<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
CONTINENTAL WASTE INDUSTRIES, INC.
(NAME OF ISSUER)
COMMON STOCK, $.0006 PAR VALUE
------------------------------
(TITLE OF CLASS OF SECURITIES)
21215T103
---------
(CUSP NUMBER)
RICHARD L. HANDLEY
REPUBLIC INDUSTRIES, INC.
200 EAST LAS OLAS BLVD.
SUITE 1400
FORT LAUDERDALE, FLORIDA 33301
------------------------------
(NAME, ADDRESS AND TELEPHONE
NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS)
JUNE 27, 1996
---------------------------
(DATE OF EVENT WHICH REQUIRES
FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
Check the following box if a fee is being paid with this statement. [x] (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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SCHEDULE 13D
CUSP NO. 21215T103
<TABLE>
<S> <C>
NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
REPUBLIC INDUSTRIES, INC.; I.R.S. IDENTIFICATION NO. 73-1105145
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)[ ]
2
(b)[ ]
SEC USE ONLY
3
SOURCE OF FUNDS
4
OO (SEE ITEM 3)
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
5
CITIZENSHIP OR PLACE OF ORGANIZATION
6
DELAWARE
SOLE VOTING POWER
7
Number of 3,564,446
Shares
Beneficially SHARED VOTING POWER
Owned by
Each 8
Reporting
Person 0
With
SOLE DISPOSITIVE POWER
9
0
SHARED DISPOSITIVE POWER
10
0
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,564,446
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 12
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
25.0%
TYPE OF REPORTING PERSON
14
CO
</TABLE>
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ITEM 1. SECURITY AND ISSUER
This statement relates to common stock, par value $.0006 per
share (the "Issuer Common Stock"), of Continental Waste Industries,
Inc., a Delaware corporation (the "Issuer"). The principal
executive offices of the Issuer are located at 67 Walnut Avenue,
Suite 103, Clark, New Jersey 07066.
ITEM 2. IDENTITY AND BACKGROUND
Republic Industries, Inc., a corporation organized under the laws
of the State of Delaware ("Republic"), is a diversified service
company primarily engaged in (i) integrated solid waste collection,
disposal and recycling business, (ii) electronic security services
businesses and (iii) used automobile sales business. Republic's
principal office is located at 200 East Las Olas Blvd., Suite 1400,
Ft. Lauderdale, Florida 33301.
The following table sets forth the name and position of each of
the officers (collectively, the "Officers") of Republic:
EXECUTIVE OFFICERS
NAME POSITION
H. Wayne Huizenga Chief Executive Officer
Harrris W. Hudson President
Donald E. Koogler Executive Vice President
J. Ronald Castell Senior Vice President
Robert A. Guerin Senior Vice President
Richard L. Handley Senior Vice President and
General Counsel
Thomas W. Hawkins Senior Vice President
Robert J. Henninger Senior Vice President
The business address of each of the Officers is 200 East Las Olas
Blvd., Suite 1400, Ft. Lauderdale, Florida 33301.
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The following table sets forth the name and address of each of the directors
(collectively, the "Directors") of Republic:
NAME ADDRESS
H. Wayne Huizenga 200 East Las Olas Blvd.
(Chairman of the Board) Suite 1400
Ft. Lauderdale, Florida 33301
Michael G. DeGroote (1) Victoria Hall
(Vice Chairman of the Board) 11 Victoria Street
P.O. Box HM 1065
Hamilton, HMEX Bermuda
Harris W. Hudson 200 East Las Olas Blvd.
Suite 1400
Ft. Lauderdale, Florida 33301
J.P. Bryan 401 9th Avenue, S.W.
Calgary, Alberta, Canada T2P2H7
Rick Burdick (3) 1900 Pennzoil Place - South Tower
711 Louisiana Street
Houston, Texas 77002
George P. Johnson, Jr. (4) 500 East Broward Blvd.
Suite 950
Fort Lauderdale, Florida 33394
John J. Melk (5) 676 North Michigan Ave.
Suite 4000 Chicago, Illinois 60611
- -------------------
(1) Mr. DeGroote serves as Chairman, President and Chief Executive
Officer of Republic Environmental Systems, Inc., a hazardous
waste services company.
(2) Mr. Bryan serves as President and Chief Executive Officer of
Gulf Canada Resources Ltd., which is engaged in oil and gas
exploration and production.
(3) Mr. Burdick is a partner in the law firm of Akin, Gump, Strauss,
Hauer & Feld, L.L.P.
(4) Mr. Johnson serves as President and Chief Executive Officer of
Extended Stay America, Inc., an economy extended-stay lodging
chain.
(5) Mr. Melk serves as Chairman and Chief Executive Officer of H2O
Plus Inc., a bath and skin care product manufacturer and rental
distributor.
During the past five years, Republic and its Officers and Directors (i)
have not been named as defendants to any criminal proceeding, and (ii) have
not been parties to any civil proceeding of judicial or administrative body
of competent jurisdiction which resulted in Republic and/or its Officers
and Directors being subject to any judgment, decree or final order
enjoining future violation of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to that certain Merger Agreement, dated as of June 27,
1996 (the "Merger Agreement"), by and among Republic, RI/CW Merger
Corp., the Issuer and Thomas A. Volini and Carlos E. Aguero (the
"Management Stockholders"), each share of Issuer Common Stock will
be converted into right to receive 4/5 of one share of common stock,
par value $.01 (the"Republic Common Stock"), of Republic. See Item
4.
ITEM 4. PURPOSE OF TRANSACTION
As part of its overall strategy to acquire all of the outstanding
shares of Issuer Common Stock, Republic obtained beneficial
ownership of 3,564,446 shares (the "Shares") of Issuer Common Stock
pursuant to Irrevocable Proxies (the "Irrevocable Proxies") granted
to Republic by each of Thomas A. Volini, Carlos E. Aguero and Bert
R. Maxwell, individually, and on behalf of Environmental Venture
Fund Limited Partnership, Apex Investment Funds, L.P. and The
Productivity Fund Limited Partnership (collectively, the
"Stockholders"). Under the terms each of the Irrevocable Proxies,
the Stockholders have granted proxies to Republic to vote the Shares
(i) in favor of the Merger Agreement and the consummation of all
other transactions contemplated by the Merger Agreement; (ii)
against any competing transaction involving the Issuer, or any
action or agreement that would result in breach of any covenant,
representation or warranty or any other obligation or agreement of
the Issuer under the Merger Agreement or which could result in any
of the conditions to the Issuer's obligations under the Merger
Agreement not being fulfilled; and (iii) in favor of any other
matter relating to the consummation of the transactions contemplated
by the Merger Agreement.
Upon consummation of the merger of the Issuer with and into
Republic (the "Merger"), (i) the Issuer will become a wholly-owned
subsidiary of Republic; (ii) a new board of directors of the Issuer
will be appointed by Republic; (iii) the Issuer Common Stock will be
delisted from The Nasdaq National Market; and (iv) the Issuer will
file a Form 15 Certification of Notice of Termination of
Registration under Section 12(g) of the Securities and Exchange Act
of 1934, as amended, with the Securities and Exchange Commission.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Republic beneficially owns 3,564,446 shares of Issuer Common
Stock, constituting approximately 25.0% of all the outstanding
shares of Issuer Common Stock as of June 17, 1996. The
Officers and Directors do not beneficially own any shares of
Issuer Common Stock.
(b) Republic has sole power to direct the vote of the 3,564,446
shares of Issuer Common Stock in connection with certain
matters pertaining to the Merger. Republic and its Officers
and Directors do not have shared power to vote or direct the
vote, or sole or shared power to dispose or to direct the
disposition, of any other shares of Issuer Common Stock.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Republic and the Stockholders are parties to that certain
Irrevocable Proxies pursuant to which the Stockholders have granted
proxies to Republic to vote the Shares (i) in favor of the Merger
Agreement and the consummation of all other transactions
contemplated by the Merger Agreement; (ii) against any competing
transaction involving the Issuer, or any action or agreement that
would result in breach of any covenant, representation or warranty
or any obligation or agreement of the Issuer under the Merger
Agreement or which could result in any of the conditions to Issuer's
obligation under the
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Merger Agreement not being fulfilled; and (iii) in favor of any
other matter relating to the consummation of the transactions
contemplated by the Merger Agreement. The Stockholders granted to
Republic Irrevocable Proxies in connection with the Merger
Agreement, pursuant to which the Issuer will merge with and into
Republic (with Republic being the surviving corporation) and each
share of the Issuer Common Stock will be converted into right to
receive 4/5 of one share of Republic Common Stock. The Irrevocable
Proxies will remain in effect until the earlier of (i) consummation
of Merger, (ii) consummation of a competing transaction or (iii)
termination of the Merger Agreement.
There are no other contracts, arrangements or relationships
between Republic and the Issuer relating to the Issuer Common Stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 -- Merger Agreement, dated as of June 27, 1996, by and
among Republic, RI/CW Merger Corp., the Issuer and
the Management Stockholders.
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
REPUBLIC INDUSTRIES, INC.
July 8, 1996 By: /s/ Richard L. Handley
-----------------------------
Richard L. Handley
Senior Vice President and General Counsel
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<PAGE> 8
Exhibit 1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 27, 1996 (this
"Agreement"), by and among REPUBLIC INDUSTRIES, INC., a Delaware corporation
("Republic"), RI/CW MERGER CORP., a Delaware corporation and wholly-owned
subsidiary of Republic ("Mergersub"), CONTINENTAL WASTE INDUSTRIES, INC., a
Delaware corporation (the "Company"), and THOMAS A. VOLINI and CARLOS E. AGUERO
(the "Management Stockholders").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law"), the parties desire to enter into a business
combination transaction pursuant to which Mergersub will be merged with and
into the Company (the "Merger');
WHEREAS, the Board of Directors of the Company has determined that the
Merger is fair to, and in the best interests of, the Company and its
stockholders, has approved and adopted this Agreement and the Merger, and has
recommended approval and adoption of this Agreement and the Merger by the
stockholders of the Company;
WHEREAS, the Board of Directors of Republic has determined that the
Merger is fair to, and in the best interests of, Republic and its stockholders
and has approved and adopted this Agreement and the Merger;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that the Merger shall
be accounted for as a pooling-of-interests business combination.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
<PAGE> 9
ARTICLE I
THE MERGER
SECTION 1.1. THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with Delaware Law, at
the Effective Time (as defined in Section 1.3), Mergersub shall be merged with
and into the Company, with the Company being the surviving corporation in the
Merger (the "Surviving Corporation") and thereby becoming a wholly-owned
subsidiary of Republic, and the separate corporate existence of Mergersub shall
cease.
SECTION 1.2. CLOSING. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 9.1 and subject to the satisfaction or waiver of the
conditions set forth in Article VIII, the closing of the Merger (the "Closing")
will take place at a date and time determined by the parties as promptly as
practicable (and in any event within two business days) after satisfaction or
waiver of the conditions precedent set forth in Article VIII at the offices of
Akerman, Senterfitt & Eidson, P.A., One S.E. Third Avenue, Miami, Florida,
unless another date, time or place is agreed to in writing by the parties
hereto.
SECTION 1.3. EFFECTIVE TIME. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VIII, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware in such form as required by, and executed in
accordance with the relevant provisions of, Delaware Law (the date and time of
such filing, or such later date or time as set forth therein, being the
"Effective Time").
SECTION 1.4. EFFECT OF THE MERGER. At the Effective Time, the
effect of the Merger shall be as provided in Section 259 of the Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all property, rights,
privileges, powers and franchises of the Company and Mergersub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Mergersub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.5. CERTIFICATE OF INCORPORATION: BY-LAWS. At the
Effective Time, the Certificate of Incorporation and the By-Laws of the
Company, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation and the By-Laws of the Surviving Corporation
thereafter, unless and until amended in accordance with their terms and as
provided by law.
SECTION 1.6. DIRECTORS AND OFFICERS. At the Effective Time, the
directors of Mergersub at such time shall be the directors of the Surviving
Corporation, and the officers of the Company at such time shall be the officers
of the Surviving Corporation, each to hold a directorship
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or office in accordance with the Certificate of Incorporation and By-Laws of
the Surviving Corporation, until their respective successors are duly elected
and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.1. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of the Company,
Mergersub or the stockholders of the Company or Mergersub:
(a) Each share of common stock, par value $0.0006 per
share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time (other than any shares of Company
Common Stock to be canceled pursuant to Section 2.1(b)) shall be converted,
subject to Section 2.2(d), into the right to receive 4/5 of one share (the
"Exchange Ratio") of common stock, par value $0.01 per share, of Republic
("Republic Common Stock"); provided, however, that if between the date of this
Agreement and the Effective Time the outstanding shares of Company Common Stock
or Republic Common Stock shall have been changed into a different number of
shares or a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the Exchange Ratio shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split, combination
or exchange of shares. Nothing stated in the immediately preceding sentence
shall be construed as providing the holders of Company Common Stock any
preemptive or antidilutive rights other than in the case of a stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, and there shall be no adjustment to the Exchange Ratio in the event
that Republic issues or agrees to issue any shares of Republic Common Stock
between the date hereof and the Effective Time, whether for cash, through
option grants, option or warrant exercises, in acquisitions, or in other
transactions. At the Effective Time, all shares of Company Common Stock issued
and outstanding immediately prior thereto shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
certificate previously evidencing any such shares shall thereafter represent
the right to receive, upon the surrender of such certificate in accordance with
the provisions of Section 2.2, certificates evidencing such number of whole
shares of Republic Common Stock into which such Company Common Stock was
converted in accordance with the Exchange Ratio and any cash in lieu of
fractional shares of Republic Common Stock paid in consideration therefor
pursuant to Section 2.2(d). The holders of such certificates previously
evidencing such shares of Company Common Stock outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such shares
of Company Common Stock except as otherwise provided herein or by law.
(b) Each share of Company Common Stock held in the
treasury of the Company and each share of Company Common Stock owned by
Republic or any direct or indirect wholly
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owned subsidiary of Republic or of the Company immediately prior to the
Effective Time shall automatically be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
(c) Each share of common stock of Mergersub issued and
outstanding at the Effective Time shall be converted into one share of the
common stock , $0.0006 par value per share, of the Surviving Corporation.
SECTION 2.2 EXCHANGE OF CERTIFICATES.
(a) Exchange Agent. Republic shall deposit, or shall
cause to be deposited, with Wells Fargo Bank (Texas), National Association, or
such other bank or trust company as may be designated by Republic (the
"Exchange Agent"), for the benefit of the holders of shares of Company Common
Stock, for exchange in accordance with this Article II, through the Exchange
Agent, at the Effective Time, (i) certificates evidencing the shares of
Republic Common Stock issuable pursuant to Section 2.1 in exchange for
outstanding shares of Company Common Stock and (ii) upon the request of the
Exchange Agent, cash in an amount sufficient to make any cash payment in lieu
of fractional shares of Republic Common Stock pursuant to Section 2.2(d) (such
certificates for shares of Republic Common Stock, together with any dividends
or distributions with respect thereto, and cash in lieu of fractional shares of
Republic Common Stock being hereafter collectively referred to as the "Exchange
Fund"). The Exchange Agent shall, pursuant to irrevocable instructions,
deliver the Republic Common Stock contemplated to be issued pursuant to Section
2.1 out of the Exchange Fund to holders of shares of Company Common Stock.
Except as contemplated by Section 2.2(e) hereof, the Exchange Fund shall not be
used for any other purpose. Any interest, dividends or other income earned on
the investment of cash or other property held in the Exchange Fund shall be for
the account of Republic.
(b) Exchange Procedures. Republic shall instruct the
Exchange Agent to mail, within five (5) business days after the Effective Time,
to each holder of record of a certificate or certificates which immediately
prior to the Effective Time evidenced outstanding shares of Company Common
Stock (the "Certificates") (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange Agent
and shall be in such form and have such other provisions as Republic may
reasonably specify) and (ii) instructions to effect the surrender of the
Certificates in exchange for the certificates evidencing shares of Republic
Common Stock and cash (if any). Upon surrender of a Certificate for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, and such other customary documents as may be required pursuant
to such instructions, the holder of such Certificate shall be entitled to
receive in exchange therefor (A) certificates evidencing that number of whole
shares of Republic Common Stock that such holder has the right to receive in
accordance with the Exchange Ratio in respect of the shares of Company Common
Stock formerly evidenced by such Certificate, (B) any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(c), and
(C) cash in lieu of fractional shares of Republic Common Stock to which such
holder is entitled pursuant to Section 2.2(d) (the shares of
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Republic Common Stock, and the dividends, distributions and cash described in
clauses (A), (B) and (C) being, collectively, the "Merger Consideration"), and
the Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Company Common Stock that is not registered
in the transfer records of the Company, Merger Consideration may be issued and
paid in accordance with this Article II to a transferee if the Certificate
evidencing such shares of Company Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid or by the transferee requesting such payment paying to the Exchange Agent
any such transfer tax. Until surrendered as contemplated by this Section 2.2,
each Certificate shall be deemed at any time after the Effective Time to
evidence only the right to receive upon such surrender the Merger
Consideration.
(c) Distributions with Respect to Unexchanged Shares of
Republic Common Stock. No dividends or other distributions declared or made
after the Effective Time with respect to Republic Common Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Republic Common Stock represented
thereby and no cash payment in lieu of fractional shares of Republic Common
Stock shall be paid to any such holder pursuant to Section 2.2(d), until the
holder of such Certificate shall surrender such Certificate. Upon such
surrender, there shall be paid to the person or entity (hereinafter, any person
or entity being referred to as a "Person") in whose name the certificates
representing the shares of Republic Common Stock into which such Certificates
were converted and registered, all dividends and other distributions payable in
respect of such Republic Common Stock on a date after, and in respect of a
record date after, the Effective Time.
(d) Fractional Shares. No fraction of a share of
Republic Common Stock shall be issued in the Merger and any such fractional
share interest shall not entitle the owner thereof to vote or to any other
rights of a stockholder of Republic. In lieu of any such fractional shares,
each holder of Company Common Stock upon surrender of a Certificate for
exchange pursuant to this Section 2.2 shall be paid an amount in cash (without
interest), rounded to the nearest cent, determined by multiplying (i) the per
share closing price on The Nasdaq Stock Market-National Market ("Nasdaq") of
Republic Common Stock on the date of the Effective Time (or, if shares of
Republic Common Stock are not quoted on the Nasdaq on such date, the first date
of trading of such Republic Common Stock on the Nasdaq after the Effective
Time) by (ii) the fractional interest to which such holder would otherwise be
entitled (after taking into account all shares of Company Common Stock then
held of record by such holder).
