q,
Forms 8-K and proxy statements (collectively, the "Republic Reports").
Republic has previously furnished to the Company and made available to the
Shareholders copies of all Republic Reports filed with the SEC since January 1,
1996, and with respect to Republic Reports filed after the date of this
Agreement until the Effective Date, will promptly furnish to the Company and
make available to the Shareholders, copies of each of the Republic Reports
filed with the SEC during such period. As of their respective dates (but
taking into account any amendments filed prior to the date of this Agreement),
the Republic Reports complied, or, with respect to Republic Reports filed after
the date of this Agreement, will comply, in all material respects with all the
rules and regulations promulgated by the SEC and did not contain, or, with
respect to Republic Reports filed after the date of this Agreement, will not
contain any untrue statement of a material fact or omit to state a material
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fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
Republic Reports filed by Republic with the SEC prior to the date of this
Agreement, since December 31, 1995 to the date of this Agreement, there has not
been any change in the financial condition, results of operations or business
of Republic and the Republic Subsidiaries that either individually or in the
aggregate would have a Material Adverse Effect on the financial condition of
Republic.
2.10 ACCOUNTING AND TAX MATTERS. Neither Republic nor, to the best
of its knowledge, any of its affiliates, has taken or agreed to take any action
that would prevent Republic from accounting from the business combinations to
be effected by the Merger as a "purchase." Republic warrants that it has no
present intention of disposing of any of the common stock of the Company to be
received by Republic in the Mergers. Republic does not have any present
intention to take any action to cause the Merger to lose its tax free status.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS
As a material inducement to each of the Republic Companies to enter
into this Agreement and to consummate the transactions contemplated hereby,
each of the Shareholders jointly and severally makes the following
representations and warranties to Republic:
3.1 CORPORATE STATUS. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and has the requisite power and authority to own or lease its
properties and to carry on its business as now being conducted. The Company is
legally qualified to transact business as a foreign corporation in all
jurisdictions where the nature of its properties and the conduct of its
business requires such qualification (all of which jurisdictions are listed on
Schedule 3.1) and is in good standing in each of the jurisdictions in which it
is so qualified. The Company has fully complied with all of the requirements
of any statute governing the use and registration of fictitious names, and has
the legal right to use the names under which it operates its business. There
is no pending or threatened proceeding for the dissolution, liquidation,
insolvency or rehabilitation of the Company.
3.2 POWER AND AUTHORITY. The Company has the power and authority
to execute and deliver this Agreement, to perform its respective obligations
hereunder and to consummate the transactions contemplated hereby. The Company
has taken all action necessary to authorize the execution and delivery of this
Agreement, the performance of its respective obligations hereunder and the
consummation of the transactions contemplated hereby. Each of the Shareholders
resides in the Commonwealth of Pennsylvania, and has the requisite power,
competence and authority to
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execute and deliver this Agreement, to perform each of their respective
obligations hereunder and to consummate the transactions contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Company and the Shareholders, and constitutes the legal, valid
and binding obligation of each of them, enforceable against them in accordance
with its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
3.4 CAPITALIZATION. Schedule 3.4 sets forth, with respect to the
Company, (a) the number of authorized shares of each class of its capital
stock, (b) the number of issued and outstanding shares of each class of its
capital stock, and (c) the number of shares of each class of its capital stock
which are held in treasury. All of the issued and outstanding shares of
capital stock of the Company (i) have been duly authorized and validly issued
and are fully paid and non-assessable, (ii) were issued in compliance with all
applicable state and federal securities laws, and (iii) were not issued in
violation of any preemptive rights or rights of first refusal. No preemptive
rights or rights of first refusal exist with respect to the shares of capital
stock of the Company and no such rights arise by virtue of or in connection
with the transactions contemplated hereby. There are no outstanding or
authorized rights, options, warrants, convertible securities, subscription
rights, conversion rights, exchange rights or other agreements or commitments
of any kind that could require the Company to issue or sell any shares of its
capital stock (or securities convertible into or exchangeable for shares of its
capital stock). Except as otherwise set forth on Schedule 3.17C, there are no
outstanding stock appreciation, phantom stock, profit participation or other
similar rights with respect to the Company. There are no proxies, voting
rights or other agreements or understandings with respect to the voting or
transfer of the capital stock of the Company. The Company is not obligated to
redeem or otherwise acquire any of its outstanding shares of capital stock.
3.5 SHAREHOLDERS OF THE COMPANY. Schedule 3.5 sets forth, with
respect to the Company, (a) the name, address and federal taxpayer
identification number of, and the number of outstanding shares of each class of
its capital stock owned by, each shareholder of record as of the close of
business on the date of this Agreement; and (b) the name, address and federal
taxpayer identification number of, and number of shares of each class of its
capital stock beneficially owned by, each beneficial owner of outstanding
shares of capital stock (to the extent that record and beneficial ownership of
any such shares are different). The Shareholders constitute all of the holders
of all issued and outstanding shares of capital stock of the Company, and each
of the Shareholders owns such shares as is set forth on Schedule 3.5, free and
clear of all Liens, restrictions and claims of any kind.
3.6 NO VIOLATION. The execution and delivery of this Agreement by
the Company and the Shareholders, the performance by them of their respective
obligations hereunder and the consummation by them of the transactions
contemplated by this Agreement will not (i) contravene any provision of the
articles of incorporation or bylaws of the Company, (ii) violate or conflict
with
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any law, statute, ordinance, rule, regulation, decree, writ, injunction,
judgment or order of any Governmental Authority or of any arbitration award
which is either applicable to, binding upon or enforceable against the Company
or any of the Shareholders, (iii) conflict with, result in any breach of, or
constitute a default (or an event which would, with the passage of time or the
giving of notice or both, constitute a default) under, or give rise to a right
to terminate, amend, modify, abandon or accelerate, any Contract which is
applicable to, binding upon or enforceable against the Company or any of the
Shareholders, (iv) result in or require the creation or imposition of any Lien
upon or with respect to any of the property or assets of the Company, or (v)
require the consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, any court or tribunal or any other
Person, except any applicable filings required under the HSR Act, and any SEC
and other filings required to be made by Republic.
3.7 RECORDS OF THE COMPANY. The copies of the respective articles
of incorporation and bylaws of the Company which were provided to Republic are
true, accurate and complete and reflect all amendments made through the date of
this Agreement. The minute books for the Company made available to Republic
for review were correct and complete in all material respects as of the date of
such review, no further entries have been made through the date of this
Agreement, such minute books contain the true signatures of the persons
purporting to have signed them, and such minute books contain an accurate
record of all material corporate actions of the shareholders and directors (and
any committees thereof) of the Company taken by written consent or at a meeting
since incorporation. All material corporate actions taken by the Company have
been duly authorized or ratified. All accounts, books, ledgers and official
and other records of the Company have been fully, properly and accurately kept
and completed in all material respects, and there are no material inaccuracies
or discrepancies of any kind contained therein. The stock ledgers of the
Company, as previously made available to Republic, contain accurate and
complete records of all issuances, transfers and cancellations of shares of the
capital stock of the Company.
3.8 SUBSIDIARIES. The Company does not own, directly or
indirectly, any outstanding voting securities of or other interests in, or
controls, any other corporation, partnership, joint venture or other business
entity.
3.9 FINANCIAL STATEMENTS. The Shareholders have delivered to
Republic the financial statements of the Company, including the notes thereto,
for the year ended December 31, 1996, audited by Xxxxxx & Company, copies of
which are attached to Schedule 3.9A hereto. The balance sheet of the Company
dated as of December 31, 1996, included in the Financial Statements are
referred to herein as the "Current Balance Sheet." The Financial Statements
fairly present the financial position of the Company at each of the balance
sheet dates and the results of operations for the periods covered thereby, and
have been prepared in accordance with GAAP consistently applied throughout the
periods indicated. The books and records of the Company fully and fairly
reflect all of its transactions, properties, assets and liabilities. Except as
disclosed on Schedule 3.9B, there are no material special or non-recurring
items of income or expense during the periods covered by the Financial
Statements and the balance sheets included in the Financial Statements do not
reflect any writeup or revaluation increasing the book value of any assets,
except as specifically disclosed in the
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notes thereto. The Financial Statements reflect all adjustments necessary for
a fair presentation of the financial information contained therein.
3.10 CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Since the date
of the Current Balance Sheet of the Company, the Company has not (i) issued any
capital stock or other securities; (ii) made any distribution of or with
respect to its capital stock or other securities or purchased or redeemed any
of its securities; (iii) paid any bonus to or increased the rate of
compensation of any of its officers or salaried employees or amended any other
terms of employment of such persons; (iv) sold, leased or transferred any of
its properties or assets other than in the ordinary course of business
consistent with past practice; (v) made or obligated itself to make capital
expenditures out of the ordinary course of business consistent with past
practice; (vi) made any payment in respect of its liabilities other than in the
ordinary course of business consistent with past practice; (vii) incurred any
obligations or liabilities (including any indebtedness) or entered into any
transaction or series of transactions involving in excess of $25,000 in the
aggregate out of the ordinary course of business, except for this Agreement and
the transactions contemplated hereby; (viii) suffered any theft, damage,
destruction or casualty loss, not covered by insurance and for which a timely
claim was filed, in excess of $25,000 in the aggregate; (ix) suffered any
extraordinary losses (whether or not covered by insurance); (x) waived,
canceled, compromised or released any rights having a value in excess of
$25,000 in the aggregate; (xi) made or adopted any change in its accounting
practice or policies; (xii) made any adjustment to its books and records other
than in respect of the conduct of its business activities in the ordinary
course consistent with past practice; (xiii) entered into any transaction with
any Affiliate other than intercompany transactions in the ordinary course of
business consistent with past practice; (xiv) entered into any written
employment agreement or any other employment agreements other than "at will"
employment agreements; (xv) terminated, amended or modified any agreement
involving an amount in excess of $25,000, except in the ordinary course of
business; (xvi) imposed any security interest or other Lien on any of its
assets other than in the ordinary course of business consistent with past
practice; (xvii) delayed paying any accounts payable which are due and payable
except to the extent being contested in good faith; (xviii) made or pledged any
charitable contribution other than in the ordinary course of business
consistent with past practice; (xix) entered into any other transaction or been
subject to any event which has or may have a Material Adverse Effect on the
Company; or (xx) agreed to do or authorized any of the foregoing.
