SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)
Addington Resources, Inc.
(Name of Issuer)
Common Stock, par value $1.00
(Title of Class of Securities)
006516108
(CUSIP Number)
Mr. Howard P. Berkowitz (212) 664-0990
HPB Associates, L.P. 888 Seventh Avenue
New York, New York 10106
(Name, address and telephone number of person
authorized to receive notices and communications)
June 25, 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 schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement [ ]. (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.)
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. HPB Associates, L.P.
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
WC
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 2,455,285
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 2,455,285
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 2,455,285
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 15.4%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
PN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. Howard P. Berkowitz
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
OO
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 2,455,285 (all shares are
owned for the account of HPB Associates, L.P.)
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 2,455,285 (all shares are
owned for the account of HPB Associates, L.P.)
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 2,455,285 (all shares are
owned for the account of HPB Associates, L.P.)
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 15.4%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. Harold Blumenstein
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
PF
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 100,000
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 100,000
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 100,000
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 0.6%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. James Grosfeld
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS PF
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [X]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 155,000
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 155,000
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 155,000
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 1.0%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. Richard Ravitch
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS PF
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 10,000
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 10,000
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 10,000
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 0.06%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. Cliff Greenberg
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
PF
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 50,000
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 50,000
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 50,000
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 0.3%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. David Sachs
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
PF
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 5,000
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 5,000
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 5,000
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 0.03%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
13D
CUSIP No. 006516108
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. Carl Bennett
OF ABOVE PERSON
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [X]
(b) [ ]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
PF
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_____________________________________________________________________________
NUMBER OF (7) SOLE VOTING POWER 2,500
SHARES ______________________________________________________________
BENEFICIALLY (8) SHARED VOTING POWER -0-
OWNED BY ______________________________________________________________
EACH (9) SOLE DISPOSITIVE POWER 2,500
REPORTING ______________________________________________________________
PERSON WITH (10) SHARED DISPOSITIVE POWER -0-
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 2,500
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 0.02%
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This Schedule 13D, initially filed on January 20, 1992, as amended
by Amendment No. 1 filed on April 5, 1995, Amendment No. 2 filed on July 18,
1995, Amendment No. 3 filed on August 11, 1995, Amendment No. 4 filed on
August 31, 1995, Amendment No. 5 filed on September 20, 1995 and Amendment No.
6 filed on June 11, 1996 by HPB Associates, L.P., a Delaware limited
partnership
("HPB"), and by Howard P. Berkowitz, the managing partner of the Partnership,
relating to the common stock, par value $1.00 per share (the "Addington Common
Stock"), of ADDINGTON RESOURCES, INC., a Delaware corporation whose principal
executive offices are located at 1500 North Big Run Road, Ashland, Kentucky
41102 ("Addington") is hereby amended by this Amendment No. 7 to the Schedule
13D as follows:
Item 4. Purpose of Transaction.
Item 4 is hereby supplemented by the addition of the following:
On June 25, 1996, Addington entered into a definitive AGREEMENT AND
PLAN OF MERGER (the "Agreement"), with Republic Industries, Inc. ("Republic"),
a Delaware corporation, and RI/AR MERGER CORP., a Delaware corporation and
wholly-owned subsidiary of Republic ("Mergersub") pursuant to which Mergersub
will be merged with and into Addington (the "Merger"). It is intended that
the Merger will qualify as a "pooling of interests" for accounting purposes
and that the Merger will constitute a tax free reorganization for federal
income tax purposes.
Upon the terms and subject to the conditions set forth in the
Agreement, and in accordance with Delaware Law, at the date and time of the
filing of the Certificate of Merger, or such later date or time as set forth
in the Certificate of Merger (the "Effective Time"), Mergersub shall be merged
with and into Addington, with Addington being the surviving corporation in the
Merger and a wholly-owned subsidiary of Republic. The separate corporate
existence of Mergersub will then cease.
At the Effective Time each share of Addington Common Stock issued
and outstanding immediately prior to the Effective Time will be converted into
the right to receive (i) 9/10 of one share (the "Exchange Ratio") of common
stock, par value $0.01 per share, of Republic ("Republic Common Stock"), (ii)
any cash in lieu of fractional shares and (iii) any dividends or other
distribution to which each shareholder is entitled pursuant to the terms of
the Agreement. If between the date of the Agreement and the Effective Time
the outstanding shares of Addington 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.
Consummation of the Merger is subject to, among other things, the
approval by the holders of a majority of the outstanding shares of Addington
Common Stock and other customary conditions, including: receipt of material
regulatory approvals, expiration of the applicable waiting period pursuant to
the provisions of the Hart-Scott-Rodino Anti-Trust Act of 1976; completion of
an environmental assessment of Addington by Republic that shall not indicate a
Company Material Adverse Effect (as defined in the Agreement); performance and
compliance in all material respects with all agreements required by the
Agreement to be performed or complied with by Addington, Republic and
Mergersub on or prior to the Effective Time; absence of a breach of the
representations and warranties set forth in the Agreement; and the receipt by
Addington of confirmation of the fairness opinion delivered by Oppenheiemer &
Co., Inc. to the effect that as of the date the proxy statement is mailed to
Addington stockholders, the consideration to be received in the Merger is fair
to such stockholders from a financial point of view, and such opinion shall
not have been withdrawn prior to the Effective Time. Addington has agreed to
pay Republic a $1,000,000 termination fee in certain circumstances involving
certain competing transactions as specified in the Agreement.
HPB, Harold Blumenstein, James Grosfeld, Larry Addington, Robert
Addington and Bruce Addington (the "Principal Stockholders") have executed a
Voting Agreement, dated as of June 25, 1996, with Republic (the "Voting
Agreement") whereby they have agreed to vote all the shares of Addington
Common Stock owned by them (a) in favor of the Merger, the Agreement and any
transactions contemplated thereunder; and (b) against any proposal for any
merger, sale of substantial assets, sales of shares of Addington Common Stock
or other securities, recapitalization, or other business combination
transactions between Addington or any of the subsidiaries of Addington and any
person or entity (other than the Merger) or any other corporate action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of Addington under the Agreement
or which could result in any of the conditions to Addington's obligations
under the Agreement not being fulfilled (collectively the "Voting
Commitments.") However, the Voting Commitments terminate if the Agreement is
terminated. The Voting Agreement covers approximately 45% of the outstanding
shares of Addington Common Stock.
The Voting Agreement also provides that until termination of the
Agreement, Republic is irrevocably appointed the Principal Stockholder's
attorney and proxy, with full power of substitution, to vote and otherwise act
(by written consent or otherwise) with respect to the shares of Addington
Common Stock at any meeting of stockholders of Addington, or consent in lieu
of any such meeting or otherwise, subject to the terms of the Voting
Agreement, on matters concerning the Principal Stockholder's Voting
Commitments.
