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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 22, 1996
SANIFILL, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-10490 76-0279492
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
2777 Allen Parkway, Suite 700
Houston, Texas 77019-2155
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (713) 942-6200
<PAGE>
ITEM 5. OTHER EVENTS
On June 24, 1996, Sanifill, Inc. ("Sanifill") issued a press release
announcing that it had entered into a definitive agreement (the "Agreement") for
the merger of a special purpose subsidiary of USA Waste Services, Inc. with and
into Sanifill, which, subject to stockholder approval and other conditions, will
result in Sanifill's becoming a wholly owned subsidiary of USA Waste Services,
Inc. In the proposed merger, Sanifill stockholders will receive 1.7 shares of
USA Waste common stock for each Sanifill common share. In connection with the
proposed merger, Sanifill and Chemical Bank entered into an amendment (the
"First Amendment") to the Company's 1991 Rights Agreement. A copy of the press
release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
A copy of the Agreement is attached hereto as Exhibit 99.2 and incorporated
herein by reference. A copy of the First Amendment is attached hereto as
Exhibit 99.3 and incorporated herein by reference.
Disclosure Regarding Forward Looking Statements. This Current Report
on Form 8-K and the documents incorporated by reference herein (collectively,
the "Report") contain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements other than statements of
historical fact included in this Report are forward-looking statements,
including without limitation: (a) the statement in the joint press release of
Sanifill and USA Waste Services, Inc. dated June 24, 1996 (the "Press Release")
regarding the anticipated closing date of the merger; (b) statements regarding
the management and governance of the combined company; (c) the statement in the
Press Release regarding the growth that will result from the ongoing acquisition
programs of both Sanifill and USA Waste; (d) the statements by John E. Drury in
the Press Release regarding the significant benefits provided by the merger to
stockholders of Sanifill and USA Waste; (e) the statements by Mr. Drury in the
Press Release regarding the continuation of strong earnings growth of the
combined company, the expectation of accretion to the earnings per share of USA
Waste as a result of annual cost savings and operational synergies, the
operational and financial strength of the combined entity, and the enhancement
of USA Waste's capacity to benefit from growth opportunities in the industry;
and (f) the statement by Lorne D. Bain in the Press Release regarding the
synergies of the merger. Although Sanifill believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from Sanifill's
expectations ("Cautionary Statements") include: (i) the timing and receipt of
necessary approvals and other closing conditions for the merger; (ii) the
ability of the combined entity to achieve administrative cost savings,
rationalization of collection routes, insurance and bonding, cost reductions,
lower interest expense and general economies of scale and generally to
capitalize on the combined asset base and strategic position of the combined
entity; and (iii) the actual results of the combined company which may be
influenced by, among other things, the level and nature of competition from
other waste companies, the current regulatory environment and the costs
associated with such regulation, the availability of attractive acquisition
opportunities, successful integration of acquired businesses, availability of
working capital, ability to maintain margins and the management of costs in a
changing regulatory environment. All related or subsequent written and oral
forward-looking statements attributable to Sanifill or persons acting on its
behalf are expressly qualified in their entirety by the Cautionary Statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed herewith:
99.1 -- Joint press release of Sanifill, Inc. and USA Waste Services,
Inc. dated June 24, 1996.
99.2 -- Agreement and Plan of Merger dated June 22, 1996 among Sanifill,
Inc., Quatro Acquisition Corp. and USA Waste Services, Inc.
99.3 -- Amendment to Rights Agreement dated June 22, 1996 between
Sanifill, Inc. and Chemical Bank, as successor rights agent to
First City - Houston, N.A.
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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.
SANIFILL, INC.
By: /s/ H. Steven Walton
----------------------
H. Steven Walton
Vice President and General Counsel
Date: June 25, 1996
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EXHIBIT 99.1
------------
FOR IMMEDIATE RELEASE
FIL #96-08
Contact:
Sanifill, Inc.