3.11 LIABILITIES OF THE COMPANY. Except as set forth on Schedule
3.12, the Company does not have any liabilities or obligations, whether
accrued, absolute, contingent or otherwise, except (a) to the extent reflected
or taken into account in the Current Balance Sheet and not heretofore paid or
discharged, (b) to the extent specifically set forth in or incorporated by
express reference in any of the Schedules attached hereto, (c) liabilities
incurred in the ordinary course of business consistent with past practice since
the date of the Current Balance Sheet (none of which relates to breach of
contract, breach of warranty, tort, infringement or violation of law, or which
arose out of any action, suit, claim, governmental investigation or arbitration
proceeding), (d) normal accruals, reclassifications, and audit adjustments
which would be reflected on an audited financial statement and which would not
be material in the aggregate, and (e) liabilities incurred in the ordinary
course of business prior to the date of the Current Balance Sheet which, in
accordance with
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GAAP consistently applied, were not recorded thereon. The aggregate amount of
indebtedness for borrowed money, including principal and accrued but unpaid
interest, and including remaining payments on capitalized equipment leases and
operating equipment leases, of the Company, will not exceed $10.0 million, and
its net worth will be no less than $4.1 million, as of the Effective Time.
3.12 LITIGATION. Except as set forth in Schedule 3.12, there is no
action, suit, or other legal or administrative proceeding or governmental
investigation pending, threatened, anticipated or contemplated against, by or
affecting the Company, or any of its properties or assets, or which questions
the validity or enforceability of this Agreement or the transactions
contemplated hereby, and there is no basis for any of the foregoing. There are
no outstanding orders, decrees or stipulations issued by any Governmental
Authority in any proceeding to which the Company is or was a party which have
not been complied with in full or which continue to impose any material
obligations on the Company.
3.13 ENVIRONMENTAL MATTERS.
(a) The Company (as defined in clause (h) below)
is and has at all times been in full compliance with all Environmental Laws (as
defined in clause (h) below) governing its business, operations, properties and
assets, including, without limitation: (i) all requirements relating to the
Discharge (as defined in clause (h) below) and Handling (as defined in clause
(h) below) of Hazardous Substances (as defined in clause (h) below) or other
Waste (as defined in clause (h) below); (ii) all requirements relating to
notice, record keeping and reporting; (iii) all requirements relating to
obtaining and maintaining Licenses (as defined in clause (h) below) for the
ownership of its properties and assets and the operation of its business as
presently conducted, including Licenses relating to the Handling and Discharge
of Hazardous Substances and other Waste; and (iv) all applicable writs, orders,
judgements, injunctions, governmental communications, decrees, informational
requests or demands issued pursuant to, or arising under, any Environmental
Laws.
(b) Except with respect to matters disclosed in
Schedule 3.12, there are no (and there is no basis for any) non-compliance
orders, warning letters, notices of violation (collectively "Notices"), claims,
suits, actions, judgments, penalties, fines, or administrative or judicial
investigations or proceedings (collectively "Proceedings") pending or
threatened against or involving the Company, or its business, operations,
properties, or assets, issued by any Governmental Authority or third party with
respect to any Environmental Laws or Licenses issued to the Company thereunder
in connection with, related to or arising out of the ownership by the Company
of its properties or assets or the operation of its business, which have not
been resolved to the satisfaction of the issuing Governmental Authority or
third party in a manner that would not impose any obligation, burden or
continuing liability on Republic or the Surviving Corporation in the event that
the transactions contemplated by this Agreement are consummated, or which could
have a Material Adverse Effect on the Company, including, without limitation:
(i) Notices or Proceedings related to the Company being a potentially
responsible party for a federal or state environmental cleanup site or for
corrective action under any applicable Environmental Laws; (ii) Notices or
Proceedings in connection with any federal or state environmental cleanup site,
or in
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connection with any real property or premises where the Company has
transported, transferred or disposed of other Waste; (iii) Notices or
Proceedings relating to the Company being responsible to undertake any response
or remedial actions or clean-up actions of any kind; or (iv) Notices or
Proceedings related to the Company being liable under any Environmental Laws
for personal injury, property damage, natural resource damage, or clean up
obligations.
(c) Except as disclosed in Schedule 3.13B(1), the
Company has not Handled or Discharged, nor has it allowed or arranged for any
third party to Handle or Discharge, Hazardous Substances or other Waste to, at
or upon: (i) any location other than a site lawfully permitted to receive such
Hazardous Substances or other Waste; (ii) any real property currently or
previously owned or leased by the Company; or (iii) any site which, pursuant to
any Environmental Laws, (x) has been placed on the National Priorities List or
its state equivalent; or (y) the Environmental Protection Agency or the
relevant state agency or other Governmental Authority has notified the Company
that such Governmental Authority has proposed or is proposing to place on the
National Priorities List or its state equivalent. There has not occurred, nor
is there presently occurring, a Discharge, or threatened Discharge, of any
Hazardous Substance on, into or beneath the surface of, or adjacent to, any
real property currently or previously owned or leased by the Company in an
amount requiring a notice or report to be made to a Governmental Authority or
in violation of any applicable Environmental Laws.
(d) Schedule 3.13A identifies the operations and
activities, and locations thereof, which have been conducted or are being
conducted by the Company on any real property currently or previously owned or
leased by the Company which have involved the Handling or Discharge of
Hazardous Substances. None of the operations and activities listed on Schedule
3.13A have had nor will they have a Material Adverse Effect on the use and
occupancy of any such real property.
(e) Schedule 3.13B(2) identifies the locations to which
the Company has ever transferred, transported, hauled, moved, or disposed of
Waste and the types and volumes of Waste transferred, transported, hauled,
moved, or disposed of to each such location.
(f) Except as set forth on Schedule 3.13C, the Company
does not use, nor has it used, any Aboveground Storage Tanks (as defined in
clause (h) below) or Underground Storage Tanks (as defined in clause (h)
below), and there are not now nor have there ever been any Underground Storage
Tanks beneath any real property currently or previously owned or leased by the
Company that are required to be registered under applicable Environmental Laws.
There has been no Discharge from any Aboveground Storage Tanks or Underground
Storage Tanks set forth on Schedule 3.13C.
(g) Schedule 3.13D identifies (i) all environmental
audits, assessments or occupational health studies undertaken by the Company or
its agents or, to the knowledge of the Company, undertaken by any Governmental
Authority, or any third party, relating to or affecting the Company or any real
property currently or previously owned or leased by the Company; (ii) the
results of any ground, water, soil, air or asbestos monitoring undertaken by
the Company or its 12
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agents or, to the knowledge of the Company, undertaken by any Governmental
Authority or any third party, relating to or affecting the Company or any real
property currently or previously owned or leased by the Company which indicate
the presence of Hazardous Substances at levels requiring a notice or report to
be made to a Governmental Authority or in violation of any applicable
Environmental Laws; (iii) Schedule 3.13E identifies all material written
communications between the Company and any Governmental Authority arising under
or related to Environmental Laws; and (iv) Schedule 3.13F identifies all
outstanding citations issued under OSHA, or similar state or local statutes,
laws, ordinances, codes, rules, regulations, orders, rulings, or decrees,
relating to or affecting either the Company or any real property currently or
previously owned or leased by the Company.
(h) For purposes of this Section 3.13, the following
terms shall have the meanings ascribed to them below:
"Aboveground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Aboveground Storage
Tanks.
"Company" means the Company, Lancaster Waste Disposal, Inc.,
America's Recycling Center, Inc. and the businesses referred to in
Schedule 3.30B.
"Discharge" means any manner of spilling, leaking, dumping,
discharging, releasing or emitting, as any of such terms may further
be defined in any Environmental Law, into any medium including,
without limitation, ground water, surface water, soil or air.
"Environmental Laws" means all federal, state, regional or
local statutes, laws, rules, regulations, codes, orders, plans,
injunctions, decrees, rulings, and changes or ordinances or judicial
or administrative interpretations thereof, or similar laws of foreign
jurisdictions where the Company conducts business, whether currently
in existence or hereafter enacted or promulgated, any of which govern
(or purport to govern) or relate to pollution, protection of the
environment, public health and safety, air emissions, water
discharges, hazardous or toxic substances, solid or hazardous waste or
occupational health and safety, as any of these terms are or may be
defined in such statutes, laws, rules, regulations, codes, orders,
plans, injunctions, decrees, rulings and changes or ordinances, or
judicial or administrative interpretations thereof, including, without
limitation: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act of 1986, 42 U.S.C. Section 9601, et seq.
(collectively "CERCLA"); the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act of 1976 and subsequent
Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. Section 6901
et seq. (collectively "RCRA"); the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. Section 1801, et seq.; the Clean Water Act,
as amended, 33 U.S.C. Section 1311, et seq.; the Clean Air Act, as
amended (42 U.S.C. Section 7401-7642); the Toxic Substances
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Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act as amended, 7 U.S.C.
Section 136-136y ("FIFRA"); the Emergency Planning and Community
Right-to-Know Act of 1986 as amended, 42 U.S.C. Section 11001, et seq.
(Title III of XXXX) ("EPCRA"); and the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. Section 651, et seq. ("OSHA").
"Handle" means any manner of generating, accumulating,
storing, treating, disposing of, transporting, transferring, labeling,
handling, manufacturing or using, as any of such terms may further be
defined in any Environmental Law, of any Hazardous Substances or
Waste.
"Hazardous Substances" shall be construed to include any toxic
or hazardous material, or waste, and any other contaminant or
pollutant whether liquid, solid, semi-solid, sludge and/or gaseous,
including without limitation, chemicals, compounds, by-products,
pesticides, asbestos containing materials, petroleum or petroleum
products, and polychlorinated biphenyls, the presence of which
requires investigation or remediation under any Environmental Laws or
which are regulated, listed or controlled by, under or pursuant to any
Environmental Laws, including, without limitation, RCRA, CERCLA, the
Hazardous Materials Transportation Act, the Toxic Substances Control
Act, the Clean Air Act, the Clean Water Act, FIFRA, EPCRA and OSHA, or
any similar state statute, or regulations implementing such statutes,
laws, ordinances, codes, rules, regulations, orders, rulings, or
decrees, or which has been or shall be determined or interpreted at
any time by any Governmental Authority to be a hazardous or toxic
substance regulated under any other statute, law, regulation, order,
code, rule, order, or decree.
"Licenses" means all licenses, certificates, permits,
approvals and registrations.
"Underground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Underground Storage
Tanks.