Under the terms of the Voting Agreement, each of the Principal
Stockholders have covenanted and agreed, except as contemplated by the Voting
Agreement, not to offer or agree to sell, transfer, tender, assign,
hypothecate or otherwise dispose of, grant a proxy or power of attorney with
respect to, create or permit to exist any lien, claim, pledge, option, right
of first refusal, agreement, limitation on its voting rights, charge or other
encumbrance of any nature whatsoever with respect to, the shares of Addington
Common Stock subject to the Voting Agreement, or, directly or indirectly,
initiate, solicit or encourage, subject to the provisions of the Agreement,
any person to take actions which could reasonably be expected to lead to the
occurrence of any of the foregoing.
In addition, the Principal Stockholders have agreed to be bound by
and to comply with the non-solicitation obligations of Addington as set forth
in the Agreement. Furthermore, the Principal Stockholders have agreed to pay
to Republic in circumstances involving certain competing transactions, the
excess of the amount per share of Addington Common Stock realized by the
Principal Stockholders in such competing transactions over $15.00 (or in
certain circumstances $21.50).
The foregoing description and terms of the Merger are qualified in
their entirety by the express terms of the Agreement which is filed as Exhibit
1 to this Schedule 13 D Amendment and the Voting Agreement which is filed as
Exhibit 2 to this Schedule 13D Amendment. A copy of the press release of
Addington, dated June 25, 1996, is attached as Exhibit 3 and is hereby
incorporated by reference.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby supplemented by the addition of the following:
1. Agreement and Plan of Merger, dated as of June 25, 1996, by and
among Republic Industries, Inc., RI/AR Merger Corp. and Addington Resources,
Inc. (the "Agreement)(including exhibits referenced in the Agreement).
Omitted from this Exhibit, as filed, are the schedules referenced in the
Agreement. HPB Associates, L.P. will furnish supplementally a copy of any
such schedules to the Commission upon request.
2. Voting Agreement, dated as of June 25, 1996, by HPB Associates,
L.P., Harold Blumenstein, James Grosfeld, Larry Addington, Robert Addington
and Bruce Addington with Republic Industries, Inc.
3. Press Release, dated June 25, 1996.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of their knowledge and
belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: July 8, 1996
HPB ASSOCIATES, L.P.
By: /s/ Howard P. Berkowitz
Howard P. Berkowitz
Managing Partner
/s/ Howard P. Berkowitz
Howard P. Berkowitz
/s/ Harold Blumenstein
Harold Blumenstein
/s/ James Grosfeld
James Grosfeld
/s/ Richard Ravitch
Richard Ravitch
/s/ Cliff Greenberg
Cliff Greenberg
/s/ David Sachs
David Sachs
/s/ Carl Bennett
Carl Bennett
<PAGE>
INDEX TO EXHIBITS
Current Report on Form 8-K Dated May 31, 1996
ADDINGTON RESOURCES, INC.
Exhibit Item Page
1. Agreement and Plan of Merger, dated as of
June 25, 1996, by and among Republic
Industries, Inc., RI/AR Merger Corp. and
Addington Resources, Inc. (the "Agreement")
(including exhibits referenced in the
Agreement. Omitted from this Exhibit,
as filed, are the schedules
referenced in the Agreement.
HPB Associates, L.P. will furnish supplementally
a copy of any such schedules to the Commission
upon request.
2. Voting Agreement, dated as of June 25, 1996, by HPB
Associates, L.P., Harold Blumenstein, James Grosfeld,
Larry Addington, Robert Addington and Bruce Addington
with Republic Industries, Inc.
3. Press Release, dated June 25, 1996.
<PAGE>
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 25, 1996
(this "Agreement"), by and among REPUBLIC INDUSTRIES, INC., a
Delaware corporation ("Republic"), RI/AR MERGER CORP., a Delaware
corporation and wholly-owned subsidiary of Republic
("Mergersub"), and ADDINGTON RESOURCES, INC., a Delaware
corporation (the "Company").
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:
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 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
$1.00 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 9/10 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 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 , $1.00 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 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 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.
(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. At the Effective Time,
the Company's obligations with respect to each outstanding
Company Stock Option (as defined in Section 3.3) 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 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, as in effect
immediately prior to the Effective Time, except that from and
after the Effective Time each such Company Stock Option 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 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 immediately prior to 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 pursuant to this Section 2.4 and
(ii) promptly after the Effective Time issue to each holder of an
outstanding Company Stock Option a document evidencing the
assumption by Republic of the Company's obligations with respect
thereto under this Section 2.4. Nothing in this Section 2.4
shall affect the schedule of vesting with respect to the Company
Stock Options to be assumed by Republic as provided in this
Section 2.4, except to the extent vesting is accelerated at the
Effective Time as a result of the Merger pursuant to the existing
terms and conditions of certain of the Company Stock Options as
is indicated on Schedule 3.3.
SECTION 2.5. STOCK GRANTS. At the Effective Time,
the Company's obligations with respect to each outstanding Stock
Grant (as defined in Section 3.3) to deliver shares of Company
Common Stock, as amended in the manner described in the following
sentence, shall be assumed by Republic. The Stock Grants so
assumed by Republic shall continue to have, and be subject to,
the same terms and conditions as set forth in the stock grant
plans and agreements pursuant to which such Stock Grants were
issued and any other agreements evidencing such Stock Grants (all
of which are set forth on Schedule 3.3), as in effect on the date
hereof, except that from and after the Effective Time each such
Stock Grant 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 grant 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. Republic shall (a) reserve for issuance the number
of shares of Republic Common Stock that will become issuable upon
the exercise of such Stock Grants pursuant to this Section 2.5
and (b) promptly after the Effective Time issue to each holder of
an outstanding Stock Grant a document evidencing the assumption
by Republic of the Company's obligations with respect thereto
under this Section 2.5. Nothing in this Section 2.5 shall affect
the schedule of vesting with respect to any of the Stock Grants
to be assumed by Republic as provided in this Section 2.5.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants 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
Company Material Adverse Effect (as defined in Section 8.3(b)).
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 30,000,000 shares of
Company Common Stock. At the close of business on May 31, 1996,
(i) 15,172,984 shares of Company Common Stock were issued and
outstanding, (ii) 1,000,000 shares of Company Common Stock were
held by the Company in its treasury, (iii) 378,700 shares of
Company Common Stock were reserved for issuance upon the exercise
of outstanding stock options ("Company Stock Options") granted
pursuant to the Company Restated Stock Option Plan, and (iv)
24,000 shares of Company Common Stock were reserved for issuance
upon the exercise of outstanding and vested stock grants (the
"Stock Grants"). 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 Stock Grants, with the
respective amounts of shares, exercise prices (in the case of
Company Stock Options), vesting dates and expiration dates
thereof, is set forth on Schedule 3.3, and a copy of the Company
Restated Stock Option Plan, and of all plans and agreements
related to the Stock Grants, is attached thereto. All
outstanding shares of capital stock of the Company are, and all
shares which may be issued pursuant to the Company Stock Options
and Stock Grants 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
3.3, 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. The
Company has the requisite corporate power and authority to
execute and deliver this Agreement and, subject 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 consummation by
the Company of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action,
subject 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 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'
generally and general equitable principles. Except as set forth
on Schedule 3.4, the execution and delivery of this Agreement by
the Company does not, and performance of the Company's
obligations hereunder 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
Company Material Adverse Effect, (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 (the "SEC") of a proxy statement relating to the
approval by the Company's stockholders of this Agreement and the
Merger and other transactions contemplated hereby (as amended or
supplemented from time to time, the "Proxy Statement") and 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 Company Material Adverse Effect or
prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement.