--------------
J. Chris Brewster
(713) 942-6216
or (212) 872-7262
PRESS RELEASE
USA WASTE AND SANIFILL
JOINTLY ANNOUNCE MERGER AGREEMENT
Houston, Texas (June 24, 1996) -- USA Waste Services, Inc. (NYSE --
"UW") and Sanifill, Inc. (NYSE -- "FIL") today jointly announced that the
companies have entered into a definitive merger agreement, approved by both
Boards of Directors, whereby Sanifill stockholders will receive 1.7 shares of
USA Waste common stock for each Sanifill common share. USA Waste and Sanifill
have received opinions from independent financial advisors, Donaldson, Lufkin
and Jenrette Securities Corporation and Merrill Lynch and Co., respectively,
stating that the share exchange ratio is fair from a financial point of view to
their respective shareholders. The closing of the merger is subject to approval
by both Companies' stockholders and certain lenders, Hart-Scott-Rodino antitrust
clearance, opinions that the merger will qualify as a tax-free pooling of
interests transaction and other standard and customary closing requirements.
USA Waste's stock price closed Friday, June 21, 1996 at $27-7/8 per
share. Based upon Sanifill's approximately 25.9 million outstanding shares and
share equivalents and existing
1
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indebtedness, the merger would be valued at about $1.6 billion. The Companies
anticipate that the merger should close in the late summer or early fall.
John E. Drury, Chairman and Chief Executive Officer of USA Waste, will
retain that position, and Rodney R. Proto, President, Chief Operating Officer
and Director of Sanifill will assume these positions at USA Waste. Donald F.
Moorehead, Jr., Vice Chairman and Chief Development Officer, and Earl E.
DeFrates, Executive Vice President and Chief Financial Officer, will retain
these positions at USA Waste. Mr. Proto and two designees from Sanifill's Board
will join USA Waste's Board, which will remain a twelve person board.
Lorne D. Bain, Chairman and Chief Executive Officer of Sanifill, and
J. Chris Brewster, its Chief Financial Officer, will relinquish their posts, but
both will assist with merger transition matters. David Sutherland-Yoest, USA
Waste's current President and Chief Operating Officer, will continue to serve
the Company as Regional Vice President of operations in the northeastern U.S.
and Canada, as well as being a Vice Chairman and Director of the Board. In
connection with the merger, USA Waste will move its headquarters to Houston,
Texas.
The combined Companies have annualized revenues of approximately $1.3
billion and total assets in excess of $2 billion. Giving effect to the merger,
USA Waste, currently the third largest solid waste company in North America,
will have 108 collection operations, 83 landfills with total airspace of over
2.5 billion cubic gate yards, 45 transfer stations and 31 other operations,
serving over 1.7 million customers in 33 states, the District of Columbia,
Canada, Mexico and Puerto Rico. The ongoing acquisition programs of both
Companies will be continued during the pendency of the merger, resulting in
further growth.
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Mr. Drury stated, "The combination of these two fine companies will
provide significant benefits to both stockholder groups. We expect the combined
company to continue to reflect the strong earnings growth that each has
demonstrated over the past several years. The merger is expected to be
immediately accretive to USA Waste's earnings per share as a result of
substantial annual cost savings and operational synergies which have been
identified. Mr. Drury stated that, "the combined company will be strong
operationally and financially and have outstanding management talent at all
levels of the organization. This combination will enhance USA Waste's capacity
to continue to benefit from the substantial growth opportunities that exist in
our industry."
Mr. Bain said, "This merger is a thoroughly logical transaction, that
makes operating and financial sense across the board. The synergies are
significant and sustainable, and the combined management team has the skills and
capabilities needed by a growth company in a consolidating industry. This
merger will create North America's premier solid waste company, to the benefit
of employees, customers and stockholders."
USA Waste, currently based in Dallas, Texas, is an integrated, non-
hazardous, solid waste management company serving municipal, commercial,
industrial and residential customers in 24 states.
Sanifill, Inc., headquartered in Houston, Texas, is an environmental
services company specializing in the management and disposal of nonhazardous
waste in 23 states, the District of Columbia, the Commonwealth of Puerto Rico,
Mexico and Canada.
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EXHIBIT 99.2
------------
AGREEMENT AND PLAN OF MERGER
DATED AS OF JUNE 22, 1996
BY AND AMONG
USA WASTE SERVICES, INC.,
QUATRO ACQUISITION CORP.
AND
SANIFILL, INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page No.
