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Exhibit 2.3
SECOND SUPPLEMENTAL AGREEMENT
SECOND SUPPLEMENTAL AGREEMENT dated December 4, 1998 (this "Agreement") to
the Asset Sale Agreement dated September 27, 1998 (as amended, the "Asset
Agreement") between Waste Management, Inc., a Delaware corporation ("WMI"), and
Republic Services, Inc., a Delaware corporation ("Republic"), and the Stock and
Asset Sale Agreement dated November 13, 1998 between Republic and WMI (as
amended, the "Stock and Asset Agreement"), as such Agreements are supplemented
by the Supplemental Agreement dated November 13, 1998 between WMI and Republic
(the Asset Agreement and the Stock and Asset Agreement as so supplemented
being hereinafter collectively referred to as the "Main Agreements").
WHEREAS, the parties have entered into the Main Agreements to sell and
purchase certain assets and/or stock and assets from the other party as
provided in the applicable Main Agreement; and
WHEREAS, the parties desire to memorialize certain understandings and
obligations of the parties arising in connection with the Main Agreements;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Main Agreements, the
parties hereby agree as follows:
Section 1. Defined Terms. Capitalized terms which are used herein and are
not otherwise defined herein shall have the meanings assigned to such terms in
the Main Agreements.
Section 2. Prepaid Accounts. The parties acknowledge that certain
customers pay the Businesses for services in advance. Following the Closing
Date with respect to each applicable Business, the party which has received
payments in advance for services which have not been fully performed shall as
promptly as practicable pay over to the other party that portion of the
advance payments allocable to services not fully performed on the Closing Date,
which services such other party is obligated to perform subsequent to the
Closing Date.
Section 3. Amendment to Exhibits B and C of Asset Agreement. Attached
hereto as Exhibit "A" is a revised Exhibit B and C to the Asset Agreement
("Purchaser Assets to be Sold" and "Additional Agreements," respectively),
which Exhibit A shall replace and supersede Exhibits B and C to the Asset
Agreement in their entirety.
Section 4. Brazoria Landfill Royalty Payments. Effective as of the date
hereof, the Brazoria landfill's obligation to make royalty payments to Brazoria
County Disposal Corporation ("BCDC"), a wholly-owned subsidiary of WMI, under
the Royalty Agreement dated October 2, 1992 by and among Brazoria County
Recycling Center, Inc. and BCDC (the "BCDC Royalty Agreement") shall terminate.
As promptly as practicable, but in no event more than thirty (30) days following
the date
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hereof, BCDC and Republic shall enter into an agreement, satisfactory to
Republic in all respects, terminating the BCDC Royalty Agreement in full.
Section 5. Platting. The parties agree that to the extent, if any, to which
the conveyance of any Owned Real Property shall cause to be required platting of
the Owned Real Property so conveyed, and approval by a Governmental Authority of
such plat, then (i) the grantee of such Owned Real Property shall be responsible
for and shall cause to occur all such platting and plat approvals, the
reasonable cost and expense of which shall be divided equally among the grantor
and the grantee, and (ii) the grantor of such Owned Real Property shall provide
such cooperation in connection with such platting and plat approval, as may be
reasonably requested by such grantee at any time within one (1) year after the
Closing of the sale of such Owned Real Property to the grantee, provided that
any material out-of-pocket costs incurred by the grantor in connection therewith
are divided equally among the grantor and the grantee, and that such cooperation
does not materially adversely affect the use or value of any property retained
by the grantor. The obligations of the parties pursuant to this Section shall
survive the Closing of the sale of such Owned Real Property.
Section 6. Reciprocal Easements. The parties agree that to the extent, if
any, to which the conveyance of any Owned Real Property shall cause either the
property so conveyed, or any property retained by the grantor thereof or its
affiliate, to require access or utility easements or rights-of-way as necessary
to serve such property for its intended use (such easements and rights-of-way
being hereinafter called "Necessary Easements", and the property the use of
which requires such easements and rights-of-way being hereinafter called the
"Affected Property"), upon, along, across or under other property which was
retained by or conveyed to the other party hereto (such property being
hereinafter called the "Remaining Property"), then the owner of the Remaining
Property shall grant such Necessary Easements upon, along, across or under, as
appropriate, the Remaining Property, as may be reasonably requested by the owner
of the Affected Property at any time within one (1) year after the Closing of
such conveyance, provided that any material out-of-pocket costs incurred by the
owner of the Affected Property in connection therewith are paid by the grantee,
and that such cooperation does not materially adversely affect the use or value
of the Remaining Property or any other property owned by the owner of the
Remaining Property. In addition, as to the Hardy Road Transfer Station, WMI
hereby grants to Republic and its affiliates temporary easements for ingress and
egress for their benefit and the benefit of their employees, representatives,
customers and invitees to and from such station along and across the existing
roadway from such station to Hardy Road, and for utilities along and across
existing utility lines, facilities and easements on the balance of WMI's (or its
affiliate's) property at the Hardy Road facility, which easements shall expire
sixty (60) days from the date of this Agreement. The obligations of the parties
pursuant to this Section shall survive the Closing of the conveyance of such
Owned Real Property.