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 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 a Company Material Adverse Effect.
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 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 Company Material Adverse Effect; (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) except as set forth on
Schedule 3.7, any adoption or amendment in any material respect
by the Company or any of its subsidiaries of 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 Company
Material Adverse Effect, 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, any such Company Material Adverse Effect.
SECTION 3.9. COMPLIANCE WITH LAWS; PERMITS. Except
as disclosed 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 Company
Material Adverse Effect. 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 Company
Material Adverse Effect. 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
Section 3.4 are obtained or made prior to the Closing.
SECTION 3.10. ENVIRONMENTAL MATTERS.
(a) Except where the failure to comply could
not reasonably be expected to have a Company Material Adverse
Effect, 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, judgments, injunctions, governmental
communications, decrees, informational requests or demands issued
pursuant to, or arising under, any Environmental Laws.
(b) There are no (and there is no basis for
any) non-compliance orders, warning letters, notices of violation
(collectively "Notices"), claims, suits, actions, judgments,
penalties, fines, or administrative or judicial investigations or
proceedings (collectively "Proceedings") pending or threatened
against or involving the Company or 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 connection with,
related to or arising out of the ownership by the Company or any
of its subsidiaries of their properties or assets or the
operation of their businesses, 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 Company Material Adverse
Effect, 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 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 nor have there ever been any
Underground Storage Tanks beneath any of the Owned Properties or
Leased Premises that are required to be registered under
applicable Environmental Laws.
(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. 9601, et seq.
(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. 6901 et seq. (collectively "RCRA"); the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. 1801, et
seq.; the Clean Water Act, as amended, 33 U.S.C. 1311, et seq.;
the Clean Air Act, as amended (42 U.S.C. 7401-7642); the Toxic
Substances Control Act, as amended, 15 U.S.C. 2601 et seq.; the
Federal Insecticide, Fungicide, and Rodenticide Act as amended, 7
U.S.C. 136-136y ("FIFRA"); the Emergency Planning and Community
Right-to-Know Act of 1986 as amended, 42 U.S.C. 11001, et seq.
(Title III of SARA) ("EPCRA"); and the Occupational Safety and
Health Act of 1970, as amended, 29 U.S.C. 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.
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 Company Material Adverse
Effect.
(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) Neither the Company nor any Commonly
Controlled Entity has adopted any "defined benefit pension plan"
as defined in Section 3(35) of ERISA subject to Title IV of ERISA
in the five years preceding the date hereof.
(d) 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.
(e) 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 4980B(f) of the Code.
(f) Except with respect to the certain of the
Company Stock Options as indicated on Schedule 3.3 and severance
benefits as indicated on Schedule 3.4, 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.
(g) Except as set forth on Schedule 3.4,
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. 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 tax returns
and reports required to be filed by the Company and its
subsidiaries (or requests for extensions have been filed timely),
each such tax return is true and correct in all material respects
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 in accordance with
such tax returns. 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
material 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, as
of the date hereof, no material deficiency or proposed adjustment
which has not been settled or otherwise resolved for any Taxes
has been asserted or assessed by any taxing authority 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. 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,
neither the Company nor any of its subsidiaries is a party to or
bound by any material tax allocation or tax sharing agreement and
has no current or potential material contractual obligation to
indemnify any other Person with respect to Taxes. Since January
1, 1994, no material claim has been made by 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. As of
the date hereof, the federal income tax returns of the Company
and each of its subsidiaries consolidated in such returns have
been examined or audited by the Internal Revenue Service for all
years through December 31, 1992, 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. Except
as set forth on Schedule 3.13, neither the Company nor any of its
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 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 as of the date
hereof (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 exhibits 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 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 to
the knowledge of the Company 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 to the knowledge of the
Company 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 Company Material Adverse
Effect.
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 each of 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 other
than (w) Liens for real estate taxes not yet due and payable, (x)
recorded easements, covenants, encumbrances and other
restrictions which do not materially impair the current use,
occupancy or value of the property subject thereto, (y) the
matters described in the title insurance policies listed on
Schedule 3.16(a), including the mortgages in favor of The First
National Bank of Boston noted therein, and (z) any matters
disclosed on the surveys of certain of the parcels of the Owned
Properties included in Schedule 3.16(a) and any matters that
would be disclosed by an accurate and current survey of each of
the other parcels of the Owned Properties which would not
materially impair the current use, occupancy or value of the
property so surveyed; (ii) there are no pending or threatened
condemnation proceedings, suits or administrative actions
relating to the Owned Properties materially 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, and the
Owned Properties are not located within any flood plain (such
that a mortgagee would require a mortgagor to obtain flood
insurance) for which any permits or licenses necessary to the use
thereof have not been obtained; (iv) 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
(v) there are no parties (other than the Company and its
subsidiaries) in possession of the parcels of Owned Property
except pursuant to written leases entered into by the Company or
a subsidiary thereof with respect thereto in the capacity as
landlord.
(b) Schedule 3.16(b) sets forth a list of all
material 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 and its
subsidiaries taken as a whole ("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 material 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 reasonably be expected to have a
Company Material Adverse Effect.
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 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, and social security
number of each of the officers and key employees of the Company
and its subsidiaries. The current rate of compensation of each
of the officers and key employees of the Company and its
subsidiaries has been previously provided to Republic. 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 businesses 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, 1996, 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.
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
commission 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 Oppenheimer &
Co., Inc. as a financial advisor to render a fairness opinion
with respect to the Merger. A true and correct copy of the
Company's retainer agreement with Oppenheimer & Co., Inc. has
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
Republic Material Adverse Effect (as defined in Section 8.2(b)).
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.
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, (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 to which Republic or any of its subsidiaries is a party or
by which their respective properties or assets are bound, 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 Republic
Material Adverse Effect, (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 Republic Material
Adverse Effect 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 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 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 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 a Republic Material Adverse
Effect.
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 Exchange 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 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 the business, results of operations,
or business prospects of Republic 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 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 Republic Material Adverse Effect; 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 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 Republic Material Adverse
Effect, 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, a Republic Material Adverse
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 Republic
Material Adverse Effect. 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
Republic Material Adverse Effect. None of such Permits is or
will be impaired or in any way affected by the execution and
delivery of this Agreement, or the consummation of the
transactions contemplated hereby.