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<S> <C> <C>
ARTICLE I THE MERGER.............................................................. 1
Section 1.1. The Merger................................................ 1
Section 1.2. Effective Time of the Merger.............................. 1
ARTICLE II THE SURVIVING AND PARENT CORPORATIONS................................... 2
Section 2.1. Certificate of Incorporation.............................. 2
Section 2.2. By-Laws................................................... 2
Section 2.3. Directors................................................. 2
Section 2.4. Officers.................................................. 2
Section 2.5. Corporate Offices......................................... 3
ARTICLE III CONVERSION OF SHARES.................................................... 3
Section 3.1. Conversion of Company Shares in the Merger................ 3
Section 3.2. Conversion of Subsidiary Shares........................... 3
Section 3.3. Exchange of Certificates.................................. 3
Section 3.4. No Fractional Securities.................................. 5
Section 3.5. Closing................................................... 5
Section 3.6. Closing of the Company's Transfer Books................... 5
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND SUBSIDIARY................. 5
Section 4.1. Organization and Qualification............................ 5
Section 4.2. Capitalization............................................ 6
Section 4.3. Subsidiaries.............................................. 6
Section 4.4. Authority; Non-Contravention; Approvals................... 7
Section 4.5. Reports and Financial Statements.......................... 8
Section 4.6. Absence of Undisclosed Liabilities........................ 9
Section 4.7. Absence of Certain Changes or Events...................... 9
Section 4.8. Litigation................................................ 9
Section 4.9. Registration Statement and Proxy Statement................ 9
Section 4.10. No Violation of Law....................................... 10
Section 4.11. Compliance with Agreements................................ 10
Section 4.12. Taxes..................................................... 10
Section 4.13. Employee Benefit Plans; ERISA............................. 11
Section 4.14. Labor Controversies....................................... 13
Section 4.15. Environmental Matters..................................... 13
Section 4.16. Non-competition Agreements................................ 14
Section 4.17. Title to Assets........................................... 14
Section 4.18. Reorganization and Pooling of Interests................... 15
Section 4.19. Parent Stockholders' Approval............................. 15
Section 4.20. Brokers and Finders....................................... 15
Section 4.21. Opinion of Financial Advisor.............................. 15
Section 4.22. Ownership of Company Common Stock......................... 15
Section 4.23. Parent Disclosure Schedule................................ 15
</TABLE>
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Page No.
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................... 16
Section 5.1. Organization and Qualification............................ 16
Section 5.2. Capitalization............................................ 16
Section 5.3. Subsidiaries.............................................. 17
Section 5.4. Authority; Non-Contravention; Approvals................... 17
Section 5.5. Reports and Financial Statements.......................... 18
Section 5.6. Absence of Undisclosed Liabilities........................ 19
Section 5.7. Absence of Certain Changes or Events...................... 19
Section 5.8. Litigation................................................ 19
Section 5.9. Registration Statement and Proxy Statement................ 20
Section 5.10. No Violation of Law....................................... 20
Section 5.11. Compliance with Agreements................................ 21
Section 5.12. Taxes..................................................... 21
Section 5.13. Employee Benefit Plans; ERISA............................. 21
Section 5.14. Labor Controversies....................................... 23
Section 5.15. Environmental Matters..................................... 23
Section 5.16. Non-competition Agreements................................ 24
Section 5.17. Title to Assets........................................... 24
Section 5.18. Reorganization and Pooling of Interests................... 24
Section 5.19. Company Stockholders' Approval............................ 24
Section 5.20. Brokers and Finders....................................... 24
Section 5.21. Opinion of Financial Advisor.............................. 25
Section 5.22. Amendment to Preferred Stock Rights Agreement............. 25
Section 5.23. Company Disclosure Schedule............................... 25
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER.................................. 25
Section 6.1. Conduct of Business by the Company Pending the Merger..... 25
Section 6.2. Conduct of Business by Parent and Subsidiary
Pending the Merger....................................... 27
Section 6.3. Control of the Company's Operations....................... 29
Section 6.4. Control of Parent's Operations............................ 29
Section 6.5. Acquisition Transactions.................................. 29
ARTICLE VII ADDITIONAL AGREEMENTS................................................... 30
Section 7.1. Access to Information..................................... 30
Section 7.2. Registration Statement and Proxy Statement................ 31
Section 7.3. Stockholders' Approvals................................... 31
Section 7.4. Compliance with the Securities Act........................ 31
Section 7.5. Exchange Listing.......................................... 32
Section 7.6. Expenses and Fees......................................... 32
Section 7.7. Agreement to Cooperate.................................... 32
Section 7.8. Public Statements......................................... 33
Section 7.9. Option Plans.............................................. 33
Section 7.10. Notification of Certain Matters........................... 33
Section 7.11. Directors' and Officers' Indemnification.................. 34
</TABLE>
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Page No.