"Waste" shall be construed broadly to include agricultural
wastes, biomedical wastes, biological wastes, bulky wastes,
construction and demolition debris, garbage, household wastes,
industrial solid wastes, liquid wastes, recyclable materials, sludge,
solid wastes, special wastes, used oils, white goods, and yard trash
as those terms are defined under any applicable Environmental Laws.
3.14 REAL ESTATE. The Company does not own any real property or
any interest therein. Schedule 3.14 sets forth a list of all leases, licenses
or similar agreements ("Leases") to which the Company is a party (copies of
which have previously been furnished to Republic), in each case, setting forth
(A) the lessor and lessee thereof and the date and term of each of the Leases,
(B) the legal description, including street address, of each property covered
thereby, and (C) a brief
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description (including size and function) of the principal improvements and
buildings thereon (the "Leased Premises"), all of which are within the property
set-back and building lines of the respective property. The Leases are in full
force and effect and have not been amended, and no party thereto is in default
or breach under any such Lease. No event has occurred which, with the passage
of time or the giving of notice or both, would cause a material breach of or
default under any of such Leases. There is no breach or anticipated breach by
any other party to such Leases. With respect to each such Leased Premises:
(i) The Company has valid leasehold interests in
the Leased Premises, free and clear of any Liens, covenants and
easements or title defects of any nature whatsoever;
(ii) The portions of the buildings located on the
Leased Premises that are used in the business of the Company are each
in good repair and condition, normal wear and tear excepted, and are
in the aggregate sufficient to satisfy the Company's current and
reasonably anticipated normal business activities as conducted
thereat;
(iii) Each of the Leased Premises (a) has direct
access to public roads or access to public roads by means of a
perpetual access easement, such access being sufficient to satisfy the
current and reasonably anticipated normal transportation requirements
of the Company's business as presently conducted at such parcel; and
(b) is served by all utilities in such quantity and quality as are
sufficient to satisfy the current normal business activities as
conducted at such parcel; and
(iv) The Company has not received notice of (a)
any condemnation proceeding with respect to any portion of the Leased
Premises or any access thereto, and no such proceeding is contemplated
by any Governmental Authority; or (b) any special assessment which may
affect any of the Leased Premises, and no such special assessment is
contemplated by any Governmental Authority.
3.15 GOOD TITLE TO AND CONDITION OF ASSETS.
(a) The Company has good and marketable title to all of
its Assets (as hereinafter defined) and except as set forth on Schedule 3.15A,
free and clear of any Liens or restrictions on use. For purposes of this
Agreement, the term "Assets" means all of the properties and assets of the
Company, other than the Leased Premises, whether personal or mixed, tangible or
intangible, wherever located.
(b) The Fixed Assets (as hereinafter defined) currently
in use or necessary for the business and operations of the Company are in good
operating condition, normal wear and tear excepted, and have been maintained
substantially in accordance with all applicable manufacturer's specifications
and warranties. For purposes of this Agreement, the term "Fixed Assets" means
all
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vehicles, machinery, equipment, tools, supplies, leasehold improvements,
furniture and fixtures used by or located on the premises of the Company or set
forth on the Current Balance Sheet or acquired by the Company since the date of
the Current Balance Sheet. Schedule 3.15B lists the vehicles owned, leased or
used by the Company, setting forth the make, model, description of body and
chassis, vehicle identification number, and year of manufacture, and for each
vehicle, whether it is owned or leased, and if owned, the name of any
lienholder and the amount of the lien, and if leased, the name of the lessor
and the general terms of the lease, and, whether owned or leased, if it is used
to transport, transfer, handle, dispose or haul Waste materials.
3.16 COMPLIANCE WITH LAWS.
(a) The Company is and has been in compliance with all
laws, regulations and orders applicable to it, its business and operations (as
conducted by it now and in the past), the Assets, the Leased Premises and any
other properties and assets (in each case owned or used by it now or in the
past). The Company has not been cited, fined or otherwise notified of any
asserted past or present failure to comply with any laws, regulations or orders
and no proceeding with respect to any such violation is pending or threatened.
(b) Neither the Company, nor any of its employees or
agents, has made any payment of funds in connection with the business of the
Company which is prohibited by law, and no funds have been set aside to be used
in connection with the business of the Company for any payment prohibited by
law.
(c) The Company is and at all times has been in full
compliance with the terms and provisions of the Immigration Reform and Control
Act of 1986, as amended (the "Immigration Act"). With respect to each Employee
(as defined in 8 C.F.R. 274a.1(f)) of the Company for whom compliance with the
Immigration Act is required, the Company has on file a true, accurate and
complete copy of (i) each Employee's Form I-9 (Employment Eligibility
Verification Form) and (ii) all other records, documents or other papers
prepared, procured and/or retained by the Company pursuant to the Immigration
Act. The Company has not been cited, fined, served with a Notice of Intent to
Fine or with a Cease and Desist Order, nor has any action or administrative
proceeding been initiated or threatened against the Company, by the Immigration
and Naturalization Service by reason of any actual or alleged failure to comply
with the Immigration Act.
(d) The Company is not subject to any Contract, decree or
injunction in which the Company is a party which restricts the continued
operation of any business of the Company or the expansion thereof to other
geographical areas, customers and suppliers or lines of business.
3.17 LABOR AND EMPLOYMENT MATTERS. Schedule 3.17A sets forth the
name, address, social security number and current rate of compensation of the
employees of the Company. Except as set forth on Schedule 3.17B, the Company
is not a party to or bound by any collective bargaining agreement or any other
agreement with a labor union, and there has been no effort by any labor union
during the 24 months prior to the date hereof to organize any employees of the
Company into one
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or more collective bargaining units. There is no pending or threatened labor
dispute, strike or work stoppage which affects or which may affect the business
of the Company or which may interfere with its continued operations. Neither
the Company nor any agent, representative or employee thereof has within the
last 24 months committed any unfair labor practice as defined in the National
Labor Relations Act, as amended, and there is no pending or threatened charge
or complaint against the Company by or with the National Labor Relations Board
or any representative thereof. There has been no strike, walkout or work
stoppage involving any of the employees of the Company during the 24 months
prior to the date hereof. None of the Shareholders is aware that any executive
or key employee or group of employees has any plans to terminate his, her or
their employment with the Company as a result of the Merger or otherwise.
Schedule 3.17C contains detailed information about each contract, agreement or
plan of the following nature, whether formal or informal, and whether or not in
writing, to which the Company is a party or under which it has an obligation:
(i) employment agreements, (ii) employee handbooks, policy statements and
similar plans, (iii) noncompetition agreements and (iv) consulting agreements.
The Company has complied with applicable laws, rules and regulations relating
to employment, civil rights and equal employment opportunities, including but
not limited to, the Civil Rights Act of 1964, the Fair Labor Standards Act, and
the Americans with Disabilities Act, as amended.
3.18 EMPLOYEE BENEFIT PLANS.
(a) Employee Benefit Plans. Schedule 3.18 contains a
list setting forth each employee benefit plan or arrangement of the Company,
including but not limited to employee pension benefit plans, as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), multiemployer plans, as defined in Section 3(37) of ERISA, employee
welfare benefit plans, as defined in Section 3(1) of ERISA, deferred
compensation plans, stock option plans, bonus plans, stock purchase plans,
hospitalization, disability and other insurance plans, severance or termination
pay plans and policies, whether or not described in Section 3(3) of ERISA, in
which employees, their spouses or dependents, of the Company participate
("Employee Benefit Plans") (true and accurate copies of which, together with
the most recent annual reports on Form 5500 and summary plan descriptions with
respect thereto, were furnished to Republic).
(b) Compliance with Law. With respect to each Employee
Benefit Plan (i) each has been administered in all material respects in
compliance with its terms and with all applicable laws, including, but not
limited to, ERISA and the Code; (ii) no actions, suits, claims or disputes are
pending, or threatened; (iii) no audits, inquiries, reviews, proceedings,
claims, or demands are pending with any governmental or regulatory agency; (iv)
there are no facts which could give rise to any material liability in the event
of any such investigation, claim, action, suit, audit, review, or other
proceeding; (v) all material reports, returns, and similar documents required
to be filed with any governmental agency or distributed to any plan participant
have been duly or timely filed or distributed; and (vi) no "prohibited
transaction" has occurred within the meaning of the applicable provisions of
ERISA or the Code.
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(c) Qualified Plans. With respect to each Employee
Benefit Plan intended to qualify under Code Section 401(a) or 403(a) (i) the
Internal Revenue Service has issued a favorable determination letter, true and
correct copies of which have been furnished to Republic, that such plans are
qualified and exempt from federal income taxes; (ii) no such determination
letter has been revoked nor has revocation been threatened, nor has any
amendment or other action or omission occurred with respect to any such plan
since the date of its most recent determination letter or application therefor
in any respect which would adversely affect its qualification or materially
increase its costs; (iii) no such plan has been amended in a manner that would
require security to be provided in accordance with Section 401(a)(29) of the
Code; (iv) no reportable event (within the meaning of Section 4043 of ERISA)
has occurred, other than one for which the 30-day notice requirement has been
waived; (v) as of the Effective Date, the present value of all liabilities that
would be "benefit liabilities" under Section 4001(a)(16) of ERISA if benefits
described in Code Section 411(d)(6)(B) were included will not exceed the then
current fair market value of the assets of such plan (determined using the
actuarial assumptions used for the most recent actuarial valuation for such
plan); (vi) all contributions to, and payments from and with respect to such
plans, which may have been required to be made in accordance with such plans
and, when applicable, Section 302 of ERISA or Section 412 of the Code, have
been timely made; and (vii) all such contributions to the plans, and all
payments under the plans (except those to be made from a trust qualified under
Section 401(a) of the Code) and all payments with respect to the plans
(including, without limitation, PBGC (as defined below) and insurance premiums)
for any period ending before the Effective Date that are not yet, but will be,
required to be made are properly accrued and reflected on the Current Balance
Sheet.
(d) Multiemployer Plans. With respect to any
multiemployer plan, as described in Section 4001(a)(3) of ERISA ("MPPA Plan")
(i) all contributions required to be made with respect to employees of the
Company have been timely paid; (ii) the Company has not incurred or is not
expected to incur, directly or indirectly, any withdrawal liability under ERISA
with respect to any such plan (whether by reason of the transactions
contemplated by the Agreement or otherwise); (iii) Schedule 3.18 sets forth (A)
the withdrawal liability under ERISA to each MPPA Plan, (B) the date as of
which such amount was calculated, and (C) the method for determining the
withdrawal liability; and (iv) no such plan is (or is expected to be) insolvent
or in reorganization and no accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived,
exists or is expected to exist with respect to any such plan.
