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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (date of earliest event reported) AUGUST 24, 1995
REPUBLIC WASTE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-9787 73-1105145
---- ---- ----
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
200 EAST LAS OLAS BLVD.
SUITE 1400
FT. LAUDERDALE, FLORIDA 33301
(Address of principal executive offices)
Registrant's telephone number, including area code (305) 761-8333
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With respect to each contract, agreement or other document referred to
herein and filed with the Securities and Exchange Commission (the "Commission")
as an exhibit to this report, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference.
ITEM 5. OTHER EVENTS.
PROPOSED ACQUISITION OF SOUTHLAND ENVIRONMENTAL SERVICES, INC.
MERGER AGREEMENT. On August 24, 1995, Republic Waste Industries,
Inc., a Delaware corporation ("Republic"), RS Mergersub, Inc., a Florida
corporation and wholly-owned subsidiary of Republic ("Republic Merger Sub"),
Southland Environmental Services, Inc., a Florida corporation ("Southland"),
and Southland's principal shareholders, Felix A. Crawford, individually and as
Trustee of the Felix A. Crawford Revocable Living Trust, and CFP, Ltd., a
Florida limited partnership of which Felix A. Crawford is the sole general
partner, entered into a Merger Agreement (the "Merger Agreement"). The Merger
Agreement is attached hereto as Exhibit (c)(1) and is incorporated herein by
reference for all purposes.
The Merger Agreement provides for the merger of Republic Merger Sub
with and into Southland, resulting in Southland becoming a wholly-owned
subsidiary of Republic (the "Merger"), on the terms set forth in the Merger
Agreement. The Merger will be accounted for as a pooling of interests business
combination. In exchange for all of the issued and outstanding shares of
capital stock of Southland, the shareholders of Southland will be issued a
total of 2,600,000 shares of common stock, $0.01 par value, of Republic
("Republic Common Stock"). The terms and conditions of the Merger were
determined by arm's-length negotiations between Republic and Southland. The
2,600,000 shares of Republic Common Stock to be issued in the Merger will be
restricted under Rule 145 promulgated under the Securities Act of 1933, as
amended (the "Act"), and will be registered under the Act for resale by
Southland's shareholders as soon as permitted under the terms of the Merger
Agreement.
Closing of the transactions contemplated by the Merger Agreement are
subject to satisfying customary closing conditions and obtaining certain
regulatory approvals, including expiration or early termination of applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended. The closing of the transactions contemplated by the Merger
Agreement will close promptly when all conditions are satisfied or waived,
which is expected to occur by mid-October 1995, and under the Merger Agreement
can occur no later than November 30, 1995 unless the parties otherwise agree.
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Southland is based in Jacksonville, Florida, and, through its
wholly-owned subsidiaries, provides solid waste collection and disposal
services to residential, commercial and industrial customers in Duval, St.
Johns and Clay Counties, Florida. Southland also operates a construction and
debris landfill, and has composting and recycling operations. Southland will
continue to employ Felix A. Crawford and its other key officers and employees
after the closing of the Merger, and they will be eligible to receive option
grants from time to time under Republic's employee stock option plans.
ITEM 7. FINANCIAL INFORMATION AND EXHIBITS.
(a)-(b) Not applicable.
*(c)(2.1) Merger Agreement.
___________________________
* Filed herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
REPUBLIC WASTE INDUSTRIES, INC.
Date: August 29, 1995 By: /s/ Gregory K. Fairbanks
-----------------------------------------
Gregory K. Fairbanks,
Chief Financial Officer and
Executive Vice President
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------
<S> <C>
(a)-(b) Not applicable.
*(c)(2.1) Merger Agreement entered into as of August 24, 1995 by Republic Waste Industries,
Inc., a Delaware corporation; RS Mergersub, Inc., a Florida corporation; Southland
Environmental Services, Inc., a Florida corporation; Felix A. Crawford; Felix A.
Crawford, Trustee under the Felix A. Crawford Revocable Living Trust; and CFP, Ltd., a
Florida limited partnership.
</TABLE>
___________________________
* Filed herewith.
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EXHIBIT(c)(2.1)
MERGER AGREEMENT
This Merger Agreement (this "Agreement") is entered into as of August
24, 1995 among Republic Waste Industries, Inc., a Delaware corporation
("Republic"), RS Mergersub, Inc., a Florida corporation and wholly-owned
subsidiary of Republic ("Republic Merger Sub", and together with Republic, the
"Republic Companies"), Southland Environmental Services, Inc., a Florida
corporation (the "Company"), Felix A. Crawford, the principal shareholder of
the Company, owning more than 74% of the Company's common stock, and a resident
of the State of Florida, ("Crawford"), Felix A. Crawford, as trustee of the
Felix A. Crawford Revocable Living Trust, a shareholder of the Company (the
"Trust"), and CFP, Ltd., a Florida limited partnership and shareholder of the
Company of which Felix A. Crawford is the sole general partner (collectively,
the Trust and CFP, Ltd. are referred to hereinafter as the "Crawford
Entities"). Certain other capitalized terms used herein are defined in Article
XI and at various places throughout.
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 the Company upon the terms and subject to the conditions set forth
in this Agreement. In order to effectuate the transaction, Republic has
organized Republic Merger Sub as a wholly-owned subsidiary, and the parties
have agreed, subject to the terms and conditions set forth in this Agreement,
to merge Republic Merger Sub with and into the Company with the Company as the
surviving corporation (the "Surviving Corporation"). As a result, the Company
will become a wholly-owned subsidiary of Republic.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
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ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined below) Republic Merger Sub shall
be merged with and into the Company (the "Merger") on the terms and conditions
set forth in 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.
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 Akerman, Senterfitt & Eidson, P.A., 801 Brickell Avenue, 24th
Floor, Miami, Florida 33131.
1.3 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
Department of State of the State of Florida, in such form as the parties
reasonably determine is required by and is in accordance with the relevant
provisions of the Florida Business Corporation Act (the "FBCA") (the date and
time of such filing is referred to herein as the "Effective Date" and
"Effective Time").
1.4 ISSUANCE OF REPUBLIC SHARES. At the Effective Time, by virtue
of the Merger and without any further action on the part of the parties hereto,
each share of common stock, $1.00 par value per share of the Company (the
"Company Common Stock") shall be converted into and exchanged for four and
one-third (4 1/3) shares (the "Conversion Amount") of the voting common stock,
$0.01 par vaper share of Republic ("Republic Common Stock"). Republic shall
issue to each shareholder of record of the Company at the Effective Time duly
executed certificates, in valid form registered in such record holder's name,
evidencing that number of shares of Republic Common Stock determined, to the
nearest whole share, by multiplying (a) the Conversion Amount times (b) the
number of shares of the Company Common Stock owned of record by such
shareholder.
1.5 DELIVERY OF CERTIFICATES. At the Closing, each holder of
shares of Company Common Stock shall deliver the certificates representing such
shares to Republic for cancellation, and Republic shall deliver one or more
certificates representing the
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shares of Republic Common Stock issued pursuant to Section 1.4 to each such
holder (rounded to the nearest whole share). The shares of Republic Common
Stock issuable by Republic in the aggregate in exchange for the Company Common
Stock are sometimes referred to herein as the "Republic Shares", and will be
validly issued, fully paid and non-assessable.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE REPUBLIC COMPANIES
As a material inducement to the Company and each shareholder of the
Company (the "Company Shareholders") to enter into this Agreement and to
consummate the transactions contemplated hereby, each of the Republic Companies
jointly and severally make the following representations and warranties to the
Company and the Company Shareholders:
2.1 CORPORATE STATUS. Republic is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Republic Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida. Republic Merger Sub is a
wholly-owned first tier subsidiary of Republic within the meaning of Section
368()(2)(E) of the Internal Revenue Code and Rev. Rul. 74-564, 1974-2 C.B. 124.
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, eceable 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 Company Shareholders, the Republic
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Shares will be validly issued, fully paid and non-assessable shares of Republic
Common Stock.
2.5 NO COMMISSIONS. Neither 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 350,000,000 shares of Republic Common Stock and 5,000,000 shares of
preferred stock. As of August 4, 1995, (i) 51,448,806 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
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 Internal Revenue 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 mbrances, 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 Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), (iv) consents, approvals, authorizations,
permits, filings or notifications which have either been obtained or made prior
to
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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 Company 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 Commission, including, but not limited to Form 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
Company Shareholders copies of all Republic Reports filed with the Commission
since January 1, 1995, 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 Company Shareholders, copies of each of the
Republic Reports filed with the Commission 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
Commission 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 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 wite Commission prior to the date of
this Agreement, since December 31, 1994 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 for the business combination to be
effected by the Merger as a "pooling of interests." Republic warrants that it
has no intention of disposing of any of the Company Common Stock to be received
by Republic in the Merger. Republic agrees that from and after the Effective
Time, it will not take any action to cause the Merger to lose its tax free
status.
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2.11 SURVIVAL. Each of the representations and warranties made by
Republic in this Agreement or pursuant hereto shall survive for a period of one
year after the Effective Time, notwithstanding any investigation at any time
made by or on behalf of the Company Shareholders, and upon expiration of such
one year period, such representations and warranties of Republic shall expire,
except that the representations and warranties of Republic contained in
Sections 2.1, 2.2, 2.3 and 2.4 shall not expire but shall continue
indefinitely.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
As a material inducement to each of the Republic Companies to enter
into this Agreement and to consummate the transactions contemplated hereby, the
Company makes the following representations and warranties to the Republic
Companies:
3.1 CORPORATE STATUS. The Company and each of the Company's
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida 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 and each of the Company's subsidiaries 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.