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Section 7.12. Corrections to the Joint Proxy Statement/Prospectus
and Registration Statement............................... 35
Section 7.13. Effect on Accounting Treatment............................ 35
Section 7.14. Amendment of Certain Acquisition Agreements............... 35
ARTICLE VIII CONDITIONS.............................................................. 35
Section 8.1. Conditions to Each Party's Obligation to Effect the Merger 35
Section 8.2. Conditions to Obligation of the Company to Effect the
Merger................................................... 36
Section 8.3. Conditions to Obligations of Parent and Subsidiary
to Effect the Merger..................................... 37
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER....................................... 38
Section 9.1. Termination............................................... 38
Section 9.2. Effect of Termination..................................... 40
Section 9.3. Amendment................................................. 40
Section 9.4. Waiver.................................................... 40
ARTICLE X GENERAL PROVISIONS...................................................... 40
Section 10.1. Non-Survival of Representations and Warranties............ 40
Section 10.2. Notices................................................... 40
Section 10.3. Interpretation............................................ 41
Section 10.4. Miscellaneous............................................. 41
Section 10.5. Counterparts.............................................. 42
Section 10.6. Parties In Interest....................................... 42
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of June 22, 1996 (this
"Agreement"), by and among USA Waste Services, Inc., a Delaware corporation
("Parent"), Quatro Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Subsidiary"), and Sanifill, Inc., a Delaware corporation
(the "Company");
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Parent, Subsidiary and the Company
have approved the merger of Subsidiary with and into the Company on the terms
set forth in this Agreement (the "Merger"); and
WHEREAS, Parent, Subsidiary and the Company intend the Merger to qualify
as a tax-free reorganization under the provisions of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder;
WHEREAS, in connection with the Merger and as an inducement to the
Company to enter into this Agreement, the Company, Parent and the shareholders
of Parent listed on the Parent Disclosure Schedule (as defined in Article IV)
have executed as of the date hereof a voting agreement in favor of the Company
with respect to, among other things, the voting of shares of capital stock of
Parent held or to be held by them in favor of the Merger; and
WHEREAS, in connection with the Merger and as an inducement to Parent to
enter into this Agreement, Parent, the Company and the shareholders of the
Company listed on the Company Disclosure Schedule (as defined in Article V) have
executed as of the date hereof a voting agreement in favor of Parent with
respect to, among other things, the voting of shares of capital stock of the
Company held or to be held by such shareholder in favor of the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
The Merger
SECTION 1.1. THE MERGER. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time (as defined in Section 1.2) in accordance
with the General Corporation Law of the State of Delaware (the "DGCL"),
Subsidiary shall be merged with and into the Company and the separate existence
of Subsidiary shall thereupon cease. The Company shall be the surviving
corporation in the Merger and is hereinafter sometimes referred to as the
"Surviving Corporation."
SECTION 1.2. EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective at such time (the "Effective Time") as shall be stated in a
certificate of merger, in a form mutually acceptable to Parent
<PAGE>
and the Company, to be filed with the Secretary of State of the State of
Delaware in accordance with the DGCL (the "Merger Filing"). The Merger Filing
shall be made simultaneously with or as soon as practicable after the closing of
the transactions contemplated by this Agreement in accordance with Section 3.5.
The parties acknowledge that it is their mutual desire and intent to consummate
the Merger as soon as practicable after the date hereof. Accordingly, the
parties shall, subject to the provisions hereof and to the fiduciary duties of
their respective boards of directors, use all reasonable efforts to consummate,
as soon as practicable, the transactions contemplated by this Agreement in
accordance with Section 3.5.