(e) Termination of Exchange Fund. Any portion of the
Exchange Fund that remains undistributed to the holders of Company Common Stock
for six months after the Effective Time shall be delivered to Republic, upon
demand, and any holders of Company Common Stock who have not theretofore
complied with this Article II shall thereafter look only to Republic for the
Merger Consideration to which they are entitled pursuant to this Article II.
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(f) No Liability. Neither Republic nor the Company shall
be liable to any holder of shares of Company Common Stock for any such shares
of Republic Common Stock (or dividends or distributions with respect thereto)
from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(g) Withholding Rights. Republic or the Exchange Agent
shall be entitled to deduct and withhold from the Merger Consideration
otherwise payable pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as Republic or the Exchange Agent is required to
deduct and withhold with respect to the making of such payment under the Code
or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Republic or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Company Common Stock in respect of which such
deduction and withholding was made by Republic or the Exchange Agent.
(h) Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Republic Common Stock, any cash in lieu of fractional
shares and any unpaid dividends and distributions on shares of Republic Common
Stock deliverable in respect thereof, pursuant to this Agreement.
SECTION 2.3. STOCK TRANSFER BOOKS. At the Effective Time, the
stock transfer books of the Company shall be closed, and there shall be no
further recordation of transfers of shares of the Company Common Stock
thereafter on the stock transfer books of the Company. On or after the
Effective Time, any Certificates presented to the Exchange Agent or Republic in
accordance with Section 2.2(b) shall be converted into the Merger
Consideration.
SECTION 2.4. STOCK OPTIONS AND WARRANTS. At the Effective Time,
the Company's obligations with respect to each outstanding Company Stock Option
(as defined in Section 3.3) and each outstanding Company Warrant (as defined in
Section 3.3), in each case to purchase shares of Company Common Stock, as
amended in the manner described in the following sentence, shall be assumed by
Republic. The Company Stock Options and Company Warrants so assumed by
Republic shall continue to have, and be subject to, the same terms and
conditions as set forth in the stock option plans and agreements pursuant to
which such Company Stock Options were issued and any other agreements
evidencing such options and warrants, as in effect immediately prior to the
Effective Time, except that from and after the Effective Time each such Company
Stock Option and Company Warrant shall be exercisable for that number of whole
shares of Republic Common Stock equal to the product of the number of shares of
Company Common Stock covered by such option or warrant immediately prior to the
Effective Time multiplied by the Exchange Ratio and rounded up to the nearest
whole number of shares of Republic Common Stock, with an exercise price per
share equal to the exercise price per share of such option or warrant
immediately prior to
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the Effective Time divided by the Exchange Ratio; provided, however, that in
the case of any option to which Section 421 of the Code applies by reason of
its qualification under any of the requirements of Section 421 of the Code, the
option price, the number of shares purchasable pursuant thereto and the terms
and conditions of exercise thereof shall be determined in order to comply with
Section 424(a) of the Code. Republic shall (i) reserve for issuance the number
of shares of Republic Common Stock that will become issuable upon the exercise
of such Company Stock Options and Company Warrants pursuant to this Section 2.4
and (ii) promptly after the Effective Time issue to each holder of an
outstanding Company Stock Option or Company Warrant a document evidencing the
assumption by Republic of the Company's obligations with respect thereto under
this Section 2.4.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND MANAGEMENT STOCKHOLDERS
The Company and the Management Stockholders, jointly and severally,
represent and warrant to Republic that:
SECTION 3.1. ORGANIZATION AND GOOD STANDING. Each of the Company
and its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated
and has the requisite corporate power and authority to carry on its business as
now being conducted. Each of the Company and its subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed or to be in
good standing (individually or in the aggregate) would not have a material
adverse effect on the Company. The Company has delivered to Republic complete
and correct copies of its Certificate of Incorporation and By-Laws and the
certificates of incorporation and by-laws (or similar organizational documents)
of its subsidiaries, in each case as amended to the date hereof.
SECTION 3.2. SUBSIDIARIES. Schedule 3.2 lists each subsidiary of
the Company, together with its jurisdiction of incorporation or organization.
Except as set forth on Schedule 3.2, all the outstanding shares of capital
stock of each such subsidiary have been validly issued and are fully paid and
nonassessable and are owned by the Company or by another subsidiary of the
Company, free and clear of all pledges, claims, liens, charges, encumbrances
and security interests of any kind or nature whatsoever (collectively,
"Liens"). Except for the capital stock of its subsidiaries set forth on
Schedule 3.2, the Company does not own, directly or indirectly, any capital
stock or other ownership interest in any corporation, partnership, joint
venture or other entity.
SECTION 3.3. CAPITAL STRUCTURE. The authorized capital stock of
the Company consists of: (a) 40,000,000 shares of Company Common Stock, and (b)
an aggregate total of 644,200
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shares of preferred stock (the "Company Preferred Stock"), consisting of (1)
425,200 shares of preferred stock, $5.64 par value, (2) 119,000 shares of
preferred stock, $20.00 par value, and (3) 100,000 shares of preferred stock,
$0.001 par value. At the close of business on June 17, 1996: (i) 14,243,748
shares of Company Common Stock were issued and outstanding; (ii) 79,375 shares
of Company Common Stock were held by the Company in its treasury; (iii) an
aggregate total of 619,941 shares of Company Common Stock were reserved for
issuance upon the exercise of outstanding stock options ("Company Stock
Options") granted pursuant to the Company 1995 Employee Stock Option Plan, the
Company 1995 Stock Option Plan for Outside Directors, the Company's prior stock
option plans, and certain employment agreements and other contracts with
officers and key employees of the Company; (iv) 287,023 shares of Company
Common Stock were reserved for issuance upon exercise of outstanding warrants,
all of which warrants are presently exercisable ("Company Warrants"); and (v)
no shares of Company Preferred Stock are issued and outstanding. Except as set
forth above, as of the date of this Agreement, no shares of capital stock or
other voting securities of the Company were issued, reserved for issuance or
outstanding. A list of the names of the holders of all outstanding Company
Stock Options and Company Warrants, with the respective amounts of shares,
exercise prices, vesting dates and expiration dates thereof, is set forth on
Schedule 3.3, as are descriptions of other obligations to issue shares of
Company Common Stock, and copies of the Company Warrants, Company 1995 Employee
Stock Option Plan and Company 1995 Stock Option Plan for Outside Directors are
attached to Schedule 3.3. All outstanding shares of capital stock of the
Company are, and all shares which may be issued pursuant to the Company Stock
Options and Company Warrants will be, when issued against payment therefor in
accordance with the terms thereof, duly authorized, validly issued, fully-paid
and nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to vote
(or convertible into securities having the right to vote) on any matters on
which stockholders of the Company may vote. Except as set forth above and
except for the matters listed on Schedule 5.9, as of the date of this
Agreement, there are no securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of its subsidiaries is a party or by which any of them is bound,
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or of any of its subsidiaries, or
obligating the Company or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the date hereof, there are no
outstanding contractual obligations which require or will require or obligate
the Company or any of its subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its subsidiaries.
SECTION 3.4. AUTHORITY; NONCONTRAVENTION. Each of the Company and
the Management Stockholders has the requisite corporate or other power and
authority to execute and deliver this Agreement and, subject, in the case of
the Company, to approval of this Agreement by the holders of a majority of the
outstanding shares of the Company Common Stock, to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement
by the Company and the Management Stockholders and the consummation by the
Company and the Management Stockholders of the transactions contemplated by
this Agreement have been duly
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<PAGE> 16
authorized by all necessary corporate or other action on their respective
parts, subject, in the case of the Company, to approval of this Agreement by
the holders of a majority of the outstanding shares of the Company Common
Stock. This Agreement has been duly executed and delivered by the Company and
the Management Stockholders and constitutes a valid and binding obligation of
the Company and the Management Stockholders, enforceable against them in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
generally and general equitable principles. Except as set forth on Schedule
3.4, the execution and delivery of this Agreement does not, and performance of
the respective obligations hereunder by the Company and the Management
Stockholders will not, conflict with, or result in any violation of, or
constitute a default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation of
any Lien upon any of the properties or assets of the Company or any of its
subsidiaries under, any provision of (a) the Certificate of Incorporation or
By-laws of the Company or any provision of the comparable charter or
organizational documents of any of its subsidiaries, (b) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, or license to which the Company or
any of its subsidiaries is a party or by which their respective properties or
assets are bound, or (c) subject to the governmental filings and other matters
referred to in the following sentence, any (A) statute, law, ordinance, rule or
regulation or (B) judgment, order or decree applicable to the Company or any of
its subsidiaries or their respective properties or assets, other than, in the
case of clause (b) and clause (c), any such conflicts, violations, defaults,
rights, losses or Liens that individually or in the aggregate would not (x)
have a material adverse effect on the Company or its subsidiaries, (y) impair
in any material respect the ability of the Company to perform its obligations
under this Agreement, or (z) prevent or materially delay the consummation of
any of the transactions contemplated by this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state or local government or any court, tribunal, administrative
agency or commission or other governmental authority or agency, domestic or
foreign (a "Governmental Authority"), is required by or with respect to the
Company or any of its subsidiaries in connection with the execution, delivery
and performance of this Agreement by the Company, except for: (i) the filing
of a premerger notification and report form by the Company under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"); (ii) the filing with the Securities and Exchange Commission ("SEC") of
(y) a proxy statement relating to the approval by the Company's stockholders of
this Agreement and the Merger (as amended or supplemented from time to time,
the "Proxy Statement"), and (z) such reports under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as may be required in connection with
this Agreement and the transactions contemplated by this Agreement; (iii) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of other
states in which the Company is qualified to do business; (iv) the consents set
forth on Schedule 3.4; and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, have a
material adverse effect on the Company or prevent or materially delay the
consummation of any of the transactions contemplated by this Agreement.
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<PAGE> 17
SECTION 3.5. SEC DOCUMENTS AND FINANCIAL STATEMENTS. The Company
has filed all required reports, schedules, forms, statements and other
documents with the SEC since January 1, 1995 (the "SEC Documents"). As of
their respective dates, the SEC Documents complied as to form in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and none of the SEC Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Except to the extent that information
contained in any SEC Document has been revised or superseded by a later-filed
SEC Document, filed and publicly available prior to the date of this Agreement,
as of the date of this Agreement, none of the SEC Documents contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents complied as of their
respective dates of filing with the SEC as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with
generally accepted accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q) applied on a consistent basis during the
period involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position, results of the Company's
operations and cash flows as at the dates and for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the SEC Documents and except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice, neither the Company nor any of its subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles
to be set forth on a consolidated balance sheet of the Company and its
consolidated subsidiaries or in the notes thereto which individually or in the
aggregate, could reasonably be expected to have material adverse effect on the
Company.
SECTION 3.6. INFORMATION SUPPLIED. None of the information
supplied or to be supplied by the Company specifically for inclusion or
incorporation by reference in (i) the registration statement on Form S-4 to be
filed with the SEC by Republic in connection with the issuance of Republic
Common Stock in the Merger (the "Registration Statement") will, at the time the
Registration Statement is filed with the SEC, at any time it is amended or
supplemented and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, and
(ii) the Proxy Statement will, at the date it is first mailed to the Company's
stockholders and at the time of the meeting of the Company's stockholders held
to vote on approval of this Agreement, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply in all material respects with the requirements of the Exchange Act,
and the rules and regulations thereunder. No representation is
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<PAGE> 18
made by the Company in this Section 3.6 with respect to statements made or
incorporated by reference in the Proxy Statement based on information supplied
by Republic or Mergersub specifically for inclusion or incorporation by
reference in the Proxy Statement.
SECTION 3.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in the SEC Documents filed and publicly available prior to the date
of this Agreement, and except as expressly contemplated by this Agreement,
since the date of the most recent audited financial statements included in such
SEC Documents, the Company has conducted its business only in the ordinary
course, and there has not been: (i) any material adverse change in the
business, assets, results of operations, customer and employee relations, or
business prospects of the Company and its subsidiaries, taken as a whole; (ii)
any declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of the Company's
capital stock; (iii) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock; (iv) any granting by the Company or any of its subsidiaries to
any officer of the Company or any of its subsidiaries of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of the
date of the most recent audited financial statements included in such SEC
Documents; (v) any granting by the Company or any of its subsidiaries to any
officer of any increase in severance or termination pay, except as was required
under any employment, severance or termination agreements in effect as of the
date of the most recent audited financial statements included in such SEC
Documents; (vi) an entry by the Company or any of its subsidiaries into any
employment, severance or termination agreement with any officer; (vii) any
damage, destruction or loss, whether or not covered by insurance, that has had
or is likely to have a material adverse effect on the Company; (viii) any
change in accounting methods, principles or practices by the Company materially
affecting its assets, liabilities or business, except insofar as may have been
required by a change in generally accepted accounting principles; or (ix) any
adoption or amendment in any material respect by the Company or any of its
subsidiaries of any collective bargaining agreement or any bonus, pension,
profit sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan, arrangement
or understanding in each case maintained or contributed to, or required to be
maintained or contributed to, by the Company or its subsidiaries for the
benefit of any current or former employee, officer or director of the Company
or any of its subsidiaries (each, a "Benefit Plan" and, collectively, "Benefit
Plans").
SECTION 3.8. LITIGATION. Except as disclosed on Schedule 3.8 or
in the SEC Documents filed and publicly available prior to the date of this
Agreement, there is no suit, action or proceeding pending or threatened in
writing against the Company or any of its subsidiaries challenging the
acquisition by Republic or Mergersub of any shares of the Company Common Stock
or any provision of this Agreement or seeking to restrain or prohibit the
consummation of the Merger, or that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the Company, nor is
there any judgment, decree, injunction, rule or order of any
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<PAGE> 19
Governmental Authority or arbitrator outstanding against the Company or any of
its subsidiaries having, or which could reasonably be expected to have, any
such effect.
SECTION 3.9. COMPLIANCE WITH LAWS; PERMITS. Except as disclosed
on Schedule 3.9 or in the SEC Documents filed and publicly available prior to
the date of this Agreement, the Company and its subsidiaries are in compliance
with all applicable statutes, laws, ordinances, regulations, rules, judgments,
decrees and orders of any Governmental Authority applicable to its business or
operations, except for instances of possible noncompliance that, individually
or in the aggregate, would not have a material adverse effect on the Company or
its subsidiaries. Except as set forth on Schedule 3.9, each of the Company and
its subsidiaries has in effect all Federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights ("Permits"), necessary for it to own,
lease or operate its properties and assets and to carry on its business as now
conducted, and there has occurred no default under any such Permit, except for
the absence of Permits and for defaults under Permits which, individually or in
the aggregate, would not have a material adverse effect on the Company or its
subsidiaries. None of such Permits is or will be impaired or in any way
affected by the execution and delivery of this Agreement, or consummation of
the transactions contemplated hereby provided that the consents or filings
referred to in Schedule 3.4 are obtained or made prior to the Closing.
SECTION 3.10. ENVIRONMENTAL MATTERS.
(a) Except as set forth on Schedule 3.10 or where the
failure to comply could not reasonably be expected to have a material adverse
effect on the Company, the Company and each of its subsidiaries is and has at
all times been in full compliance with all Environmental Laws (as defined in
clause (h) below) governing its business, operations, properties and assets,
including, without limitation: (i) all requirements relating to the Discharge
(as defined in clause (h) below) and Handling (as defined in clause (h) below)
of Hazardous Substances (as defined in clause (h) below) or other Wastes (as
defined in clause (h) below); (ii) all requirements relating to notice, record
keeping and reporting; (iii) all requirements relating to obtaining and
maintaining Licenses (as defined in clause (h) below) for the ownership of its
properties and assets and the operation of its business as presently conducted,
including Licenses relating to the Handling and Discharge of Hazardous
Substances and other Wastes; or (iv) all applicable writs, orders, judgements,
injunctions, governmental communications, decrees, informational requests or
demands issued pursuant to, or arising under, any Environmental Laws.
(b) Except as set forth on Schedule 3.10, there are no
(and to the knowledge of the Company there is no basis for any) non-compliance
orders, warning letters, notices of violation (collectively "Notices"), claims,
suits, actions, judgments, penalties, fines, or administrative or judicial
investigations or proceedings (collectively "Proceedings") pending or
threatened against or involving the Company or any of its subsidiaries, or any
of their respective businesses, operations, properties, or assets, issued by
any Governmental Authority or third party with respect to any Environmental
Laws or Licenses issued to the Company or any of its subsidiaries thereunder in
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<PAGE> 20
connection with, related to or arising out of the ownership by the Company of
its properties or assets or the operation of its business, which have not been
resolved to the satisfaction of the issuing Governmental Authority or third
party in a manner that would not impose any obligation, burden or continuing
liability on Republic or the Surviving Corporation in the event that the
transactions contemplated by this Agreement are consummated, or which could
have a material adverse effect on the Company, including, without limitation:
(i) Notices or Proceedings related to the Company or any of its subsidiaries
being a potentially responsible party for a federal or state environmental
cleanup site or for corrective action under any applicable Environmental Laws;
(ii) Notices or Proceedings in connection with any federal or state
environmental cleanup site, or in connection with any of the real property or
premises where the Company or any of its subsidiaries has transported,
transferred or disposed of other Wastes; (iii) Notices or Proceedings relating
to the Company or any of its subsidiaries being responsible to undertake any
response or remedial actions or clean-up actions of any kind; or (iv) Notices
or Proceedings related to the Company or any of its subsidiaries being liable
under any Environmental Laws for personal injury, property damage, natural
resource damage, or clean up obligations.