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
("Republic Designated Contracts"). Republic and its subsidiaries
have satisfied in full or provided for all of their liabilities
and obligations under the Republic 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 Republic Designated
Contracts nor to the knowledge of Republic is any other party to
any such Republic 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 reasonably be
expected to have a Republic Material Adverse Effect.
SECTION 4.10. BROKERS. No broker, investment
banker, financial advisory or other Person, is entitled to any
broker's, finder's, financial advisor's or other similar fee or
commission 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
the Company 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 5.8, neither 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
SECTION 5.1. CONDUCT OF BUSINESS OF THE COMPANY.
Except 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) use its and their best efforts to 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 upon exercise of Company Stock
Options and Stock Grants against payment therefor in accordance
with their terms;
(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 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 Bank
of Boston 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;
(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"), the Company shall not, 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 (a "Competing Transaction"). The Company 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 furnishing confidential information to,
entering into discussions with or 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 (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 other entity 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 enter into this
Agreement, the Company agrees that should it or any of 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, 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).
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"). 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 (i) shall recommend that the Company's stockholders
approve 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, and (ii) 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, at its own cost and expense, an
environmental assessment of the Owned Properties and, to the
extent permitted under the terms of the Leases, of the Leased
Premises (hereinafter referred to as the "Environmental
Assessment"). 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 fully cooperate with Republic's
conduct of the Environmental Assessment. Any such Environmental
Assessment shall be conducted with a view to their completion as
promptly as practicable, but in any event prior to the date of
first mailing of the Proxy Statement to stockholders of the
Company. Any Environmental Assessment by Republic will be
conducted in a manner that does not cause any meaningful
interruption to the business or operations of the Company and its
subsidiaries. Republic shall indemnify and hold the Company and
its subsidiaries harmless against, and agrees to promptly
reimburse them for, any losses, costs, penalties, injuries, or
damages to their respective assets or to any third parties
resulting from the conduct (but not the results or discoveries)
of the Environmental Assessment. Republic shall hold, and will
cause its directors, officers, employees, agents, advisors
(including attorneys, auditors, and representatives) to hold in
confidence, all documents and information concerning the Company
and its subsidiaries furnished to Republic in connection with the
transactions contemplated in this Agreement, to the extent
required by, and in accordance with, the provisions of the letter
dated November 9, 1995 between Republic and the Company.
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 Principal Stockholders (as
defined in Section 5.7) and all 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 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, each of HPB Associates, L.P., Larry Addington, Robert
Addington, Bruce Addington, Harold Blumenstein, and James
Grosfeld (collectively, the "Principal 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 Letter").
SECTION 5.8. VOTING AGREEMENT. On the date hereof,
the Principal Stockholders shall execute and deliver to Republic
a voting agreement and voting proxy in the form of Exhibit C
hereto (the "Voting Agreement").
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 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.
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 Company Stock Options,
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.
(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 commission
or similar fee in connection with any of the transactions
contemplated by this Agreement (except as set forth in Section
3.23), 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,
commissions 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 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 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 or officer 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.
As of the date hereof, the Company has no knowledge, after due
inquiry of its directors and executive officers, of any pending
or threatened claims, actions or other matters which reasonably
could give rise to Indemnified Liabilities.
(b) 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 six 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) From and after the Effective Time, the
Surviving Corporation shall honor the terms and conditions of the
various indemnification agreements previously entered into by the
Company.
(d) The Company shall, and from and after the
Effective Time the Surviving Corporation shall, obtain and
maintain in effect an extended reporting period under the
Company's existing directors' and officers' liability insurance
policy for a period of at least five years from the Effective
Time.
(e) 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 after 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 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 Company Material
Adverse Effect or a Republic Material Adverse Effect, 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 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 Letters. The Company shall have
received a letter from Arthur Andersen LLP addressed to the
Company, dated the date the Proxy Statement is first mailed to
the stockholders of the Company and confirmed in writing as of
the Effective Time, and Republic shall have received a letter
from Arthur Anderson LLP, addressed to Republic, 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 Nasdaq, 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 on 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 on and as of the Effective Time,
with the same force and effect as through such representations
and warranties had been made on and as of 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. 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 the
business, results of operations or business prospects of Republic
and its subsidiaries, taken as a whole (a "Republic Material
Adverse Effect"). 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 Republic
Material Adverse Effect.
(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 C.
(e) Opinion of Financial Advisor. The Company
shall have received the opinion of Oppenheimer & Co., 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 the
date thereof, 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 of Company's Counsel. The
Company shall have received the opinion, based on appropriate
representations of the Company and Republic, of Schulte Roth &
Zabel, 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.
(g) Tax Opinion of Republic's Counsel.
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.
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:
(a) Performance of Obligations of the Company.
The Company shall have performed and complied in all material
respects with all agreements required by this Agreement to be
performed or complied with by the Company at or prior to the
Effective Time, and Republic and Mergersub shall have received a
certificate of the Company, signed by the chief executive 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 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 on and as of the Effective Time, and
Republic and Mergersub shall have received a certificate 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) that could reasonably be expected to have a material
adverse effect on the business, assets, results of operations,
customer and employee relations, or business prospects of the
Company and its subsidiaries, taken as a whole (a "Company
Material Adverse Effect"). 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 Company
Material Adverse Effect.
(c) Corporate Action. 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 by its corporate secretary, 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. 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. The
Environmental Assessment shall not have disclosed environmental
conditions, which were not otherwise disclosed to Republic in the
SEC Documents or Schedule 3.10 prior to the date of this
Agreement, which individually or in the aggregate would
reasonably be expected to have a Company Material Adverse Effect;
provided, that this Section 8.3(e) shall be of no further force
or effect unless the Environmental Assessment has been completed
by the date of the first mailing of the Proxy Statement to the
stockholders of the Company and Republic shall have given notice
to the Company of the failure of this condition to be satisfied
by such mailing date.
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 December 31, 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
Principal 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), 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, and further provided,
that if Republic terminates this Agreement pursuant to Section
9.1(i), then Republic shall be entitled to recover its reasonable
attorney's fees and costs incurred in any action brought by
Republic against the Company to recover its damages caused by
such breach, or if the Company terminates this Agreement pursuant
to Section 9.1(j), then the Company shall be entitled to recover
its reasonable attorney's fees and costs incurred in any action
brought by the Company against Republic to recover its damages
caused by such breach. Upon termination of this Agreement, each
party shall return all documents and other materials of any other
party which 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.
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 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. 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 (i) the
expenses payable in connection with printing and mailing the
Proxy Statement and the Registration Statement, and all SEC
filing fees relating to the transactions contemplated herein,
shall be borne by Republic and (ii) all HSR Act filing fees
payable with respect to the Merger shall be shared equally by
Republic and the Company.