There is no pending or threatened proceeding for the dissolution, liquidation,
insolvency or rehabilitation of the Company or any of the Company's
subsidiaries.
3.2 POWER AND AUTHORITY. The Company and the Crawford Entities
have the power and authority to execute and deliver this Agreement, to perform
their respective obligations hereunder and to consummate the transactions
contemplated hy. The Company and the Crawford Entities have taken all
action necessary to authorize the execution and delivery of this Agreement, the
performance of their respective obligations hereunder and the consummation of
the transactions contemplated hereby. The transactions contemplated by this
Agreement shall have been, as of the Effective Time, unanimously approved by
all of the shareholders of the Company, each of whom shall have waived any
dissenter's rights he may have pursuant to Chapter 607, Florida Statutes, and
shall have received notice of any rescission rights he may have pursuant to
Chapter 517, Florida Statutes. Crawford is an individual residing in the State
of Florida with the requisite competence and authority to execute and deliver
this
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Agreement, to perform his respective obligations hereunder and to consummate
the transactions contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Company, Crawford and the Crawford Entities and constitutes
the legal, valid and binding obligation of the Company, Crawford and the
Crawford Entities, enforceable against the Company, Crawford and the Crawford
Entities 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 and each of its subsidiaries, (a) the number of authorized shares of
each class of capital stock, (b) the number of issued and outstanding shares of
each class of capital stock, and (c) the number of shares of each of class of
capital stock which are held in treasury. All of the issued and outstanding
shares of capital stock of the Company and each of its subsidiaries (a) have
been duly authorized and validly issued and are fully paid and non-assessable,
(b) were issued in compliance with all applicable state and federal securities
laws, (c) were not issued in violation of any preemptive rights or rights of
first refusal, and (d) no preemptive rights or rights of first refusal exist,
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 or any of its subsidiaries to issue or sell any shares of
its capital stock (or securities convertible into or exchangeable for shares of
its capital stock). There are no outstandingck appreciation, phantom
stock, profit participation or other similar rights with respect to the Company
or any of its subsidiaries. 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 or any of its subsidiaries. Neither the Company
nor any of its subsidiaries is 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 and each of its subsidiaries, (a) the name, address and
social security number of, and the number of outstanding shares of each class
of 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 social
security number of, and number of shares of each class of capital stock
beneficially owned by each beneficial owner of outstanding shares of capital
stock (to the extent that record and beneficial
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ownership of any such shares are different). Each of the holders of shares of
capital stock of the Company owns such shares, and the Company owns the shares
of capital stock of its subsidiaries free and clear of all Liens, restrictions
and claims of any kind. Crawford is the sole trustee and grantor of the Trust,
and is the sole general partner of CFP, Ltd.
3.6 NO VIOLATION. Except as set forth on Schedule 3.6, the
execution and delivery of this Agreement by the Company, Crawford and the
Crawford Entities, the performance by the Company and Crawford of their
respective obligations hereunder and the consummation by the Company, Crawford
and the Crawford Entities of the transactions contemplated by this Agreement
will not (i) contravene any provision of the articles of incorporation or
bylaws of the Company or any of its subsidiaries, (ii) violate or conflict with
any federal, state or local law, statute, ordinance, rule, regulation or any
decree, writ, injunction, judgment or order of any court or administrative or
other governmental body or of any arbitration award which is either applicable
to, binding upon or enforceable against the Company or any of its subsidiaries
or Crawford or the Crawford Entities except for such violations which
individually or in the aggregate will not have a Material Adverse Effect on the
Company, (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 its subsidiaries or Crawford
or the Crawford Entities except for such conflicts, breaches and defaults which
individually or in the aggregate will not have a Material Adverse Effect on the
Company, (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 Com or any of its
subsidiaries, or (v) require the consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
any court or tribunal or any other Person, except any applicable filings
required under the Hart-Scott-Rodino-Antitrust Improvements Act of 1976, as
amended ("HSR Act") HSR Act and any filings required to be made by the Republic
Companies.
3.7 RECORDS OF THE COMPANY. The copies of the articles of
incorporation and bylaws of the Company and each of its subsidiaries 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 and
each of its subsidiaries made available to Republic for review was correct and
complete 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 it, and such minute books
contain a substantially
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complete and accurate record of all corporate actions of the shareholders and
directors (and any committees thereof) of the Company and its subsidiaries
taken by written consent or at a meeting since the dates of incorporation
thereof. All material corporate actions taken by the Company and its
subsidiaries have been duly authorized or ratified. All accounts, books,
ledgers and official and other records of the Company and its subsidiaries 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 ledger of the Company and its subsidiaries, as
previously made available to Republic, contains an accurate and complete record
of all issuances, transfers and cancellations of shares of the capital stock of
the Company and its subsidiaries.
3.8 SUBSIDIARIES. Except as set forth on Schedule 3.8, the
Company does not own, directly or indirectly, any outstanding voting securities
of or other interests in, or control, any corporation, partnership, joint
venture or other business entity. Special Landfill Projects Company, a Florida
corporation organized by Crawford, has no assets and no business operations and
is not a subsidiary of the Company.
3.9 FINANCIAL STATEMENTS. The Company has delivered to Republic
the financial consolidated statements of the Company and its subsidiaries, for
the fiscal year ended September 30, 1994 including the notes pertaining
thereto, audited by Grenadier, Appleby, Collins & Company, Certified Public
Accountants, together with unaudited financial statements for the quarter ended
June 30, 1995, which unaudited statements are subject to normal year end
adjustments which will not be material (individually or in the aggregate) and
lack footnotes and other presentation items (collectively, the "Financial
Statements") a copy of which is attached to Schedule 3.9 hereto. The balance
sheet of the Company dated as of June 30, 1995 included in thnancial
Statements is referred to herein as the "Current Balance Sheet". The Financial
Statements fairly present the consolidated financial position of the Company
and its subsidiaries 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 and its subsidiaries fully and fairly
reflect all transactions, properties, assets and liabilities of the Company and
its subsidiaries. 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 notes thereto. The Financial Statements reflect
all adjustments necessary for a fair presentation of the financial information
contained therein.
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3.10 CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Except as
disclosed in Schedule 3.10, since the date of the Current Balance Sheet,
neither the Company nor any of its consolidated subsidiaries has (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 other than in the ordinary course of
business and other than to Crawford; (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 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,
cancelled, 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
businesnsistent with past practice; (xiv) entered into any employment
agreement; (xv) terminated, amended or modified any agreement involving an
amount in excess of $25,000; (xvi) imposed any security interest on any of the
Company's assets other than in the ordinary course of business consistent with
past practice; (xvii) delayed paying any accounts payable which is 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; or (xx) agreed to do or authorized any of the foregoing.
3.11 LIABILITIES OF THE COMPANY. Except as set forth on Schedule
3.11, the Company and its subsidiaries do 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
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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 GAAP consistently applied, were not recorded. The
aggregate amount of indebtedness for borrowed money, including principal and
accrued but unpaid interest, and including remaining payments on capitalized
equipment leases, of the Company and its subsidiaries, will not exceed
$12,500,000, and its net worth will be no less than $5,250,000, as of the
Effective Time.
3.12 LITIGATION. Except as set forth on Schedule 3.12, there is no
action, suit, or other legal or administrative proceeding or governmental
investigation pending, or to the Company's knowledge threatened, or
contemplated against the Company or any of its subsidiaries, or any of its
properties or assets, or which question the validity or enforceability of this
Agreement or the transactions contemplated hereby, and to the Company's
knowledge there is no basis for any of the foregoing. There are no
outstanding orders, decrees or stipulations issued by any federal, state, local
or foreign judicial or administrative authority in any proceeding to which the
Company or any of its subsidiaries is or was a party.
3.13 ENVIRONMENTAL MATTERS. Except as set forth on Schedule 3.13:
(a) Except for violations or liabilities which would not
reasonably be expected, individually or in the aggregate, to havMaterial
Adverse Effect on the Company: (i) the Company is and has at all times been in
compliance with all Environmental, Health and Safety Laws (as defined herein)
governing its business, operations, properties and assets, including, without
limitation, Environmental, Health and Safety Laws with respect to discharges
into the ground water, surface water and soil, emissions into the ambient air,
and generation, accumulation, storage, treatment, transportation, labeling or
disposal of solid and hazardous waste materials and substances or process by-
products; (ii) The Company is not currently liable for any penalties, fines or
forfeitures for failure to comply with any of the foregoing; (iii) The Company
is in compliance with all notice, record keeping and reporting requirements of
all Environmental, Health and Safety Laws, and has complied with all
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informational requests or demands arising under the Environmental, Health and
Safety Laws.
(b) The Company has all licenses, permits and
registrations required by the Environmental, Health and Safety Laws for the
ownership of its properties and assets and the operation of its business as
presently conducted, including, without limitation, all air emission, water
discharge and solid and hazardous waste generation, storage, treatment or
disposal permits and registrations, and the Company is in compliance therewith.
There are no legal or governmental proceedings pending or to the Company's
knowledge, threatened against the Company which question the validity or
entitlement of the Company to any permit, license, order or registration
required by the Environmental, Health and Safety Laws for the ownership of each
of the Company's properties and assets and the operation of its business or
wherein an unfavorable decision, ruling or finding could have a Material
Adverse Effect on the Company.