(c) Except as set forth on Schedule 3.10, neither the
Company nor any of its subsidiaries has not Handled or Discharged, nor have any
of them allowed or arranged for any third party to Handle or Discharge,
Hazardous Substances or other Waste to, at or upon: (i) any location other than
a site lawfully permitted to receive such Hazardous Substances or other Waste;
(ii) any of the Owned Properties (as defined in Section 3.16(a)) or Leased
Premises (as defined in Section 3.16(b)); or (iii) any site which, pursuant to
CERCLA (as defined in clause (h) below) 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 or other
Governmental Authority has notified the Company or any of its subsidiaries that
such Governmental Authority has proposed or is proposing to place on the
National Priorities List or its state equivalent. There has not occurred, nor
is there presently occurring, a Discharge, or threatened Discharge, of any
Hazardous Substance on, into or beneath the surface of, or adjacent to, any of
the Owned Properties or Leased Premises in an amount or otherwise requiring a
notice or report to be made to a Governmental Authority or in violation of any
applicable Environmental Laws.
(d) Schedule 3.10 identifies the operations and
activities, and locations thereof, which have been conducted and are being
conducted by the Company on any of the Owned Properties or Leased Premises
which have involved the Handling or Discharge of Hazardous Substances.
(e) Schedule 3.10 identifies the locations to which the
Company has transferred, transported, hauled, moved, or disposed of Waste over
the past five (5) years and the types and volumes of Waste transferred,
transported, hauled, moved, or disposed of to each such location.
(f) Except as set forth on Schedule 3.10, neither the
Company nor any of its subsidiaries uses, nor has any of them used, any
Aboveground Storage Tanks (as defined in clause (h) below) or Underground
Storage Tanks (as defined in clause (h) below), and there are not now
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nor have they ever been any Underground Storage Tanks beneath any of the Owned
Properties or Leased Premises.
(g) Schedule 3.10 identifies (i) all environmental
audits, assessments or occupational health studies undertaken since January 1,
1994 by the Company or its agents or, to the knowledge of the Company,
undertaken by any Governmental Authority, or any third party, relating to or
affecting the Company or any of the Owned Properties or Leased Premises; (ii)
the results of any ground, water, soil, air or asbestos monitoring undertaken
by the Company or its agents or, to the knowledge of the Company, undertaken by
any Governmental Authority or any third party, relating to or affecting the
Company or any of the Owned Properties or Leased Premises which indicate the
presence of Hazardous Substances at levels requiring a notice or report to be
made to a Governmental Authority or in violation of any applicable
Environmental Laws; (iii) all material written communications between the
Company and any Governmental Authority arising under or related to
Environmental Laws; and (iv) all outstanding citations issued under OSHA, or
similar state or local statutes, laws, ordinances, codes, rules, regulations,
orders, rulings, or decrees, relating to or affecting either the Company or any
of the Owned Properties or Leased Premises.
(h) For purposes of this Section 3.10, the following
terms shall have the meanings ascribed to them below:
"Aboveground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Aboveground Storage
Tanks.
"Discharge" means any manner of spilling, leaking, dumping,
discharging, releasing or emitting, as any of such terms may further
be defined in any Environmental Law, into any medium including,
without limitation, ground water, surface water, soil or air.
"Environmental Laws" means all federal, state, regional or
local statutes, laws, rules, regulations, codes, orders, plans,
injunctions, decrees, rulings, and changes or ordinances or judicial
or administrative interpretations thereof, or similar laws of foreign
jurisdictions where the Company or any of its subsidiaries conducts
business, whether currently in existence or hereafter enacted or
promulgated, any of which govern (or purport to govern) or relate to
pollution, protection of the environment, public health and safety,
air emissions, water discharges, hazardous or toxic substances, solid
or hazardous waste or occupational health and safety, as any of these
terms are or may be defined in such statutes, laws, rules,
regulations, codes, orders, plans, injunctions, decrees, rulings and
changes or ordinances, or judicial or administrative interpretations
thereof, including, without limitation: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendment and Reauthorization Act of 1986, 42
U.S.C. Section 9601, et seq. (hereinafter collectively "CERCLA"); the
Solid Waste Disposal Act, as amended by the Resource Conversation and
Recovery Act of 1976 and subsequent Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. Section 6901 et seq. (hereinafter,
collectively "RCRA");
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the Hazardous Materials Transportation Act, as amended, 49
U.S.C. Section 1801, et seq.; the Clean Water Act, as amended, 33
U.S.C. Section 1311, et seq.; the Clean Air Act, as amended (42 U.S.C.
Section 7401-7642); the Toxic Substances Control Act, as amended, 15
U.S.C. Section 2601 et seq.; the Federal Insecticide, Fungicide, and
Rodenticide Act as amended, 7 U.S.C. Section 136-136y ("FIFRA"); the
Emergency Planning and Community Right-to-Know Act of 1986 as amended,
42 U.S.C. Section 11001, et seq. (Title III of SARA) ("EPCRA"); and
the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
Section 651, et seq. ("OSHA").
"Handle" means any manner of generating, accumulating,
storing, treating, disposing of, transporting, transferring, labeling,
handling, manufacturing or using, as any of such terms may further be
defined in any Environmental Law, of any Hazardous Substances or
Waste.
"Hazardous Substances" shall be construed broadly to include
any toxic or hazardous substance, material, or waste, and any other
contaminant, pollutant or constituent thereof, whether liquid, solid,
semi-solid, sludge and/or gaseous, including without limitation,
chemicals, compounds, by-products, pesticides, asbestos containing
materials, petroleum or petroleum products, and polychlorinated
biphenyls, the presence of which requires investigation or remediation
under any Environmental Laws or which are or become regulated, listed
or controlled by, under or pursuant to any Environmental Laws,
including, without limitation, RCRA, CERCLA, the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, the Clean Air
Act, the Clean Water Act, FIFRA, EPCRA and OSHA, or any similar state
statute, or any future amendments to, or regulations implementing such
statutes, laws, ordinances, codes, rules, regulations, orders,
rulings, or decrees, or which has been or shall be determined or
interpreted at any time by any Governmental Authority to be a
hazardous or toxic substance regulated under any other statute, law,
regulation, order, code, rule, order, or decree.
"Licenses" means all licenses, certificates, permits,
approvals and registrations.
"Underground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Underground Storage
Tanks.
"Waste" shall be construed broadly to include agricultural
wastes, biomedical wastes, biological wastes, bulky wastes,
construction and demolition debris, garbage, household wastes,
industrial solid wastes, liquid wastes, recyclable materials, sludge,
solid wastes, special wastes, used oils, white goods, and yard trash
as those terms are defined under any applicable Environmental Laws.
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SECTION 3.11. BENEFIT PLAN COMPLIANCE.
(a) Schedule 3.11 contains a list and brief description
of all "employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(sometimes referred to herein as "Pension Plans"), "employee welfare benefit
plans" (as defined in Section 3(1) of ERISA) and all other Benefit Plans
maintained, or contributed to, or required to be contributed to, by the Company
or any of its subsidiaries or any other Person that, together with the Company,
is treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code (the Company and each such other Person, a "Commonly Controlled Entity")
for the benefit of any current or former employees, officers or directors of
the Company or any of its subsidiaries. The Company has delivered or made
available to Republic true, complete and correct copies of (i) each Benefit
Plan (or, in the case of any unwritten Benefit Plans, descriptions thereof),
(ii) the most recent annual report on Form 5500 filed with the Internal Revenue
Service with respect to each Benefit Plan (if any such report was required),
(iii) the most recent summary plan description for each Benefit Plan for which
such summary plan description is required, and (iv) each trust agreement and
group annuity contract relating to any Benefit Plan. Each Benefit Plan has
been administered in all material respects in accordance with its terms and is
in compliance with the applicable provisions of ERISA, the Code, all other
applicable laws and all applicable collective bargaining agreements except
where the failure to comply would not be reasonably expected to result in a
material adverse effect on the Company.
(b) All Pension Plans have been the subject of
determination letters from the Internal Revenue Service, or have filed a timely
application therefor, to the effect that such Pension Plans are qualified and
exempt from federal income taxes under Section 401(a) and 501(a), respectively,
of the Code, and no such determination letter has been revoked nor has any such
Pension Plan been amended since the date of its most recent determination
letter or application therefor in any respect that would adversely affect its
qualification or materially increase its costs.
(c) No Commonly Controlled Entity has incurred any
liability which has not been fully paid to a Pension Plan under Title IV of
ERISA (other than for contributions not yet due) or to the Pension Benefit
Guaranty Corporation (other than for payment of premiums not yet due) that,
when aggregated with other such liabilities, would result in a material adverse
effect on the Company.
(d) As of the most recent valuation date for each Pension
Plan that is a "defined benefit pension plan" (as defined in Section 3(35) of
ERISA subject to Title IV of ERISA (other than a multiemployer plan)
(hereinafter a "Defined Benefit Plan")), there was not any material amount of
"unfunded benefit liabilities" (as defined in Section 4001(a)(18) of ERISA)
under such Defined Benefit Plan, and the Company is not aware of any facts or
circumstances that would materially adversely change the funded status of any
such Defined Benefit Plan. The Company has furnished or made available to
Republic the most recent actuarial report or valuation with respect to each
Defined Benefit Plan and has no reason to believe that the conclusions
expressed in those reports or valuations are incorrect.
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(e) No Commonly Controlled Entity has been required at
any time within the five calendar years preceding the date hereof or is
required currently to contribute to any "multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) or has withdrawn from any multiemployer plan where
such withdrawal has resulted or would result in any "withdrawal liability"
(within the meaning of Section 4201 of ERISA) that has not been fully paid.
(f) With respect to any Benefit Plan that is an employee
welfare benefit plan, (i) no such Benefit Plan is funded through a "welfare
benefits fund", as such term is defined in Section 419(e) of the Code, and (ii)
each such Benefit Plan that is a "group health plan", as such term is defined
in Section 5000(b)(1) of the Code, complies substantially with the applicable
requirements of Section 4980(B)(f) of the Code.
(g) Except with respect to certain of the Company Stock
Options as indicated on Schedule 3.3, no employee of the Company or any of its
subsidiaries will be entitled to any additional compensation or benefits or any
acceleration of the time of payment or vesting of any compensation or benefits
under any Benefit Plan as a result of the transactions contemplated by this
Agreement.
(h) Neither the Company or any of its subsidiaries nor
any Person acting on behalf of the Company or any of its subsidiaries has, in
contemplation of any corporate transaction involving Republic, issued any
written communication to, or otherwise made or entered into any legally binding
commitment with, any employees of the Company or of any of its subsidiaries to
the effect that, following the date hereof, (i) any benefits or compensation
provided to such employees under existing Benefit Plans or under any other plan
or arrangement will be enhanced, (ii) any new plans or arrangements providing
benefits or compensation will be adopted, (iii) any Benefit Plans will be
continued for any period of time, or (iv) any plans or arrangements provided by
Republic or Mergersub will be made available to such employees.
SECTION 3.12. TAXES. As used in this Section 3.12, "Taxes" shall
include all federal, state, local and foreign income, property, sales, payroll,
employee withholding, excise and other taxes, tariffs or governmental charges
of any nature whatsoever, including any interest, penalties or additions with
respect thereto. Except as set forth on Schedule 3.12, the Company and each of
its subsidiaries, and each affiliated, consolidated, combined or unitary group
of which the Company or any of its subsidiaries is a member (an "Affiliated
Group"), has filed timely all material income tax returns and reports required
to be filed by the Company and its subsidiaries, each such tax return is true
and correct to the knowledge of the Company and has been prepared in material
compliance with all applicable laws and regulations, and the Company and each
of its subsidiaries has paid (or the Company has paid on their behalf) all
Taxes required to be paid by it and them. The most recent financial statements
contained in the SEC Documents filed and publicly available prior to the date
of this Agreement reflect an adequate reserve for all Taxes payable by the
Company and its subsidiaries for all taxable periods and portions thereof
through the date of such financial statements. Except as set forth on Schedule
3.12, no deficiency or proposed adjustment which has not been settled or
otherwise resolved for any Taxes has been asserted or assessed by any taxing
authority
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against the Company or any of its subsidiaries or any Affiliated Group. Except
as set forth on Schedule 3.12, the Company and each of its subsidiaries has not
consented to extend the time in which any Taxes may be assessed or collected by
any taxing authority, and the Company and each of its subsidiaries has not
requested or been granted an extension of the time for filing any tax return to
a date later than the Effective Time. The Company and each of its
subsidiaries has not made an election under Section 341(f) of the Code, or any
corresponding provision of state, local or foreign law. None of the assets or
properties of the Company or any of its subsidiaries is subject to any material
tax lien except for taxes not yet due and payable. Except as set forth on
Schedule 3.12, the Company and each of its subsidiaries will not be required to
(A) as a result of a change in method of accounting for a taxable period ending
at or prior to the Effective Time, 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
defined 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. Neither the Company nor any of its subsidiaries is a party to
or bound by any tax allocation or tax sharing agreement and, except as set
forth on Schedule 3.12, has no current or potential contractual obligation to
indemnify any other Person with respect to Taxes. The Company and each of its
subsidiaries has not been a United States real property holding corporation
within the meaning of Section 897(c)(1)(a)(ii) 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). No material claim has ever been
received by the Company from a taxing authority in a jurisdiction where the
Company or any of its subsidiaries do not file tax returns that the Company or
any such subsidiary is or may be subject to Taxes assessed by such
jurisdiction. 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, except Costa
Rica. The federal income tax returns of the Company and each of its
subsidiaries consolidated in such returns have not been examined or audited by
the Internal Revenue Service, except as set forth on Schedule 3.12, and the
Company has not received notice of any proposed tax audit. True, correct and
complete copies of all federal and state income tax returns filed by or with
respect to the Company and each of its subsidiaries for the past three years
have been made available to Republic.
SECTION 3.13. NO EXCESS PARACHUTE PAYMENTS. Neither the Company
nor any affiliates has made any payments, is obligated to make any payments, or
is a party to any agreement that could obligate it to make any payments, that
will not be deductible under Section 280G of the Code (or any corresponding
provision of state, local or foreign law).
SECTION 3.14. CONTRACTS.
(a) Neither the Company nor any of its subsidiaries is a
party to or bound by, and neither they nor their properties are subject to, any
contracts, agreements or arrangements required
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to be disclosed in a Form 10-K or 10-Q under the Exchange Act which is not
filed as an exhibit to one or more of the SEC Documents filed and publicly
available prior to the date of this Agreement.
(b) Schedule 3.14 sets forth (x) a list of all written
and oral contracts, agreements or arrangements to which the Company or any of
its subsidiaries is a party or by which the Company or such subsidiary or any
of their respective assets is bound which would be required to be filed as
exhibits to the Company's Annual Report on Form 10-K for the year ending
December 31, 1996 and (y) the following written and oral arrangements (all such
written or oral agreements, arrangements or commitments as are required to be
set forth on Schedule 3.14 or filed as an exhibit to any SEC Document,
collectively the "Designated Contracts"), which schedule further identifies
each of the Designated Contracts which contain change of control provisions:
(i) each partnership, joint venture or similar
agreement of the Company or any of its subsidiaries with
another Person;
(ii) each contract or agreement under which the
Company or any of its subsidiaries have created, incurred,
assumed or guaranteed (or may create, incur, assume or
guarantee) indebtedness of more than $1,000,000 in principal
amount or under which the Company or any of its subsidiaries
have imposed (or may impose) a security interest or lien on
any of their respective assets, whether tangible or intangible
securing indebtedness in excess of $1,000,000;
(iii) each contract or agreement to which the
Company or any of its subsidiaries is a party which involves
an obligation or commitment to pay or be paid an amount in
excess of $1,000,000 per year;
(iv) each contract or agreement which involves or
contributes to the Company or any of its subsidiaries
aggregate annual remuneration which exceeds 5% of the
Company's and its subsidiaries' consolidated annual net
revenues for the twelve months ended December 31, 1994 or
December 31, 1995;
(v) each contract or agreement relating to
employment or consulting which provides for annual
compensation in excess of $100,000 and each severance,
termination, confidentiality, non- competition or
indemnification agreement or arrangement with any of the
directors, officers, consultants or employees of the Company
or any of its subsidiaries;
(vi) each contract or agreement to which the
Company or any of its subsidiaries or affiliates is a party
limiting, in any material respect, the right of the Company or
any of its subsidiaries prior to the Effective Time, or the
Surviving Corporation or any of its subsidiaries or affiliates
at or after the Effective Time (i) to engage in, or to compete
with any Person in, any business, including each contract or
agreement containing exclusivity provisions restricting the
geographical area in which, or the method by which, any
business
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may be conducted by the Company or any of its subsidiaries or
affiliates prior to the Effective Time, or the Surviving
Corporation or any of its subsidiaries or affiliates after the
Effective Time or (ii) to solicit any customer or client;
(vii) all contracts or agreements between the
Company or any of its subsidiaries, and any Person
controlling, controlled by or under common control with the
Company;
(viii) each contract, agreement and franchise with
any municipality, county or city for waste collection,
disposal, recycling or other services which is for a term of
one year or longer;
(ix) all other contracts or agreements which are
material to the Company and its subsidiaries, taken as a
whole, or the conduct of their respective business, other than
those made in the ordinary course of business or those which
are terminable by the Company or any of its subsidiaries upon
no greater than 60 days prior notice and without penalty or
other adverse consequence.
(c) All the Designated Contracts are valid, subsisting,
in full force and effect, binding upon the Company or one of its subsidiaries
in accordance with their terms, and binding upon the other parties thereto in
accordance with their terms. The Company and its subsidiaries have paid in
full or accrued all amounts now due from them under the Designated Contracts
and have satisfied in full or provided for all of their liabilities and
obligations under the Designated Contracts which are presently required to be
satisfied or provided for, and are not (with or without notice or lapse of time
or both) in default in any material respect under any of the Designated
Contracts nor is any other party to any such Designated Contract (with or
without notice or lapse of time or both) in default in any material respect
thereunder, except for any defaults that could not be reasonably expected to
have a material adverse effect on the Company and its subsidiaries taken as a
whole.
SECTION 3.15. VOTING REQUIREMENTS. The affirmative vote of the
holders of a majority of the outstanding shares of Company Common Stock
approving this Agreement is the only vote of the holders of any class or series
of the Company's capital stock necessary to approve this Agreement and the
Merger.
SECTION 3.16. REAL ESTATE.