Section 7. Surveys. Due to the delays in obtaining the Surveys with respect
to the Owned Real Property being conveyed to Republic or its affiliates on the
date of this Agreement, and more fully described on Exhibit "B" attached hereto
and incorporated herein, Republic and WMI agree that (i) such Owned Real
Property shall constitute Purchased Parcels pursuant to and as that term is
defined in the Third Amendment to Asset Sale Agreement ("Third Amendment")
between Republic and
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WMI dated November 13, 1998 (except that for purposes of the Third Amendment,
WMI shall have forty (40) days from the date of this Agreement, rather than
forty (40) days from the date of the Third Amendment, in which to deliver to
Republic the Surveys with respect to the Owned Real Property described on
Exhibit "B" hereto), (ii) the Owned Real Property described on Exhibit "B"
hereto is hereby added to Exhibit "A" to the Third Amendment, and (iii) Exhibit
"C" attached hereto, and setting forth certain known title exceptions with
regard to the Owned Real Property described on Exhibit "B" hereto, is hereby
added to Exhibit "B" to the Third Amendment, with the effects intended with
respect thereto by Paragraph 5 of the Third Amendment.
Section 8. MORTGAGE INDEMNITY. In addition to the indemnities provided for
in the Asset Agreement, and without being limited by the limitations on the
amounts of indemnities pursuant to Section 8.2 of the Asset Sale Agreement, WMI,
on behalf of itself and its successors, agrees to indemnify, defend and hold
harmless Republic and its affiliates from and against any liability, loss, cost
or expense (including reasonable attorneys' fees and costs) suffered or incurred
by Republic or its Affiliates as a result of the enforcement of the First
Mortgage and Security Agreement on the ▇▇▇▇▇▇ Point Transfer Station dated
November 15, 1985, from Independent Pier Company to Fidelity Bank National
Association, and recorded on November 17, 1985 in Mortgage Book FHS 388, page
375, of the Real Property Records of the County of Philadelphia, Commonwealth of
Philadelphia, or the collection of the indebtedness secured thereby. This
indemnity shall survive the Closing of the sale of the ▇▇▇▇▇▇ Point Transfer
Station to Republic or its Affiliate, but shall be released if (but only if) (i)
a recordable release (the "Release") of such Mortgage and Security Agreement
duly executed by the holder thereof shall be delivered to Republic, or (ii) the
owner's title insurance policy on the ▇▇▇▇▇▇ Point Transfer Station shall be
issued to Republic without exception for such Mortgage and Security Agreement
(or if issued with such exception, same shall be endorsed or modified to delete
such exceptions). WMI agrees to either secure the Release, or to provide such
other documents, indemnities or other items to the Title Company as the Title
Company shall deem sufficient to cause the deletion of such exceptions from the
Title Policy for the ▇▇▇▇▇▇ Point Transfer Station.
Section 9. INDEMNITY. Republic agrees to defend, protect, indemnify and
hold harmless WMI and its Affiliates from and against all Damages incurred or
suffered by WMI and its Affiliates resulting from or arising out of:
(i) paragraphs (1), (2) and/or (4) of the Agreement of Assignment of
Contract (for Execution by Assignor) regarding contract no. 82797WD00036 with
the City of New York Department of Sanitation; and
(ii) the taking of possession or exercise of control by Republic of the
Assets included within the "Houston hauling assets" (i.e., WMI Houston, Texas;
USA Houston - TransAmerican, Houston, Texas; WMI South Texas Dickinson, Texas;
USA ▇▇▇▇▇▇ Road Hauling Facility, Houston, Texas; and USA Hardy Road Transfer
Station, Houston, Texas) prior to the effective time of the Closing of such
Assets.
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Republic's obligations under this Section shall survive the Closing of such
Assets.
Section 10. FURTHER ASSURANCES. On and after the date hereof, at the
request of the other party, the parties hereto shall execute and deliver such
documents or other instruments and take such further actions as may be
reasonably necessary or appropriate to effectuate and carry out the
transactions contemplated hereby.
Section 11. PURCHASE PRICE. The purchase price payable with respect to
the Assets to be conveyed on the date is hereof set forth on Exhibit D hereto.
Section 12. NEKBOH PERMITS. The Assets conveyed to Republic include all
WMI's (or its subsidiaries') right, title and interest in USA Waste, Inc.'s
pending application to construct and operate a waste transfer station located
at ▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, which is known as the Nekboh
Transfer Station (the "Nekboh Facility"). Republic shall use its best efforts
to obtain all such permits to construct and operate the Nekboh Facility as soon
as reasonably possible. WMI shall cooperate and shall cause its Affiliates to
cooperate with Republic and its Affiliates in obtaining all such necessary
permits and approvals to construct and operate the Nekboh Facility; provided
that WMI and its Affiliates shall not be required to expend any sum of money
other than amounts that Republic agrees to reimburse.