ARTICLE II
The Surviving and Parent Corporations
SECTION 2.1. CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Subsidiary as in effect immediately prior to the Effective Time
shall be the Certificate of Incorporation of the Surviving Corporation after the
Effective Time, and thereafter may be amended in accordance with its terms and
as provided in the DGCL.
SECTION 2.2. BY-LAWS. The By-laws of Subsidiary as in effect immediately
prior to the Effective Time shall be the By-laws of the Surviving Corporation
after the Effective Time, and thereafter may be amended in accordance with their
terms and as provided by the Certificate of Incorporation of the Surviving
Corporation and the DGCL.
SECTION 2.3. DIRECTORS. (a) The Board of Directors of Parent shall take
such action as may be necessary to cause Parent's Board of Directors immediately
following the Effective Time to be composed of twelve members, including three
members designated by the Board of Directors of the Company prior to the Closing
(the "Company Designees"). One of the Company Designees shall be Rodney R.
Proto and the remaining two Company Designees shall be non-officers of the
Company and its subsidiaries reasonably acceptable to Parent. If the Board
positions are of different terms, the Company shall have the right to designate
which of the Company Designees shall fill each Board position. Rodney R. Proto
shall have an initial term of office expiring in 1997 or thereafter and the
remaining two Company Designees shall have initial terms of office expiring in
1998 or thereafter. If the initial term of Rodney R. Proto shall expire in 1997,
the Board of Directors of the Company shall take such action as may be necessary
to renominate Rodney R. Proto to the Board of Directors of the Company with a
term of office expiring in 2000 or thereafter. All of the Company Designees
shall serve in accordance with the charter and bylaws of Parent until their
respective successors are duly elected or appointed and qualified. One of the
Company Designees (to be designated by the Board of Directors of the Company
prior to the Closing and reasonably acceptable to Parent) shall be appointed by
the Board of Directors of Parent to the Executive Committee of Parent's Board of
Directors to serve in accordance with the By-laws of Parent.
(b) The directors of Subsidiary in office immediately prior to the
Effective Time shall be the directors of the Surviving Corporation after the
Effective Time, and such directors shall serve in accordance with the By-laws of
the Surviving Corporation until their respective successors are duly elected or
appointed and qualified.
SECTION 2.4. OFFICERS. (a) Immediately following the Effective Time,
the Board of Directors of Parent shall elect Rodney R. Proto as President and
Chief Operating Officer of Parent to serve in accordance with the By-laws of
Parent.
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(b) The officers of Subsidiary in office immediately prior to the Effective
Time shall be the officers of the Surviving Corporation after the Effective
Time, and such officers shall serve in accordance with the By-laws of the
Surviving Corporation until their respective successors are duly elected or
appointed and qualified.
SECTION 2.5. CORPORATE OFFICES. As soon as practicable following the
Effective Time, Parent shall transfer Parent's principal executive offices to
Houston, Texas.
ARTICLE III
Conversion of Shares
SECTION 3.1. CONVERSION OF COMPANY SHARES IN THE MERGER. At the
Effective Time, by virtue of the Merger and without any action on the part of
any holder of any capital stock of Parent or the Company:
(a) each share of the common stock, par value $.01 per share, of the
Company (the "Company Common Stock") shall, subject to Sections 3.3 and 3.4, be
converted into the right to receive, without interest, 1.70 (the "Exchange
Ratio") shares of the common stock, par value $.01 per share, of Parent
("Parent Common Stock");
(b) each share of capital stock of the Company, if any, owned by Parent or
any subsidiary of Parent or held in treasury by the Company or any subsidiary
of the Company immediately prior to the Effective Time shall be canceled and no
consideration shall be paid in exchange therefor and shall cease to exist from
and after the Effective Time; and
(c) subject to and as more fully provided in Section 7.9, each unexpired
option or warrant to purchase Company Common Stock that is outstanding at the
Effective Time, whether or not exercisable, shall automatically and without any
action on the part of the holder thereof be converted into an option or warrant
to purchase a number of shares of Parent Common Stock equal to the number of
shares of Company Common Stock that could be purchased under such option or
warrant multiplied by the Exchange Ratio, at a price per share of Parent Common
Stock equal to the per share exercise price of such option or warrant divided
by the Exchange Ratio.