(a) The Company and its subsidiaries does not own any
real property or any interest therein except as set forth on Schedule 3.16(a)
(the "Owned Properties"), which Schedule sets forth the location and size of,
and principal improvements and buildings on, the Owned Properties, together
with a list of all title insurance policies relating to such properties, all of
which policies have previously been delivered or made available to Republic by
the Company. With respect to each such parcel of Owned Property, except as set
forth on Schedule 3.16(a): (i) the Company has good and marketable title to
the parcel of Owned Property, free and clear of any Lien
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other than (x) Liens for real estate taxes not yet due and payable, (y)
recorded easements, covenants, and other restrictions which do not impair the
current use, occupancy or value of the property subject thereto, and (z)
encumbrances and restrictions described in the title insurance policies listed
on Schedule 3.16(a); (ii) there are no pending or threatened condemnation
proceedings, suits or administrative actions relating to the Owned Properties
or other matters affecting adversely the current use, occupancy or value
thereof; (iii) the legal descriptions for the parcels of Owned Property
contained in the deeds thereof describe such parcels 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, local comprehensive plan provisions, zoning laws and ordinances
(and none of the properties or buildings or improvements thereon are subject to
"permitted non-conforming use" or "permitted non-conforming structure"
classifications), building code requirements, permits, licenses or other forms
of approval by any Governmental Authority, 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 material 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; (v) there are no outstanding options or rights of first refusal to
purchase the parcels of Owned Property, or any portion thereof or interest
therein; and (vii) there are no parties (other than the Company and its
subsidiaries) in possession of the parcels of Owned Property.
(b) Schedule 3.16(b) sets forth a list of all leases,
licenses or similar agreements to which the Company or its subsidiaries is a
party, which are for the use or occupancy of real estate owned by a third party
and which are material to the operations or the business of the Company or its
subsidiaries ("Leases")(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 street 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"). The Leases are in full force and effect and have not been amended,
and neither the Company or its subsidiaries nor, to the knowledge of the
Company, any other party thereto is in material 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 breach of or default under any of such
Leases, except for breaches or defaults which in the aggregate could not be
expected to have a material adverse effect on the Company.
SECTION 3.17. GOOD TITLE TO, CONDITION AND ADEQUACY OF ASSETS.
Except as set forth on Schedule 3.17, the Company and its subsidiaries have
good title to all of their respective Assets (as hereinafter defined), free and
clear of any Liens or restrictions on use. The Assets constitute, in the
aggregate, all of the assets and properties necessary for the conduct of the
business of the Company and its subsidiaries in the manner in which and to the
extent to which such business is currently being conducted. All vehicles,
machinery, equipment, tools, supplies, leasehold
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improvements, furniture and fixtures constituting part of the Assets and which
are used by or located on the premises of the Company or its subsidiaries and
which are currently in use or necessary for the business and operations of the
Company or its subsidiaries are in operating condition, normal wear and tear
excepted. For purposes of this Agreement, the term "Assets" means all of the
properties and assets owned by the Company and its subsidiaries, whether
personal or mixed, tangible or intangible, wherever located.
SECTION 3.18. LABOR AND EMPLOYMENT MATTERS. Schedule 3.18 sets
forth the name, address, social security number and current rate of
compensation of each of the officers and key employees of the Company and its
subsidiaries. Except as set forth on Schedule 3.18, 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 there has been no
effort by any labor union during the 24 months prior to the date hereof to
organize any employees of the Company 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 any of its subsidiaries. As of the date hereof, the Company
is not aware that any officer, key employee or group of employees has any plans
to terminate his or their employment with the Company or any of its
subsidiaries as a result of the Merger or otherwise.
SECTION 3.19. INSURANCE. Section 3.19 sets forth a list of all
insurance policies maintained as of the date hereof by the Company and its
subsidiaries. There are valid and enforceable policies of insurance covering
the respective properties, assets and business of the Company and its
subsidiaries against risks of the nature normally insured against by entities
in the same or similar lines of business and in coverage amounts typically and
reasonably carried by such entities. Such policies are in full force and
effect, and all premiums due thereon have been paid. None of such policies
will lapse or terminate as a result of the transactions contemplated by this
Agreement. The Company has not failed to give, in a timely manner, any notice
required under any of such policies to preserve its material rights thereunder.
SECTION 3.20. RELATED PARTY TRANSACTIONS. Except as set forth in
the SEC Documents, since January 1, 1995, none of the officers or directors of
the Company or any of its subsidiaries, and no Person owning of record or
beneficially more than 5% of the Company Common Stock, or any members of their
immediate families, has been a party to any transaction, or series of similar
transactions, with the Company or any of its subsidiaries, in which the amount
involved exceeds $60,000 per annum, and in which any such Persons had or will
have a direct or indirect material interest.
SECTION 3.21. NAMES; PRIOR ACQUISITIONS. All names under which the
Company and its subsidiaries do business as of the date hereof are specified on
Schedule 3.21. Except as set forth on Schedule 3.21, 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.
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SECTION 3.22. STATE TAKEOVER STATUTES. The Board of Directors of
the Company has approved the Merger and this Agreement, and such approval is
sufficient to render inapplicable to this Agreement, the Merger and the other
transactions contemplated by this Agreement, the provisions of Section 203 of
the Delaware Law, to the extent, if any, such provisions of Section 203 are
applicable to this Agreement, the Merger and the other transactions
contemplated by this Agreement.
SECTION 3.23. BROKERS. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or SEC in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company, except that the Company has retained Raymond James & Associates,
Inc. and First Analysis Corporation as financial advisors. A true and correct
copy of the Company's agreements with Raymond James & Associates, Inc. and with
First Analysis Corporation have been delivered to Republic.
SECTION 3.24. ACCOUNTING MATTERS. Neither the Company nor any of
its affiliates has taken or agreed to take any action that (without regard to
any action taken or agreed to be taken by Republic or any of its affiliates)
would prevent Republic from accounting for the business combination to be
effected by the Merger as a pooling of interests.
SECTION 3.25. TAX MATTERS. Neither the Company nor any of its
affiliates has taken or agreed to take any action, or knows of any
circumstances, that (without regard to any action taken or agreed to be taken
by Republic or any of its affiliates) would prevent the Merger from qualifying
as a reorganization within the meaning of Section 368(a)(2)(E) of the Code.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF REPUBLIC
Republic hereby represents and warrants to the Company that:
SECTION 4.1. ORGANIZATION AND GOOD STANDING. Each of Republic and
Mergersub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on its business as now
being conducted. Each of Republic and Mergersub is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed or to be in good standing
(individually or in the aggregate) would not have a material adverse effect on
Republic. Republic has delivered to the Company complete and correct copies of
the Certificate of Incorporation and By-Laws of Republic and of Mergersub, in
each case as amended to the date hereof. Mergersub is controlled by Republic
within the meaning of Section 368(a)(2)(E) of the Code.
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SECTION 4.2. CAPITAL STRUCTURE. The authorized capital stock of
Republic consists 500,000,000 shares of Republic Common Stock and 5,000,000
shares of preferred stock, par value $0.01 per share ("Republic Preferred
Stock"). At the close of business on June 19, 1996, (i) 184,023,886 shares of
Republic Common Stock were issued and outstanding, (ii) no shares of Republic
Common Stock were held by Republic in its treasury, (iii) 15,735,194 shares of
Republic Common Stock were reserved for issuance upon the exercise of
outstanding stock options granted pursuant to Republic's various stock option
plans, (iv) 34,853,900 shares of Common Stock were reserved for issuance upon
the exercise of outstanding and vested warrants, and (v) no shares of Republic
Preferred Stock were issued or outstanding. All outstanding shares of capital
stock of Republic are, and all shares which may be issued pursuant to
outstanding options and warrants will be, when issued in accordance with the
terms thereof, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. There are no bonds, debentures, notes or
other indebtedness of Republic having the right to vote (or convertible into
securities having the right to vote) on any matters on which stockholders of
Republic may vote. Except as set forth above and except in connection with
other acquisitions of businesses and business combinations by Republic and its
subsidiaries, as of the date of this Agreement, there are no securities,
options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which Republic or any of its subsidiaries is a
party or by which any of them is bound, obligating Republic or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of Republic
or of any of its subsidiaries, or obligating Republic or any of its
subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. As of
the date of this Agreement, there are not any outstanding contractual
obligations which require or will require or obligate Republic or any of its
subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of Republic or any of its subsidiaries.
SECTION 4.3. AUTHORITY; NONCONTRAVENTION. Republic and Mergersub
have the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated by this Agreement.
The execution and delivery of this Agreement by Republic and Mergersub has been
duly authorized by all necessary corporate action on the part of Republic and
Mergersub, respectively. This Agreement has been duly executed and delivered
by Republic and Mergersub and constitutes a valid and binding obligation of
Republic and Mergersub, enforceable against Republic and Mergersub in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and general equitable principles. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or constitute
a default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to loss of a material benefit under, or result in the creation of any Lien
upon any of the properties or assets of Republic or any of its subsidiaries
under, any provision of (a) the Certificate of Incorporation or By-laws of
Republic or any provision of the comparable charter or organizational documents
of any of its subsidiaries,
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(b) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, or license
applicable to Republic or any of its subsidiaries or their respective
properties or assets, or (c) subject to the governmental filings and other
matters referred to in the following sentence, any (A) statute, law, ordinance,
rule or regulation or (B) judgment, order or decree applicable to Republic or
any of its subsidiaries or their respective properties or assets, other than,
in the case of clause (b) and clause (c), any such conflicts, violations,
defaults, rights, losses or Liens that individually or in the aggregate would
not (x) have a material adverse effect on Republic, (y) impair in any material
respect the ability of Republic or Mergersub to perform its obligations under
this Agreement, or (z) prevent or materially delay the consummation of any of
the transactions contemplated by this Agreement. No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Authority, is required by or with respect to Republic or any of
its subsidiaries in connection with the execution, delivery and performance of
this Agreement by Republic or Mergersub, except for: (i) the filing of a
premerger notification and report form by Republic under the HSR Act; (ii) the
filing with the SEC of the Registration Statement and such reports under the
Exchange Act as may be required in connection with this Agreement and the
transactions contemplated by this Agreement; (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware; and
(iv) such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a material adverse effect on Republic or
Mergersub or prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement.
SECTION 4.4. SEC DOCUMENTS AND FINANCIAL STATEMENTS. Republic has
filed all required reports, schedules, forms, statements and other documents
with the SEC since January 1, 1995 (the " Republic SEC Documents"). As of
their respective dates, the Republic SEC Documents complied as to form in all
material respects with the requirements of Securities Act, or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Republic SEC Documents, and none of the Republic
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. Except to the extent that information contained in
any Republic SEC Document has been revised or superseded by a later-filed
Republic SEC Document, filed and publicly available prior to the date of this
Agreement, as of the date of this Agreement, none of the Republic SEC Documents
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Republic included in the Republic SEC
Documents complied as of their respective dates of filing with the SEC in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case
of unaudited statements, as permitted by Form 10-Q or 8-K) applied on a
consistent basis during the period involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position, results
of operations and cash flows as at the dates and for the periods then ended
(subject, in the case of
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unaudited statements, to normal year-end audit adjustments). Except as set
forth in the Republic SEC Documents and except for liabilities and obligations
incurred in the ordinary course of business consistent with past practice,
neither Republic nor any of its subsidiaries has any liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise) required by
generally accepted accounting principles to be set forth on a consolidated
balance sheet of Republic and its consolidated subsidiaries or in the notes
thereto which individually or in the aggregate, could reasonably be expected to
have material adverse effect on Republic.
SECTION 4.5. INFORMATION SUPPLIED. None of the information
supplied or to be supplied by Republic specifically for inclusion or
incorporation by reference in (i) the Registration Statement will, at the time
the Registration Statement is filed with the SEC, at any time it is amended or
supplemented and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading, and
(ii) the Proxy Statement will, at the date it is first mailed to the Company's
stockholders and at the time of the meeting of the Company's stockholders held
to vote on approval of this Agreement, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statement therein, in light of the
circumstances under which they are made, not misleading. The Registration
Statement will comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations thereunder. No
representation is made by Republic in this Section 4.5 with respect to
statements made or incorporated by reference in the Registration Statement
based on information supplied by the Company or the Management Stockholders
specifically for inclusion or incorporation by reference in the Registration
Statement.
SECTION 4.6. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in the Republic SEC Documents filed and publicly available prior to
the date of this Agreement, and except as expressly contemplated by this
Agreement, since the date of the most recent audited financial statements
included in such Republic SEC Documents, Republic has conducted its business
only in the ordinary course, and there has not been: (i) any material adverse
change in Republic's business, results of operation, or business prospects;
(ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of
Republic's capital stock; (iii) any split, combination or reclassification of
any of its capital stock or any issuance or the authorization of any insurance
of any other securities in respect of, in lieu of or in substitution for shares
of its capital stock; (iv) any damage, destruction or loss, whether or not
covered by insurance, that has had or is likely to have a material adverse
effect on Republic; or (v) any change in accounting methods, principles or
practices by Republic materially affecting its assets, liabilities or business,
except insofar as may have been required by a change in generally accepted
accounting principles.
SECTION 4.7. LITIGATION. Except as disclosed in the Republic SEC
Documents filed and publicly available prior to the date of this Agreement,
there is no suit, action or proceeding pending or threatened against Republic
or any of its subsidiaries challenging the acquisition by
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Republic or Mergersub of any shares of Company Common Stock or any provision of
this Agreement or seeking to restrain or prohibit the consummation of the
Merger, or that, individually or in the aggregate, could reasonably be expected
to have a material adverse effect on Republic, nor is there any judgment,
decree, injunction, rule or order of any Governmental Authority or arbitrator
outstanding against Republic or any of its subsidiaries having, or which could
reasonably by expected to have, any such effect.
SECTION 4.8. COMPLIANCE WITH LAWS. Except as disclosed in the
Republic SEC Documents filed and publicly available prior to the date of this
Agreement, Republic and its subsidiaries are in compliance with all applicable
statutes, laws, ordinances, regulations, rules, judgments, decrees and orders
of any Governmental Authority applicable to its business or operations, except
for instances of possible noncompliance that, individually or in the aggregate,
would not have a material adverse effect on Republic. Each of Republic and its
subsidiaries has in effect all Permits, necessary for it to own, lease or
operate its properties and assets and to carry on its business as now
conducted, and there has occurred no default under any such Permit, except for
the lack of Permits and for defaults under Permits which, individually or in
the aggregate, would not have a material adverse effect on Republic. None of
such Permits is or will be impaired or in any way affected by the execution and
delivery of this Agreement, or consummation of the transactions contemplated
hereby.
SECTION 4.9. CONTRACTS. Neither Republic nor any of its
subsidiaries is a party to or bound by, and neither they nor their properties
are subject to, any contracts, agreements or arrangements required to be
disclosed in its most recently filed Form 10-K, 10-Q or 8-K under the Exchange
Act which has not been filed as an exhibit to one or more of the Republic SEC
Documents filed and publicly available prior to the date of this Agreement.
SECTION 4.10. BROKERS. No broker, investment banker, financial
advisor or other Person, is entitled to any broker's, finder's, financial
advisor's or other similar fee or SEC in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Republic.
SECTION 4.11. ACCOUNTING MATTERS. Neither Republic nor any of its
affiliates has taken or agreed to take any action that (without regard to any
action taken or agreed to be taken by Republic or any of its affiliates) would
prevent Republic from accounting for the business combination to be effected by
the Merger as a pooling of interests.
SECTION 4.12. TAX MATTERS. Neither Republic nor any of its
affiliates has taken or agreed to take any action, or knows of any
circumstances, that (without regard to any action taken or agreed to be taken
by the Company or any of its affiliates) would prevent the Merger from
qualifying as a reorganization within the meaning of Sections 368(a)(2)(E) of
the Code.
SECTION 4.13. OWNERSHIP OF COMPANY COMMON STOCK. As of the date
hereof, except for the voting proxies granted to Republic as described in
Section 5.10, neither
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Republic nor any of its affiliates or associates (as such terms are defined
under the Exchange Act), (i) beneficially owns, directly or indirectly, or (ii)
is party to any agreement, arrangement or understanding providing for the
acquisition, holding, voting or disposition of, in each case, shares of capital
stock of the Company or any securities convertible into or exercisable or
exchangeable for capital stock of the Company, which in the aggregate represent
10% or more of the outstanding shares of the Company Common Stock after giving
effect to the conversion, exercise or exchange of all such securities
beneficially owned by Republic and its affiliates and associates which are
convertible into or exercisable or exchangeable for capital stock of the
Company.