(c) The Company has not received and is not aware of any
notice of any outstanding or threatened non-compliance order, violation, claim,
suit, action, judgment or proceeding pending against or involving the Company
issued by any federal, state or local judicial or administrative authority with
respect to any Environmental, Health and Safety Laws in connection with the
ownership by the Company of its properties and assets or the operation of its
business which has not been resolved to the satisfaction of the issuing
authority or authorities or which could have a Material Adverse Effect on the
Company.
(d) The Company is in compliance with, and is not in
breach of or default under any applicable writ, order, judgment, injunction or
decree issued pursuant to the Environmental, Health and Safety Laws, and no
event has occurred or is continuing which, with the passage of time or the
giving of notice or both, would constitute such non-compliance, breach or
default theder.
(e) Except for violations or liabilities which would not
reasonably be expected, individually or in the aggregate, to have a Materially
Adverse Effect on the Company:
(1) (i) The Company has not transported, stored,
handled, treated or disposed, nor has it allowed or arranged for any
third parties to transport, store, handle, treat or dispose of,
Hazardous Substances or other waste to or at any location other than a
site lawfully permitted to receive such Hazardous Substances or other
waste for such purposes, nor has it performed, arranged for or allowed
by any method or procedure such transportation, storage, treatment or
disposal in contravention of any laws or regulations; and (ii) the
Company has not stored, handled, treated or
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disposed of, or allowed or arranged for any third parties to store,
handle, treat or dispose of, Hazardous Substances or other waste upon
property owned or leased by it, except as permitted by law. For
purposes of this Section 3.13, the term "Hazardous Substances" shall
mean and include: any "Hazardous Substance," "Pollutant" or
"Contaminant" as defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Sections 9601 et
seq., or the regulations promulgated thereunder ("CERCLA"); any
hazardous waste as that term is defined in applicable state or local
law; any substance containing petroleum, as that term is defined in
Section 9001(8) of the Resource Conservation and Recovery Act of 1976,
as amended ("RCRA"), 42 U.S.C. Section 6991(8) or in 40 C.F.R. Section
280.1; or any other substance for which any governmental entity with
jurisdiction over the Leasehold Premises or the Owned Properties (as
hereinafter defined) requires special handling in its generation,
handling, use, collection, storage, treatment or disposal.
(2) The Company has not caused a Release of any
Hazardous Substance on, into or beneath the surface of any parcel of
the Owned Properties or the Leasehold Premises. There has not
occurred, nor is there presently occurring, a Release of any Hazardous
Substance on, into or beneath the surface of any parcel of the Owned
Properties or the Leasehold Premises. For purposes of this Section,
the term "Release" shall have the meanings given it in CERCLA.
(3) The Company has not shipped, transported or
disposed of, nor has it allowed or arranged, by contract, agreement or
otherwise, for any third parties to ship, transport or dispose of, any
Hazardous Substance or other waste toat a site which, pursuant to
CERCLA or any similar state law, (x) has been placed on the National
Priorities List or its state equivalent; or (y) the Environmental
Protection Agency or the relevant state agency has notified the
Company that it has proposed or is proposing to place on the National
Priorities List or its state equivalent. Neither the Company nor any
Company Shareholder has knowledge of any facts which could give rise
to any notice that the Company is a potentially responsible party for
a federal or state environmental cleanup site or for corrective action
under CERCLA or any other applicable law or regulation. The Company
has not submitted nor was it required to submit any notice pursuant to
Section 103(c) of CERCLA with respect to the Leasehold Premises or the
Owned Properties. The Company has not received any written or oral
request for information in connection with any federal or state
environmental cleanup site. The Company has not been required to nor
has it undertaken any response or remedial actions or clean-up actions
of any kind at the
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request of any federal state or local governmental entity, or at the
request of any other Person.
(f) Except as set forth on Schedule 3.13, the Company
does not use, nor has it used, any Underground Storage Tanks, and there are not
now nor have there ever been any Underground Storage Tanks on the Leasehold
Premises or the Owned Properties. For purposes of this Section 3.13, the term
"Underground Storage Tanks" shall have the meanings given it in Section 6901
et seq., as amended of RCRA.
(g) Schedule 3.13 identifies (i) all environmental
audits, assessments or occupational health studies undertaken by the Company or
its agents or, to the knowledge of the Company or any Company Shareholder,
undertaken by any Governmental Authority relating to or affecting the Company
or any of the Leasehold Premises or the Owned Properties within the last 3
years relating to any claim of violation of any Environmental, Health and
Safety Laws; (ii) the results of any ground, water, soil, air or asbestos
monitoring undertaken by the Company or its agents or, to the knowledge of any
Company Shareholder, undertaken by any Governmental Authority relating to or
affecting the Company or any of the Leasehold Premises or the Owned Properties
within the last 3 years; (iii) all written communications between the Company
and environmental agencies within the last 3 years; and (iv) all citations
issued under the Occupational Safety and Health Act of 1970, 29 U.S.C. Sections
651 et seq., as amended ("OSHA"), relating to or affecting the Company or any
of the Leasehold Premises or the Owned Properties.
(h) The Company does not have any liability under any
Environmental, Health and Safety Laws for personal injury, property damage or
clean up obligations.
(i) Schedule 3.13 contains a list of the assets of the
Company which contain "asbestos" or "asbestos-containing material" (as such
terms are identified under the Environmental, Health Safety Laws). Except
as set forth in Schedule 3.13, the Company has operated and continues to
operate in compliance with all Environmental, Health and Safety Laws governing
the handling, use and exposure to and disposal of asbestos or
asbestos-containing materials. Except as set forth in Schedule 3.13, there are
no claims, actions, suits, governmental investigations or proceedings in any
court or before any governmental authority or arbitral tribunal pending, or to
the knowledge of the Company threatened against or directly affecting the
Company, or any of its assets or operations relating to the use, handling or
exposure to and disposal of asbestos or asbestos-containing materials in
connection with its assets and operations.
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(j) As used in this Agreement, "Environmental, Health and
Safety Laws" means all federal, state or local laws, rules, regulations, codes,
orders, plans, injunctions, decrees, rulings, and changes or ordinances or
judicial or administrative interpretations thereof, 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 and occupational health and safety, as any
of these terms are or may be defined in such laws, rules, regulations, codes,
orders, plans, injunctions, decrees, rulings and changes or ordinances, or
judicial or administrative interpretations thereof, including, without
limitation, RCRA, CERCLA, as amended, by the Superfund Amendments and
Reauthorization Act, the Hazardous Materials Transportation Act, the Toxic
Substances Control Act, the Clean Air Act, the Clean Water Act and OSHA.
(k) As used in this Section 3.13, the term "the Company"
is deemed to refer to the Company and/or any of its subsidiaries.
(l) For all matters disclosed on Exhibit B to Schedule
3.13 with respect to the site identified as 8619 Western Way, the Company has a
valid and enforceable indemnity from Browning-Ferris Industries, Inc. ("BFI"),
pursuant to which BFI is bound to indemnify the Company for and pay (or
reimburse the Company for) any and all costs or expenses in excess of the first
$10,000 expended by the Company for the remediation and evaluation of such
disclosed matters at such site.
3.14 REAL ESTATE
(a) The Company and its subsidiaries do not own any real
property or any interest therein except as set forth on Schedule 3.14(a) (the
"Owned Properties"), which Schedule sets forth the location and size of, and
principal improvements and buildings on, the Owned Properties. Except as set
forth on Schedule 3.14(a), with respect to each such parcel of Owned Property:
(i) The Company or a subsidiary thereof
has good and marketable title to the parcel of Owned Property, free
and clear of any Lien other than (x) liens for real estate taxes not
yet due and payable; (y) recorded easements, covenants, and other
restrictions which do not materially impair the current use, occupancy
or value of the property subject thereto, and (z) encumbrances
described in the title insurance policies listed on Schedule 3.14(a),
all of which policies have been previously delivered or made available
to Republic by the Company;
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(ii) there are no pending or, to the
knowledge of the Company or Crawford, threatened condemnation
proceedings, suits or administrative actions relating to the Owned
Properties or other matters affecting adversely the current use or
occupancy thereof;
(iii) the legal description for the
parcels of Owned Property contained in the deed thereof describes such
parcel fully and adequately, the buildings and improvements are
located within the boundary lines of the described parcels of land,
are not in violation of applicable setback requirements, zoning laws
and ordinances and do not encroach on any easement which may burden
the land, the land does not serve any adjoining property for any
purpose inconsistent with the use of the land, and the Owned
Properties are not located within any flood plain (such that a
mortgagee would require a mortgagor to obtain flood insurance) or
subject to any similar type restriction for which any permits or
licenses necessary to the use thereof have not been obtained;
(iv) all facilities have received all
approvals of Governmental Authorities (including licenses and permits)
required in connection with the ownership or operation thereof and
have been operated and maintained in accordance with applicable laws,
ordinances, rules and regulations in all material respects;
(v) there are no Contracts written or
oral, granting to any party or parties the right of use or occupancy
of any portion of the parcels of Owned Property;
(vi) there are no outstanding options or
rights of first refusal to purchase the parcels of Owned Property, or
any portion thereof or interest therein;
(vii) there are no parties (other than the
Company and its subsidiaries) in possession of the parcels of Owned
Property, other than tenants under any leases disclosed in Schedule
3.14(a) who are in possession of space to which they are entitled;
(viii) all facilities located on the
parcels of Owned Property are supplied with utilities and other
services necessary for the operation of such facilities, including,
electricity, water, telephone, sanitary sewer and storm sewer, all of
which services are adequate in accordance with all applicable laws,
ordinances, rules and regulations, and are provided via public roads
or via permanent, irrevocable, appurtenant easements benefitting the
parcels of Owned Property;
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(ix) each parcel of Owned Property abuts
on and has direct vehicular access to a public road, or has access to
a public road via a permanent, irrevocable, appurtenant easement
benefitting the parcel of Owned Property, access to the property is
provided by paved public right-of-way with adequate curb cuts
available, and there is no pending or threatened termination of the
foregoing access rights;
(x) Except for matters or conditions
which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on the Company, all
improvements and buildings on the Owned Property are in good repair
and are safe for occupancy and use, free from termites or other
wood-destroying organisms, the roofs are watertight, and the
structural components and systems (including plumbing, electrical, air
conditioning/heating, and sprinklers) are in good working order and
adequate for the use of such Owned Property in the manner in which
presently used; and
(xi) there are no service contracts,
management agreements or similar agreements which affect the parcels
of Owned Property.