(e) Welfare Plans. (i) The Company is not obligated
under any employee welfare benefit plan as described in Section 3(1) of ERISA
("Welfare Plan") to provide medical or death benefits with respect to any
employee or former employee of the Company or its predecessors after
termination of employment; (ii) the Company has complied with the notice and
continuation coverage requirements of Section 4980B of the Code and the
regulations thereunder with respect to each Welfare Plan that is, or was during
any taxable year for which the statute of limitations on the assessment of
federal income taxes remains, open, by consent or otherwise, a group health
plan within the meaning of Section 5000(b)(1) of the Code; and (iii) there are
no reserves, assets, surplus or prepaid premiums under any Welfare Plan which
is an Employee Benefit Plan. The
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consummation of the transactions contemplated by this Agreement will not
entitle any individual to severance pay, and, will not accelerate the time of
payment or vesting, or increase the amount of compensation, due to any
individual.
(f) Controlled Group Liability. Neither the Company, nor
any entity that would be aggregated with it under Code Section 414(b), (c), (m)
or (o): (i) has ever terminated or withdrawn from any employee benefit plan
under circumstances resulting (or expected to result) in liability to the
Pension Benefit Guaranty Corporation ("PBGC"), the fund by which the employee
benefit plan is funded, or any employee or beneficiary for whose benefit the
plan is or was maintained (other than routine claims for benefits); (ii) has
any assets subject to (or expected to be subject to) a lien for unpaid
contributions to any employee benefit plan; (iii) has failed to pay premiums to
the PBGC when due; (iv) is subject to (or expected to be subject to) an excise
tax under Code Section 4971; (v) has engaged in any transaction which would
give rise to liability under Section 4069 or Section 4212(c) of ERISA; or (vi)
has violated Code Section 4980B or Section 601 through 608 of ERISA.
(g) Other Liabilities. (i) None of the Employee Benefit
Plans obligates the Company to pay separation, severance, termination or
similar benefits solely as a result of any transaction contemplated by this
Agreement or solely as a result of a "change of control" (as such term is
defined in Section 280G of the Code); (ii) all required or discretionary (in
accordance with historical practices) payments, premiums, contributions,
reimbursements, or accruals for all periods ending prior to or as of the
Effective Date shall have been made or properly accrued on the Current Balance
Sheet or will be properly accrued on the books and records of the Company as of
the Effective Date; and (iii) none of the Employee Benefit Plans has any
unfunded liabilities which are not reflected on the Current Balance Sheet or
the books and records of the Company.
3.19 TAX MATTERS. All Tax Returns required to be filed prior to
the date hereof with respect to the Company or any of its income, properties,
franchises or operations have been timely filed, each such Tax Return has been
prepared in compliance with all applicable laws and regulations, and all such
Tax Returns are true and accurate in all respects. All Taxes due and payable
by or with respect to the Company have been paid and are accrued on the Current
Balance Sheet or will be accrued on its books and records as of the Closing.
Except as set forth in Schedule 3.19 hereto: (i) with respect to each taxable
period of the Company, either such taxable period has been audited by the
relevant taxing authority or the time for assessing or collecting Taxes with
respect to each such taxable period has closed and such taxable period is not
subject to review by any relevant taxing authority; (ii) no deficiency or
proposed adjustment which has not been settled or otherwise resolved for any
amount of Taxes has been asserted or assessed by any taxing authority against
the Company; (iii) the Company has not consented to extend the time in which
any Taxes may be assessed or collected by any taxing authority; (iv) the
Company has not requested or been granted an extension of the time for filing
any Tax Return to a date later than the Effective Time; (v) there is no action,
suit, taxing authority proceeding, or audit or claim for refund now in
progress, pending or threatened against or with respect to the Company
regarding Taxes; (vi) the Company has not made an election or filed a consent
under Section 341(f) of the Code (or any corresponding provision
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of state, local or foreign law) on or prior to the Effective Time; (vii) there
are no Liens for Taxes (other than for current Taxes not yet due and payable)
upon the assets of the Company; (viii) the Company will not be required (A) as
a result of a change in method of accounting for a taxable period ending on or
prior to the Effective Date, to include any adjustment under Section 481(c) of
the Code (or any corresponding provision of state, local or foreign law) in
taxable income for any taxable period (or portion thereof) beginning after the
Effective Time or (B) as a result of any "closing agreement," as described in
Section 7121 of the Code (or any corresponding provision of state, local or
foreign law), to include any item of income or exclude any item of deduction
from any taxable period (or portion thereof) beginning after the Effective
Time; (ix) the Company has not been a member of an affiliated group (as defined
in Section 1504 of the Code) or filed or been included in a combined,
consolidated or unitary income Tax Return; (x) the Company is not a party to or
bound by any tax allocation or tax sharing agreement or has any current or
potential contractual obligation to indemnify any other Person with respect to
Taxes; (xi) no taxing authority will claim or assess any additional Taxes
against the Company for any period for which Tax Returns have been filed; (xii)
the Company has not made any payments, and will not become obligated (under any
contract entered into on or before the Effective Date) to make any payments,
that will be non-deductible under Section 280G of the Code (or any
corresponding provision of state, local or foreign law); (xiii) the Company has
not been a United States real property holding corporation within the meaning
of Section 897(c)(2) of the Code (or any corresponding provision of state,
local or foreign law) during the applicable period specified in Section
897(c)(1)(a)(ii) of the Code (or any corresponding provision of state, local or
foreign law); (xiv) no claim has ever been made by a taxing authority in a
jurisdiction where the Company does not file Tax Returns that such company is
or may be subject to Taxes assessed by such jurisdiction; and (xv) the Company
does not have any permanent establishment in any foreign country, as defined in
the relevant tax treaty between the United States of America and such foreign
country; (xvi) true, correct and complete copies of all income and sales Tax
Returns filed by or with respect to the Company for the past three years have
been furnished or made available to Republic; (xvii) the Company will not be
subject to any Taxes for the period ending at the Effective Time for any period
for which a Tax Return has not been filed imposed pursuant to Section 1374 or
Section 1375 of the Code (or any corresponding provision of state, local or
foreign law); (xviii) no sales or use tax, non-recurring intangibles tax,
documentary stamp tax or other excise tax (or comparable tax imposed by any
governmental entity) will be payable by Republic by virtue of the transactions
completed in this Agreement; and (xix) the Company has duly and validly filed
an election for "S" corporation status under the Code, and such "S" election
has not been revoked or terminated and neither the Company nor the Shareholders
have taken any action which would cause a termination of such "S" election.
3.20 INSURANCE. The Company is covered by valid, outstanding and
enforceable policies of insurance covering its respective properties, assets
and businesses against risks of the nature normally insured against by
corporations in the same or similar lines of business and in coverage amounts
typically and reasonably carried by such corporations (the "Insurance
Policies"). Such Insurance Policies are in full force and effect, and all
premiums due thereon have been paid. As of the Effective Time, each of the
Insurance Policies will be in full force and effect. None of the Insurance
Policies will lapse or terminate as a result of the transactions contemplated
by this
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Agreement. The Company has complied with the provisions of such Insurance
Policies. Schedule 3.20 contains (i) a complete and correct list of all
Insurance Policies and all amendments and riders thereto (copies of which have
been provided to Republic) and (ii) a detailed description of each pending
claim under any of the Insurance Policies for an amount in excess of $10,000
that relates to loss or damage to the properties, assets or businesses of the
Company. The Company has not failed to give, in a timely manner, any notice
required under any of the Insurance Policies to preserve its rights thereunder.
3.21 RECEIVABLES. All of the Receivables (as hereinafter defined)
are valid and legally binding, represent bona fide transactions and arose in
the ordinary course of business of the Company. All of the Receivables are
good and collectible receivables, and will be collected in full in accordance
with the terms of such receivables (and in any event within six months
following the Closing), without setoff or counterclaims, subject to the
allowance for doubtful accounts, if any, set forth on the Current Balance Sheet
as reasonably adjusted since the date of the Current Balance Sheet in the
ordinary course of business consistent with past practice. For purposes of
this Agreement, the term "Receivables" means all receivables of the Company,
including those set forth on the Current Balance Sheet and all trade account
receivables arising from the provision of services, sale of inventory, notes
receivable, and insurance proceeds receivable.
3.22 LICENSES AND PERMITS. The Company possesses all licenses and
required governmental or official approvals, permits or authorizations
(collectively, the "Permits") for its respective businesses and operations,
including with respect to the operation of each of the Leased Premises. All
such Permits are valid and in full force and effect, the Company is in full
compliance with the respective requirements thereof, and no proceeding is
pending or threatened to revoke or amend any of them. None of such Permits is
or will be impaired or in any way affected by the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
3.23 ADEQUACY OF THE ASSETS; RELATIONSHIPS WITH CUSTOMERS AND
SUPPLIERS; AFFILIATED TRANSACTIONS. The Assets and the Leased Premises
constitute, in the aggregate, all of the assets and properties necessary for
the conduct of the business of the Company in the manner in which and to the
extent to which such business is currently being conducted. No current
supplier to the Company of items essential to the conduct of its business will
or has threatened to terminate its business relationship with it for any
reason. The Company does not have any direct or indirect interest in any
customer, supplier or competitor of the Company, or in any person from whom or
to whom the Company leases real or personal property. Except as set forth in
Schedule 3.23, no officer, director or shareholder of the Company, nor any
person related by blood or marriage to any such person, nor any entity in which
any such person owns any beneficial interest, is a party to any Contract or
transaction with the Company or has any interest in any property used by the
Company.
3.24 INTELLECTUAL PROPERTY. The Company has full legal right,
title and interest in and to all trademarks, service marks, trade names,
copyrights, know-how, patents, trade secrets, licenses (including licenses for
the use of computer software programs), and other intellectual property used
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in the conduct of its business (the "Intellectual Property"). The conduct of
the business of the Company as presently conducted, and the unrestricted
conduct and the unrestricted use and exploitation of the Intellectual Property,
does not infringe or misappropriate any rights held or asserted by any Person,
and no Person is infringing on the Intellectual Property. No payments are
required for the continued use of the Intellectual Property. None of the
Intellectual Property has ever been declared invalid or unenforceable, or is
the subject of any pending or threatened action for opposition, cancellation,
declaration, infringement, or invalidity, unenforceability or misappropriation
or like claim, action or proceeding.