SECTION 4.14. INTERIM OPERATIONS OF MERGERSUB. Mergersub was
formed solely for the purpose of engaging in a business combination transaction
with the Company and has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
ARTICLE V
COVENANTS OF THE COMPANY AND THE MANAGEMENT STOCKHOLDERS
SECTION 5.1. CONDUCT OF BUSINESS OF THE COMPANY. Except for those
items described in Section 5.9 and as may be agreed to in writing by Republic,
from the date hereof to the Effective Time, the Company shall, and shall cause
its subsidiaries to, (i) use its and their best efforts to conduct its and
their operations according to its and their ordinary and usual course of
business, consistent with past practice, (ii) preserve intact its and their
business organization, (iii) keep or cause to be kept in full force and effect
all of its and their material rights, contracts and agreements, (iv) maintain
all of its and their property in good operating condition and repair, (v) use
its and their best efforts to maintain satisfactory relationships with
licensors, licensees, supplies, contractors, distributors, customers and others
having business relationships with any of them, consistent with the Company's
past practices, and (vi) maintain continuously insurance coverage substantially
equivalent to the insurance coverage in existence on the date of this
Agreement. Subject to the exercise of the applicable fiduciary duties of the
Board of Directors of the Company as set forth in Section 5.2(a), the Company
and its subsidiaries shall not take any action that would, or that could
reasonably be expected to, result in any of the conditions to the obligations
of the Company or Republic to consummate the Merger set forth in Article VIII
not being satisfied. Without limiting the generality of the foregoing and
except as provided above, the Company shall not, and shall not permit any of
its subsidiaries to:
(a) authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the issuance or granting
of additional employee or other options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any options or
rights to acquire, or any securities convertible into, shares of stock of any
class; provided that the Company shall be entitled to issue shares of the
Company Common Stock (1) upon exercise of Company Stock Options and Company
Warrants against payment therefor in accordance with their
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terms, and (2) in connection with the closing of any of the Company's pending
acquisitions described on and in accordance with Schedule 5.9;
(b) split, combine or reclassify any shares of its or any
of its subsidiaries' capital stock; declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any combination
thereof) to its stockholders whether or not in respect of its capital stock; or
redeem, purchase or otherwise acquire any shares of, or rights to acquire
shares of, its or any of its subsidiaries' capital stock;
(c) amend its charter or by-laws;
(d) voluntarily sell, transfer, surrender, abandon or
dispose of any of its material assets or property rights (tangible or
intangible), other than in the ordinary course of business consistent with past
practices;
(e) acquire (including, without limitation, for cash or
shares of stock, by merger, consolidation, or acquisitions of stock or assets)
any interest in any corporation, partnership or other business organization or
division thereof, or make any investment in any such entity either by purchase
of securities, contributions of capital or transfer of property, or make any
loans or advances to any Person;
(f) grant or make any mortgage or pledge or subject
itself or any of its material properties or assets to any lien, charge or
encumbrance of any kind, except liens for taxes not currently due;
(g) create, incur or assume any liability or indebtedness
for borrowed money (contingent or otherwise), in an amount exceeding $1,000,000
individually or $2,500,000 in the aggregate, except borrowings under the
Company's credit facilities with LaSalle National Bank and certain other
lenders to the extent such borrowings are in the ordinary course of business
consistent with past practices;
(h) make or commit to make any capital expenditures in
excess of $1,000,000 individually or $2,500,000 in the aggregate, other than as
set forth on the capital expenditure budget provided by the Company to
Republic, a copy of which is attached as Schedule 5.1;
(i) grant any increase in the compensation payable or to
become payable to directors, officers or employees (including, without
limitation, any such increase pursuant to any Benefit Plan or otherwise), other
than merit increases to employees of the Company or its subsidiaries who are
not directors or officers of the Company, in the ordinary course of business
and consistent with past practices;
(j) alter the manner of keeping its books, accounts or
records, or change in any manner the accounting practices therein reflected;
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(k) enter into any material commitment, transaction or
agreement, other than in the ordinary course of business consistent with past
practices and other than commitments, transactions or agreements that are
terminable by the Company without cost or penalty on no more than 60 days prior
notice;
(l) apply any of its assets to the direct or indirect
payment, discharge, satisfaction or reduction of any amount payable directly or
indirectly to or for the benefit of any affiliate of the Company or any of its
subsidiaries, except in the ordinary course of business consistent with past
practices;
(m) modify any provision of any Benefit Plan, any stock
option plans of the Company or the terms of any stock options granted
thereunder;
(n) modify any of the Designated Contracts other than in
the ordinary course of business consistent with past practices;
(o) enter into any agreement or transaction with any
Person controlling, controlled by or under common control with the Company; or
(p) agree, whether in writing or otherwise, to do any of
the foregoing.
SECTION 5.2. NO SOLICITATION; COMPETING TRANSACTIONS.
(a) From the date hereof until the earlier of (A) the
Effective Time, or (B) the date this Agreement shall terminate in accordance
with its terms (the "Non-Solicitation Period"), neither the Company nor the
Management Stockholders shall, directly or indirectly, solicit or initiate
discussion with, enter into negotiations or agreements with, or furnish any
information about the Company that is not publicly available to, or otherwise
assist, facilitate or encourage, any Person or group (other than Republic, an
affiliate of Republic or their authorized representatives) concerning any
proposal for a merger, sale of substantial assets, sale of shares of capital
stock or other securities, recapitalization or other business combination
transactions involving the Company or any of the subsidiaries of the Company,
other than the transactions set forth on Schedule 5.9 (a "Competing
Transaction"). The Company and the Management Stockholders will instruct the
respective officers, directors, employees, advisors, affiliates, counsel and
agents of the Company and its subsidiaries (collectively, the
"Representatives") not to take any action contrary to the provisions of the
previous sentence; provided, however, that the Company and the Representatives
shall not be prohibited from entering into any negotiations (or entering into
an agreement resulting from such negotiations) which were not so solicited or
initiated to the extent such action is taken by, or upon the authority of, the
Board of Directors of the Company due to the applicable fiduciary duties of
such Board of Directors to the stockholders of the Company, as determined by
such directors in the exercise of good faith judgment based upon the written
advice of independent, outside legal counsel that a failure of the Board of
Directors of the Company to take such action would be likely to constitute a
breach of its fiduciary duties to the stockholders of the Company; and
provided, further, that for a period of thirty
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(30) days following the date hereof, if the Company receives an offer or
proposal involving a Competing Transaction it may furnish all information
pertaining to the Company and its subsidiaries as the Board of Directors of the
Company believes in good faith to be appropriate, if the Board of Directors of
the Company (after consultation with its independent, outside legal counsel)
determines in good faith that such action is required due to the applicable
fiduciary duties of the directors. The Company will notify Republic
immediately in writing if the Company becomes aware that any inquiries or
proposals are received by, any information is requested from, or any
negotiations or discussions are sought to be initiated with, the Company or its
subsidiaries with respect to a Competing Transaction. Each time, if any, that
the Board of Directors of the Company determines, upon written advice of such
legal counsel and in the exercise of its good faith judgment as to its
fiduciary duties to the Company's stockholders, that it must enter into
negotiations with, or furnish any information that is not publicly available
to, any Person or group (other than Republic, an affiliate of Republic or their
authorized representatives) concerning any Competing Transaction, the Company
will give Republic prompt notice of such determination (which shall include a
copy of the written advice of such legal counsel), the Company will promptly
provide Republic copies of the information provided to such other Person or
group, and the Company will fully inform Republic of the status and substance
of such negotiations in a prompt manner.
(b) To induce Republic to commit to expend its resources
and money to perform the due diligence investigation of the Company and to
enter into this Agreement, the Company agrees that should it or any of the
Management Stockholders or the Representatives during the Non-Solicitation
Period either (i) receive an unsolicited proposal for a Competing Transaction
(an "Acquisition Proposal"), other than from Republic or an affiliate of
Republic or their authorized representatives, and, during the Non-Solicitation
Period or, provided that this Agreement has not been terminated by the Company
pursuant to Section 9.1(j), within one (1) year after the date hereof,
consummate a transaction of a kind that would constitute a Competing
Transaction with (x) the offeror or any affiliate of the offeror who made the
Acquisition Proposal (the "Original Offeror") or (y) another party who makes an
Acquisition Proposal prior to the termination of negotiations with the Original
Offeror, or (ii) solicit or initiate any discussions for a Competing
Transaction (regardless of whether it is consummated); then, in either
instance, (A) the Company shall pay to Republic, as liquidated damages (and not
as a penalty) to compensate Republic for the effort and expense which Republic
will be expending in entering into and performing this Agreement and for its
lost opportunity, the sum of $1,000,000 (which shall be paid contemporaneously
with consummation of the Competing Transaction if the Acquisition Proposal was
not solicited, or contemporaneously with the solicitation or initiation of any
discussion if the Acquisition Proposal was solicited) and (B) each Management
Stockholder shall pay to Republic an amount in cash equal to the consideration
paid by the acquiror (the "Third Party Acquisition Consideration") on a per
share of Company Common Stock basis in excess of (1) $16.00 (in the case of
proposals noted in (i) above, and then this provision shall apply only to the
individual Management Stockholders) or (2) $13.375 (in the case of
solicitations under (ii) above) (in either case, the "Base Amount") multiplied
by the number of shares beneficially owned by each such Management Stockholder
(which additional amounts shall be paid contemporaneously with consummation of
the acquisition, whether or not such Acquisition Proposal was solicited);
provided, that number of shares and the Base Amount shall be appropriately
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adjusted for stock splits, stock dividends, stock combinations,
recapitalizations, reclassifications and other similar transactions. The Third
Party Acquisition Consideration shall be deemed to include both cash and any
securities or other property received in the transaction, as well as debts
assumed in the transaction. In the event that any Third Party Acquisition
Consideration shall be payable in securities; debt securities shall be valued
at the greater of par or market value on the day of delivery; preferred stock
shall be valued at the greater of par, liquidation preference or market value
on the day of delivery; and common stock shall be valued by its market value on
the day of delivery based on the ten day average closing price of such common
stock on the principal stock exchange or Nasdaq market on which it is traded or
quoted for the period prior to the consummation of such acquisition. In the
event that any Third Party Acquisition Consideration shall be payable in other
property, such other property shall be valued at an amount to be reasonably
determined by Republic.
SECTION 5.3. APPROVAL BY THE COMPANY'S STOCKHOLDERS. The Company
shall, as soon as practicable following the date hereof, establish a record
date for, duly call, give notice of, convene and hold a meeting of its
stockholders, to be held as promptly as practicable after the date of this
Agreement, for the purpose of voting upon the Merger and this Agreement (the
"Company Special Meeting"). The Company, through its Board of Directors, shall
recommend that the Company's stockholders approve of this Agreement and the
Merger and include such recommendation in the Proxy Statement, provided that
the Board of Directors shall not be obligated to make such recommendation if
the Company shall have received an offer for a Competing Transaction that the
Board of Directors determines in good faith is more favorable to the
stockholders of the Company from a financial point of view than the
transactions contemplated by this Agreement. Subject to the exercise of its
applicable fiduciary duties under Delaware Law to the stockholders of the
Company, the Board of Directors of the Company shall use its reasonable best
efforts to solicit from stockholders of the Company votes in favor of the
Merger and the transactions contemplated hereby. The parties will use their
respective best efforts to cause the Company Special Meeting to be held and to
close the transactions contemplated hereby on or before August 12, 1996.
SECTION 5.4. ACCESS TO INFORMATION. From the date of this
Agreement to the Effective Time, the Company shall, and shall cause its
subsidiaries and its and their representatives, officers, directors, employees,
auditors and agents to, afford the representatives, officers, employees and
agents of Republic reasonable access at all reasonable times to its
representatives, officers, employees, agents, properties, offices, and other
facilities and to all books and records, and shall furnish Republic with all
financial, operating and other data and information Republic, through its
representatives, officers, employees or agents, may reasonably request.
Republic shall be entitled to conduct prior to Closing an environmental
assessment of the Owned Properties, and to the extent permitted under the terms
of the Leases, the Leased Premises (hereinafter referred to as the
"Environmental Assessment"), and to otherwise conduct a due diligence
investigation of the Company and its assets and financial condition. The
Environmental Assessment may include, but not be limited to, a physical
examination of such real property, and any structures, facilities, or equipment
located thereon, soil samples, ground and surface water samples, storage tank
testing, review of pertinent records, documents, and licenses of the Company.
The Company shall provide Republic or its designated agents or consultants with
the access to such property which Republic,
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its agents or consultants require to conduct the Environmental Assessment and
due diligence review. If the results of the Environmental Assessment or due
diligence review are not satisfactory to Republic in its sole discretion, then
Republic may elect not to close, in which event the provisions of Section
5.2(b) shall not thereafter apply provided that the Company and the Management
Stockholders had complied with Section 5.2(a) in all respects prior to the date
of their receipt of notice of Republic's election not to close in accordance
with this Section 5.4.
SECTION 5.5. AFFILIATE LETTERS.
(a) Schedule 5.5 sets forth a list of names and addresses
of those persons who may be deemed "affiliates" of the Company within the
meaning of Rule 145 under the Securities Act ("Rule 145"), including the
Management Stockholders and all other officers and directors of the Company
(each an "Affiliate"). The Company shall provide Republic such information and
documents as Republic shall reasonably request for purposes of reviewing the
accuracy and completeness of such list. There shall be added to such list the
names and addresses of any other Person who becomes an Affiliate of the Company
at any time after the date hereof up to and including the time of the Company
Special Meeting or who Republic reasonably identifies (by written notice to the
Company) as being a Person who may be deemed to be an Affiliate of the Company.
The Company shall deliver or cause to be delivered to Republic, concurrent
herewith, from each of the Affiliates identified on Schedule 5.5 (as the same
may be supplemented as aforesaid), a letter in the form of Exhibit A hereto
(the "Affiliate Letter"), which shall contain (i) a representation that on the
date hereof, such Affiliate had no plan or intention to sell, exchange or
otherwise dispose of the Republic Common Stock received by it pursuant to the
Merger, (ii) a covenant that such Affiliate shall not sell or otherwise dispose
of any shares of Republic Common Stock issued to it in the Merger until such
time as final results of operations of Republic covering at least thirty (30)
days of combined operations of Republic and the Company have been published and
(iii) a covenant that such Affiliate will not sell or otherwise dispose of any
shares of Republic Common Stock issued to it in the Merger, except pursuant to
an effective registration statement under the Securities Act or in accordance
with the provisions of paragraph (d) of Rule 145 or another exemption from
registration under the Securities Act.
(b) Republic shall be entitled to place appropriate
legends on the certificates evidencing the Republic Common Stock to be received
by such Affiliates pursuant to the terms of this Agreement, and to issue
appropriate stock transfer instructions to the transfer agent for the Republic
Common Stock, to the effect that the shares of the Republic Common Stock
received or to be received by such Affiliates pursuant to the terms of this
Agreement may only be sold, transferred or otherwise conveyed, and the holder
thereof may only reduce his interest in or risks relating to such shares of
Republic Common Stock, pursuant to an effective registration statement under
the Securities Act or in accordance with the provisions of paragraph (d) of
Rule 145 or another exemption from registration under the Securities Act and,
in any event, only after financial results covering at least 30 days of
combined operations of Republic and the Company after the Effective Time shall
have been published. The foregoing restrictions on the transferability of the
Republic Common Stock shall apply to all purported sales, transfers and other
conveyances of the shares of
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Republic Common Stock received or to be received by such Affiliates pursuant to
this Agreement and to all purported reductions in the interest in or risks
relating to such shares of the Republic Common Stock whether or not such
Affiliate has exchanged the certificates previously evidencing such Affiliate's
shares of the Company Common Stock for certificates evidencing the shares of
Republic Common Stock into which such shares of the Company Common Stock were
converted. The Proxy Statement and the Registration Statement shall disclose
the foregoing in a reasonably prominent manner.
SECTION 5.6. LETTER OF COMPANY'S ACCOUNTANTS. The Company shall
cause to be delivered to Republic a letter of Arthur Andersen LLP, the
Company's independent public accountants, dated a date within two business days
before (a) the date on which the Registration Statement shall become effective,
(b) the date of the Company Special Meeting, and (c) the Effective Time, and
addressed to Republic in form and substance reasonably satisfactory to Republic
and customary in scope and substance for letters delivered by independent
public accountants in connection with registration statements similar to the
Registration Statement. In connection with the Company's efforts to obtain
such letter, if requested by Arthur Andersen LLP, Republic shall provide a
representation letter to Arthur Andersen LLP complying with SAS 72 (as
amended), if then required.
SECTION 5.7. COVENANT NOT TO COMPETE. On the date hereof, the
Management Stockholders shall execute and deliver to Republic a covenant not to
compete and non-disclosure agreement in the form of Exhibit B hereto (the
"Covenant Letters").
SECTION 5.8. INDEMNIFICATION BY MANAGEMENT STOCKHOLDERS. The
Management Stockholders covenant and agree that, from and after the Closing,
they shall jointly indemnify and hold Republic harmless from any losses,
claims, liabilities, damages, and expenses (including attorneys' fees) arising
out of any breach or inaccuracy in any representation, warranty or covenant
made by them in this Agreement or in any certificate delivered pursuant hereto,
provided that each Management Stockholder will be liable only to the extent of
the lesser of (i) the amount of such losses, claims, damages, liabilities, and
expenses resulting to Republic or the Surviving Corporation from such breach or
inaccuracy in excess of $500,000 or (ii) 15% of the aggregate Merger
Consideration (valued as of the Effective Time) multiplied by the percentage
ownership of such Management Stockholder (and members of such Management
Stockholder's immediate family and the affiliates and associates of such
Management Stockholder as owned by such persons on May 20, 1996) of the
outstanding Company Common Stock on May 20, 1996, and further provided, that
Republic has furnished written notice to the Management Stockholders of any
such losses, claims, liabilities, damages, and expenses, prior to the date on
which Republic files its annual report on Form 10-K for the year ending
December 31, 1996.
SECTION 5.9. CERTAIN PENDING TRANSACTIONS. Notwithstanding
anything to the contrary contained herein, from the date hereof until the
Effective Time, the Company may (a) continue to pursue certain acquisition
opportunities which are set forth on Schedule 5.9 to the extent approved in
writing by Republic, such approval to be withheld or granted by Republic in its
sole and
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absolute discretion, provided, that the Company shall promptly provide Republic
copies of all material agreements and due diligence with respect to such
transactions and will keep Republic fully informed of the status and substance
of all negotiations related thereto, and, further provided that the Company
shall not bind itself to closing any such acquisition without the prior written
approval of Republic, such approval to be withheld or granted by Republic in
its sole and absolute discretion, and (b) expand its existing credit facility
from $45,000,000 to $70,000,000 and borrow thereunder in the ordinary course of
business, consistent with past practices, for usual corporate purposes,
including funding the purchase price incurred in closing (if and to the extent
approved by Republic) any of the acquisitions set forth on Schedule 5.9 and/or
paying off all indebtedness for borrowed money of any business acquired in
accordance with Schedule 5.9.
SECTION 5.10. IRREVOCABLE PROXIES. On the date hereof, each of
Thomas A. Volini, Carlos E. Aguero, Environmental Venture Fund, Limited
Partnership, Apex Investment Funds L.P., and The Productivity Fund Limited
Partnership shall execute and deliver to Republic an irrevocable voting proxy
in the form of Exhibit C hereto (the "Irrevocable Proxies").
SECTION 5.11. LANDFILL OPERATIONS. Without the prior written
approval of Republic, which approval may be withheld or granted in Republic's
sole and absolute discretion, the Company agrees not to directly or indirectly
acquire any ownership interest or joint venture interest in any additional
landfill facility, and, unless Republic otherwise approves in writing, the
Company further agrees that it shall, prior to the Effective Time, terminate or
dispose of any and all of its or its subsidiaries' landfill management or
remediation contracts or operations with respect to any and all landfill
facilities which the Company or a subsidiary thereof does not own as of the
date hereof.
ARTICLE VI
COVENANTS OF REPUBLIC AND MERGERSUB
SECTION 6.1. CERTAIN ACTIONS. Republic and its subsidiaries shall
not take any action that would, or that could reasonably be expected to, result
in any of the conditions to the obligations of Republic to consummate the
Merger set forth in Article VIII not being satisfied.