Section 13. NEW YORK PROPERTIES. Effective as of the date of this
Agreement, WMI has conveyed to Republic, and Republic has paid for the Owned
Real Property known colloquially as the "All City Transfer Station" and
"Promuto Transfer Station" (collectively, the "New York Real Properties"), and
more fully described on Exhibit "D" attached hereto and incorporated herein by
reference, notwithstanding the fact that the title to the New York Real
Properties as of the date hereof is subject to certain matters which are
required to be satisfied or removed by WMI pursuant to the provisions of the
Asset Sale Agreement. Accordingly, and in consideration of Republic's payment
to WMI of the scheduled purchase price for the New York Real Properties, WMI
agrees to use best efforts to conclude all title curative work on or before
December 18, 1998, so as to cause such conveyance of title to the New York Real
Properties to Republic or its designated affiliates to be in accordance with
the provisions of the Asset Sale Agrement, and subject to no title exceptions
which materially adversely affect the use of such New York Real Properties for
their intended purposes as municipal nonhazardous solid waste transfer stations,
except as otherwise provided in the following sentences. Such conveyances, and
the owner's title insurance policies to be issued to Republic or its affiliates
thereon, shall be made subject to the existing easements, restrictions, and
other exceptions ("Existing Matters") affecting title to the New York Real
Properties which are set forth in title commitment numbers 9802-00189 dated
effective September 4, 1998 (as to the Promuto Transfer Station) and 9804-00545
dated effective July 17, 1998 (as to the All City Transfer Station) issued by
Chicago Title Insurance Company to Republic or its affiliates on the New York
Real Properties, except for any curative deeds or items identified as
requirements thereon, and any judgments, mortgages, deeds of trust or liens
(other than liens for taxes or assessments which are not yet due and payable).
In addition, the provisions of Section 7 of this Agreement shall be applicable
to the New York Real Properties.
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Section 14. Brazoria County Landfill.
(a) Effective as of the date of this Agreement, WMI has conveyed or caused
its affiliate to convey to Republic or its designated affiliate a portion (the
"Conveyed Portion") of, and Republic has paid for all of, the Owned Real
Property known colloquially as the "Brazoria County Landfill" (the "Brazoria
County Landfill"). The Conveyed Portion is more fully described on Exhibit "E"
attached hereto and incorporated herein by reference. However, due to the need
for additional time for WMI to cause to be performed certain title examination
work with regard to the remainder of the Brazoria County Landfill (the
"Unconveyed Portion"), the conveyance of the Unconveyed Portion from WMI or its
affiliates to Republic will be delayed. Accordingly, and in consideration of
Republic's payment to WMI of the scheduled purchase price for the Brazoria
County Landfill, WMI agrees to convey or cause its affiliates to convey to
Republic or its designated affiliate the Unconveyed Portion, on or before
December 18, 1998, in accordance with the Asset Sale Agreement, and subject to
no title exceptions which materially adversely affect the use of such Unconveyed
Portion for its intended purposes as a municipal nonhazardous solid waste
landfill (or as to the portion of the Brazoria County Landfill currently used
for such purpose, as a municipal nonhazardous solid waste recycling center),
except as otherwise provided in the following sentences. Such conveyance and the
owner's title insurance policy to be issued to Republic or its affiliate thereon
respecting the Brazoria County Landfill (which shall include the Conveyed
Portion and the Unconveyed Portion), shall be made subject (to the extent
applicable) to (1) the existing easements, restrictions, and other exceptions
("Existing Matters") affecting title to the Conveyed Portion which are set forth
in title commitment number 9808101A issued October 19, 1998, issued by Chicago
Title Insurance Company to Republic or its affiliates on the Conveyed Portion,
except for any curative deeds or items identified as requirements thereon, and
any judgments, mortgages, deeds of trust or liens (other than liens for taxes or
assessments which are not yet due and payable), and (2) as to the Unconveyed
Portion, any other applicable title exceptions which do not materially adversely
affect the use of the Unconveyed Portion for its intended purposes (as set forth
above). In addition, the provisions of Section 7 of this Agreement shall be
applicable to the Brazoria County Landfill.
(b) In addition to the indemnities provided for in the Asset Sale
Agreement, and without being limited by the limitations on such indemnities
pursuant to Section 8.2 of the Asset Sale Agreement, WMI agrees to indemnify,
defend and hold harmless Republic and its affiliates from and against any
liability, loss, cost or expense (including reasonable attorney's fees and
costs) suffered or incurred by Republic or its affiliates as a result of WMI's
failure to fully comply with the provisions of subsection (a) above. The
provisions of this Section shall survive the Closing of the sale of the Brazoria
County Landfill to Republic or is affiliates, and the termination or expiration
of this Agreement and the Asset Sale Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf as of the date first above written.
REPUBLIC SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
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WASTE MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Senior Vice President
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