3.25 CONTRACTS. Schedule 3.25 sets forth a list of each Contract
to which the Company is a party or by which it or its properties and assets are
bound and which is material to its business, assets, properties or prospects
(the "Designated Contracts"), true and correct copies of which have been
provided to Republic. The copy of each Designated Contract furnished to
Republic is a true and complete copy of the document it purports to represent
and reflects all amendments thereto made through the date of this Agreement.
The Company has not violated any of the material terms or conditions of any
Designated Contract or any term or condition which would permit termination or
material modification of any Designated Contract, and all of the covenants to
be performed by any other party thereto have been fully performed and there are
no claims for breach or indemnification or notice of default or termination
under any Designated Contract. No event has occurred which constitutes, or
after notice or the passage of time, or both, would constitute, a material
default by the Company under any Designated Contract, and no such event has
occurred which constitutes or would constitute a material default by any other
party. The Company is not subject to any liability or payment resulting from
renegotiation of amounts paid it under any Designated Contract. As used in
this Section, Designated Contracts shall include, without limitation, (a) loan
agreements, indentures, mortgages, pledges, hypothecations, deeds of trust,
conditional sale or title retention agreements, security agreements, equipment
financing obligations or guaranties, or other sources of contingent liability
in respect of any indebtedness or obligations to any other Person, or letters
of intent or commitment letters with respect to same; (b) contracts obligating
the Company to provide products or services for a period of one year or more,
excluding standard waste collection and disposal contracts entered into in the
ordinary course of business without material modification from the preprinted
forms used by the Company in the ordinary course of its business; (c) leases of
real property, and leases of personal property not cancelable without penalty
on notice of sixty (60) days or less or calling for payment of an annual gross
rental exceeding Ten Thousand Dollars ($10,000.00); (d) distribution, sales
agency or franchise or similar agreements, or agreements providing for an
independent contractor's services, or letters of intent with respect to same;
(e) employment agreements, management service agreements, consulting
agreements, confidentiality agreements, non-competition agreements and any
other agreements relating to any employee, officer or director of the Company;
(f) licenses, assignments or transfers of trademarks, trade names, service
marks, patents, copyrights, trade secrets or know how, or other agreements
regarding proprietary rights or intellectual property; (g) any Contract
relating to pending capital expenditures by the Company; and (h) other material
Contracts or understandings, irrespective of subject matter and whether or not
in writing, not entered into in the ordinary course of business by the Company
and not otherwise disclosed on the Schedules.
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3.26 CUSTOMER LISTS AND RECURRING REVENUE. Schedule 3.26 is a
true, correct and complete list of all existing municipal, county or city or
other large customers (collectively, the "Material Customers") of the Company
who have entered into valid and enforceable long-term (i.e., more than one
year) waste collection and disposal, recycling or other franchises or
agreements with the Company. True, correct and complete copies of such
franchises and agreements, and any ordinances relating thereto, have been
furnished by the Shareholders to Republic. Other than the Material Customers
listed on Schedule 3.26, no customer of the Company as of the date of this
Agreement accounts for more than 1% of its annual revenue. Schedule 3.26 sets
forth each Material Customer's name, address, account number, term of franchise
or agreement, billing cycle, type of service and rates charged. The average
gross monthly revenue generated for the Company by all of its customers during
the six (6) calendar month period immediately following the Effective Date
(the "Test Period") will not be less than $3,200,000.00 per month.
3.27 ACCURACY OF INFORMATION FURNISHED BY THE SHAREHOLDERS. No
representation, statement or information made or furnished by the Shareholders
to Republic or any of Republic's representatives, including those contained in
this Agreement and the various Schedules attached hereto and the other
information and statements referred to herein and previously furnished by the
Company and the Shareholders, contains or shall contain any untrue statement of
a material fact or omits or shall omit any material fact necessary to make the
information contained therein not misleading. The Shareholders have provided
Republic with true, accurate and complete copies of all documents listed or
described in the various Schedules attached hereto.
3.28 SECURITIES LAW MATTERS. Each of the Shareholders is acquiring
the Republic Shares hereunder for his own account for investment and not with a
view to, or for the sale in connection with, any distribution of any of the
Republic Shares, except in compliance with applicable state and federal
securities laws. Each of the Shareholders has had the opportunity to discuss
the transactions contemplated hereby with Republic and has had the opportunity
to obtain such information pertaining to the Republic Companies as has been
requested, including but not limited to filings made by Republic with the SEC
under the Exchange Act. Each of the Shareholders acknowledge receiving a
prospectus of Republic in accordance with the requirements of the Securities
Act. Each of the Shareholders represent that they have such knowledge and
experience in business or financial matters that are capable of evaluating the
merits and risks of an investment in the Republic Shares.
3.29 BANK ACCOUNTS; BUSINESS LOCATIONS. Schedule 3.29 sets forth
all accounts of the Company with any bank, broker or other depository
institution, and the names of all persons authorized to withdraw funds from
each such account. As of the date hereof, the Company has no office or place
of business other than as identified on Schedule 3.14 and the Company's
principal place of business and chief executive offices are indicated on
Schedule 3.14, and, except for equipment leased to customers in the ordinary
course of business, all locations where the equipment, inventory, chattel paper
and books and records of the Company is located as of the date hereof are fully
identified on Schedule 3.14.
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3.30 NAMES; PRIOR ACQUISITIONS. All names under which the Company
does business as of the date hereof are specified on Schedule 3.30A. Except as
set forth on Schedule 3.30B, the Company has not changed its name or used any
assumed or fictitious name, or been the surviving entity in a merger, acquired
any business or changed its principal place of business or chief executive
office, within the past three years.
3.31 NO COMMISSIONS. Neither the Company nor the Shareholders has
incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The
Company covenants and agrees that, between the date of this Agreement and the
Effective Time, the business of the Company shall be conducted only in, and the
Company shall not take any action except in, the ordinary course of business,
consistent with past practice. The Company shall use its best efforts to
preserve intact its business organization, to keep available the services of
its current officers, employees and consultants, and to preserve its present
relationships with customers, suppliers and other persons with which it has
significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, the Company shall not, between the
date of this Agreement and the Effective Time, directly or indirectly, do or
propose or agree to do any of the following without the prior written consent
of Republic:
(a) amend or otherwise change its articles of
incorporation or bylaws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, encumber, or,
authorize the issuance, sale, pledge, disposition, grant or
encumbrance of (i) any shares of its capital stock of any class, or
any options, warrants, convertible securities or other rights of any
kind to acquire any shares of such capital stock, or any other
ownership interest, of it or (ii) any of its assets, tangible or
intangible, except in the ordinary course of business consistent with
past practice (except for distributions to the Shareholders of the
certain assets more particularly described in Schedule 4.1(b) attached
hereto);
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock (except for distributions to the
Shareholders in amounts reasonably necessary for the Shareholders to
pay taxes with respect to the taxable income of the Company, which
amounts are consistent with past practices of the Company);
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(d) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) acquire (including, without limitation, for cash
or shares of stock, by merger, consolidation, or acquisition of stock
or assets) any interest in any corporation, partnership or other
business organization or division thereof or any assets, or make any
investment either by purchase of stock or securities, contributions of
capital or property transfer, or, except in the ordinary course of
business, consistent with past practice, purchase any property or
assets of any other Person, (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse or
otherwise as an accommodation become responsible for, the obligations
of any Person, or make any loans or advances, or (iii) enter into any
Contract other than in the ordinary course of business, consistent
with past practice;
(f) subject to the provisions of any agreements
referenced on Schedule 3.17C, increase the compensation payable or to
become payable to its officers or employees, or, except as presently
bound to do, grant any severance or termination pay to, or enter into
any employment or severance agreement with, any of its directors,
officers or other employees, or establish, adopt, enter into or amend
or take any action to accelerate any rights or benefits which any
collective bargaining, bonus, profit sharing, trust, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
directors, officers or employees;
(g) take any action other than in the ordinary course of
business and in a manner consistent with past practice with respect to
accounting policies or procedures;
(h) pay, discharge or satisfy any existing claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction in the ordinary course of business and consistent with
past practice of due and payable liabilities reflected or reserved
against in its financial statements, as appropriate, or liabilities
incurred after the date hereof in the ordinary course of business and
consistent with past practice; provided, however, that the
Shareholders may, at their option, provide the Company with additional
capital to be applied by the Company to increase Working Capital;
(i) other than in the ordinary course of its business,
increase or decrease prices charged to its customers, except for
previously announced price changes, or take any other action which
might reasonably result in any material increase in the loss of
customers through non-renewal or termination of service contracts or
other causes; or
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(j) agree, in writing or otherwise, to take or authorize
any of the foregoing actions or any action which would make any
representation or warranty in Article III untrue or incorrect.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.
5.2 COMPLIANCE WITH COVENANTS. The Shareholders shall cause the
Company to comply with all of the respective covenants of the Company under
this Agreement.
5.3 COOPERATION. Each of the parties agrees to cooperate with the
other in the preparation and filing of all forms, notifications, reports and
information, if any, required or reasonably deemed advisable pursuant to any
law, rule or regulation or the rules of any exchange on which the Republic
Common Stock is listed or The NASDAQ Stock Market in connection with the
transactions contemplated by this Agreement and to use their respective best
efforts to agree jointly on a method to overcome any objections by any
Governmental Authority to any such transactions.
5.4 HSR ACT AND OTHER ACTIONS. Each of the parties hereto shall
(i) make promptly (and in no event later than five (5) business days following
the date hereof) its respective filings, if any, and thereafter make any other
required submissions, under the HSR Act, with respect to the transactions
contemplated hereby, and (ii) use its reasonable best efforts to take, or cause
to be taken, all appropriate actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated herein, including,
without limitation, using its best efforts to obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of any
Governmental Authority and parties to Contracts with the Company as are
necessary for the consummation of the transactions contemplated hereby. Each
of parties shall make on a prompt and timely basis all governmental or
regulatory notifications and filings required to be made by it for the
consummation of the transactions contemplated hereby. The parties also agree
to use best efforts to defend all lawsuits or other legal proceedings
challenging this Agreement or the consummation of the transactions contemplated
hereby and to lift or rescind any injunction or restraining order or other
order adversely affecting the ability of the parties to consummate the
transactions contemplated hereby.