SECTION 6.2. ACCESS TO INFORMATION. From the date of this
Agreement to the Effective Time, Republic shall furnish the Company with all
publicly available information relating to Republic and allow Representatives
of the Company to engage in discussions with such senior management of Republic
as the parties mutually agree upon.
SECTION 6.3. LETTER OF REPUBLIC'S ACCOUNTANTS. Republic shall
cause to be delivered to the Company a letter of Arthur Andersen LLP,
Republic's independent public accountants, dated a date within two business
days before the date on which the Registration Statement shall become effective
and addressed to the Company, in form and substance reasonably satisfactory to
the Company and customary in scope and substance for letters delivered by
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independent public accountants in connection with registration statements
similar to the Registration Statement. In connection with Republic's efforts
to obtain such letter, if requested by Arthur Andersen LLP, the Company shall
provide a representation letter to Arthur Andersen LLP complying with SAS 72
(as amended), if then required.
SECTION 6.4. COMPLIANCE WITH NASDAQ AND SEC REQUIREMENTS. From
the date hereof to the Effective Time, Republic shall comply in all material
respects with all applicable requirements of Nasdaq and the SEC with respect to
the filing of information and reports.
SECTION 6.5. BENEFIT PLANS. As soon as practicable after the
Effective Time but in no event later than January 1, 1997, Republic shall
provide benefits to employees of the Company and its subsidiaries which are
substantially similar to the benefits provided to similarly situated employees
of Republic and its subsidiaries (the date(s) on which employees of the Company
and its subsidiaries are provided such benefits is hereinafter referred to as
the "Benefit Plan Transition Dates"). Subject to requirements of applicable
law, after the Effective Time, Republic shall cause the Surviving Corporation
to maintain the Benefit Plans in substantially the same form as in effect on
the date of this Agreement until the applicable Benefit Plan Transition Date.
With respect to employee benefit plans and other benefit arrangements covering
employees of Republic and its subsidiaries ("Republic Benefit Plans"), Republic
shall grant all employees of the Company and its subsidiaries who become
participants in such plans after the applicable Benefit Plan Transition Date
credit for all service with the Company and its subsidiaries and their
respective predecessors prior to the applicable Benefit Plan Transition Date
for all purposes for which such service was recognized by the Company. To the
extent the Republic Benefit Plans provide medical or dental welfare benefits
after the applicable Benefit Plan Transition Date, for all employees who have
already met the pre-existing conditions and actively at work requirements under
the Benefit Plans that provide medical or dental welfare benefits, Republic
shall cause all pre-existing conditions exclusions and actively at work
requirements to be waived. For all other employees of the Company and its
subsidiaries, Republic shall credit all service with the Company and its
subsidiaries that counted toward the pre-existing conditions and actively at
work requirements of such Benefit Plans toward satisfying the pre- existing
conditions and actively at work requirements of the Republic Benefit Plans.
Republic shall provide that any expenses incurred on or before the applicable
Benefit Plan Transition Date shall be taken into account under the Republic
Benefit Plans for purposes of satisfying the applicable deductible, coinsurance
and maximum out-of-pocket provisions for such employees and their covered
dependents. On and after the Effective Time, Republic shall cause the Benefit
Plans that provide medical or dental welfare benefits to provide continuation
coverage (within the meaning of Section 4980B of the Code) to employees of the
Company and its subsidiaries who terminated employment prior to the Effective
Time and their dependents.
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ARTICLE VII
COVENANTS OF THE COMPANY, REPUBLIC AND MERGERSUB
SECTION 7.1. LEGAL CONDITIONS TO MERGER. Each of the Company,
Republic and Mergersub, shall use its best efforts to comply promptly with all
legal requirements which may be imposed on it with respect to the Merger, this
Agreement and the transactions contemplated hereby. Such actions shall
include, without limitation, filing or causing to be filed under the HSR Act a
premerger notification and report form, with respect to the transactions
contemplated hereby, furnishing all additional information required under the
HSR Act and in connection with approvals of or filings with any Governmental
Authority. Each of the Company, Republic and Mergersub promptly shall
cooperate with and furnish information to each other in connection with any
such requirements imposed upon any of them or any of their subsidiaries in
connection with such transactions. Each of the Company, Republic and Mergersub
shall, and shall cause each of its subsidiaries to, use its best efforts to
obtain (and shall cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any exemption by, any Governmental
Authority or other public or private third party, required to be obtained or
made by the Company, Republic or any of their subsidiaries in connection with
the Merger and the other transactions contemplated by this Agreement. In
connection with the filings under the HSR Act, each party shall request early
termination of the HSR waiting period.
SECTION 7.2. PREPARATION OF PROXY STATEMENT AND REGISTRATION
STATEMENT.
(a) Republic promptly shall prepare, with the Company's
cooperation and assistance, and file with the SEC the Proxy Statement and
Republic promptly shall prepare and file with the SEC the Registration
Statement relating to the issuance of the Merger Consideration, in which the
Proxy Statement will be included as a prospectus. Each of Republic and the
Company shall use its best efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after such
filing.
(b) Republic shall use its best efforts to obtain, prior
to the effective date of the Registration Statement, all necessary state
securities law or "Blue Sky" permits or approvals in connection with the
issuance of Republic Common Stock in the Merger and under the Stock Plans,
except that Republic shall not be required to execute or file any general
consent to service of process in any jurisdiction in which it is not qualified
to transact business or to register as a dealer in any jurisdiction. Republic
shall advise the Company (promptly after it receives notice thereof) of the
time when the Registration Statement has become effective, of any supplement or
amendment that has been filed, of the issuance of any stop order, of the
suspension of the qualification of the shares of Republic Common Stock for
offering or sale in any jurisdiction, or of any request by the SEC for
amendment of the Registration Statement or for additional information.
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(c) If at any time prior to the Effective Time any event
relating to Republic or any of its subsidiaries or Mergersub should be
discovered which should be set forth in an amendment of, or a supplement to,
the Proxy Statement, Republic promptly shall so inform the Company and shall
furnish all necessary information to the Company relating to such event. If at
any time prior to the Effective Time any event relating to the Company or any
of its subsidiaries should be discovered which should be set forth in an
amendment of, or a supplement to, the Registration Statement, the Company
promptly shall so inform Republic and shall furnish all necessary information
to Republic relating to such event.
SECTION 7.3. BEST EFFORTS. Upon the terms and subject to the
conditions of this Agreement (including, without limitation, the provisions of
Section 5.2(a) relating to the exercise of the applicable fiduciary duties of
the Board of Directors of the Company), each of the parties to this Agreement
shall use its best efforts to take or cause to be taken all actions and to do
or cause to be done all things necessary, proper or advisable under applicable
laws and regulations to consummate the transactions contemplated by this
Agreement, and shall use its best efforts to obtain all necessary waivers,
consents and approvals, including the actions described in Sections 7.1 and 7.2
above.
SECTION 7.4. NOTIFICATION OF CERTAIN MATTERS. The Company shall
give prompt notice to Republic and Republic shall give prompt notice to the
Company, of (a) the occurrence, or non-occurrence, of any event the occurrence,
or non- occurrence, of which would, in the reasonable judgment of their
respective management, be likely to cause either (i) any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date of this Agreement to the Effective Time or
(ii) any condition set forth herein to be unsatisfied in any material respect
at any time from the date of this Agreement to the Effective Time, and (b) any
material failure of the Company, Republic or Mergersub, as the case may be, or
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, provided that the delivery of any notice pursuant to this Section
7.4 shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 7.5. BROKERS OR FINDERS. Each of the Company and Republic
represents that no agent, broker, investment banker, financial advisor or other
firm or Person is or shall be entitled to any brokers' or finder's fee or any
other SEC or similar fee in connection with any of the transactions
contemplated by this Agreement (except as set forth in Section 3.24), and each
of the Company and Republic shall indemnify and hold the other harmless from
and against any and all claims, liabilities or obligations with respect to any
other fees, SECs or expenses asserted by any Person on the basis of any act or
statement alleged to have been made by such party.
SECTION 7.6. PUBLIC ANNOUNCEMENTS. Neither the Company nor
Republic shall issue any press release or public announcement, including
announcements by any party for general reception by or dissemination to
employees, agents or customers, with respect to this Agreement, the Merger and
the other transactions contemplated by this Agreement without the prior written
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consent of the other party (which consent shall not be withheld unreasonably),
provided that the Company or Republic may make any disclosure or announce with
such party, in the opinion of its counsel, is obligated to make pursuant to
applicable law or regulation of the Nasdaq or any national securities exchange,
as applicable, in which case the party desiring to make the disclosure shall
reasonably consult with the other party prior to making such disclosure or
announcement.
SECTION 7.7. TAX TREATMENT. Until the Effective Time, the Company
and Republic shall, and from and after the Effective Time Republic shall, use
its best efforts to qualify the Merger, and shall use best efforts not to take
any action to cause the Merger not to qualify, as a reorganization within
Section 368(a) of the Code. From and after the Effective Time, (a) Republic
shall cause the Surviving Corporation to continue the Company's historic
business or use a significant portion of the Company's historic business assets
in a business within the meaning of the Treasury regulation Section 1.368-1(d),
and (b) Republic and Mergersub shall, and Republic shall cause the Surviving
Corporation to, treat the Merger as a "reorganization" within the meaning of
Section 368(a) of the Code and shall file such information with their income
tax returns as may be required by Treasury regulation Section 1.368-3 or other
applicable law.
SECTION 7.8. INDEMNIFICATION AND INSURANCE OF COMPANY OFFICERS AND
DIRECTORS.
(a) The Company shall, and from and after the Effective
Time Republic and the Surviving Corporation shall, indemnify, defend and hold
harmless each Person who is now, or who becomes prior to the Effective Time, an
officer or director of the Company or any of its subsidiaries (the "Indemnified
Parties") against (i) all losses, claims, damages, costs, expenses, liabilities
or judgments or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be withheld unreasonably) of or in
connection with any claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of the fact that such
Person is or was a director, officer or employee of the Company or any of its
subsidiaries, whether pertaining to any matter existing or occurring at or
prior to the Effective Time and whether asserted or claimed prior to, or at or
after, the Effective Time ("Indemnified Liabilities"), and (ii) all Indemnified
Liabilities based in whole or in part on, or arising in whole or in part out
of, or pertaining to this Agreement or the transactions contemplated by this
Agreement, in each case to the full extent provided under the Certificate of
Incorporation and By-laws of the Company as in effect as of the date hereof or
permitted under Delaware Law, as applicable, to indemnify directors and
officers. Prior to the Effective Time, the Company shall cause each Person
eligible for indemnification pursuant to this Section 7.8(a) to execute and
deliver to Republic, and/or to the insurance company providing the insurance
referred to in clause (b) below, a writing confirming, among other matters,
that he or she has no knowledge of any pending or threatened claims, actions or
other matters which reasonably could give rise to Indemnified Liabilities, in
such form as shall be reasonably satisfactory to Republic and/or such insurance
company.
(b) The Company shall, and from and after the Effective
Time Republic shall, use its reasonable best efforts to cause the Surviving
Corporation to obtain and maintain in effect an
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extended reporting period under the Company's existing directors' and officers'
liability insurance policy or comparable coverage through a "tail" or other
policy for a period of at least five years from the Effective Time. The
Certificate of Incorporation and the Bylaws of the Surviving Corporation shall
contain the provisions with respect to indemnification set forth in the
Company's Certificate of Incorporation and Bylaws on the date of this
Agreement, and such provisions shall not be amended, repealed or otherwise
modified for a period of five years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who on or prior to
the Effective Time were directors or officers of the Company, unless such
modification is required by law.
(c) The provisions of this Section 7.8 are intended for
the benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs and executors to the extent that each Indemnified Party has executed
and delivered the writing with respect to himself or herself in accordance with
Section 7.8(a) prior to the Effective Time.
SECTION 7.9. FURTHER ASSURANCES. In the event that at any time
after the Effective Time any further action is necessary or desirable to carry
out the purposes of this Agreement, the proper officers and/or directors of the
Company, Republic and Mergersub shall take such necessary action.
ARTICLE VIII
CONDITIONS TO CLOSING
SECTION 8.1. CONDITIONS TO OBLIGATIONS OF THE COMPANY, REPUBLIC
AND MERGERSUB. The obligations of the Company, Republic and Mergersub to
consummate the Merger and the other transactions contemplated by this Agreement
are subject to the fulfillment, on or before the Effective Time, of each of the
following conditions:
(a) Stockholder Approval. This Agreement and the Merger
shall have been approved and adopted by the affirmative vote, in person or by
proxy, of the holders of a majority of the outstanding shares of Company Common
Stock entitled to vote at the Company Special Meeting.
(b) Approvals of Governmental Authorities and Other
Persons. All authorizations, consents, orders or approvals of, or declarations
or filings with, or expiration or termination of any notice and waiting period
imposed by, any Governmental Authority or any other Person upon the
consummation of the transactions contemplated by this Agreement, the failure of
which to obtain could reasonably be expected to have a material adverse effect
on Republic and its subsidiaries or the Company and its subsidiaries, in each
case taken as a whole, shall have been filed or obtained or shall have
occurred. All of such authorizations, consents, orders or approvals shall have
been obtained without the imposition of any conditions which would require the
divestiture of
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any of the Company's or Republic's assets or would otherwise materially
adversely effect Republic's ability to operate the businesses of the Company
and its subsidiaries following the Effective Time.
(c) Registration Statement. The Registration Statement
shall have been declared effective, and no stop order terminating the
effectiveness of the Registration Statement shall have been issued or
threatened.
(d) No Order or Injunction. The consummation of the
Merger shall not be precluded, enjoined, prohibited or materially restricted by
any order or injunction of a court of competent jurisdiction (each party
agreeing to use its best efforts to have any such order reversed or injunction
lifted), and no litigation, arbitration, or other proceeding initiated by any
Governmental Authority shall be pending which seeks to enjoin prohibit or
materially restrict the consummation of the Merger.
(e) Pooling Letter. The Company and Republic shall have
received a letter from Arthur Andersen LLP, addressed to each of them, dated
the date the Proxy Statement is first mailed to the stockholders of the Company
and confirmed in writing as of the Effective Time, stating that the Merger
shall qualify as a pooling of interests business combination under applicable
accounting and SEC rules.
(f) Accountants Letters. The Company and Republic shall
have received the letters of Arthur Andersen LLP described in Sections 5.6 and
6.3 above.
(g) Nasdaq Listing. The shares of Republic Common Stock
included in the Merger Consideration shall have been duly listed for trading on
the Nasdaq National Market, subject to official notice of issuance.
SECTION 8.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY. Except as
otherwise provided below, the obligations of the Company to consummate the
Merger and the other transactions contemplated by this Agreement shall be
subject to the fulfillment on or prior to the Effective Time of the following
additional conditions, any one or more of which may be waived by the Company:
(a) Performance of Obligations of Republic and Mergersub.
Republic and Mergersub shall have performed and complied in all material
respects with all agreements required by this Agreement to be performed or
complied with by them at or prior to the Effective Time, and the Company shall
have received a certificate signed on behalf of each of Republic and Mergersub
by an executive officer of each such company to such effect.
(b) Representations and Warranties; Change in Condition.
The representations and warranties of Republic and Mergersub set forth in this
Agreement shall be true and correct on and as of the date hereof and at and as
of the Effective Time, with the same force and effect as through such
representations and warranties had been made at and as of the Effective Time,
and the
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Company shall have received a certificate signed on behalf of each of Republic
and Mergersub by an executive officer of each such company to such effect.
Since the date hereof, no event or condition shall have occurred (or shall be
discovered) that could reasonably be expected to have a material adverse effect
on Republic and its subsidiaries taken as a whole. Notwithstanding the
foregoing, the Company acknowledges and agrees that: (i) the enactment or
proposal of any legislation relating to solid waste flow control, (ii) the
occurrence of any event (or series of events) which materially effects solid
waste companies and/or electronic security services companies generally, or
(iii) the commencement of any litigation by Republic stockholders in the name
of or against Republic or any of its subsidiaries or affiliates arising as a
result of the transactions contemplated by this Agreement, shall in no event be
deemed to have had or reasonably be expected to have a material adverse effect
on Republic and its subsidiaries taken as a whole.
(c) Corporate Action. The Company shall have received
from Republic (i) copies of the certificates of incorporation and bylaws of
Republic and Mergersub, (ii) copies of resolutions of Republic's and
Mergersub's Boards of Directors approving and adopting this Agreement and the
transactions contemplated hereby, certified on behalf of each of Republic and
Mergersub by the corporate secretary of each such company, and (iii) a
certificate of good standing from the Secretary of State of the State of
Delaware for each of Republic and Mergersub (dated as of a date not more than
10 days prior to the Closing).
(d) Opinion of Counsel. The Company shall have received
an opinion of counsel to Republic and Mergersub, dated the Effective Time, in
the form of Exhibit D.
(e) Opinion of Financial Advisor. The Company shall
have received the opinion of Raymond James & Associates, Inc. dated as of the
date of this Agreement and confirmed or updated in writing as of the date that
the Proxy Statement is first mailed to stockholders of the Company to the
effect that, as of such respective dates, the consideration to be received in
the Merger by the Company's stockholders is fair to such stockholders from a
financial point of view and such opinion shall not have been withdrawn prior to
the Effective Time.
(f) Tax Opinion. The Company shall have received the
opinion, based on appropriate representations of the Company and Republic, of
Shefsky Froelich & Devine Ltd., counsel to the Company, to the effect that the
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code, and that the Company,
Republic and Mergersub each will be a party to that reorganization within the
meaning of Section 368(b) of the Code, which opinion shall have been dated on
or about the date the Proxy Statement is first mailed to stockholders of the
Company.
SECTION 8.3. CONDITIONS TO OBLIGATIONS OF REPUBLIC AND MERGERSUB.
The obligations of Republic and Mergersub to consummate the Merger and the
other transactions contemplated by this Agreement shall be subject to the
fulfillment on or prior to the Effective Time of the following additional
conditions, any one or more of which may be waived by Republic and Mergersub:
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(a) Performance of Obligations of the Company and the
Management Stockholders. The Company and the Management Stockholders shall
have performed and complied in all material respects with all agreements
required by this Agreement to be performed or complied with by them at or prior
to the Effective Time, and each of Republic and Mergersub shall have received a
certificate of the Company and the Management Stockholders (in the case of the
Company, signed by the chief executive officer, the chief operating officer,
and the chief financial officer of the Company) to such effect.