(b) Schedule 3.14(b) sets forth a list of all leases,
licenses or similar agreements ("Leases") to which the Company or any of its
subsidiaries 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 location, including address,
of each property covered thereby, and (c) a brief 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 fforce and effect and have
not been amended except as set forth on Schedule 3.14(b), and the Company is
not 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. Except as set forth on
Schedule 3.14(b), with respect to each such Leased Premises:
(a) The Company or a subsidiary thereof has valid
leasehold interests in the Leasehold Premises, free and clear of any
Liens, covenants and easements or title defects of any nature
whatsoever;
(b) Except for matters or conditions which would
not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect on the Company, the portions of the
buildings located on the Leasehold
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Premises that are used in the Company's businesses 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;
(c) Each of the Leasehold Premises (i) 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
(ii) 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
(d) Neither the Company nor its subsidiaries have
received notice of (i) any condemnation proceeding with respect to any
portion of the Leasehold Premises or any access thereto, and no such
proceeding is contemplated by any Governmental Authority; or (ii) any
special assessment which may affect any of the Leasehold Premises, and
to the best of the Company's knowledge, no such special assessment is
contemplated by any Governmental Authority.
3.15 GOOD TITLE TO AND CONDITION OF ASSETS
(a) EXCEPT AS SET FORTH IN SCHEDULE 3.15 hereof, the
Company and its subsidiaries have good and marketable title to all of their
Assets (as hereinafter defined), 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 and its subsidiaries, other than the Owned
Properties and the Leasehold Premises, whether personal or mixed, tangible or
intangible, wherever located.
(b) Except for matters or conditions which would not
reasonabl expected, individually or in the aggregate, to have a Material
Adverse Effect on the Company, the Fixed Assets (as hereinafter defined)
currently in use or necessary for the business and operations of the Company
and its subsidiaries are in good operating condition, normal wear and tear
excepted. For purposes of this Agreement, the term "Fixed Assets" means all
vehicles, machinery, equipment, tools, supplies, leasehold improvements,
furniture and fixtures used by or located on the premises of the Company and
its subsidiaries or set forth on the Current Balance Sheet or acquired by the
Company or its subsidiaries since the date of the Current Balance Sheet.
Schedule 3.15 lists the vehicles owned, leased or used by the Company and its
subsidiaries, setting forth the make, model, description of body and chassis,
vehicle identification number, and year of manufacture, and for each vehicle,
whether it is
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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.
3.16 COMPLIANCE WITH LAWS.
(a) The Company and each of its subsidiaries is and has
been in material 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 Owned Properties and the Leasehold Premises and any other
properties and assets (in each case owned or used by it now or in the past).
Except as set forth on Schedule 3.16, neither the Company nor any of its
subsidiaries has 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, to the knowledge
of the Company threatened.
(b) Neither the Company nor any of its subsidiaries, nor
any of its employees has made any payment of funds in connection with the
businesses of the Company which is prohibited by law, and no funds have been
set aside to be used in connection with the businesses of the Company for any
payment prohibited by law.
(c) The Company and each of its subsidiaries is and at
all times has been in substantial 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 and each of its subsidiaries for whom compliance with the Immigration
Act by the Company as employer is required, the Company has previously made
available to Republic 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. Neither the Company nor any of its
subsidiaries has been ci 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 or its subsidiaries by reason
of any actual or alleged failure to comply with the Immigration Act.
(d) Neither the Company nor any of its subsidiaries is
subject to any Contract, decree or injunction in which the Company is a party
which restricts the continued operation of any business or the expansion
thereof to other geographical areas, customers and suppliers or lines of
business.
3.17 LABOR AND EMPLOYMENT MATTERS. Schedule 3.17 sets forth the
name, address, social security number and current rate
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of compensation of each of the employees of the Company and each of its
subsidiaries. To protect the privacy of the Company's employees, this
information shall be provided to only those with a legitimate business need to
know the information. Neither the Company nor any of its subsidiaries is a
party to or bound by any collective bargaining agreement or any other agreement
with a labor union, and the Company is unaware of efforts by any labor union
during the 24 months prior to the date hereof to organize any employees of the
Company or any of its subsidiaries into one 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 operation. There has been no strike, walkout
or work stoppage involving any of the employees of the Company or any of its
subsidiaries during the 24 months prior to the date hereof. Neither the
Company nor any of its subsidiaries, nor any agent, representative or employee
of the Company or any subsidiary 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 or its subsidiaries by or with the National Labor Relations Board or
any representative thereof. Neither the Company nor any Company Shareholder 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 or any subsidiary.
Schedule 3.17 contains detailed information about each contract, agreement,
policy or plan of the following nature, whether formal or informal, and whether
or not in writing, to which the Company or any subsidiary is a party, under
which the Company or any subsidiary has an obligation, or which serves as a
guideline to the Company and its employees: (i) employment agreements, (ii)
employee handbooks, policy statements and similar pl (iii) noncompetition
agreements and (iv) consulting agreements. The Company and each of its
subsidiaries has complied in all material respects with applicable laws, rules
and regulations governing employment practices and civil rights, including but
not limited to, the Civil Rights Act of 1964, the Fair Labor Standards Act, the
Americans with Disabilities Act, and the Age Discrimination in Employment Act.
3.18 EMPLOYEE BENEFIT PLANS.
(a) Employee Benefit Plans. Schedule 3.18 contains a
list setting forth each employee benefit plan or arrangement, 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
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in Section 3(3) of ERISA, in which employees 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 delivered 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 to the best of the Company's knowledge, 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.
(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 therefore
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; (vi) no reportablent (within the meaning of Section 4043 of ERISA)
has occurred, other than one for which the 30-day notice requirement has been
waived; and (v) as of the Closing 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) except as disclosed on Schedule 3.18, 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; (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 and
insurance
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premiums) for any period ending before the Closing Date that are not yet, but
will be, required to be made are properly accrued and reflected on the Current
Balance Sheet or are disclosed on Schedule 3.18.
(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 and its subsidiaries have been timely paid; (ii) the Company and its
subsidiaries have not incurred nor is it 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. Other than as disclosed in Schedule
3.18, (i) the Company and its subsidiaries are not obligated under any employee
welfare benefit plan as described in Section 3(1) of ERISA ("Welfare Plan"),
whether or not disclosed in Schedule 3.18, to provide medical or death benefits
with respect to any employee or former employee of the Company, its
subsidiaries or their predecessors after termination of employment, (ii) the
Company and each of its subsidiaries 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 of the Company for which the statute of limitations on the
assessment of federal income taxes remains open, by consent or otherwise,roup
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 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 the Company under Code Section 414(b),
(c), (m) or (o): (i) has ever terminated or withdrawn from an 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
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routine claims for benefits); (ii) has 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 (iv) has violated Code Section 4980B or
Section 601 through 608 of ERISA.
(g) Other Liabilities. Except as set forth on Schedule
3.18, (i) none of the Employee Benefit Plans obligates the Company or any of
its subsidiaries 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 Closing Date shall have been made or
properly accrued on the books and records of the Company as of the Closing, 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. Except as set forth in Schedule 3.19 hereto, all
Tax Returns required to be filed prior to the date hereof with respect to the
Company and each of its subsidiaries or any of their 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. To the best of the
knowledge of the Company, all Taxes due and payable by or with respect to the
Company and each of its subsidiaries have been paid and are accrued on the
Current Balance Sheet or will be accrued on the books and records of thmpany as
of the Closing. Except as set forth in Schedule 3.19 hereto: (i) 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 and its subsidiaries, (ii) The Company and each of its subsidiaries
have not consented to extend the time in which any Taxes may be assessed or
collected by any taxing authority; (iii) the Company and each of its
subsidiaries have not requested or been granted an extension of the time for
filing any Tax Return to a date later than the Effective Time; (iv) there is
no action, suit, taxing authority proceeding or audit now in progress, pending
or threatened against or with respect to the Company or any of its subsidiaries
regarding Taxes; (v) the Company and each of its subsidiaries has not made an
election under Section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code") (or any corresponding provision of state, local or foreign law) on
or prior to the Effective Time; (vi) there are no liens for Taxes
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(other than for current Taxes not yet due and payable) upon the assets of the
Company or its subsidiaries; (vii) the Company and each of its subsidiaries
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; (viii) neither the Company nor any
of its subsidiaries is a party to or bound by any tax allocation or tax sharing
agreement and has no current or potential contractual obligation to indemnify
any other person with respect to Taxes; (ix) no taxing authority will claim or
assess any additional Taxes for any period for which Tax Returns have been
filed; (x) neither the Company nor any of its subsidiaries has made any
payments, and is not 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); (xi) the Company and each of its subsidiaries
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); (xii) no claim has ever been made by a taxing authority in a
jurisdiction where the Company or its subsidiaries do not file Tax Returns that
the Company or such subsidiaries is or may beject to Taxes assessed by such
jurisdiction; and (xiii) the Company and each of its subsidiaries has no
permanent establishment in any foreign country, as defined in the relevant tax
treaty between the United States of America and such foreign country; and (xiv)
true, correct and complete copies of all income Tax Returns filed by or with
respect to the Company and each of its subsidiaries for the past five years
have been furnished or made available to Republic.