5.5 ACCESS TO INFORMATION. From the date hereof to the Effective
Time, the Company shall (and shall cause its directors, officers, employees,
auditors, counsel and agents) to afford Republic and Republic's officers,
employees, auditors, counsel and agents reasonable access at all
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reasonable times to its properties, offices, and other facilities, to its
officers and employees and to all books and records, and shall furnish such
persons with all financial, operating and other data and information as may be
requested. No information provided to or obtained by Republic shall affect any
representation or warranty in this Agreement.
5.6 NOTIFICATION OF CERTAIN MATTERS. The Shareholders shall give
prompt notice to Republic of the occurrence or non-occurrence of any event
which would likely cause any representation or warranty contained herein to be
untrue or inaccurate, or any covenant, condition, or agreement contained herein
not to be complied with or satisfied.
5.7 TAX TREATMENT. Republic, the Company and the Shareholders
will use their respective best efforts to cause the Merger to qualify as a
reorganization under the provisions of Section 368(a) of the Code and do not
presently intend to take any action after the Merger is effected to cause the
Merger to lose its tax-free status. All parties hereto agree to file the Plan
of Merger with its respective federal income tax returns for the year in which
the Merger is effective, and to comply with the reporting requirements of
Treasury Regulation 1.368-3.
5.8 CONFIDENTIALITY; PUBLICITY. Except as may be required by law
or as otherwise permitted or expressly contemplated herein, no party hereto or
their respective Affiliates, employees, agents and representatives shall
disclose to any third party this Agreement or the subject matter or terms
hereof without the prior consent of the other parties hereto. No press release
or other public announcement related to this Agreement or the transactions
contemplated hereby shall be issued by any party hereto without the prior
approval of the other parties, except that Republic may make such public
disclosure which it believes in good faith to be required by law or by the
terms of any listing agreement with or requirements of a securities exchange
(in which case Republic will consult with an officer of the Company prior to
making such disclosure).
5.9 NO OTHER DISCUSSIONS. The Company, the Shareholders, and
their respective Affiliates, employees, agents and representatives will not (i)
initiate, encourage the initiation by others of discussions or negotiations
with third parties or respond to solicitations by third persons relating to any
merger, sale or other disposition of any substantial part of the assets,
business or properties of the Company (whether by merger, consolidation, sale
of stock or otherwise) or (ii) enter into any agreement or commitment (whether
or not binding) with respect to any of the foregoing transactions. The
Shareholders will immediately notify Republic if any third party attempts to
initiate any solicitation, discussion or negotiation with respect to any of the
foregoing transactions.
5.10 RESTRICTIVE COVENANTS. In order to assure that Republic will
realize the benefits of the Merger, each of the Shareholders jointly and
severally agrees with Republic that he will not for a period of three years
from the Effective Time:
(a) directly or indirectly, alone or as a partner, joint
venturer, officer, director, employee, consultant, agent, independent
contractor or stockholder of any company or business, engage in any
business activity in the counties set forth in
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Schedule 5.10 attached hereto in the states of Pennsylvania or
Maryland in which the Company presently conducts business which is
directly or indirectly in competition with the business conducted by
the Company at the Effective Time; provided, however, that, (i) the
beneficial ownership of less than five percent (5%) of the shares of
stock of any corporation having a class of equity securities actively
traded on a national securities exchange or over-the-counter market
shall not be deemed, in and of itself, to violate the prohibitions of
this Section, (ii) Xxxxxxx Construction, Inc., an affiliate of certain
Shareholders, may, from time to time, engage in demolition activities
and remove and transport construction and demolition debris solely in
connection with its construction and demolition business as currently
conducted, and (iii) Advantage Recovery LLC, an affiliate of certain
of the Shareholders, may engage in the processing of recycled
materials at its present facility in Baltimore County, Maryland and
the transporting of recycled products from such facility, as currently
conducted by it;
(b) directly or indirectly (i) induce any Person which is
a customer of the Company at the Effective Time to patronize any
business directly or indirectly in competition with the business
conducted by the Company; (ii) canvass, solicit or accept from any
Person which is a customer of the Company, any such competitive
business; or (iii) request or advise any Person which is a customer of
the Company at the Effective Time to withdraw, curtail or cancel any
such customer's business with the Company or its successors;
(c) directly or indirectly employ, or knowingly permit
any company or business directly or indirectly controlled by him, to
employ, any person who was employed by the Company at or within six
months prior to the Effective Time, or in any manner seek to induce
any such person to leave his or her employment; and
(d) directly or indirectly, at any time following the
Effective Time, in any way utilize, disclose, copy, reproduce or
retain in his possession the Company's proprietary rights or records,
including, but not limited to, any of its customer lists.
The Shareholders agree and acknowledge that the restrictions contained in this
Section are reasonable in scope and duration and are necessary to protect
Republic after the Effective Time. If any provision of this Section as applied
to any party or to any circumstance is adjudged by a court to be invalid or
unenforceable, the same will in no way affect any other circumstance or the
validity or enforceability of this Agreement. If any such provision, or any
part thereof, is held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision, and/or to delete specific words or phrases, and in its reduced
form, such provision shall then be enforceable and shall be enforced. The
parties agree and acknowledge that the breach of this Section will cause
irreparable damage to Republic and upon breach of any provision of this
Section, Republic shall be entitled to injunctive relief, specific performance
or other equitable relief;
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provided, however, that, this shall in no way limit any other remedies which
Republic may have (including, without limitation, the right to seek monetary
damages).
5.11 DUE DILIGENCE REVIEW AND ENVIRONMENTAL ASSESSMENT. At its
sole expense, Republic shall be entitled to have conducted prior to Closing a
due diligence review of the assets, properties, books and records of the
Company and an environmental assessment of the Leased Premises (hereinafter
referred to as "Environmental Assessment"). The Environmental Assessment may
include, but not be limited to, a physical examination of the Leased Premises,
and any structures, facilities, or equipment located thereon, soil samples,
ground and surface water samples, storage tank testing, review of pertinent
records, documents, and Licenses of the Company. The Shareholders shall
provide Republic or its designated agents or consultants with the access to
such property which Republic, its agents or consultants require to conduct the
Environmental Assessment. If the Environmental Assessment identifies
environmental contamination which requires remediation or further evaluation
under the Environmental, Health and Safety Laws or if the results of the
Environmental Assessment are otherwise not satisfactory to Republic in its sole
discretion, then Republic may elect not to close the transactions contemplated
by this Agreement in which case this Agreement shall be terminated. Republic's
failure or decision not to conduct any such Environmental Assessment shall not
affect any representation or warranty of the Shareholders under this Agreement.
5.12 TRADING IN REPUBLIC COMMON STOCK. Except as otherwise
expressly consented to by Republic, from the date of this Agreement until the
Effective Time, neither the Company nor the Shareholders (nor any Affiliates
thereof) will directly or indirectly purchase or sell (including short sales)
any shares of Republic Common Stock in any transactions effected on The NASDAQ
Stock Market or otherwise.
5.13 LEASES. At or prior to the Effective Time, (i) the Company
and the Shareholders shall enter into lease amendments with respect to the
headquarters facility and the recycling facility of the Company located at 0000
Xxxx Xxxxxxxx Xxxxxx, Xxxx, Xxxxxxxxxxxx upon such commercially reasonable
terms reasonably acceptable to Republic, the Company and the Shareholders, and
(ii) the Company and Concord Road Associates shall enter into a lease with
respect to that certain C&D facility located at Concord Road, York,
Pennsylvania, for an initial two-year term commencing the Effective Date and
containing successive renewal options, at the option of the Company and at the
annual rent specified in the current lease, as follows: (A) a two-year
renewal term immediately following the initial two-year term and (B) two
successive five- year renewal terms, and containing such other commercially
reasonable terms reasonably acceptable to Republic and Concord Road Associates.
5.14 NASDAQ LISTING. During the three (3) years following the
Effective Date, Republic shall use reasonable efforts to maintain its listing
on the NASDAQ Stock Market or other nationally-recognized securities exchanges.
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ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE REPUBLIC COMPANIES
The obligations of the Republic Companies to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of the
following conditions, any or all of which may be waived in whole or in part by
the Republic Companies:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the Shareholders contained
in this Agreement shall be true and correct at and as of the Effective Time
with the same force and effect as though made at and as of that time except (i)
for changes specifically permitted by or disclosed pursuant to this Agreement,
and (ii) that those representations and warranties which address matters only
as of a particular date shall remain true and correct as of such date. The
Company and the Shareholders shall have performed and complied with all of
their respective obligations required by this Agreement to be performed or
complied with at or prior to the Effective Time. The Company and the
Shareholders shall have delivered to the Republic Companies a certificate,
dated as of the Effective Date, duly signed (in the case of the Company, by its
President), certifying that such representations and warranties are true and
correct and that all such obligations have been complied with and performed.
6.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY.
Between the date hereof and the Effective Time, (i) there shall have been no
Material Adverse Change to the Company, (ii) there shall have been no adverse
federal, state or local legislative or regulatory change affecting in any
material respect the services, products or business of the Company, and (iii)
none of the properties and assets of the Company shall have been damaged by
fire, flood, casualty, act of God or the public enemy or other cause
(regardless of insurance coverage for such damage) which damages may have a
Material Adverse Effect thereon, and there shall have been delivered to the
Republic Companies a certificate to that effect, dated the Effective Date and
signed by or on behalf of the Company and the Shareholders.
6.3 CORPORATE CERTIFICATE. The Shareholders shall have delivered
to the Republic Companies (i) copies of the articles of incorporation and
bylaws of the Company as in effect immediately prior to the Effective Time,
(ii) copies of resolutions adopted by the Board of Directors and Shareholders
of the Company authorizing the transactions contemplated by this Agreement, and
(iii) a certificate of good standing of the Company issued by the Secretary of
State of the Commonwealth of Pennsylvania and each other state in which the
Company is qualified to do business as of a date not more than thirty days
prior to the Effective Date, certified in the case of subsections (i) and (ii)
of this Section as of the Effective Date by the Secretary of the Company as
being true, correct and complete.