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 nothing herein expressed or
implied shall give or be construed or is intended to give to any
Person, other than the parties hereto, any legal or equitable
rights hereunder.
SECTION 10.5. RELIANCE ON AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES. 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 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 representation,
warranties, or 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 Voting Agreements.
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 to:
Addington Resources, Inc.
771 Corporate Drive, Suite 1000
Lexington, Kentucky 40503
Attn: Howard P. Berkowitz
Fax: (212) 757-0577
with a copy to:
Schulte Roth & Zabel
900 Third Avenue, 23rd Floor
New York, NY 10022
Attn: Stuart D. Freedman, Esq.
Fax: (212) 593-5955
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.
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.
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 of the Board and
Chief Executive Officer
RI/AR MERGER CORP., a
Delaware corporation
By: /s/ Richard L. Handley
Richard L. Handley
Vice President
ADDINGTON RESOURCES, INC., a
Delaware corporation
By: /s/ Howard P. Berkowitz
Howard P. Berkowitz
Chairman of the Board
<PAGE>
EXHIBIT A
June 25, 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 25, 1996 (the "Merger Agreement"), among
REPUBLIC INDUSTRIES, INC., a Delaware corporation ("Republic");
RI/AR MERGER CORP., a Delaware corporation and wholly-owned
subsidiary of Republic ("Mergersub"); and ADDINGTON RESOURCES,
INC., a Delaware corporation (the "Company"); pursuant to which
Mergersub is to be merged with and into the Company (the
"Merger"), with the Company continuing as the surviving
corporation and as a wholly-owned subsidiary of Republic
following the Merger. 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 1933, 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
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, 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), National Association, 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,
specifically, Rules 144(f) 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:
<PAGE>
ANNEX I
[FORM OF REPRESENTATION LETTER TO BE
COMPLETED BY BROKER OR OTHER APPROPRIATE PARTY]
Well Fargo Bank (Texas), National Association.
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
<PAGE>
EXHIBIT B
June 25, 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 25, 1996 (the "Merger Agreement"), among
REPUBLIC INDUSTRIES, INC., a Delaware corporation ("Republic");
RI/AR MERGER CORP., a Delaware corporation and wholly-owned
subsidiary of Republic ("Mergersub"); and ADDINGTON RESOURCES,
INC., a Delaware corporation (the "Company"); 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 for a period of three (3)
years following the Effective Time, 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 Republic, the Company or any of their
subsidiaries (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 (A) the beneficial ownership
by the undersigned of less than five percent (5%) (provided that
the collective beneficial ownership of the Management
Stockholders does not exceed ten percent (10%)) 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, and (B) the continuation of the
current operations of the business (if any) owned by the
undersigned, as identified herein on the line below the signature
line of the undersigned, shall not be deemed to be a Competing
Business;
(2) (i) induce any Person which is known by the
undersigned to be a customer of the Republic Companies to
patronize any Competing Business; (ii) solicit or accept for or
on behalf of any Competing Business any Person which is known by
the undersigned customer of the Republic Companies; or (iii)
request or advise any person which is known by the undersigned to
be a customer of the Republic Companies to withdraw, curtail or
cancel any such customer's business with the Republic Companies;
(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:
Other Business (if any):
ACCEPTED AND AGREED TO AS OF THE
DATE FIRST ABOVE WRITTEN:
REPUBLIC INDUSTRIES, INC.
By: ___________________________________
Name:______________________________
Title:_______________________________
<PAGE>
EXHIBIT C
VOTING AGREEMENT
VOTING AGREEMENT, dated as of June 25, 1996 (this
"Agreement"), by HPB ASSOCIATES, L.P., HAROLD BLUMENSTEIN, JAMES
GROSFELD, LARRY ADDINGTON, ROBERT ADDINGTON and BRUCE ADDINGTON
(collectively, the "Stockholders") with REPUBLIC INDUSTRIES,
INC., a Delaware corporation ("Acquiror").
WHEREAS, Acquiror and RI/AR Merger Corp., a Delaware
corporation and a wholly owned subsidiary of Acquiror ("Acquiror
Sub"), propose to enter into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), with
Addington Resources, Inc., a Delaware corporation (the
"Company"), which provides, among other things, that the Company
will merge with Acquiror Sub pursuant to the merger contemplated
by the Merger Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholders own
6,867,615 shares of common stock, par value $1.00 per share, of
the Company ("Company Common Stock"), which represent in the
aggregate approximately 45% of the total issued and outstanding
Company Common Stock; and
WHEREAS, as a condition to the willingness of Acquiror
to enter into the Merger Agreement, Acquiror has required that
the Stockholders agree, and in order to induce Acquiror to enter
into the Merger Agreement, the Stockholders have agreed, to enter
into this Agreement with respect to all the shares of Company
Common Stock now owned and which may hereafter be acquired by the
Stockholders (the "Shares") and any other securities, if any,
which the Stockholders are entitled to vote at any meeting of
stockholders of the Company (the "Other Securities").
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto hereby
agree as follows:
ARTICLE I
PROXY OF THE STOCKHOLDERS
SECTION 1.01. Voting Agreement. Each Stockholder
hereby agrees that during the time this Agreement is in effect,
at any meeting of the shareholders of the Company, however
called, and in any action by consent of the shareholders of the
Company, each of the Stockholders shall vote the Shares and the
Other Securities: (a) in favor of the Merger, the Merger
Agreement (as amended from time to time) or any of the
transactions contemplated by the Merger Agreement; and (b)
against any proposal for any merger, sale of substantial assets,
sale of shares of Company Common Stock or other securities,
recapitalization, or other business combination transactions
between the Company or any of the subsidiaries of the Company and
any person or entity (other than the Merger) or any other
corporate action or agreement that would result in a breach of
any 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. Each
Stockholder acknowledges receipt and review of a copy of the
Merger Agreement.
SECTION 1.02. Irrevocable Proxy. Each Stockholder
hereby irrevocably appoints Acquiror, until termination of the
Merger Agreement, as his or its attorney and proxy pursuant to
the provisions of Section 212(c) of the General Corporation Law
of the State of Delaware, with full power of substitution, to
vote and otherwise act (by written consent or otherwise) with
respect to the Shares and the Other Securities, which such
Stockholder is entitled to vote at any meeting of stockholders of
the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or consent in lieu of any such
meeting or otherwise, on the matters and in the manner specified
in Section 1.01 hereof. THIS PROXY AND POWER OF ATTORNEY IS
IRREVOCABLE AND COUPLED WITH AN INTEREST. The Stockholders
hereby revoke all other proxies and powers of attorney with
respect to the Shares and the Other Securities which they may
have heretofore appointed or granted, and no subsequent proxy or
power of attorney shall be given or written consent executed (and
if given or executed, shall not be effective) by the Stockholders
with respect to the matters specified in Section 1.01 hereof.