3.20 INSURANCE. The Company and each of its subsidiaries is
covered by valid, outstanding and enforceable policies of insurance issued to
it by reputable insurers covering its properties, assets and business 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
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force and effect. None of the Insurance Policies will lapse or terminate as a
result of the transactions contemplated by this Agreement. The Company and
each of its subsidiaries have 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 or its subsidiaries. The Company and its subsidiaries have 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. Except as set forth on Schedule 3.21: (i) 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 and its consolidated subsidiaries; (ii) all of the Receivables
are good and collectible receivables, 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 and its consolidated subsidiaries, including all trade account
receivables arising from the provision of services, sale of inventory, and
insurance proceeds receivable.
3.22 LICENSES AND PERMITS. The Company and its subsidiaries
possess all licenses and required governmental or official approvals, permits
or authorizations (collectively, the "Permits") for its business and
operations, including with respect to the operation of each of the Owned
Properties and Leasehold Premises. All such Permits are valid and ull
force and effect, the Company and each of its subsidiaries is in full
compliance with their requirements, and no proceeding is pending or to the best
of the Company's knowledge, 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, Owned Properties and Leasehold
Premises constitute, in the aggregate, all of the assets and properties
necessary for the conduct of the businesses of the Company and its subsidiaries
in the manner in which and to the extent to which such businesses are currently
being conducted. No current supplier to the Company or its subsidiaries of
items essential to the conduct of its business has threatened to terminate its
business relationship with the
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Company or such subsidiary for any reason. Except as set forth on Schedule
3.23, the Company and its subsidiaries have no direct or indirect interest in
any customer, supplier or competitor of the Company or its subsidiaries, nor in
any person from whom or to whom the Company or its subsidiaries leases real or
personal property. Except as set forth on Schedule 3.23, no officer, director
or shareholder of the Company or its subsidiaries, 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 its subsidiaries or has any interest in any property used by the
Company or its subsidiaries.
3.24 INTELLECTUAL PROPERTY. To the best of its knowledge, the
Company and each of its subsidiaries has full legal right, title and interest
in and to all trademarks, service marks, tradenames, copyrights, know how,
patents, trade secrets, licenses (including licenses for the use of computer
software programs), and other intellectual property used in the conduct of its
business (the "Intellectual Property"). The conduct of the Company's business
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 and each of its subsidiaries is a party or by which the
Company or its subsidiaries or their properties and assets are bound andch
is material to the business, assets, properties or prospects of the Company or
its subsidiaries (the "Designated Contracts"), true and correct copies of which
have been provided to Republic. The copy of each Designated Contract supplied
by the Company 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. Except as set forth on Schedule 3.25, neither the Company
nor any of its subsidiaries has 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. Except as set forth on
Schedule 3.25, no event has occurred which constitutes, or after notice or the
passage of
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time, or both, would constitute, a material default by the Company or its
subsidiaries under any Designated Contract, and no such event has occurred
which constitutes or would constitute a material default by any other party.
Neither the Company nor any of its subsidiaries is 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 or any of its subsidiaries 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 or its subsidiaries 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 Twenty-Five Thousand Dollars ($25,000.00); (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 or its subsidiaries; (f) licenses, assignments or transfers of
trademarks, trade names, service marks, patents, copyrights, trade secrets or
know how, or other agreements regarding proprietary rs or intellectual
property; (g) any Contract relating to pending capital expenditures by the
Company or its subsidiaries; 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 and not otherwise disclosed
on the Schedules.
3.26 CUSTOMER LISTS AND RECURRING REVENUE. Schedule 3.26 is a
true, correct and complete list of all existing non-residential customers of
the Company and its subsidiaries who have entered into valid and enforceable
waste collection and disposal contracts in substantially the form of one or
more of the preprinted standard forms attached to Schedule 3.26, and who
represent in the aggregate substantially all of the customers of the Company or
its subsidiaries as of the date of this Agreement. Schedule 3.26 sets forth
each such customer's name, address, account number, billing cycle, type of
service and rates charged. The average gross combined monthly billings for the
Company by the customers listed on Schedule 3.26 during the six
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calendar month period ended June 30, 1995 (the "Test Period") were not less
than $650,000.
3.27 INVESTMENT INTENT; ACCREDITED INVESTOR STATUS; SECURITIES
DOCUMENTS. Each of the Company 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. Crawford does
not, at the present time, and will not, as of the Effective Time, have any
present plan to sell any of the Shares of Republic Common Stock issued to him
pursuant to this Agreement and will not sell any of said shares in violation of
the "Pooling of Interest" letter to be delivered by Crawford to Republic
pursuant to Section 6.8 hereof. Each of the Company 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. Crawford is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act, and has such knowledge and experience in business or financial matters
that he is capable of evaluating the merits and risks of an investment in the
Republic Shares.
3.28 BUSINESS LOCATIONS. As of the date hereof, the Company and
its subsidiaries have no office or place of business other than as identified
on Schedules 3.14(a) and 3.14(b) and the Company's principal place of business
and chief executive office (as such terms are used in subsection 9-401 of the
Uniform Commercial Code as enacted in the State of Florida as of the date
hereof) are indicated on Schedule 3.14(a) or 3.14(b), and all locations where
the Company and its subsidiaries's equipment, inventory, chattel paper and
books and records are located as of the date hereof are fully identified on
Scles 3.14(a) and 3.14(b).
3.29 NAMES; PRIOR ACQUISITIONS. All names under which the Company
and each of its subsidiaries does business as of the date hereof are specified
on Schedule 3.29. Except as set forth on Schedule 3.29, neither the Company
nor any of its subsidiaries has 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.
3.30 NO COMMISSIONS. Neither the Company nor Crawford 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.
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3.31 ACCOUNTING AND TAX MATTERS. Neither the Company 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 for the business combination
to be effected by the Merger as a "pooling of interests." The Company agrees
that from and after the date hereof until the Effective Date, it will not take
any action to cause the Merger to lose its tax free status.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.1 CONDUCT OF BUSINESSES BY THE COMPANY PENDING THE MERGER.
Except as set forth on Schedule 4.1, the Company covenants and agrees that,
between the date of this Agreement and the Effective Time, the business of the
Company and its subsidiaries shall be conducted only in, and the Company and
its subsidiaries shall not take any action except in, the ordinary course of
business, consistent with past practice. The Company and its subsidiaries
shall use their 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 and each of its subsidiaries 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 securi 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;
(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;
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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 (other than advances under existing credit facilities incurred
in the ordinary course of business) 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) 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 the Current Balance Sheet, or liabilities incurred after
the date of the Current Balance Sheet in the ordinary course of
business and consistent with past practice;
(i) increase or decrease prices charged to its customers
except in the ordinary course of business and except for previously
announced price changes, or take any
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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
(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 COVENANTS OF THE COMPANY. Until the Effective Date, Crawford
shall cause the Company to comply with all of the 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 National 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) promptly (within five business days) make 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 advisableer 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 Governmental Authorities and parties to Contracts
with the Company as are necessary for the consummation of the transactions
contemplated hereby. Each of the 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
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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. The fees
and expenses incurred in responding to any injunctive proceeding brought by a
Governmental Authority under the HSR Act shall be paid by Republic. The
Company shall promptly (within five business days) make the notifications in
accordance with the Final Judgment referred to in Section 9.2.
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 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.
5.6 NOTIFICATION OF CERTAIN MATTERS. The Company 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 AND ACCOUNTING TREATMENT. Republic, the Company and
Crawford will use their respective best efforts to cause the Merger to: (a)
qualify as a reorganization under the provisions of Section 368(a) of the Code,
and (b) treated as a pooling of interests combination. Republic agrees that
from and after the Merger it will not take any action to cause the Merger to
lose its tax free status. All parties hereto agree to file the Plan of Merger
with their respectiveeral 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 a securities exchange (in
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which case Republic will consult with the other parties prior to making such
disclosure).
5.9 NO OTHER DISCUSSIONS. From the date hereof until the
Effective Time, or until termination of this Agreement pursuant to Article XII
hereof, whichever first occurs, the Company, Crawford, 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 Company 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 PURCHASE OR SALE OF REPUBLIC COMMON STOCK. Except as
otherwise expressly provided in this Agreement, from the date hereof until the
Effective Time, or until termination of the Agreement pursuant to Article XII
hereof, whichever first occurs, neither the Company nor Crawford will, directly
or indirectly, purchase or sell any shares of Republic Common Stock in
transactions effected on any national securities exchange or on the NASDAQ
National Market.
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 Company contained in
this Agreement shall be true anrrect in all material respects 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 Company and Crawford 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. The Company
shall have delivered to the Republic Companies a certificate, dated as of the
Effective Time, and signed by the
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Chief Executive Officer and Chief Financial Officer, certifying that such
representations and warranties are true and correct and that all such
obligations have been performed and complied with.