SECTION 3.2. CONVERSION OF SUBSIDIARY SHARES. At the Effective Time, by
virtue of the Merger and without any action on the part of Parent as the sole
stockholder of Subsidiary, each issued and outstanding share of common stock,
par value $.01 per share, of Subsidiary ("Subsidiary Common Stock") shall be
converted into one share of common stock, par value $.01 per share, of the
Surviving Corporation.
SECTION 3.3. EXCHANGE OF CERTIFICATES. (a) From and after the Effective
Time, each holder of an outstanding certificate which immediately prior to the
Effective Time represented shares of Company Common Stock shall be entitled to
receive in exchange therefor, upon surrender thereof to an exchange agent
reasonably satisfactory to Parent and the Company (the "Exchange Agent"), a
certificate or certificates representing the number of whole shares of Parent
Common Stock to which such holder is entitled pursuant to Section 3.1(a).
Notwithstanding any other provision of this Agreement, (i) until holders or
transferees of certificates theretofore representing shares of Company Common
Stock have surrendered them for exchange as provided herein, no dividends shall
be paid with respect to any shares represented by such certificates and
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no payment for fractional shares shall be made and (ii) without regard to when
such certificates representing shares of Company Common Stock are surrendered
for exchange as provided herein, no interest shall be paid on any dividends or
any payment for fractional shares. Upon surrender of a certificate which
immediately prior to the Effective Time represented shares of Company Common
Stock, there shall be paid to the holder of such certificate the amount of any
dividends which theretofore became payable, but which were not paid by reason of
the foregoing, with respect to the number of whole shares of Parent Common Stock
represented by the certificate or certificates issued upon such surrender.
(b) If any certificate for shares of Parent Common Stock is to be issued in
a name other than that in which the certificate for shares of Company Common
Stock surrendered in exchange therefor is registered, it shall be a condition of
such exchange that the person requesting such exchange shall pay any applicable
transfer or other taxes required by reason of such issuance.
(c) Promptly after the Effective Time, Parent shall make available to the
Exchange Agent the certificates representing shares of Parent Common Stock
required to effect the exchanges referred to in paragraph (a) above and cash for
payment of any fractional shares referred to in Section 3.4.
(d) Promptly after the Effective Time, the Exchange Agent shall mail to
each holder of record of a certificate or certificates that immediately prior to
the Effective Time represented outstanding shares of Company Common Stock (the
"Company Certificates") (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Company
Certificates shall pass, only upon actual delivery of the Company Certificates
to the Exchange Agent) and (ii) instructions for use in effecting the surrender
of the Company Certificates in exchange for certificates representing shares of
Parent Common Stock. Upon surrender of Company Certificates for cancellation to
the Exchange Agent, together with a duly executed letter of transmittal and such
other documents as the Exchange Agent shall reasonably require, the holder of
such Company Certificates shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Parent Common Stock into
which the shares of Company Common Stock theretofore represented by the Company
Certificates so surrendered shall have been converted pursuant to the provisions
of Section 3.1(a), and the Company Certificates so surrendered shall be
canceled. Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to a holder of shares of Company Common Stock for
any shares of Parent Common Stock or dividends or distributions thereon
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(e) Promptly following the date which is nine months after the Effective
Date, the Exchange Agent shall deliver to Parent all cash, certificates
(including any Parent Common Stock) and other documents in its possession
relating to the transactions described in this Agreement, and the Exchange
Agent's duties shall terminate. Thereafter, each holder of a Company
Certificate may surrender such Company Certificate to the Surviving Corporation
and (subject to applicable abandoned property, escheat and similar laws) receive
in exchange therefor the Parent Common Stock, without any interest thereon.
Notwithstanding the foregoing, none of the Exchange Agent, Parent, Subsidiary,
the Company or the Surviving Corporation shall be liable to a holder of shares
of Company Common Stock for any shares of Parent Common Stock delivered to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(f) In the event any Company Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Company Certificate to be lost, stolen or destroyed, the Surviving
Corporation shall issue in exchange for such lost, stolen or destroyed Company
Certificate the
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Parent Common Stock deliverable in respect thereof determined in accordance with
this Article III. When authorizing such issuance in exchange therefor, the
Board of Directors of the Surviving Corporation may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed Company Certificate to give the Surviving Corporation such
indemnity as it may reasonably direct as protection against any claim that may
be made against the Surviving Corporation with respect to the Company
Certificate alleged to have been lost, stolen or destroyed.