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of any Stockholder and any
obligation of any Stockholder under this Agreement shall be
binding upon the heirs, personal representatives and successors
of such Stockholder.
SECTION 1.03. Waiver of Restrictions. HPB Associates,
L.P. and Robert Addington, Bruce Addington and Larry Addington
agree hereby to waive any restrictions placed on the granting of
proxies pursuant to the Stock Purchase Agreement, dated August 4,
1995, by and between HPB Associates, L.P. and Robert Addington,
Bruce Addington and Larry Addington.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS
Each Stockholder hereby represents and warrants,
severally but not jointly, to Acquiror as follows:
SECTION 2.01. Authority Relative to This Agreement.
Each Stockholder has all necessary power and authority to execute
and deliver this Agreement, to perform his or its obligations
hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by such
Stockholder and constitutes a legal, valid and binding obligation
of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
SECTION 2.02. No Conflict. (a) The execution and
delivery of this Agreement by such Stockholder do not, and the
performance of this Agreement by such Stockholder shall not, (i)
conflict with or violate any federal, state or local law,
statute, ordinance, rule, regulation, order, judgment or decree
applicable to such Stockholder or by which the Shares or the
Other Securities owned by such Stockholder are bound or affected
or (ii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the Shares or the
Other Securities owned by such Stockholder pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which such
Stockholder is a party or by which such Stockholder or the Shares
or Other Securities owned by such Stockholder are bound or
affected.
(b) The execution and delivery of this
Agreement by such Stockholder do not, and the performance of this
Agreement by such Stockholder shall not, require any consent,
approval, authorization or permit of, or filing with or
notification to, any Governmental Entity (as such term is defined
in the Merger Agreement) except for applicable requirements, if
any, of the Securities Exchange Act of 1934, as amended, or the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
SECTION 2.03. Title to the Shares. As of the date
hereof, each Stockholder is the record and beneficial owner of
the number of shares of Company Common Stock set forth opposite
such Stockholder's name on Appendix A hereto, which Shares
represent on the date hereof the percentage of the outstanding
Company Common Stock set forth on such Appendix. Such Shares are
all the securities of the Company owned, either of record or
beneficially, by such Stockholder. Except as set forth on
Appendix A, such Shares are owned free and clear of all security
interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on such Stockholder's voting
rights, charges and other encumbrances of any nature whatsoever.
Except as provided in this Agreement, no Stockholder has
appointed or granted any proxy, which appointment or grant is
still effective, with respect to the Shares or Other Securities
owned by such Stockholder.
ARTICLE III
COVENANTS OF THE STOCKHOLDERS
SECTION 3.01. No Disposition or Encumbrance of Shares.
Each Stockholder hereby covenants and agrees that, except as
contemplated by this Agreement, such Stockholder shall not offer
or agree to sell, transfer, tender, assign, hypothecate or
otherwise dispose of, grant a proxy or power of attorney with
respect to, or create or permit to exist any security interest,
lien, claim, pledge, option, right of first refusal, agreement,
limitation on any Stockholder's voting rights, charge or other
encumbrance of any nature whatsoever with respect to the Shares
or, directly or indirectly, initiate, solicit or encourage,
subject to the provisions of Section 5.2 of the Merger Agreement,
any person to take actions which could reasonably be expected to
lead to the occurrence of any of the foregoing.
SECTION 3.02. No Solicitation of Transactions. Each
Stockholder hereby agrees, jointly and severally, to be bound and
to comply with the obligations of the Company set forth in
Section 5.2(a) of the Merger Agreement as if such obligations
were set forth in their entirety in this Section 3.02 as
obligations of such Stockholder.
SECTION 3.03. No Profit From Competing Transaction.
Each Stockholder hereby covenants and agrees that should the
Company or the Representatives (as defined in Section 5.2(a) of
the Merger Agreement) during the Non-Solicitation Period (as
defined in Section 5.2(a) of the Merger Agreement) either (i)
receive an unsolicited proposal for a Competing Transaction (an
"Acquisition Proposal"), other than from Acquiror or an affiliate
of Acquiror or their authorized representatives, and, during the
Non-Solicitation Period or 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, each Stockholder shall pay to Acquiror
an amount in cash (or if the consideration to be received in such
Competing Transaction is securities of the acquiror, an amount of
such securities, or payment in such form, as permitted by the
Competing Transaction) 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) $21.50 (in
the case of proposals noted in (i) above) or (2) $15.00 (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 Stockholder (which amounts shall be paid
contemporaneously with consummation of the acquisition, whether
or not such Acquisition Proposal was solicited); provided that
the number of shares and the Base Amount shall be appropriately
adjusted for stock splits, stock dividends, stock combinations,
recapitalizations, reclassifications and other similar
transactions; provided further that no payments shall be required
pursuant to the terms of this Section 3.03 if the Merger
Agreement is terminated as a result of the breach of any of the
terms of the Merger Agreement by Acquiror. 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 of the Stockholders assumed in the transaction.
In the event that any Third Party Acquisition Consideration shall
be payable in securities; debt securities shall be valued at
market value on the day of delivery; preferred stock shall be
valued at 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 Acquiror.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Termination. This Agreement (except for
Section 3.03 and Article IV of this Agreement) shall terminate
upon the termination of the Merger Agreement in accordance with
its terms. Section 3.03 and Article IV of this Agreement shall
survive termination of this Agreement.
SECTION 4.02. Further Assurances. Each Stockholder
and Acquiror will execute and deliver all such further documents
and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated
hereby.
SECTION 4.03. Specific Performance. The parties
hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any
other remedy at law or in equity. Acquiror shall be entitled to
its reasonable attorneys' fees in any action brought to enforce
this Agreement in which it is the prevailing party.
SECTION 4.04. Entire Agreement. This Agreement
constitutes the entire agreement between Acquiror and the
Stockholders with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written
and oral, between Acquiror and the Stockholders with respect to
the subject matter hereof.
SECTION 4.05. Amendment. This Agreement may not be
amended except by an instrument in writing signed by the parties
hereto.
SECTION 4.06. Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner
materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable
manner in order that the terms of this Agreement remain as
originally contemplated to the fullest extent possible.
SECTION 4.07. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of Delaware applicable to contracts executed in and to be
performed in that State. All actions and proceedings arising out
of or relating to this Agreement shall be heard and determined in
any Delaware state or federal court.
IN WITNESS WHEREOF, each Stockholder has duly executed
this Agreement.
HPB ASSOCIATES, L.P.
By: HPB GROUP LLC
Dated: June __, 1996 By: ___________________
Howard P. Berkowitz
Managing Member
Dated: June __, 1996 Harold Blumenstein,
individually
Dated: June __, 1996 James Grosfeld,
individually
Dated: June __, 1996 Larry Addington,
individually
Dated: June __, 1996 Robert Addington,
individually
Dated: June __, 1996 Bruce Addington,
individually
Agreed and Accepted
as of June __, 1996:
REPUBLIC INDUSTRIES, INC.