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 of 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 Change on the Company, and there shall have been delivered to
the Republic Companies a certificate to that effect, dated the Effective Time
and signed by or on behalf of the Company and Crawford.
6.3 CORPORATE CERTIFICATE. The Company and Crawford shall have
delivered to the Republic Companies (i) true, correct and complete copies of
the articles of incorporation and bylaws of the Company and each of its
subsidiaries 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 and each of its subsidiaries
issued by the Department of State of the State of Florida and each other state
in which the Company and each of its subsidiaries is qualified to do business
as of a date not more than ten days prior to the Effective Time, certified in
each case as of the Effective Time 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 Time from counsel for the Company
and Crawforn form and substance acceptable to the Republic Companies, to
the effect that:
(i) The Company and each of its subsidiaries is a
corporation duly organized and existing and in good standing under the
laws of the State of Florida, 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, where such properties are located;
(ii) The Company has obtained all necessary
authorizations and consents of its Board of Directors and its
shareholders;
(iii) Except as set forth in Schedule 3.12, such
counsel does not know or have reason to believe that there is any
litigation, proceeding or investigation pending or
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threatened which might result in any material adverse change in the
properties, business or prospects or in the condition of the Company,
or which questions the validity of this Agreement;
(iv) The instruments executed and delivered to the
Republic Companies under this Agreement by the Company and Crawford
are valid and binding and enforceable in accordance with their terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally and general equitable principals
regardless of whether such enforceability is considered in a
proceeding at law or in equity.
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 Designated Contract or instrument
as of a date not more than ten days prior to the Effective Time, 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 SECURITIES LAWS. Republic shall have received all necessary
consents and otherwise complied with any state Blue Sky or securities laws
applicable to the issuance of the Republic Shares, in connection with the
transactions contemplated hereby.
6.7 POOLING LETTERS. Southland shall have received from
Grenadier, Appleby, Collins & Company, independent certified public accounts
for the Company, a letter dated the Effective Time, in form and substance
acceptable to Republic, confirming that, to their knowledge after due and
diligent inquiry of management, there have been no transactions or events with
respect to the Company which would, and the structure of Company and the
Company Shareholders, would not, prescribe the transactions contemplated
hereby, if consummated, from being considered as a pooling of interests
combination. Republic shall have received from Arthur Andersen LLP, a letter
dated the Effective Time, confirming that the transactions contemplated hereby,
if consummated, can properly be accounted for as a pooling of interests
combination in accordance with GAAP and the criteria of Accounting Principles
Board Opinion No. 16.
6.8 UNDERTAKINGS. At or prior to the Closing, each of the Company
Shareholders shall have delivered to Republic a letter agreement relating to
Rule 145 under the Securities Act and "pooling of interests" criteria, in form
and substance satisfactory to the Republic Companies.
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6.9 COMPANY COMMON STOCK. At the Closing, each of the Company
Shareholders shall have delivered to the Republic Companies all certificates
evidencing the Company Common Stock held by him.
6.10 STOCK POWERS. At the Closing, Crawford shall have delivered
to Republic, for use in connection with the Pledged Shares, ten stock powers
executed in blank.
6.11 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.
6.12 HSR ACT WAITING PERIOD. Any applicable HSR Act waiting period
shall have expired or been terminated.
6.13 EMPLOYMENT. Crawford shall have agreed to become an employee
of Republic, or remain an employee of the Company, on terms and conditions
acceptable to Republic.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
THE COMPANY AND CRAWFORD
The obligations of the Company and Crawford 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 Crawford:
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 in all material
respects 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 partic
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
Crawford a certificate, dated as of the Effective Time, and signed by the Chief
Executive Officer and Chief Financial Officer, certifying that such
representations and
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warranties are true and correct and that all such obligations have been
performed and complied with.
7.2 BFI FINAL JUDGMENT. The Company shall have notified the
United States Department of Justice, the State of Florida by and through its
Attorney General, and the State of Maryland by and through its Attorney
General, of the transactions contemplated by this Agreement at least 45 days
prior to closing the Merger and other transactions contemplated hereby, unless
consents are earlier received from such authorities to the earlier consummation
of the Merger and such other transactions, pursuant to that certain Final
Judgment entered against Browning-Ferris Industries, Inc. in the United States
District Court in and for the District of Columbia, Case No. 94-2588.
7.3 REPUBLIC SHARES. At the Closing, Republic shall have
delivered to Crawford and to the other shareholders of the Company certificates
representing the Republic Shares required to be issued to them hereunder.
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 Crawford makes it inadvisable to proceed with the
Merger and other transactions.
7.5 HSR ACT WAITING PERIOD. Any applicable HSR Act Waiting Period
shall have expired or been terminated.
7.6 KEY PERSONNEL. H. Wayne Huizenga and Harris W. Hudson shall
be members of Republic's Board of Directors as of the Effective Time.
7.7 NO CASH DIVIDENDS. Republic shall not have declared or paid
any cash dividends with respect to its Common Stock between the date hereof and
the Effective Time.
7.8 NO STOCK ADJUSTMENTS. Republic shall not have declared or
caused to occur a stock split or stock dividend with respect to the Common
Stock of Republic withoutportionately adjusting the number of Republic
Shares to be issued pursuant to the Merger.
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7.9 CAPITALIZATION. Republic shall not have amended its First
Amended and Restated Certificate of Incorporation to change its capitalization
from that described in Section 2.6.
ARTICLE VIII
REGISTRATION RIGHTS
Persons owning shares of Company Common Stock as of the Effective Time
shall have the following registration rights with respect to the Republic
Shares issued to them hereunder:
8.1 REGISTRATION RIGHTS FOR REPUBLIC SHARES; FILING OF
REGISTRATION STATEMENT. Republic will utilize its reasonable best efforts to
cause, as soon as practicable following the execution of this Agreement, a
registration statement to be filed under the Securities Act or an existing
registration statement to be amended for the purpose of registering the
Republic Shares for resale by a Holder thereof (the "Registration Statement").
For purposes of this Article, a person is deemed to be a "Holder" of Republic
Shares whenever such person owns Republic Shares. Republic will use its
reasonable best efforts to have the Registration Statement become effective and
cause the Republic Shares to be registered under the Securities Act, and
registered, qualified or exempted under the state securities laws of such
jurisdictions as any Holder reasonably requests, as soon as is reasonably
practicable after the Effective Time.
8.2 EXPENSES OF REGISTRATION. Republic shall pay all expenses
incurred by Republic in connection with the registration, qualification and/or
exemption of the Republic Shares, including any SEC and state securities law
registration or qualification, filing and NASD fees, word processing,
duplicating and printing expenses, fees and disbursements of Republic's counsel
and accountants, transfer agents' and registrars' fees, fees and disbursements
of experts used by Republic in connection with such registration, qualification
and/or exemption, and expenses incidental to any amendment or supplement to the
Registrn Statement or prospectuses contained therein. Republic shall not,
however, be liable for any sales, broker's or underwriting commissions upon
sale by any Holder of any of the Republic Shares.
8.3 FURNISHING OF DOCUMENTS. Republic shall furnish to the
Holders such reasonable number of copies of the Registration Statement, such
prospectuses as are contained in the Registration Statement, each amendment and
supplement to the foregoing and such other documents as the Holders may
reasonably request in order to facilitate the offering of the Republic Shares.
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8.4 AMENDMENTS AND SUPPLEMENTS. Republic shall prepare and
promptly file with the SEC and promptly notify the Holders of the filing of
such amendments or supplements to the Registration Statement or prospectuses
contained therein as may be necessary to correct any statements or omissions
if, at the time when a prospectus relating to the Republic Shares is required
to be delivered under the Securities Act, any event shall have occurred as a
result of which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Republic shall also
advise the Holders promptly after it shall receive notice or obtain knowledge
thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of the Registration Statement or the initiation or threatening of
any proceeding for that purpose and promptly use its reasonable best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such stop
order should be issued.
8.5 DURATION. Republic shall maintain the continual effectiveness
of the Registration Statement for a period of three (3) years following the
Effective Date or until such earlier time as Republic reasonably determines,
based on an opinion of counsel, (a copy of which shall be provided to the
Holders), that the Holders will be eligible to sell all of the Shares then
owned by the Holders without the need for continued registration of the shares,
in the three month period immediately following the termination of the
effectiveness of the Registration Statement.
8.6 FURTHER INFORMATION. If Republic Shares owned by a Holder are
included in any registration, such Holder shall furnish Republic such
information regarding itself as Republic may reasonably request and as shall be
required in connection with any registration, qualificationcompliance
referred to in this Agreement.
8.7 ADDITIONAL UNDERTAKINGS.
(a) In order to facilitate the resale by Holders of
Republic Shares during any period in which the Registration Statement shall not
be effective, Republic shall use its best efforts to take all action and file
with the Commission such information as the Commission may require as a
condition to the availability of Rule 144 or Rule 145 under the Securities Act
(or any successor exemptive rule hereafter in effect).
(b) During the three (3) years following the Effective
Date, Republic shall use its best efforts to maintain its listing on the Nasdaq
National Market, the Toronto Stock Exchange or other nationally recognized
securities exchange.
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8.8 INDEMNIFICATION
(a) Republic will indemnify and hold harmless the Holders
and each person, if any, who controls a Holder within the meaning of the
Securities Act, from and against any and all losses, damages, liabilities,
costs and expenses to which the Holders or any such controlling person may
become subject under the Securities Act or under any state securities or
"blue-sky" laws or any rules or regulation thereunder, insofar as such losses,
claims, damages, liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any prospectus contained therein or any amendment or
supplement thereto, or arise out of or based upon the omission or alleged
omission to state therein a material 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; provided, however, that, Republic will
not be liable in any such case to the extent that any such loss, claim, damage,
liability, cost or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by or on behalf of such Holder or such
controlling person in writing specifically for use in the preparation thereof.