(b) Representations and Warranties; Change in Condition.
The representations and warranties of the Company and the Management
Stockholders set forth in this Agreement shall be true and correct on and as of
the date hereof and at and as of the Effective Time, with the same force and
effect as though such representations and warranties had been made at and as of
the Effective Time, and each of Republic and Mergersub shall have received a
certificate of the Company and the Management Stockholders (in the case of the
Company, signed by the chief executive officer and the chief financial officer
of the Company) to such effect. Since the date hereof, no event or condition
shall have occurred (or shall be discovered of any previously existing event or
condition) that could reasonably be expected to have a material adverse effect
on the Company and its subsidiaries taken as a whole. Notwithstanding the
foregoing, each of Republic and Mergersub acknowledges and agrees that: (i) the
enactment or proposal of any legislation relating to solid waste flow control,
(ii) the occurrence of any event (or series of events) which materially effects
solid waste companies generally, or (iii) the commencement of any litigation by
the Company stockholders in the name of or against the Company or any of its
subsidiaries or affiliates arising as a result of the transactions contemplated
by this Agreement, shall in no event be deemed to have had or reasonably be
expected to have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(c) Corporate Action. Each of Republic and Mergersub
shall have received from the Company (i) copies of the certificates of
incorporation and bylaws of the Company and each of its subsidiaries, (ii)
copies of resolutions of the Company's Board of Directors approving and
adopting this Agreement and the transactions contemplated hereby, certified on
behalf of the Company and each of its subsidiaries by the corporate secretary
of each such company, and (iii) a certificate of good standing from the
Secretary of State of the State of Delaware for the Company (dated as of a date
not more than 10 days prior to the Closing).
(d) Opinion of Counsel. Each of Republic and Mergersub
shall have received an opinion of counsel to the Company, dated the Effective
Time, in the form of Exhibit E.
(e) Environmental Assessment and Due Diligence. Republic
shall be satisfied with the results of its Environmental Assessment and due
diligence review of the Company pursuant to Section 5.4.
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(f) Tax Opinion. Republic shall have received the
opinion, based on appropriate representations of the Company and Republic, of
Akerman, Senterfitt & Eidson, P.A., counsel to Republic, to the effect that the
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code, and that the Company,
Republic and Mergersub each will be a party to that reorganization within the
meaning of Section 368(b) of the Code, which opinion shall have been dated on
or about the date the Proxy Statement is first mailed to stockholders of the
Company.
ARTICLE IX
TERMINATION
SECTION 9.1. TERMINATION. This Agreement may be terminated and
the Merger contemplated by this Agreement may be abandoned at any time after
the occurrence of any of the following events, but prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company);
(a) by mutual written consent of Republic and the
Company;
(b) by either Republic or the Company, if any
Governmental Authority shall have issued an order, decree or ruling or taken
any other action permanently enjoining, restraining or otherwise prohibiting
the Merger, and such order, decree, ruling or other action shall have become
final and nonappealing;
(c) by either Republic or the Company, if the Merger has
not been consummated by November 18, 1996 (such date, or such later date
mutually agreed to in writing by the parties hereto, referred to as the "End
Date") (other than due to the failure of the party seeking to terminate this
Agreement to perform its obligations under this Agreement required to be
performed at or prior to the Effective Time);
(d) by either Republic or the Company, if the Company's
Special Meeting shall have been held, and the stockholders of the Company shall
have failed to approve and adopt this Agreement and the Merger at the Company
Special Meeting (or any adjournment thereof);
(e) by Republic, if a tender offer or exchange offer for
more than 30% of the outstanding shares of the Company Common Stock is
commenced, and the Board of Directors of the Company, within ten business days
after such tender offer or exchange offer is so commenced, fails to recommend
against acceptance of such tender offer or exchange offer by its stockholders
or takes no position with respect to such offer;
(f) by Republic, if any Person or group (as that term is
defined under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder), other than the
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Management Stockholders, shall have acquired beneficial ownership or the right
to acquire beneficial ownership of more than 50% of the then combined voting
power of all classes of the capital stock of the Company;
(g) by Republic, if the Board of Directors of the Company
does not recommend to its stockholders the approval of the Merger, this
Agreement and the transactions contemplated hereby, or withdraws, modifies or
changes its recommendation to approve the Merger, this Agreement and the
transactions contemplated hereby, or shall have resolved to do any of the
foregoing, except as permitted in accordance with the terms of Section 9.1(h)
below;
(h) by either Republic or the Company, if the Company or
its stockholders receives an offer for a Competing Transaction that the Board
of Directors of the Company determines in good faith is more favorable to the
stockholders of the Company from a financial point of view than the
transactions contemplated by this Agreement, and the Board of Directors of the
Company accepts, recommends or resolves to accept or recommend to the Company's
stockholders such a Competing Transaction;
(i) by Republic, if any of the representations and
warranties of the Company in this Agreement are not true and correct and could
not reasonably be expected to become true and correct prior to the End Date, or
if the Company breaches in any material respects any covenant of the Company
contained in this Agreement and such breach could not reasonably be expected to
be cured prior to the End Date; or
(j) by the Company, if any of the representations and
warranties of Republic in this Agreement are not true and correct and could not
reasonably be expected to become true and correct prior to the End Date, or if
Republic breaches in any material respect any covenant of Republic contained in
this Agreement and such breach could not reasonably be expected to be cured
prior to the End Date.
SECTION 9.2. EFFECT OF TERMINATION. In the event this Agreement
is terminated pursuant to Section 9.1, this Agreement shall terminate and
become void and of no force and effect, the Merger shall be abandoned without
further action by any of the parties to this Agreement, and no party to this
Agreement shall have any liability or further obligation under this Agreement,
except for the agreements contained in Sections 5.2 (No Solicitations), 7.5
(Brokers or Finders), 9.3 (Covenant Not to Purchase), 10.3 (Fees and Expenses)
and 10.8 (Governing Law); provided that any termination of this Agreement
pursuant to Sections 9.1(i) or 9.1(j) of this Agreement shall not relieve any
party from any liability for the breach of any material representation,
warranty or covenant contained in this Agreement or be deemed to constitute a
waiver of any remedy available for such breach; provided, further, and
notwithstanding the foregoing to the contrary, no party to this Agreement shall
have any continuing liability or further obligation under Section 5.2 of this
Agreement if this Agreement is terminated pursuant to Sections 9.1(b) or (j).
Upon termination of this Agreement, each party shall return all documents and
other materials of any other party which
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constitute confidential or proprietary information or trade secrets, whether so
obtained before or after the execution of this Agreement, to the party
furnishing the same.
SECTION 9.3. COVENANT NOT TO PURCHASE. In the event that this
Agreement is terminated pursuant to Sections 9.1(a), (b), (c) or (j), Republic
agrees, for a period of one year following such date of termination, not to
purchase or acquire, by means of a stock purchase, asset purchase, merger or
other business combination, any of the entities proposed to be acquired by the
Company which are set forth on Schedule 5.9.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. AMENDMENT AND MODIFICATION. Subject to applicable
law, this Agreement may be amended, modified and supplemented only by written
agreement of the Company, on the one hand, and Republic and Mergersub, on the
other hand, at any time prior to the Effective Time with respect to any of the
terms contained herein; provided, however, that, after the adoption of this
Agreement by the Company's stockholders, no such amendment or modification
shall reduce the amount or change the form of the consideration to be delivered
to the stockholders of the Company as contemplated by Article II of this
Agreement.
SECTION 10.2. WAIVER OF COMPLIANCE; CONSENTS. Any failure of the
Company, or of Republic or Mergersub, to comply with any obligation, covenant,
agreement or condition herein may be waived in writing by Republic or
Mergersub, or by the Company, respectively, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in this Section 10.2.
SECTION 10.3. FEES AND EXPENSES.
(a) Except as otherwise provided in this Agreement or by
law, all fees and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such fees or expenses, except that the expenses payable in
connection with printing and mailing the Proxy Statement and the Registration
Statement, all SEC filing fees relating to the transactions contemplated
herein, and the fees for filing under the HSR Act, shall be borne by Republic.
(b) If this Agreement is terminated pursuant to Sections
9.1(d), (e), (f), (g), or (i), then the Company shall pay Republic an amount
equal to $1,000,000, plus out-of-pocket expenses (including reasonable
attorneys and advisors fees) incurred by Republic and Mergersub in
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connection with this Agreement and the transactions contemplated by this
Agreement, except that if this Agreement is terminated pursuant to Section
9.1(d), then the Company only shall be obligated to pay such amounts to
Republic in the event that the Company's Board of Directors did not recommend
that the Company's stockholders approve and adopt this Agreement and the
Merger, or the Management Stockholders did not use their respective reasonable
best efforts to solicit votes in favor of approval of this Agreement and the
Merger prior to and at the Company Special Meeting, in accordance with Section
5.3.
(c) If this Agreement shall be terminated pursuant to
Section 9.1(h), or if within the period described in Section 5.2(b), the
Company consummates a Competing Transaction, then the Company and the
Management Stockholders shall pay Republic the amounts described in Section
5.2(b), which amounts shall be independent of any amounts payable pursuant to
Section 10.3(b).
(d) Each party agrees that the actual damages accruing to
Republic from termination of this Agreement pursuant to those termination
provisions referenced in Sections 10.3(b) and (c) are incapable of precise
estimation and would be difficult to prove, and that the damages stipulated
herein bear a reasonable relationship to the potential injury likely to be
sustained in the event of termination pursuant to such occurrence. The
payments stipulated in Sections 10.3(b) and (c) are intended by the parties to
provide just compensation in the event of termination pursuant to such
provisions and are not intended to compel performance or to constitute a
penalty for nonperformance.
(e) Any payment required to be made by the Company
pursuant to Section 10.3(b) shall be made to Republic not later than five
business days after the occurrence of the event for which Republic is entitled
to payment as provided for herein. All payments required to be made pursuant
to this Section 10.3 shall be made by wire transfer of immediately available
funds to an account designated by Republic.
SECTION 10.4. NO THIRD-PARTY BENEFICIARIES. Except as provided in
Section 7.8, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein expressed or implied shall give or
be construed or is intended to give to any Person, other than the parties
hereto and such assigns, any legal or equitable rights hereunder.
SECTION 10.5. SURVIVAL OF AND RELIANCE ON REPRESENTATIONS AND
WARRANTIES. The representations and warranties of the Company and the
Management Stockholders in this Agreement or in any schedule or certificate or
other documents delivered pursuant to this Agreement shall survive the
Effective Time, until the date on which Republic files its Annual Report on
Form 10-K for the fiscal year in which the Merger is consummated. The
representations and warranties of Republic and Mergersub in this Agreement or
in any schedule or certificate or other document delivered pursuant to this
Agreement shall expire at the Effective Time. Notwithstanding any knowledge of
facts determined or determinable by any party by investigation, each party
shall have the right to fully rely on the representations and warranties of the
other parties
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contained in this Agreement or in any other documents or certificates delivered
in connection herewith. Each representation and warranty contained in this
Agreement is independent of each other representation and warranty. None of
the covenants in this Agreement or in any Schedule, certificate, or other
document delivered pursuant to this Agreement shall survive beyond the
Effective Time, except for the agreements in Article I (The Merger), Article II
(Conversion of Securities; Exchange of Certificates), Section 6.5 (Benefit
Plans), Section 7.7 (Tax Treatment), Section 7.8 (Indemnification and Insurance
of Company Officers and Directors), Section 7.9 (Further Assurances), and
Section 10.8 (Governing Law), and for those set forth in the Affiliate Letters,
the Covenant Letters, and the Irrevocable Proxies.
SECTION 10.6. NOTICES. All notice and other communications
required or permitted hereunder shall be in writing and shall be deemed duly
given if delivered by hand, faxed (provided a confirmation is sent by
guaranteed overnight delivery), guaranteed overnight delivery or mailed, first
class certified mail with postage prepaid, to the parties at the following
addresses, or such other addresses as such party shall furnish to the other in
writing:
(a) If to Republic or Mergersub to:
Republic Industries, Inc.
200 East Las Olas Blvd., Suite 1400
Fort Lauderdale, FL 33301
Attn: Richard L. Handley, General Counsel
Fax: (954) 522-8219
with a copy to:
Akerman, Senterfitt & Eidson, P.A.
One S.E. Third Avenue, 28th Floor
Miami, FL 33131
Attn: Jonathan L. Awner, Esq.
Fax: (305) 374-5095
(b) If to the Company or any Management Stockholder to:
Continental Waste Industries, Inc.
67 Walnut Avenue, Suite 103
Clark, New Jersey 07066
Attn: Jeffrey E. Levine, General Counsel
Fax: (908) 396-4381
SECTION 10.7. ASSIGNMENT. This Agreement and all of its provisions
shall be binding upon and inure to the benefit of the parties to this
Agreement, but neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by operation of law or otherwise.
48
<PAGE> 56
SECTION 10.8. GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware applicable to contracts executed and to be wholly performed within
such State.
SECTION 10.9. HEADINGS. The table of contents and the article and
section headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement. When reference is made in this Agreement to a Section, Exhibit or
Schedule, such reference shall be to a Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated.
SECTION 10.10. ENTIRE AGREEMENT. This Agreement (which term as used
throughout includes the Exhibits and Schedules hereto) and the other documents
and certificates contemplated herein embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein, and supersedes all prior agreements and understandings (oral or
written) between or among the parties with respect to such subject matter.
There are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein.
SECTION 10.11. SEVERABILITY. Wherever possible, each provision or
portion of any provisions of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law but if any provision or
portion of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
SECTION 10.12. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
49
<PAGE> 57
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement on the date set forth above.
REPUBLIC INDUSTRIES, INC., a Delaware
corporation
By: /s/ H. Wayne Huizenga
------------------------------
H. Wayne Huizenga,
Chairman and Chief Executive
Officer
RI/CW MERGER CORP., a Delaware
corporation
By: /s/ Richard L. Handley
------------------------------
Richard L. Handley,
Vice President
CONTINENTAL WASTE INDUSTRIES, INC., a
Delaware corporation
By: /s/ Thomas A. Volini
------------------------------
Thomas A. Volini
Chairman of the Board and
Chief Operating Officer
/s/ Thomas A. Volini
------------------------------------
Thomas A. Volini, individually
/s/ Carlos E. Aguero
------------------------------------
Carlos E. Aguero, individually
50
<PAGE> 58
EXHIBIT A
June __, 1996
Republic Industries, Inc.
200 East Las Olas Boulevard
Suite 1400
Fort Lauderdale, FL 33301
Gentlemen:
Reference is made to the Agreement and Plan of Merger, dated as of
June __, 1996 (the "Merger Agreement"), among REPUBLIC INDUSTRIES, INC., a
Delaware corporation ("Republic"); RI/CW MERGER CORP., a Delaware corporation
and wholly-owned subsidiary of Republic ("Mergersub"); CONTINENTAL WASTE
INDUSTRIES, INC., a Delaware corporation (the "Company"); and THOMAS A. VOLINI
and CARLOS E. AGCERO, pursuant to which Mergersub is to be merged with and into
the Company (the "Merger"), with the Company continuing as the surviving
corporation and a wholly-owned subsidiary of Republic. Upon consummation of
the Merger, the undersigned, as a stockholder of the Company, will receive
shares (the "Shares") of common stock, $0.01 par value per share, of Republic
("Republic Common Stock") in exchange for the undersigned's shares of common
stock of the Company ("Company Common Stock"). Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to such terms in the
Merger Agreement.
The undersigned may be deemed to be an "affiliate" of the Company
within the meaning of Rule 145 ("Rule 145") promulgated under the Securities
Act of 1993, as amended (the "Securities Act"), and for purposes of qualifying
the Merger as a pooling of interests business combination under applicable
accounting and Securities and Exchange Commission ("SEC") rules and
regulations.
The undersigned hereby represents that on the date hereof, the
undersigned has no plan or intention to sell, exchange or otherwise dispose of
the Shares.
As an affiliate of the Company the undersigned understands that any
resale of the Shares must be made in accordance with the then applicable
provisions of Rule 145, pursuant to an effective registration statement filed
with the SEC under the Securities Act or in a transaction exempt from
registration under the Securities Act. Accordingly, the undersigned agrees
that the undersigned will not sell, transfer or otherwise dispose of any of the
Shares unless such sale, transfer or disposition is (i) pursuant to an
effective registration statement under the Securities Act, (ii) in compliance
with the provisions of Rule 145, or (iii) in accordance with an opinion of
counsel, in form and substance
<PAGE> 59
Republic Industries, Inc.
June __, 1996
Page 2
- -------------------------
satisfactory to Republic, that an exemption from the registration requirements
under the Securities Act is available.
The undersigned understands that it is Republic's intention that the
transactions contemplated by the Merger Agreement be accounted for as a pooling
of interests business combination. The undersigned further understands that in
order to accommodate this accounting treatment, affiliates of the Company must
comply with certain rules of the SEC restricting their resale of Republic
Common Stock received pursuant to the Merger Agreement or otherwise acquired.
Accordingly, the undersigned represents that the undersigned has not, within
the preceding 30 days, sold, transferred or otherwise disposed of any shares of
Company Common Stock held by the undersigned and agrees that the undersigned
will not sell, transfer or pledge, dispose of or otherwise part with any
interest in or with respect to, or in any other manner reduce the undersigned's
investment risk with respect to, any of the Shares until such time as Republic
publishes financial results covering at least 30 days of combined operations of
Republic and the Company.
The undersigned understands that the certificates evidencing the
Shares will bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF BY THE HOLDER EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT FILED UNDER THE ACT WITH RESPECT THERETO, (B)
IN ACCORDANCE WITH RULE 145(D) UNDER THE ACT, OR (C) IN ACCORDANCE
WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND ALSO
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER
WITHOUT COMPLIANCE WITH THE SECURITIES AND EXCHANGE COMMISSION'S
ACCOUNTING SERIES RELEASES 130 AND 135.