By: ___________________________
Name:
Title:
<PAGE>
APPENDIX A
Shares Approximate Percentage Numbers of
of Outstanding Company Shares Pledged
Shares
HPB Associates, L.P. 2,455,285 16.2
Larry Addington 2,263,324 14.9 550,000 (1)
Robert Addington 980,000 6.5 900,000 (2)
Bruce Addington 914,006 6.0 910,006 (3)
Harold Blumenstein 100,000 0.1
James Grosfeld 155,000 0.1
(1) 250,000 shares are pledged to CIT; 200,000 shares are pledged
to National City Bank; and 100,000 shares are pledged to Nations Bank.
(2) Pledged to Nations Bank.
(3) 560,006 shares pledged to Prudential Securities; 250,000
shares are pledged to CIT; and 100,000 shares are pledged to Bear Sterns.
<PAGE>
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 and its subsidiaries, taken
as a whole.
(3) The shares of Republic Common Stock to be
issued in the Merger, when issued in accordance with the terms of
the Merger Agreement, will be 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 and of 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.
(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
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 to which Republic or any of its
subsidiaries is a party or by which their respective properties
or assets are bound, 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 and its
subsidiaries, taken as a whole, (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 Republic 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 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 Republic or any of
its subsidiaries having, or which could reasonably by expected to
have, a material adverse effect on Republic and its subsidiaries,
taken as a whole.
<PAGE>
EXHIBIT E
Opinion of Counsel for Addington Resources, Inc.
The following opinion shall be addressed to Republic
Industries, Inc. and RI/AR 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 Company Material Adverse Effect.
(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 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 Company
Material Adverse Effect, (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 Company Material Adverse Effect, 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 Company
Material Adverse Effect.
<PAGE>
EXHIBIT 2
VOTING AGREEMENT
VOTING AGREEMENT, dated as of June 25, 1996 (this
"Agreement"), by HPB ASSOCIATES, L.P., HAROLD BLUMENSTEIN, JAMES
GROSFELD, LARRY ADDINGTON, ROBERT ADDINGTON and BRUCE ADDINGTON
(collectively, the "Stockholders") with REPUBLIC INDUSTRIES, INC., a
Delaware corporation ("Acquiror").
WHEREAS, Acquiror and RI/AR Merger Corp., a Delaware
corporation and a wholly owned subsidiary of Acquiror ("Acquiror
Sub"), propose to enter into an Agreement and Plan of Merger, dated
as of the date hereof (the "Merger Agreement"), with Addington
Resources, Inc., a Delaware corporation (the "Company"), which
provides, among other things, that the Company will merge with
Acquiror Sub pursuant to the merger contemplated by the Merger
Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholders own
6,867,615 shares of common stock, par value $1.00 per share, of the
Company ("Company Common Stock"), which represent in the aggregate
approximately 45% of the total issued and outstanding Company Common
Stock; and
WHEREAS, as a condition to the willingness of Acquiror to
enter into the Merger Agreement, Acquiror has required that the
Stockholders agree, and in order to induce Acquiror to enter into the
Merger Agreement, the Stockholders have agreed, to enter into this
Agreement with respect to all the shares of Company Common Stock now
owned and which may hereafter be acquired by the Stockholders (the
"Shares") and any other securities, if any, which the Stockholders
are entitled to vote at any meeting of stockholders of the Company
(the "Other Securities").
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
PROXY OF THE STOCKHOLDERS
SECTION 1.01. Voting Agreement. Each Stockholder hereby
agrees that during the time this Agreement is in effect, at any
meeting of the shareholders of the Company, however called, and in
any action by consent of the shareholders of the Company, each of the
Stockholders shall vote the Shares and the Other Securities: (a) in
favor of the Merger, the Merger Agreement (as amended from time to
time) or any of the transactions contemplated by the Merger
Agreement; and (b) against any proposal for any merger, sale of
substantial assets, sale of shares of Company Common Stock or other
securities, recapitalization, or other business combination
transactions between the Company or any of the subsidiaries of the
Company and any person or entity (other than the Merger) or any other
corporate action or agreement that would result in a breach of any
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. Each Stockholder
acknowledges receipt and review of a copy of the Merger Agreement.
SECTION 1.02. Irrevocable Proxy. Each Stockholder hereby
irrevocably appoints Acquiror, until termination of the Merger
Agreement, as his or its attorney and proxy pursuant to the
provisions of Section 212(c) of the General Corporation Law of the
State of Delaware, with full power of substitution, to vote and
otherwise act (by written consent or otherwise) with respect to the
Shares and the Other Securities, which such Stockholder is entitled
to vote at any meeting of stockholders of the Company (whether annual
or special and whether or not an adjourned or postponed meeting) or
consent in lieu of any such meeting or otherwise, on the matters and
in the manner specified in Section 1.01 hereof. THIS PROXY AND POWER
OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN INTEREST. The
Stockholders hereby revoke all other proxies and powers of attorney
with respect to the Shares and the Other Securities which they may
have heretofore appointed or granted, and no subsequent proxy or
power of attorney shall be given or written consent executed (and if
given or executed, shall not be effective) by the Stockholders with
respect to the matters specified in Section 1.01 hereof. All
authority herein conferred or agreed to be conferred shall survive
the death or incapacity of any Stockholder and any obligation of any
Stockholder under this Agreement shall be binding upon the heirs,
personal representatives and successors of such Stockholder.
SECTION 1.03. Waiver of Restrictions. HPB Associates,
L.P. and Robert Addington, Bruce Addington and Larry Addington agree
hereby to waive any restrictions placed on the granting of proxies
pursuant to the Stock Purchase Agreement, dated August 4, 1995, by
and between HPB Associates, L.P. and Robert Addington, Bruce
Addington and Larry Addington.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants, severally
but not jointly, to Acquiror as follows:
SECTION 2.01. Authority Relative to This Agreement. Each
Stockholder has all necessary power and authority to execute and
deliver this Agreement, to perform his or its obligations hereunder
and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by such Stockholder
and constitutes a legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with
its terms.
SECTION 2.02. No Conflict. (a) The execution and
delivery of this Agreement by such Stockholder do not, and the
performance of this Agreement by such Stockholder shall not, (i)
conflict with or violate any federal, state or local law, statute,
ordinance, rule, regulation, order, judgment or decree applicable to
such Stockholder or by which the Shares or the Other Securities owned
by such Stockholder are bound or affected or (ii) result in any
breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance
on any of the Shares or the Other Securities owned by such
Stockholder pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Stockholder is a party or by
which such Stockholder or the Shares or Other Securities owned by
such Stockholder are bound or affected.