6.4 OPINION OF COUNSEL. The Republic Companies shall have
received an opinion dated as of the Effective Date from counsel for the Company
and the Shareholders, in form and substance acceptable to the Republic
Companies, to the effect that:
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(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and is authorized to carry on the
business now conducted by it and to own or lease the properties now
owned or leased by it;
(ii) The Company has obtained all necessary
authorizations and consents of its Board of Directors and the
Shareholders to effect the Merger;
(iii) All issued and outstanding shares of capital
stock of the Company are owned as set forth on Schedule 3.5 hereto;
(iv) Such counsel does not know or have reason to
believe that there is any litigation, proceeding or investigation
pending or threatened which might result in any Material Adverse
Change in the properties, business or prospects or in the condition of
the Company which questions the validity of this Agreement; and
(v) This Agreement is a valid and binding
obligation of the Company, and the Shareholders, and enforceable
against the Company and the Shareholders in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally or general equitable principles.
6.5 CONSENTS. The Company shall have received consents to the
transactions contemplated hereby and waivers of rights to terminate or modify
any material rights or obligations of the Company from any Person from whom
such consent or waiver is required under any Contract or instrument as of a
date not more than ten days prior to the Effective Date, or who, as a result of
the transactions contemplated hereby, would have such rights to terminate or
modify such Contracts or instruments, either by the terms thereof or as a
matter of law.
6.6 ACKNOWLEDGMENT OF PROSPECTUS DELIVERY AND RULE 145
RESTRICTIONS. At or prior to the Closing, the Shareholders shall have
delivered to Republic a letter acknowledging receipt of a prospectus in
accordance with the Securities Act and compliance with the restrictions of Rule
145 under the Securities Act, in form and substance satisfactory to the
Republic Companies.
6.7 COMPANY COMMON STOCK. At the Closing, each of the
Shareholders shall have delivered to Republic all certificates evidencing the
shares of capital stock of the Company held by them.
6.8 STOCK POWERS. At the Closing, each of the Shareholders shall
have delivered to Republic in escrow, for use in connection with the Held Back
Shares, ten stock powers executed in blank, with signatures guaranteed.
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6.9 NO ADVERSE LITIGATION. There shall not be pending or
threatened any action or proceeding by or before any court or other
governmental body which shall seek to restrain, prohibit, invalidate or collect
damages arising out of the Merger or any other transaction contemplated hereby,
and which, in the judgment of Republic, makes it inadvisable to proceed with
the Merger and other transactions contemplated hereby.
6.10 BOARD APPROVAL. The Board of Directors of Republic shall have
authorized and approved this Agreement, the Merger and transactions
contemplated hereby.
6.11 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period
shall have expired or been terminated.
6.12 DUE DILIGENCE REVIEW. Republic shall be satisfied with the
results of its due diligence review and Environmental Assessment pursuant to
Section 5.11.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
THE COMPANY AND THE SHAREHOLDERS
The obligations of the Company and the Shareholders to effect the
Merger shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions, any or all of which may be waived in whole or in part
by the Company and the Shareholders:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of each of the Republic
Companies contained in this Agreement shall be true and correct at and as of
the Effective Time with the same force and effect as though made at and as of
that time except (i) for changes specifically permitted by or disclosed
pursuant to this Agreement, and (ii) that those representations and warranties
which address matters only as of a particular date shall remain true and
correct as of such date. Each of the Republic Companies shall have performed
and complied with all of its obligations required by this Agreement to be
performed or complied with at or prior to the Effective Time. Each of the
Republic Companies shall have delivered to the Company and the Shareholders a
certificate, dated as of the Effective Date, and signed by an executive
officer, certifying that such representations and warranties are true and
correct and that all such obligations have been complied with and performed.
7.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY.
Between the date hereof and the Effective Time, (i) there shall have been no
Material Adverse Change of the Republic Companies, (ii) there shall have been
no adverse federal, state or local legislative or regulatory change affecting
in any material respect the services, products or business of the Republic
Companies, and (iii) none of the properties and assets of the Republic
Companies shall have been damaged by fire, flood, casualty, act of God or the
public enemy or other cause (regardless of
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insurance coverage for such damage) which damages may have a Material Adverse
Effect on Republic and the Republic Companies taken as a whole, and there shall
have been delivered to the Company and the Shareholders a certificate to that
effect, dated the Effective Date and signed on behalf of Republic.
7.3 REPUBLIC SHARES. At the Closing, Republic shall have issued
all of the Republic Shares and shall have delivered to the Shareholders (i)
certificates representing the Republic Shares issued to them hereunder, other
than the Held Back Shares, and (ii) copies of stock certificates representing
the Held Back Shares issued to them.
7.4 NO ADVERSE LITIGATION. There shall not be pending or
threatened any action or proceeding by or before any court or other
governmental body which shall seek to restrain, prohibit, invalidate or collect
damages arising out of the Merger or any other transaction contemplated hereby,
and which in the judgment of the Company and the Shareholders makes it
inadvisable to proceed with the Merger and other transactions contemplated
hereby.
7.5 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period
shall have expired or been terminated.
7.6 OPINION OF COUNSEL. The Company and the Shareholders shall
have received an opinion dated as of the Closing Date from counsel for
Republic, in form and substance acceptable to the Company and the Shareholders,
to the effect that:
(a) Republic is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware;
(b) Republic has obtained all necessary
authorizations and consents of its Board of Directors to effect the
transactions contemplated hereby and the consent of its shareholders is not
required;
(c) the Republic Shares, when issued in
connection with the transactions contemplated hereby, will be duly authorized,
validly issued, fully paid and nonassessable; and
(d) this Agreement is a valid and binding
obligation of Republic, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors' rights
generally or general equitable principles.
7.7 TAX OPINION. The Company and the Shareholders shall have
received an opinion of counsel reasonably acceptable to them confirming that
the Merger is a tax-free reorganization under Section 368(a) of the Code.
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7.8 STOCK REGISTRATION AND LISTING. The Republic Shares shall
remain subject to effective registration statements under the Securities Act
and applicable state blue sky laws and have been authorized for listing on the
NASDAQ Stock Market.
7.9 RELEASE OF PERSONAL LIABILITIES OF THE SHAREHOLDERS. Republic
shall use reasonable efforts to obtain from each appropriate third party
referred to in Schedule 7.9, a release of all liabilities of the Shareholders
for the obligations of the Company, contingent or otherwise, referred to
therein. To the extent that Republic is unable to obtain any such releases,
Republic agrees to indemnify and hold harmless Shareholders for any losses,
claims or damages incurred by them for any such unreleased liabilities.
ARTICLE VIII
INDEMNIFICATION
8.1 AGREEMENT BY THE SHAREHOLDERS TO INDEMNIFY. The Shareholders
jointly and severally agree to indemnify and hold Republic harmless from and
against the aggregate of all expenses, losses, costs, deficiencies, liabilities
and damages (including, without limitation, related counsel and paralegal fees
and expenses) incurred or suffered by Republic arising out of or resulting from
(i) any breach of a representation or warranty made by the Shareholders in or
pursuant to this Agreement, (ii) any breach of the covenants or agreements made
by the Company or any Shareholder in or pursuant to this Agreement, or (iii)
any inaccuracy in any certificate delivered by the Company or any Shareholder
pursuant to this Agreement (collectively, "Indemnifiable Damages"). Without
limiting the generality of the foregoing, with respect to the measurement of
Indemnifiable Damages, Republic shall have the right to be put in the same
pre-tax consolidated financial position as it would have been in had each of
the representations and warranties of the Shareholders hereunder been true and
correct and had the covenants and agreements of the Company and the
Shareholders hereunder been performed in full.
8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Shareholders and Republic in this
Agreement or pursuant hereto shall survive the Effective Time for a period of
one year after the Effective Time except for the representations and warranties
contained in Sections 3.13, 3.16, 3.18 and 3.19, which shall expire at the time
the last applicable period of limitations expires for enforcement by an
applicable governmental authority. No claim for the recovery of Indemnifiable
Damages may be asserted by Republic against the Shareholders after such
representations and warranties shall thus expire, provided, however, that
claims for Indemnifiable Damages first asserted within the applicable period
shall not thereafter be barred. Notwithstanding any knowledge of facts
determined or determinable by any party by investigation, each party shall have
the right to fully rely on the representations, warranties, covenants and
agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement
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of the parties contained in this Agreement is independent of each other
representation, warranty, covenant and agreement.
8.3 RECURRING REVENUE. In the event that Republic shall have
determined that the actual average gross combined monthly revenue generated by
the Company from its customers during the Test Period was less than the amount
represented and warranted in Section 3.26, then, notwithstanding any other
provision of this Agreement to the contrary, an amount equal to 16.25 times the
deficiency shall be deemed to be the amount of the loss, damage or expense
incurred as a result of such breach of the representation and warranty set
forth in Section 3.26 for purposes of this Section. Such determination shall
be made within seven (7) months following the Effective Date.
8.4 SECURITY FOR THE SHAREHOLDERS' INDEMNIFICATION OBLIGATION. As
security for the agreement by the Shareholders to indemnify and hold Republic
harmless as described in this Article at the Closing, Republic shall set aside
and hold certificates representing the Held Back Shares issued pursuant to this
Agreement. The Shareholders hereby grant Republic a first priority security
interest in the Held Back Shares. Republic may set off against the Held Back
Shares any Indemnifiable Damages for which the Shareholders may be responsible
pursuant to this Agreement, subject, however, to the following terms and
conditions:
(a) Republic shall give written notice to the
Shareholders of any claim for Indemnifiable Damages or any other
damages hereunder, which notice shall set forth (i) the amount of
Indemnifiable Damages or other loss, damage, cost or expense which
Republic claims to have sustained by reason thereof, and (ii) the
basis of such claim;
(b) Unless the Indemnifiable Damages arise from a claim
of a third party with respect to which (i) the Shareholders have
agreed in writing to assume the defense of and pay all resulting
costs, liabilities, judgments or settlements thereunder and (ii)
Republic has previously consented in writing to such arrangement,
which consent is in the sole discretion of Republic, then such set off
shall be effected on the later to occur on the expiration of 10 days
from the date of such notice (the "Notice of Contest Period") or, if
such claim is contested, the date the dispute is resolved, and such
set off shall be charged proportionally against the shares set aside;
(c) If, prior to the expiration of the Notice of Contest
Period, the Shareholders shall notify Republic in writing of an
intention to dispute the claim and if such dispute is not resolved
within 30 days after expiration of such period (the "Resolution
Period"), then Republic may elect that such dispute shall be resolved
by a committee of three arbitrators (one appointed by the
Shareholders, one appointed by Republic and one appointed by the two
arbitrators so appointed), which shall be appointed within 60 days
after the expiration of the Resolution Period. The arbitrators shall
abide by the rules of the American Arbitration Association and their
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decision shall be made within 45 days of being appointed and shall be
final and binding on all parties;
(d) For purposes of any set off described under this
Section, the Held Back Shares shall be valued at the Closing Sale
Price.