The undersigned further understands that Republic will instruct its
stock transfer agent not to effect any transfer of the Shares unless such
transfer is made in compliance with said restrictions. In connection with any
sale, transfer or other disposition of the Shares in accordance with Rule 145,
the undersigned will be required to deliver to Republic's transfer agent, Wells
Fargo Bank (Texas), N.A., the undersigned's restricted stock certificate(s),
instructions for transfer and a representation letter which confirms that the
Shares are being sold in a manner that complies with the requirements of Rule
145(d) promulgated under the Securities Act of 1933, as amended, specifically,
Rules 144(f)
2
<PAGE> 60
Republic Industries, Inc.
June __, 1996
Page 3
- -------------------------
and (g) thereunder relating to the manner of sale of such shares. A form of
the representation letter is attached hereto as Annex I.
The undersigned hereby acknowledges and agrees that any breach of this
letter may result in special damage and injury to Republic not readily
recoverable as money damages and therefore the undersigned consents to, and
covenants that he or it will not oppose, any application by Republic, for
equitable relief from any such breach by way of injunction or decree of
specific performance on the basis that Republic has an adequate remedy at law.
This Letter shall terminate if the Agreement is terminated.
________________________________________
NAME:
ACCEPTED AND AGREED TO AS OF THE
DATE FIRST ABOVE WRITTEN:
REPUBLIC INDUSTRIES, INC.
By:__________________________________
Name: ____________________________
Title:____________________________
3
<PAGE> 61
ANNEX I
[FORM OF REPRESENTATION LETTER TO BE
COMPLETED BY BROKER OR OTHER APPROPRIATE PARTY]
Wells Fargo Bank (Texas), N.A.
Corporate Trust Department
1000 Louisiana, Suite 700
Houston, TX 77002
Telephone: (713) 250-4020
Facsimile: (713) 250-7929
Attn: Ms. Deri Ward
RE: SALE OF SHARES OF COMMON STOCK OF REPUBLIC
INDUSTRIES, INC. ("REPUBLIC")
Dear Ms. Ward:
The undersigned hereby certifies that, in connection with the sale of
shares of Common Stock of Republic described below issued to the Record Holder
pursuant to the Company's Prospectus, dated _________, 1996, as filed on a
Registration Statement on Form S-4 with the Securities and Exchange Commission,
the undersigned is selling such shares in a manner that complies with the
requirements of Rule 145(d) under the Securities Act of 1933, as amended,
specifically Rules 144(f) and (g) thereunder relating to the manner of sale of
such shares.
Record Holder: _______________________________________
Stock Certificate No(s). _________________________________
Number of Shares Sold: _________________________________
Date of Sale: __________________________________________
In the event that you receive stock certificates representing more
shares of Common Stock than has been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer order on your records with regard to such
certificate.
Very truly yours,
cc: Republic Industries, Inc.
Facsimile: (954) 522-8219
Attn: Corporate Secretary
4
<PAGE> 62
EXHIBIT B
_________, 1996
Republic Industries, Inc.
200 East Las Olas Boulevard
Suite 1400
Fort Lauderdale, FL 33301
Gentlemen:
Reference is made to the Agreement and Plan of Merger, dated as of
June_____, 1996 (the "Merger Agreement"), among REPUBLIC INDUSTRIES, INC., a
Delaware corporation ("Republic"); RI/CW MERGER CORP.,a Delaware corporation
and wholly-owned subsidiary of Republic ("Mergersub"); CONTINENTAL WASTE
INDUSTRIES, INC., a Delaware corporation (the "Company"); and THOMAS A. VOLINI
and CARLOS E. AGCERO, pursuant to which Mergersub is to be merged with and into
the Company (the "Merger"), with the Company continuing as the surviving
corporation and a wholly-owned subsidiary of Republic. Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to such terms
in the Merger Agreement.
The undersigned agrees that during the undersigned's employment with
Republic, the Company or any of their subsidiaries (the "Republic Companies")
immediately following the consummation of the Merger and for a period of three
(3) years after termination of the undersigned's employment with the Republic
Companies for any reason, the undersigned shall not, directly or indirectly:
(1) alone or as a partner, joint venturer, officer,
director, employee, consultant, agent, independent contractor, or
security holder, of any Person, engage in any business activity in
any State in which the Republic Companies are doing business, which is
directly or indirectly in competition with the business engaged in by
the Republic Companies in such States (a "Competing Business");
provided, however, that the beneficial ownership of less than five
percent (5%) of any class of securities of any entity having a class
of equity securities actively traded on a national securities exchange
or The Nasdaq Stock Market shall not be deemed, in and of itself, to
violate the prohibitions of this Section;
(2) (i) induce any customer of the Republic Companies to
patronize any business which is a Competing Business; (ii) solicit or
accept for or on behalf of any such Competing Business any customer of
the Republic Companies; or (iii) request or advise any customer of the
Republic Companies to withdraw, curtail or cancel any such customer's
business with the Republic Companies;
<PAGE> 63
Republic Industries, Inc.
June ______, 1996
Page 2
- -------------------------
(3) employ any person who was employed by the Republic
Companies within six months prior to the date being employed by the
undersigned, or in any manner seek to induce any employee of the
Republic Companies to leave his or her employment;
(4) in any way utilize, disclose, copy, reproduce or
retain in his possession any of the proprietary rights, records or
trade secrets of the Republic Companies, including, but not limited
to, any customer lists and non-public financial data; provided that
the foregoing shall not restrict the retention by the undersigned of
non-public financial data received by the undersigned in his capacity
as a director of the Company.
The undersigned agrees and acknowledges that the restrictions
contained in this letter are reasonable in scope and duration, and are
necessary to protect Republic. If any provision of this letter is adjudged by
a court of competent jurisdiction to be invalid or unenforceable, the same will
in no way affect the validity or enforceability of the remainder of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision, the area covered
thereby or otherwise, then the parties agree that the court making such
determination shall have the power to reduce the duration, area or scope of
such provision, and/or to delete specific words or phrases, and in its reduced
or modified form, such provision shall then be enforceable and shall be
enforced. The undersigned further agrees and acknowledges that any breach of
this letter will cause irreparable injury to Republic and upon any breach or
threatened breach of any provision of this letter, Republic shall be entitled
to injunctive relief, specific performance or other equitable relief, without
the necessity of posting bond; provided, however, that this shall in no way
limit any other remedies which Republic may have as a result of such breach,
including the right to seek monetary damages.
This Letter shall terminate if the Agreement is terminated.
________________________________________
[NAME]
ACCEPTED AND AGREED TO AS OF THE
DATE FIRST ABOVE WRITTEN:
REPUBLIC INDUSTRIES, INC.
By: ___________________________________
Name:______________________________
Title:_______________________________
2
<PAGE> 64
EXHIBIT C
IRREVOCABLE PROXY
This Irrevocable Proxy (this "Proxy") is entered into and delivered as
of June __, 1996 by the undersigned stockholder of Continental Waste
Industries, Inc., a Delaware corporation ("Stockholder"), in favor of REPUBLIC
INDUSTRIES, INC., a Delaware corporation ("Republic").
RECITALS
As of the date of this Proxy, Stockholder owns beneficially and of
record such number of shares of common stock, par value $0.0006 per share
("Company Common Stock") of Continental Waste Industries, Inc., a Delaware
corporation (the "Company") as is set forth next to its name on the signature
page hereof. All such shares, together with any shares acquired by Stockholder
prior to the termination of this Proxy, are sometimes referred to herein as the
"Shares".
On the date hereof, Republic, RI/CW Merger Corp., a Delaware
corporation and wholly-owned subsidiary of Republic ("Mergersub"), the Company
and certain stockholders of the Company, have entered into an Agreement and
Plan of Merger, dated as of the date hereof (as the same may be amended from
time to time, the "Merger Agreement"), which provides for the merger of
Mergersub with and into the Company (the "Merger"), with the Company continuing
as the surviving corporation and a wholly-owned subsidiary of Republic.
Republic has required, in connection with its execution and delivery
of the Merger Agreement that Stockholder grant Republic a proxy to vote its
shares on the terms set forth below.
TERMS OF PROXY
In consideration of the mutual representations, warranties, covenants
and agreements set forth in the Merger Agreement and in order to induce
Republic to execute and deliver the Merger Agreement, and, in each case, to
consummate the transactions contemplated thereby, the parties hereto hereby
agree as follows:
<PAGE> 65
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
Stockholder hereby represents and warrants to Republic as
follows:
1.1 DUE ORGANIZATION, ETC. Stockholder is either
a limited partnership duly organized, validly existing and in good standing
under the laws of its state of formation or an individual residing in the
United States. Stockholder has the power and authority to execute and deliver
this Proxy and to consummate the transactions contemplated hereby. Stockholder
has taken all necessary actions to authorize the execution, delivery and
performance of this Proxy and the grant of the rights covered hereby. This
Proxy has been duly executed and delivered by or on behalf of Stockholder and
constitutes a legal, valid and binding obligation of Stockholder, enforceable
against Stockholder in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and general equitable
principles, regardless of whether such enforceability is considered in a
proceeding at law or in equity.
1.2 TITLE TO SHARES. Stockholder is the record
and beneficial owner of the Shares and owns the Shares free and clear of liens,
claims, charges or encumbrances of any kind or any proxy or voting restriction
other than that granted pursuant to this Proxy.
ARTICLE II
TRANSFER AND VOTING OF SHARES
2.1 RESTRICTION ON TRANSFER OF SHARES. During
the Term (as defined below), Stockholder shall not (a) sell, transfer, pledge,
grant a security interest in or lien on or otherwise dispose of or encumber any
of the Shares, (b) deposit any of the Shares into a voting trust, enter into a
voting agreement or arrangement or grant any proxy with respect to any of the
Shares, or (c) enter into any contract, option or other arrangement or
undertaking with respect to the direct or indirect acquisition or sale,
assignment, transfer, pledge, grant of a security interest in or lien on or
other disposition of or encumbrance on the Shares.
2.2 VOTING OF SHARES. Stockholder does hereby
irrevocably constitute and appoint Republic, or any nominee of Republic, with
full power of substitution, during and for the Term, as its true and lawful
attorney and proxy, for and in its name, place and stead, to vote each of the
Shares as its proxy, at every annual, special or adjourned meeting of the
shareholders of the Company (including the right to sign its name (as
shareholder) to any consent, certificate or other document relating to the
Company that the law of the State of Delaware may permit or require) (i) in
favor of the approval of the Merger Agreement and the consummation of all other
transactions contemplated by the Merger Agreement, (ii) against any Competing
Transaction (as defined in the Merger Agreement) involving the Company, or any
action or agreement that would result in a breach of any
2
<PAGE> 66
covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or which could result in any of the
conditions to the Company's obligations under the Merger Agreement not being
fulfilled, and (iii) in favor of any other matter relating to consummation of
the transactions contemplated by the Merger Agreement. Stockholder further
agrees to cause the Shares owned by it beneficially to be voted in accordance
with the foregoing.
2.3 FURTHER ASSURANCES. Stockholder shall take
such further actions and execute such further documents and instruments as may
reasonably be requested by Republic to vest in Republic (or its designee) the
power to vote the Shares and carry out the provisions of this Proxy.
2.4 TERM. The term of this Proxy (the "Term")
shall commence on the date hereof and shall remain valid until the earlier of
(a) consummation of the Merger, (b) consummation of a Competing Transaction, or
(c) termination of the Merger Agreement for any reason (other than as a result
of a Competing Transaction). THIS PROXY IS IRREVOCABLE AND IS COUPLED WITH AN
INTEREST.
ARTICLE III
GENERAL PROVISIONS
3.1 SEVERABILITY. If any term or other provision
of this Proxy is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Proxy shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced,
Stockholder agrees to negotiate with Republic in good faith to modify this
Proxy so as to effect the original intent of the parties as closely as possible
to the fullest extent permitted by applicable law in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
3.2 ENTIRE AGREEMENT. This Proxy constitutes the
entire agreement of the parties and supersedes all prior agreements and
undertakings, both written and oral, between Stockholder and Republic, with
respect to the subject matter hereof.
3.3 ASSIGNMENT. Except as provided herein, this
Proxy shall not be assigned by operation of law or otherwise. This Proxy shall
be binding upon Stockholder and its successors and assigns.
3.4 PARTIES IN INTEREST. This Proxy shall be
binding upon and inure solely to the benefit of Republic, and nothing in this
Proxy, express or implied, is intended to or shall confer upon any other person
any right, benefit or remedy of any nature whatsoever under or by reason of
this Proxy.
3.5 SPECIFIC PERFORMANCE. Stockholder agrees
that irreparable damage would occur in the event any provision of this Proxy
was not performed in accordance with the terms hereof and that Republic shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
3
<PAGE> 67
EXHIBIT D
OPINION OF COUNSEL FOR REPUBLIC INDUSTRIES, INC.
The following shall be addressed to Continental Waste Industries, Inc.
Capitalized terms used herein without definition shall have the meanings as set
forth in the Agreement and the Plan of Merger (the "Merger Agreement").
(1) Each of Republic and Mergersub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to carry on the business as now being conducted.
(2) Each of Republic and Mergersub is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed or to be in good standing
(individually or in the aggregate) would not have a material adverse effect on
Republic.
(3) The shares of Republic Common Stock to be issued in the Merger
by Republic will be, when issued in accordance with the terms of the Merger
Agreement, duly authorized, validly issued, fully paid and nonassessable.
(4) Republic and Mergersub have the requisite corporate power and
authority to execute and deliver the Merger Agreement and to consummate the
transactions contemplated thereby. The execution and delivery of the Merger
Agreement by Republic and Mergersub has been duly authorized by all necessary
corporate action on the part of Republic and Mergersub, respectively. The
Merger Agreement has been duly executed and delivered by Republic and Mergersub
and constitutes a valid and binding obligation of Republic, enforceable against
Republic in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and general equitable principles.
(5) The execution and delivery of the Merger Agreement does not,
and the consummation of the transactions contemplated by the Merger Agreement
and compliance with the provisions of the Merger Agreement will not, conflict
with, or result in any violation of, or constitute a default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Republic or any of its subsidiaries under, any
provision of (i) the Certificate of Incorporation or By-laws of Republic or any
provision of the comparable charter or organizational documents of any of its
subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
or license applicable to Republic or any of its subsidiaries or their
respective
<PAGE> 68
properties or assets, or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any (A) statute, law, ordinance,
rule or regulation or (B) judgment, order or decree applicable to Republic or
any of its subsidiaries or their respective properties or assets, other than,
in the case of clause (ii) and clause (iii), any such conflicts, violations,
defaults, rights, losses or Liens that individually or in the aggregate would
not (1) have a material adverse effect on Republic, (2) impair in any material
respect the ability of Republic or Mergersub to perform its obligations under
the Merger Agreement, or (3) prevent or materially delay the consummation of
any of the transactions contemplated by the Merger Agreement.
(6) Except as disclosed in the SEC Documents filed and publicly
available immediately prior to the Merger, there is no suit, action or
proceeding pending or threatened against Republic or any of its subsidiaries
challenging the acquisition by Republic or Mergersub of any shares of Company
Common Stock or any provision of the Merger Agreement or seeking to restrain or
prohibit the consummation of the Merger, or that, individually or in the
aggregate, could reasonably be expected to have a material adverse effect on
Republic, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Republic or any of its
subsidiaries having, or which could reasonably by expected to have, any such
effect.
<PAGE> 69
EXHIBIT E
OPINION OF COUNSEL FOR CONTINETAL WASTE INDUSTRIES, INC.
The following opinion shall be addressed to Republic Industries, Inc.
and RI/CW Merger Corp. Capitalized terms used herein without definition shall
have the meanings set forth in the Agreement and Plan of Merger (the "Merger
Agreement").
(1) Each of the Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and has the requisite corporate power
and authority to carry on its business as now being conducted.
(2) Each of the Company and its subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed or to be in good standing
(individually or in the aggregate) would not have a material adverse effect on
the Company and its subsidiaries taken as a whole.
(3) The Company has the requisite corporate power and authority
to execute and deliver the Merger Agreement and to consummate the transactions
contemplated by the Merger Agreement. The execution and delivery of the Merger
Agreement by the Company and the consummation by the Company of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action. The Merger Agreement has been duly executed and delivered by
the Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally and general equitable
principles.
(4) All the outstanding shares of capital stock of each subsidiary
of the Company listed on Schedule 3.2 to the Merger Agreement are owned by the
Company or by another subsidiary of the Company, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever.
(5) Except as set forth on Schedule 3.4 of the Merger Agreement,
the execution and delivery of the Merger Agreement by the Company does not, and
performance of the Company's obligations thereunder will not, conflict with, or
result in any violation of, or constitute a default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any of its subsidiaries under, any provision of (i)
the Certificate of Incorporation or By-laws of the Company or any provision of
the comparable charter or organizational documents of any of its subsidiaries,
(ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, or license to which
the Company or any of its subsidiaries is a party
<PAGE> 70
or by which their respective properties or assets are bound, or (iii) subject
to the governmental filings and other matters referred to in the following
sentence, any (A) statute, law, ordinance, rule or regulation or (B) judgment,
order or decree applicable to the Company or any of its subsidiaries or their
respective properties or assets, other than, in the case of clause (ii) and
clause (iii), any such conflicts, violations, defaults, rights, losses or Liens
that individually or in the aggregate would not (1) have a material adverse
effect on the Company and its subsidiaries taken as a whole, (2) impair in any
material respect the ability of the Company to perform its obligations under
this Agreement, or (3) prevent or materially delay the consummation of any of
the transactions contemplated by the Merger Agreement.
(6) Except as disclosed on Schedule 3.8 to the Merger Agreement or
in the SEC Documents filed and publicly available prior to the Merger, there is
no suit, action or proceeding pending or threatened in writing against the
Company or any of its subsidiaries challenging the acquisition by Republic or
Mergersub of any shares of the Company Common Stock or any provision of the
Merger Agreement or seeking to restrain or prohibit the consummation of the
Merger, or that, individually or in the aggregate, could reasonably be expected
to have a material adverse effect on the Company and its subsidiaries taken as
a whole, nor is there any judgment, decree, injunction, rule or order of any
Governmental Authority or arbitrator outstanding against the Company or any of
its subsidiaries having, or which could reasonably be expected to have, a
material adverse effect on the Company and its subsidiaries taken as a whole.
2