(b) The execution and delivery of this Agreement
by such Stockholder do not, and the performance of this Agreement by
such Stockholder shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
Governmental Entity (as such term is defined in the Merger Agreement)
except for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended, or the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
SECTION 2.03. Title to the Shares. As of the date
hereof, each Stockholder is the record and beneficial owner of the
number of shares of Company Common Stock set forth opposite such
Stockholder's name on Appendix A hereto, which Shares represent on
the date hereof the percentage of the outstanding Company Common
Stock set forth on such Appendix. Such Shares are all the securities
of the Company owned, either of record or beneficially, by such
Stockholder. Except as set forth on Appendix A, such Shares are
owned free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on
such Stockholder's voting rights, charges and other encumbrances of
any nature whatsoever. Except as provided in this Agreement, no
Stockholder has appointed or granted any proxy, which appointment or
grant is still effective, with respect to the Shares or Other
Securities owned by such Stockholder.
ARTICLE III
COVENANTS OF THE STOCKHOLDERS
SECTION 3.01. No Disposition or Encumbrance of Shares.
Each Stockholder hereby covenants and agrees that, except as
contemplated by this Agreement, such Stockholder shall not offer or
agree to sell, transfer, tender, assign, hypothecate or otherwise
dispose of, grant a proxy or power of attorney with respect to, or
create or permit to exist any security interest, lien, claim, pledge,
option, right of first refusal, agreement, limitation on any
Stockholder's voting rights, charge or other encumbrance of any
nature whatsoever with respect to the Shares or, directly or
indirectly, initiate, solicit or encourage, subject to the provisions
of Section 5.2 of the Merger Agreement, any person to take actions
which could reasonably be expected to lead to the occurrence of any
of the foregoing.
SECTION 3.02. No Solicitation of Transactions. Each
Stockholder hereby agrees, jointly and severally, to be bound and to
comply with the obligations of the Company set forth in Section
5.2(a) of the Merger Agreement as if such obligations were set forth
in their entirety in this Section 3.02 as obligations of such
Stockholder.
SECTION 3.03. No Profit From Competing Transaction. Each
Stockholder hereby covenants and agrees that should the Company or
the Representatives (as defined in Section 5.2(a) of the Merger
Agreement) during the Non-Solicitation Period (as defined in Section
5.2(a) of the Merger Agreement) either (i) receive an unsolicited
proposal for a Competing Transaction (an "Acquisition Proposal"),
other than from Acquiror or an affiliate of Acquiror or their
authorized representatives, and, during the Non-Solicitation Period
or 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, each Stockholder shall pay
to Acquiror an amount in cash (or if the consideration to be received
in such Competing Transaction is securities of the acquiror, an
amount of such securities, or payment in such form, as permitted by
the Competing Transaction) 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) $21.50 (in the case of
proposals noted in (i) above) or (2) $15.00 (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
Stockholder (which amounts shall be paid contemporaneously with
consummation of the acquisition, whether or not such Acquisition
Proposal was solicited); provided that the number of shares and the
Base Amount shall be appropriately adjusted for stock splits, stock
dividends, stock combinations, recapitalizations, reclassifications
and other similar transactions; provided further that no payments
shall be required pursuant to the terms of this Section 3.03 if the
Merger Agreement is terminated as a result of the breach of any of
the terms of the Merger Agreement by Acquiror. 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 of the Stockholders assumed in the transaction. In the
event that any Third Party Acquisition Consideration shall be payable
in securities; debt securities shall be valued at market value on the
day of delivery; preferred stock shall be valued at 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 Acquiror.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Termination. This Agreement (except for
Section 3.03 and Article IV of this Agreement) shall terminate upon
the termination of the Merger Agreement in accordance with its terms.
Section 3.03 and Article IV of this Agreement shall survive
termination of this Agreement.
SECTION 4.02. Further Assurances. Each Stockholder and
Acquiror will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in
order to consummate the transactions contemplated hereby.
SECTION 4.03. Specific Performance. The parties hereto
agree that irreparable damage would occur in the event any provision
of this Agreement was not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law or in
equity. Acquiror shall be entitled to its reasonable attorneys' fees
in any action brought to enforce this Agreement in which it is the
prevailing party.
SECTION 4.04. Entire Agreement. This Agreement
constitutes the entire agreement between Acquiror and the
Stockholders with respect to the subject matter hereof and supersedes
all prior agreements and understandings, both written and oral,
between Acquiror and the Stockholders with respect to the subject
matter hereof.
SECTION 4.05. Amendment. This Agreement may not be
amended except by an instrument in writing signed by the parties
hereto.
SECTION 4.06. Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law, or public policy, all other conditions
and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of this
Agreement is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the terms of this Agreement
remain as originally contemplated to the fullest extent possible.
SECTION 4.07. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State
of Delaware applicable to contracts executed in and to be performed
in that State. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any
Delaware state or federal court.
IN WITNESS WHEREOF, each Stockholder has duly executed this
Agreement.
HPB ASSOCIATES, L.P.
By: HPB GROUP LLC
Dated: June 25, 1996 By: /s/ Howard P. Berkowitz
Howard P. Berkowitz
Managing Member
Dated: June 25, 1996 /s/ Harold Blumenstein, individually
Dated: June 25, 1996 /s/ James Grosfeld, individually
Dated: June 25, 1996 /s/ Larry Addington, individually
Dated: June 25, 1996 /s/ Robert Addington, individually
Dated: June 25, 1996 /s/ Bruce Addington, individually
Agreed and Accepted
as of June 25, 1996:
REPUBLIC INDUSTRIES, INC.
By: /s/ Richard L. Handley
Name: Richard L. Handley
Title: Senior Vice-President
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APPENDIX A
Shares Approximate Percentage Numbers of
of Outstanding Company Shares Pledged
Shares
HPB Associates, L.P. 2,455,285 16.2
Larry Addington 2,263,324 14.9 550,000 (1)
Robert Addington 980,000 6.5 900,000 (2)
Bruce Addington 914,006 6.0 910,006 (3)
Harold Blumenstein 100,000 0.1
James Grosfeld 155,000 0.1
(1) 250,000 shares are pledged to CIT; 200,000 shares are pledged to
National City Bank; and 100,000 shares are pledged to Nations Bank.
(2) Pledged to Nations Bank.
(3) 560,006 shares pledged to Prudential Securities; 250,000 shares
are pledged to CIT; and 100,000 shares are pledged to Bear Sterns.
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EXHIBIT 2
FOR IMMEDIATE RELEASE
Contact: Howard P. Berkowitz
Chairman
Addington Resources, Inc.
(212) 664-0990
New York, New York (June 25, 1996)--Addington Resources,
Inc. (NASDAQ:ADDR) today announced that it has signed a definitive
agreement to be acquired by Republic Industries, Inc. (NASDAQ:RWIN)
in a stock-for-stock transaction at the exchange ratio previously
announced. The proposed transaction is subject to approval by the
stockholders of Addington and other customary closing conditions,
including receipt of regulatory approvals. The transaction is
expected to close in the third quarter of this year.
Addington Resources, Inc. currently operates ten landfills
in the southern United States.