SECTION 3.4. NO FRACTIONAL SECURITIES. Notwithstanding any other
provision of this Agreement, no certificates or scrip for fractional shares of
Parent Common Stock shall be issued in the Merger and no Parent Common Stock
dividend, stock split or interest shall relate to any fractional security, and
such fractional interests shall not entitle the owner thereof to vote or to any
other rights of a security holder. In lieu of any such fractional shares, each
holder of shares of Company Common Stock who would otherwise have been entitled
to receive a fraction of a share of Parent Common Stock upon surrender of
Company Certificates for exchange pursuant to this Article III shall be entitled
to receive from the Exchange Agent a cash payment equal to such fraction
multiplied by the average closing price per share of Parent Common Stock on the
New York Stock Exchange, as reported by the Wall Street Journal, during the 10
trading days immediately preceding the Effective Time.
SECTION 3.5. CLOSING. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at a location mutually agreeable
to Parent and the Company as promptly as practicable following the date on which
the last of the conditions set forth in Article VIII is fulfilled or waived, or
at such other time and place as Parent and the Company shall agree. The date on
which the Closing occurs is referred to in this Agreement as the "Closing Date."
SECTION 3.6. CLOSING OF THE COMPANY'S TRANSFER BOOKS. At and after the
Effective Time, holders of Company Certificates shall cease to have any rights
as stockholders of the Company, except for the right to receive shares of Parent
Common Stock pursuant to Section 3.1 and the right to receive cash for payment
of fractional shares pursuant to Section 3.4. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of shares of
Company Common Stock which were outstanding immediately prior to the Effective
Time shall thereafter be made. If, after the Effective Time, subject to the
terms and conditions of this Agreement, Company Certificates formerly
representing shares of Company Common Stock are presented to the Surviving
Corporation, they shall be canceled and exchanged for shares of Parent Common
Stock in accordance with this Article III.
ARTICLE IV
Representations and Warranties
of Parent and Subsidiary
Parent and Subsidiary each represent and warrant to the Company that,
except as set forth in the Disclosure Schedule dated as of the date hereof and
signed by an authorized officer of Parent (the "Parent Disclosure Schedule"),
each of which exceptions shall specifically identify the relevant Section hereof
to which it relates:
SECTION 4.1. ORGANIZATION AND QUALIFICATION. Each of Parent and
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has the requisite
power and authority to own, lease and operate its assets and properties and to
carry on its
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business as it is now being conducted. Each of Parent and Subsidiary is
qualified to do business and is in good standing in each jurisdiction in which
the properties owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified and in good standing will not, when taken together with all
other such failures, have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
Parent and its subsidiaries, taken as a whole. True, accurate and complete
copies of each of Parent's and Subsidiary's charters and By-laws, in each case
as in effect on the date hereof, including all amendments thereto, have
heretofore been delivered to the Company.
SECTION 4.2. CAPITALIZATION. (a) As of June 15, 1996, the authorized
capital stock of Parent consisted of 150,000,000 shares of Parent Common Stock
and 10,000,000 shares of preferred stock, par value $.01 per share ("Parent
Preferred Stock"). As of June 15, 1996, (i) 88,330,623 shares of Parent Common
Stock were issued and outstanding, all of which were validly issued and are
fully paid, nonassessable and free of preemptive rights, (ii) no shares of
Parent Preferred Stock were issued and outstanding, (iii) 26,310 shares of
Parent Common Stock and no shares of Company Preferred Stock were held in the
treasury of Parent and (iv) 13,136,521 shares of Parent Common Stock were
reserved for issuance pursuant to the exercise of outstanding options and
warrants to purchase Parent Common Stock. Assuming the exercise of all
outstanding options and warrants to purchase Parent Common Stock, as of June 15,
1996, there would be 101,467,144 shares of Parent Common Stock issued and
outstanding. In addition, as of June 15, 1996, 4,364,152 shares of Parent
Common Stock were reserved and unissued pending conversion of shares of acquired
companies.
(b) The authorized capital stock of Subsidiary consists of 1,000 shares of
Subsidiary Common Stock, of which 100 shares are issued and outstanding, which
shares are owned beneficially and of record by Parent.