(b) The obligation of Republic to include in the
Registration Statement the Republic Shares of each Holder is subject to the
requirement that such Holder deliver to Republic an agreement pursuant to which
each Holders, individually and not jointly, will indemnify and hold harmless
Republic and each person, if any, who controls Republic within the meaning of
the Securities Act, from and against any and all losses, damages, liabilities,
costs and expenses to which Republic or any such controlling person may become
subject under the Securities Act or under any state securities or "blue-sky"
laws or any rule or region thereunder, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material 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, to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
Holder specifically for use in the preparation thereof; provided however, that
the indemnification obligations of each Holder hereunder shall be limited to
the amount of gross proceeds received by such Holder from the sale of Republic
Shares pursuant to such registration statement.
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(c) Promptly after receipt by an indemnified party
pursuant to the provisions of paragraph (a) or (b) of this Section 8.8 notice
of the commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said
paragraph (a) or (b) promptly notify the indemnifying party of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have hereunder unless the indemnifying party
has been materially prejudiced thereby nor will such failure to so notify the
indemnifying party relieve it from any liability which it may have to any
indemnified party otherwise than hereunder. In case such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, if the
defendants in any action include both the indemnified party and the
indemnifying party and there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the indemnified
party, the indemnified party or parties shall have the right to select separate
counsel to participate in the defense of such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of said paragraph (a) or (b) for any legal or other expense
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless (i) the
indemni party shall have employed counsel in accordance with the provisions
of the preceding sentence, (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after the notice of the commencement of the
action, or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
(d) In the event any of the Republic Shares are sold by
any Holder or Holders in an underwritten public offering consented to by
Republic, Republic shall provide indemnification to the underwriters of such
offering and any person controlling any such underwriter on behalf of the
Holder or Holders making the offering; provided, however, that Republic shall
not be required to consent to any such underwriting or to provide such
indemnification in respect of the matters described in the final clause of
Section 8.8(a).
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ARTICLE IX
INDEMNIFICATION
9.1 AGREEMENT BY CRAWFORD TO INDEMNIFY. Subject to the terms and
conditions set forth herein, Crawford agrees from and after the Effective Date
to indemnify and hold each of the Republic Companies harmless from and against
the aggregate of all Indemnifiable Damages (as defined below).
(a) For purposes of this Agreement, "Indemnifiable
Damages" means, without duplication, 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 any of the Republic Companies in excess of
$500,000, to the extent (i) resulting from any breach of a
representation or warranty made by the Company or Crawford in or
pursuant to this Agreement, except for matters disclosed to Republic
prior to Closing pursuant to Section 5.6, (ii) resulting from any
breach of Sections 5.7, 5.8, 5.9, and 5.10 by the Company prior to the
Effective Date or by Crawford at any time, or (iii) resulting from any
inaccuracy in any certificate delivered by the Company or Crawford
pursuant to this Agreement. The total Indemnifiable Damages shall not
exceed $15,000,000 in the aggregate.
(b) Without limiting the generality of the foregoing,
with respect to the measurement of Indemnifiable Damages, each of the
Republic Companies shall have the right to be put in the same
financial position as it would have been in had each of the
representations and warranties of the Company been true and correct.
(c) Each of the representations and warranties made by
the Company in this Agreement or pursuant hereto shall survive for a
period of one year after the Effective Time, notwithstanding any
itigation at any time made by or on behalf of the Republic
Companies, and upon expiration of such one year period, such
representations and warranties shall expire, except the
representations and warranties of the Company contained in Sections
3.1, 3.2, 3.3, 3.4, and 3.5 shall not expire but shall continue
indefinitely. No claim for the recovery of Indemnifiable Damages may
be asserted by the Republic Companies against Crawford 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.
9.2 SECURITY FOR THE COMPANY SHAREHOLDERS' INDEMNIFICATION
OBLIGATION. As security for the agreement by Crawford to
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indemnify and hold the Republic Companies harmless as described in Sections
9.1, at the Closing, Crawford shall deliver to and Republic shall set aside and
hold certificates representing 194,923 shares of Republic Common Stock (the
"Pledged Shares") for a period not to exceed one year from the Effective Date.
There shall also be deposited with Republic, subject to the terms of this
Section 9.2, all shares of Republic Common Stock issued to Crawford with
respect to the Pledged Shares as a result of any stock dividend or stock split.
(The Pledged Shares and all stock issued or paid upon Pledged Shares and
proceeds thereof are hereinafter referred to as the "Collateral.") Except with
respect to shares transferred pursuant to the right of setoff referred to below
(and in the case of such shares, until the same are transferred), all Pledged
Shares shall be deemed to be owned by Crawford and Crawford shall be entitled
to vote the same and to receive all cash dividends paid upon same.
(a) Each of the Republic Companies may make a claim for
payment of Indemnifiable Damages and may set off against the Pledged
Shares any Indemnifiable Damages for which the Company or Crawford may
be responsible pursuant to this Agreement, subject, however, to the
following terms and conditions:
(1) The Republic Companies shall
give written notice to the Company or Crawford of any claim
for Indemnifiable Damages which notice shall set forth (i) the
amount of Indemnifiable Damages, (ii) the basis of the claim
therefore, and (iii) copies of all documentation and other
evidence in support of such claim;
(2) Unless the Indemnifiable Damages
arise from a claim of a third party, with respect to which
Crawford has elected to assume the defense of and pay any
resulting liaby, judgment or settlement thereunder, such
set off shall be effected on the later to occur on the
expiration of 30 days from the delivery of such notice (the
"Notice of Contest Period") or, if such claim is contested,
the date the dispute is resolved, in accordance with paragraph
(3) below.
(3) If, prior to the expiration of the
Notice of Contest Period, Crawford shall notify the Republic
Companies 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 shall submit such dispute to arbitration. The
arbitration shall be conducted in Jacksonville, Florida by a
committee of three arbitrators one of whom shall be appointed
by
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Crawford, one of whom shall be appointed by Republic
and one of whom shall be appointed by the two arbitrators so
appointed. The arbitration panel shall be appointed within 60
days after the expiration of the Resolution Period. The
arbitrators shall permit discovery in accordance with the
Federal Rules of Civil Procedure and shall abide by the rules
of the American Arbitration Association. The decision of
arbitrators shall be made within 45 days of conclusion of the
arbitration proceeding and shall be final and binding on all
parties.
(4) If the judgment of the Arbitrators
is adverse to Crawford, the amount thereof shall be paid by
Crawford within ten (10) days of the written decision of the
Arbitrators. In the event Crawford does not pay within such
ten (10) day period, then Republic shall within five (5) days
thereafter, set off against such portion of the Collateral as
shall have an aggregate value (based upon the average closing
sale price of $20.00 per share as of the date of this
Agreement) equal to the amount of the final judgment of the
Arbitrators.
(b) Subject to applicable accounting, securities,
tax, and other legal requirements, Crawford may at any time instruct
Republic to sell some or all of the Pledged Shares and the proceeds
thereof shall be held as substitute collateral for the Pledged Shares.
Crawford may direct that such proceeds be reinvested in investment
grade securities in his name subject to the security interest
contemplated hereby.
(c) The Republic Companies agree to release the
Collateral from the secy interest created in this Section 9.2 no
later than the first anniversary of the Effective Time and the
Republic Companies agree to promptly deliver to Crawford all
certificates evidencing any Pledged Shares then held by them unless
there then remains unresolved any claim for Indemnifiable Damages or
other damages hereunder as to which notice has been given, in which
event any Collateral remaining on deposit after such claim shall not
be returned to Crawford until after the time of satisfaction.
(d) The remedies provided for in this Section 9.2
shall be in addition to and not in lieu of any other remedies
available to the Republic Companies under this Agreement; provided
however, following consummation of the Merger, a claim for
Indemnifiable Damages pursuant to this Article IX shall be Republic's
sole and exclusive remedy for a breach of the representations and
warranties contained
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herein, and in consideration of such limitation, Crawford agrees to
waive any and all rights of contribution or other claims he may have
against the Company with respect to the breach of any of the Company's
representations and warranties.
9.3 ADJUSTMENT TO MERGER CONSIDERATION. All setoffs of Pledged
Shares or payments for Indemnifiable Damages made pursuant to this Article IX
shall be treated as adjustments to the consideration granted in the Merger in
Section 1.4.
ARTICLE X
SECURITIES LAW MATTERS
The parties agree as follows with respect to the sale or other
disposition after Effective Time of the Republic Shares:
10.1 DISPOSITION OF SHARES. Crawford represents and warrants, on
behalf of himself and on behalf of each of the other shareholders of the
Company, that the shares of Republic Common Stock being acquired by Crawford
and by the other shareholders hereunder are being acquired and will be acquired
for their own respective accounts and will not be sold or otherwise disposed
of, except pursuant to (a) an exemption from the registration requirements
under the Securities Act, which does not require the filing by Republic with
the SEC of any registration statement, offering circular or other document, in
which case, the selling shareholders shall first supply to the Republic
Companies an opinion of counsel (which counsel and opinions shall be
satisfactory to the Republic Companies) that such exception is available, or
(b) a registration statement filed by Republic with the SEC under the
Securities Act.
