SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
______________________
Date of Report (Date of earliest event reported): June 25, 1996
Addington Resources, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-16498 61-1125039
(State of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
771 Corporate Drive, Suite 1000
Lexington, Kentucky 40503
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: (606) 233-3824
<PAGE>
Item 5. Other Events.
On June 25, 1996, Addington Resources, Inc. a Delaware Corporation
("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 common stock, par value $1.00
per share, of Addington ("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 Associates, L.P., 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, recapitilization, 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
10.1 to this Form 8-K and the Voting Agreement which is filed as Exhibit 10.2
to this Form 8-K. A copy of the press release of Addington, dated June 25,
1996, is attached as Exhibit 99.1 and is hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial statements of business acquired.
Not applicable
(b) Pro Forma Financial Information
Not applicable
(c) Exhibits
10.1 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. Addington Resources, Inc. will furnish supplementally a copy of
any such schedules to the Commission upon request.
10.2. 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.
99.1 Press Release, dated June 25, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADDINGTON RESOURCES, INC.
(Registrant)
BY: /s/ R. Douglas Streibel
Name: R. Douglas Striebel
Title: Vice-President and
Chief Financial Officer
Date: July 2, 1996
<PAGE>
INDEX TO EXHIBITS
Current Report on Form 8-K Dated May 31, 1996
ADDINGTON RESOURCES, INC.
Exhibit Item Page
10.1 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.
Addington Resources, Inc. will
furnish supplementally a copy of any such
schedules to the Commission upon request.
10.2. 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.
99.1. Press Release, dated June 25, 1996.
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. ss 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. ss 6901 et seq. (collectively "RCRA"); the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. ss 1801, et seq.;
the Clean Water Act, as amended, 33 U.S.C. ss 1311, et seq.; the Clean Air Act,
as amended (42 U.S.C. ss 7401-7642); the Toxic Substances Control Act, as
amended, 15 U.S.C. ss 2601 et seq.; the Federal Insecticide, Fungicide, and
Rodenticide Act as amended, 7 U.S.C. ss 136-136y ("FIFRA"); the Emergency
Planning and Community Right-to-Know Act of 1986 as amended, 42 U.S.C. ss
11001, et seq. (Title III of SARA) ("EPCRA"); and the Occupational Safety and
Health Act of 1970, as amended, 29 U.S.C. ss 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>
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>
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
<PAGE>
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.