8.5 VOTING OF AND DIVIDENDS ON THE HELD BACK SHARES. Except with
respect to shares transferred pursuant to the foregoing right of setoff (and in
the case of such shares, until the same are transferred), all Held Back Shares
shall be deemed to be owned by the Shareholders and the Shareholders shall be
entitled to vote the same; provided, however, that, there shall also be
deposited with Republic subject to the terms of this Article, all shares of
Republic Common Stock issued to the Shareholders as a result of any stock
dividend or stock split and all cash issuable to the Shareholders as a result
of any cash dividend, with respect to the Held Back Shares. All stock and cash
issued or paid upon Held Back Shares shall be distributed to the person or
entity entitled to receive such Held Back Shares together with such Held Back
Shares.
8.6 DELIVERY OF HELD BACK SHARES. Republic agrees to deliver to
the Shareholders no later than ten (10) business days following the first
anniversary of the Effective Date any Held Back Shares then held by it unless
there then remains unresolved any claim for Indemnifiable Damages or other
damages hereunder as to which notice has been given, in which event only so
many of the Held Back Shares as determined by Republic in its sole discretion,
to be necessary to cover such claim, valued at the Closing Sale Price, shall be
retained and the remainder of the Held Back Shares shall be released to the
Shareholders free and clear of Republic's security interest thereon. Any Held
Back Shares remaining on deposit after such claim shall have been satisfied
shall be returned to the Shareholders promptly after the time of satisfaction.
Republic agrees to advise the Shareholders of the number of Held Back Shares it
determines to retain pursuant to this provision.
8.7 NO BAR. If the Held Back Shares are insufficient to set off
any claim for Indemnifiable Damages made hereunder (or have been delivered to
the Shareholders prior to the making or resolution of such claim), then
Republic may take any action or exercise any remedy available to it by
appropriate legal proceedings to collect the Indemnifiable Damages.
8.8 INDEMNIFICATION THRESHOLD. Excluding any Indemnifiable
Damages arising in connection with or relating to (i) Section 1.6, (ii) the
following disposal sites (NPL) referred to on Schedule 3.13B(1) : (A) Keystone
Sanitation Co., Inc., (B) Modern Landfill and (C) York County Solid Waste
Authority, (iii) the 0 Xxxxxxx Xxx location referred to on Schedule 3.13A, (iv)
Section 5.11; and (v) Section 8.3, the Shareholders shall not be liable to
Republic with respect to any claim for Indemnifiable Damages unless the
aggregate amount of all Indemnifiable Damages incurred by Republic exceeds an
aggregate of $520,000.00 (the "Indemnification Threshold"), in which case the
Shareholders shall be only liable for the amount of such Indemnifiable Damages
above the Indemnification Threshold.
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ARTICLE IX
SECURITIES LAW MATTERS
The Shareholders agree as follows with respect to the sale or other
disposition after the Effective Time of the Republic Shares:
9.1 DISPOSITION OF SHARES. The Shareholders represent and warrant
that the shares of Republic Common Stock being acquired by them hereunder are
being acquired and will be acquired for their own respective accounts and will
not be sold or otherwise disposed of, except (a) pursuant to an exemption from
the registration requirements under the Securities Act, (b) in accordance with
Rule 145(d) under the Securities Act, or (c) pursuant to an effective
registration statement filed by Republic with the SEC under the Securities Act.
To the extent the Shareholders comply with the provisions of Rule 145(d) under
the Securities Act in effecting sales of the Republic Shares, Republic agrees
to provide its transfer agent with appropriate instructions and/or opinions of
counsel in order for the shareholders to sell, transfer and/or dispose of the
Republic Shares in accordance with Rule 145(d).
9.2 LEGEND. The certificates representing the Republic Shares
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF BY THE HOLDER EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER THE ACT AND IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO, (B) IN
ACCORDANCE WITH RULE 145(D) UNDER THE ACT, OR (C) IN ACCORDANCE WITH
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Republic may, unless a registration statement is in effect covering such shares
or unless the Shareholders comply with Rule 145(d), place stop transfer orders
with its transfer agent with respect to such certificates in accordance with
federal securities laws.
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ARTICLE X
DEFINITIONS
10.1 DEFINED TERMS. As used herein, the following terms shall have
the following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as
in effect on the date hereof.
"Closing Sale Price" shall mean $38.00 per share of Republic
Common Stock issued pursuant to the terms hereunder.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement, covenant,
employment agreement, license, instrument, purchase and sales order,
commitment, undertaking, obligation, whether written or oral, express
or implied.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time.
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof, and any
entity or official exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not limited
to, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code or comparable
law or any jurisdiction in connection with such mortgage, pledge,
security interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a change (or
effect), in the condition (financial or otherwise), properties,
assets, liabilities, rights, obligations, operations, business or
prospects which change (or effect) individually or in the
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aggregate, is materially adverse to such condition, properties,
assets, liabilities, rights, obligations, operations, business or
prospects.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, estate, trust, unincorporated
association, joint venture, Governmental Authority or other entity, of
whatever nature.
"Register", "registered" and "registration" refer to a
registration of the offering and sale of securities effected by
preparing and filing a registration statement in compliance with the
Securities Act and the declaration or ordering of the effectiveness of
such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax Return" means any tax return, filing or information
statement required to be filed in connection with or with respect to
any Taxes; and
"Taxes" means all taxes, fees or other assessments, including,
but not limited to, income, excise, property, sales, franchise,
intangible, withholding, social security and unemployment taxes
imposed by any federal, state, local or foreign governmental agency,
and any interest or penalties related thereto.
10.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the
defined meanings when used in any certificates, reports or other documents made
or delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection
with this Agreement and the transactions contemplated hereby shall be
determined in accordance with GAAP applied on a basis consistent with prior
periods, where applicable.
(d) As used herein, the neuter gender shall also denote
the masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits.
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ARTICLE XI
TERMINATION
11.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time:
(a) by mutual written consent of all of the parties
hereto at any time prior to the Closing; or
(b) by Republic in the event of a material breach by the
Company or any of the Shareholders of any provision of this Agreement;
or
(c) by the Company in the event of a material breach by
Republic of any provision of this Agreement; or
(d) by either Republic or the Company if the Closing
shall not have occurred by April 15, 1997.
11.2 EFFECT OF TERMINATION. Except for the provisions of Article
VIII hereof, which shall survive any termination of this Agreement, in the
event of termination of this Agreement pursuant to Section 12.1, this Agreement
shall forthwith become void and of no further force and effect and the parties
shall be released from any and all obligations hereunder; provided, however,
that nothing herein shall relieve any party from liability for the willful
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
ARTICLE XII
GENERAL PROVISIONS
12.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage pre-paid), guaranteed
overnight delivery, or facsimile transmission if such transmission is confirmed
by delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall
designate in writing to the other party):
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(a) IF TO ANY OF THE REPUBLIC COMPANIES TO:
Republic Industries, Inc.
000 Xxxx Xxx Xxxx Xxxx., Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, General Counsel
Telecopy: (000) 000-0000
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, P.A.
Xxx Xxxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
(b) IF TO THE COMPANY AND/OR THE SHAREHOLDERS TO:
Xx. Xxxxxx X. Xxxxxxx
c/o Kinsley Construction, Inc.
0000 Xxxxx Xxxxxx
Xxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
AND
Xx. Xxxxx X. Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
WITH A COPY TO:
Barley, Snyder, Xxxxx & Xxxxx, LLP
000 Xxxx Xxxxxx Xxxxxx
Xxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
Notice shall be deemed given on the date sent if sent by overnight
delivery or facsimile transmission and on the date delivered (or the date of
refusal of delivery) if sent by certified or registered mail.
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12.2 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto) and other documents delivered at the Closing
pursuant hereto, contains the entire understanding of the parties in respect of
its subject matter and supersedes all prior agreements and understandings (oral
or written) between or among the parties with respect to such subject matter.
The Exhibits and Schedules constitute a part hereof as though set forth in full
above.
12.3 EXPENSES. Except as otherwise provided herein, the parties
shall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby. Republic and the Shareholders each hereby agree to pay one-half ( 1/2)
of the applicable filing fees with respect to any required HSR Act filings.
12.4 AMENDMENT; WAIVER. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by all parties. No failure to exercise, and no delay in exercising,
any right, power or privilege under this Agreement shall operate as a waiver,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude the exercise of any other right, power or privilege. No
waiver of any breach of any provision shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision, nor shall
any waiver be implied from any course of dealing between the parties. No
extension of time for performance of any obligations or other acts hereunder or
under any other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts. The rights and
remedies of the parties under this Agreement are in addition to all other
rights and remedies, at law or equity, that they may have against each other.
12.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of
this Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall
be construed to give any other person any legal or equitable rights hereunder.
Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned by the Company, or any Shareholders without the
prior written consent of Republic.
12.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
12.7 INTERPRETATION. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be deemed to be to this Agreement unless otherwise indicated. The
headings contained herein and on the schedules are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement
or the schedules. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." Time shall be of the essence in this Agreement.
12.8 GOVERNING LAW; INTERPRETATION. This Agreement shall be
construed in accordance with and governed for all purposes by the laws of the
State of Florida applicable to contracts executed and to be wholly performed
within such State.
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12.9 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly
represents and warrants to all other parties hereto that (a) before executing
this Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its own judgment in executing this Agreement; (c) said party
has had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own
free will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
REPUBLIC INDUSTRIES, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, President
REPUBLIC WASTE COMPANIES HOLDING
CO., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, President
RI/YWD MERGER CORP., a Pennsylvania
corporation
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, President
YORK WASTE DISPOSAL, INC., a
Pennsylvania corporation
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, President
/s/ Xxxxx X. Xxxxxx
------------------------------------
XXXXX X. XXXXXX, individually
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
XXXXXX X. XXXXXXX, individually
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/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
XXXXXXX X. XXXXXXX, individually
/s/ Xxxxxxxx X. Xxxxxxx
------------------------------------
XXXXXXXX X. XXXXXXX, individually
/s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------------
XXXXXXXXXXX X. XXXXXXX, individually
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
XXXXXXX X. XXXXXXX, individually
/s/ Xxxxxx Xxxxxxx Xxxxxxx
------------------------------------
XXXXXX XXXXXXX XXXXXXX, individually
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