10.2 LEGEND.
(a) Each certificate representing the Republic Shares shall
bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER WITHOUT AN EFFECTIVE REGISTRATION STATEMENT BEING FILED
UNDER OR PURSUANT TO SAID ACT OR AN OPINION OF COUNSEL IN FORM
AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF RULE 145(D) PROMULGATED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR DISPOSED OF
BY THE HOLDER WITHOUT COMPLIANCE WITH SAID RULE AND SECURITIES
AND EXCHANGE COMMISSION ACCOUNTING SERIES RELEASES 130 AND
135.
Republic may, unless a registration statement is in effect covering such shares
and the holding periods under the Commission's regulations and requirements
regarding "pooling of interests" combinations are complied with, place stop
transfer orders with its transfer agents with respect to such certificates.
(b) In connection with any sale by a Holder of Republic Shares
included in the Registration Statement referred to in Article VIII hereof,
Republic agrees to cause the legend set forth in this Section 10.2 to be
promptly removed from the certificates representing the Republic Shares sold
and to cause related stop transfer restrictions to be lifted with respect to
such shares upon delivery to Republic from the Holder of facsimile or written
notice of any such sale of registered shares. The foregoing facsimile or
notice from the Holder shall be accompanied by a written representation (in a
form reasonably acceptable to Republic) from the Holder's securities broker
regarding the manner of sale and such other matters as shall be reasonably
requested by Republic. Following removal of the legend as set forth above (and
assuming that the Registration Statement shall then be effective), the Republic
Shares referred to in such notice shall be transferable by such Holder without
restriction under the federal securities laws.
ARTICLE XI
DEFINITIONS
11.1 DEFINED TERMS. As used herein, the following terms shall have
the following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 1 of the
General Rules and Regulations under the Exchange Act, as in effect on
the date hereof.
"Commission" means the Securities and Exchange Commission.
"Company Shareholders" means all of the persons holding shares of the
Company's Common Stock.
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"Contract" means any indenture, lease, sublease, license, loan
agreement, mortgage, note, indenture, restriction, will, trust,
commitment, obligation or other contract, agreement or instrument,
whether written or oral.
"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 or
other political subdivision thereof, and any entity or official
(including courts) exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"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 individually or in the aggregate, is materially adverse
to such condition, properties, assets, liabilities, rights,
obligations, operations, business or prospects.
"NASD" shall mean the National Association of Securities Dealers, Inc.
and any successor organization or other entity serving an equivalent
function in the securities industry.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, estate, trust, uninorated 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 Common Stock effected by preparing and filing
a registration statement in compliance with the Securities Act and the
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declaration or ordering of the effectiveness of such registration
statement.
"Republic Shares" means the shares of Republic Common Stock which
Crawford and the other shareholders of the Company receive in
connection with the Merger.
"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.
11.2 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.
ARTICLE XII
TERMINATION, AMENDMENT AND WAIVER
12.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time:
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(a) by mutual written consent of all of the parties
hereto at any time prior to the Closing;
(b) by any party at any time prior to the Closing Date if
there shall be a pending or threatened action or proceeding before any
court or other governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated hereby, and
which, in the reasonable judgment of such party, makes it inadvisable
to proceed with the transactions contemplated by this Agreement;
(c) by Republic in the event of a material breach by the
Company or Crawford of any provision of this Agreement, or by the
Company or Crawford in the event of a material breach by the Republic
Companies of any provision of this Agreement; or
(d) by any party, upon written notice to the other party,
in the event the Effective Date shall not be on or before November 30,
1995.
12.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to Section 12.1, this Agreement and the Plans of Merger
shall forthwith become void, there shall be no liability on the part of the
parties hereto or thereto to each other and all rights and obligations of the
parties hereto or thereto shall cease; 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 XIII
GENERAL PROVISIONS
13.1 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 c 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):
(a) IF TO ANY OF THE REPUBLIC COMPANIES TO:
Republic Waste Industries, Inc.
200 East Las Olas Blvd., Suite 1400
Ft. Lauderdale, FL 33301
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Attn: Harris W. Hudson, President
Telecopy: (305) 779-3884
WITH A COPY TO:
Akerman, Senterfitt & Eidson, P.A.
24th Floor, One Brickell Square
801 Brickell Avenue
Miami, Florida 33131
Attention: Stephen K. Roddenberry, Esq.
Telecopy: (305) 374-5095
(b) IF TO THE COMPANY OR CRAWFORD TO:
Southland Environmental Services, Inc.
Post Office Box 37797
Jacksonville, Florida 32236
Attention: Felix A. Crawford, President
Telecopy:(904) 384-1200
WITH A COPY TO:
Rogers, Towers, Bailey, Jones & Gay, P.A.
1301 Riverplace Boulevard, Suite 1500
Jacksonville, Florida 32207
Attention: Michael A. Wodrich, Esq.
Telecopy: (904) 396-0663
13.2 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.
13.3 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.
13.4 AMENDMENT; WAIVER. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executy 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
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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.
13.5 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 any party without the prior written consent of
the other parties hereto.
13.6 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.
13.7 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.
13.8 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.
13.9 ARM'S LENGTH NEGOTIATIONS. Each y 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 arms' 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 WASTE INDUSTRIES, INC.
By: /s/ H. Wayne Huizenga
-------------------------------
H. Wayne Huizenga
Chief Executive Officer
RS MERGERSUB, INC.
By: /s/ Harris W. Hudson
-------------------------------
Harris W. Hudson, President
SOUTHLAND ENVIRONMENTAL
SERVICES, INC.
By: /s/ Felix A. Crawford
-------------------------------
Felix A. Crawford, President
/s/ Felix A. Crawford
----------------------------------
FELIX A. CRAWFORD, Individually
CFP, LTD.
By: /s/ Felix A. Crawford
-------------------------------
Felix A. Crawford,
General Partner
FELIX A. CRAWFORD REVOCABLE
LIVING TRUST
By: /s/ Felix A. Crawford
-------------------------------
Felix A. Crawford, Trustee
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EXHIBIT A
PLAN OF MERGER
This Plan of Merger (this "Plan") is entered into as of
______________, 1995 by and between RS Mergersub, Inc., a Florida corporation
("Republic Sub"), and Southland Environmental Services, Inc., a Florida
corporation ("Southland").
RECITALS
The boards of directors and shareholders of Republic Sub and Southland
have determined that it is advisable and in the best interests of each such
corporation and its respective shareholders that Republic Sub be merged (the
"Merger") with and into Southland on the terms and subject to the conditions
set forth herein, such that Southland will be the surviving corporation and a
wholly-owned subsidiary of Republic Waste Industries, Inc., a Delaware
corporation.
ARTICLE I
THE MERGER
At the Effective Time (as defined in Article V hereof), Republic Sub
shall be merged with and into Southland in accordance with the Florida Business
Corporation Act (the "FBCA"), and the separate existence of Republic Sub shall
cease and Southland shall thereafter continue as the surviving corporation (the
"Surviving Corporation") under the laws of the State of Florida.
ARTICLE II
THE SURVIVING CORPORATION
A. At the Effective Time, the Articles of Incorporation of
Southland, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation, until thereafter
altered, amended or repealed in accordance with the FBCA.
B. At the Effective Time, the Bylaws of Southland, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation, until thereafter altered, amended or repealed in accordance with
the FBCA and the Articles of Incorporation and Bylaws of the Surviving
Corporation.
<PAGE> 54
C. At the Effective Time, the officers and directors of Southland
shall be the officers and directors of the Surviving Corporation until their
successors are elected and have qualified.
ARTICLE III
MANNER AND BASIS OF CONVERTING SHARES
A. At the Effective Time, each share of common stock of
Southland, $1.00 par value per share (the "Southland Common Stock"), which
shall be issued and outstanding (other than shares of Southland Common Stock
held in treasury) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to receive four and
one-third (4 1/3) shares of common stock, $0.01 par value per share, of
Republic Waste Industries, Inc., a Delaware corporation and the parent of
Republic Sub ("Republic Common Stock").
B. At the Effective Time, each share of Southland Common Stock
held in treasury shall be canceled and extinguished without any conversion
thereof.
C. At the Effective Time, each right to acquire shares of
Southland Common Stock, to the extent that any such rights exist, which shall
be issued and outstanding shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to acquire four
and one-third (4 1/3) shares of Republic Common Stock.
D. Each share of Republic Sub's Common Stock, $.01 par value per
share ("Republic Sub's Common Stock"), issued and outstanding immediately prior
to the Effective Time shall be automatically converted into one share of
Southland Common Stock, which shall be the only outstanding Common Stock of the
Surviving Corporation immediately following the Effective Time.
ARTICLE IV
EFFECT OF MERGER
At the Effective Time, all property, rights, privileges, powers and
franchises of Southland and Republic Sub shall vest in the Surviving
Corporation, and all liabilities and obligations of Southland and Republic Sub
shall become liabilities and obligations of the Surviving Corporation.
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ARTICLE V
EFFECTIVE TIME
As used in this Agreement, the term, "Effective Time" shall mean the
date and time of filing of Articles of Merger with the Department of State of
the State of Florida with respect to the Merger.
IN WITNESS WHEREOF, each of the parties has caused this Plan to be
executed on its behalf as of the date first written above.
RS MERGERSUB, INC.
By:
--------------------------------------
Name:
------------------------
Title:
------------------------
SOUTHLAND ENVIRONMENTAL SERVICES,
INC.
By:
--------------------------------------
Name: Felix A. Crawford
Title: President
3