(c) Except as disclosed in the Parent SEC Reports (as defined in Section
4.5), as of the date hereof, there are no outstanding subscriptions, options,
calls, contracts, commitments, understandings, restrictions, arrangements,
rights or warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement and also including any
rights plan or other anti-takeover agreement, obligating Parent or any
subsidiary of Parent to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of the capital stock of Parent or obligating Parent
or any subsidiary of Parent to grant, extend or enter into any such agreement or
commitment. Except as otherwise disclosed in the Parent SEC Reports, there are
no voting trusts, proxies or other agreements or understandings to which Parent
or any subsidiary of Parent is a party or is bound with respect to the voting of
any shares of capital stock of Parent other than voting agreements executed in
connection with this Agreement. The Shareholders Agreement dated as of December
18, 1995 between Parent and Donald F. Moorehead, Jr., John E. Drury, John G.
Rangos, Sr., John G. Rangos, Jr., Alexander W. Rangos and John Rangos
Development Corporation, Inc. has been terminated in connection with the
execution of this Agreement. The shares of Parent Common Stock issued to
stockholders of the Company in the Merger will be at the Effective Time duly
authorized, validly issued, fully paid and nonassessable and free of preemptive
rights.
SECTION 4.3. SUBSIDIARIES. Each direct and indirect corporate subsidiary
of Parent is duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the requisite power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted. Each subsidiary of Parent is
qualified to do business, and is in good standing, in each jurisdiction in which
the properties owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified and
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in good standing would not, when taken together with all such other failures,
have a material adverse effect on the business, operations, properties, assets,
condition (financial or other) or results of operations of Parent and its
subsidiaries, taken as a whole. All of the outstanding shares of capital stock
of each corporate subsidiary of Parent are validly issued, fully paid,
nonassessable and free of preemptive rights, and are owned directly or
indirectly by Parent, free and clear of any liens, claims or encumbrances,
except that such shares are pledged to secure Parent's credit facilities. There
are no subscriptions, options, warrants, rights, calls, contracts, voting
trusts, proxies or other commitments, understandings, restrictions or
arrangements relating to the issuance, sale, voting, transfer, ownership or
other rights with respect to any shares of capital stock of any corporate
subsidiary of Parent, including any right of conversion or exchange under any
outstanding security, instrument or agreement. As used in this Agreement, the
term "subsidiary" shall mean, when used with reference to any person or entity,
any corporation, partnership, joint venture or other entity of which such person
or entity (either acting alone or together with its other subsidiaries) owns,
directly or indirectly, 50% or more of the stock or other voting interests, the
holders of which are entitled to vote for the election of a majority of the
board of directors or any similar governing body of such corporation,
partnership, joint venture or other entity.
SECTION 4.4. AUTHORITY; NON-CONTRAVENTION; APPROVALS. (a) Parent and
Subsidiary each have full corporate power and authority to enter into this
Agreement and, subject to the Parent Stockholders' Approval (as defined in
Section 7.3(b)) and the Parent Required Statutory Approvals (as defined in
Section 4.4(c)), to consummate the transactions contemplated hereby. This
Agreement has been approved by the Boards of Directors of Parent and Subsidiary,
and no other corporate proceedings on the part of Parent or Subsidiary are
necessary to authorize the execution and delivery of this Agreement or, except
for the Parent Stockholders' Approval, the consummation by Parent and Subsidiary
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of Parent and Subsidiary, and, assuming the due
authorization, execution and delivery hereof by the Company, constitutes a valid
and legally binding agreement of each of Parent and Subsidiary enforceable
against each of them in accordance with its terms, except that such enforcement
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to enforcement of creditors' rights
generally and (ii) general equitable principles. Without limitation of the
foregoing, each of the covenants and obligations of Parent set forth in Sections
6.2, 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.10 and 7.12 is valid, legally binding and
enforceable (subject as aforesaid) notwithstanding the absence of the Parent
Stockholders' Approval.
(b) The execution and delivery of this Agreement by each of Parent and
Subsidiary do not violate, conflict with or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of Parent or any of
its subsidiaries under any of the terms, conditions or provisions of (i) the
respective charters or by-laws of Parent or any of its subsidiaries, (ii) any
statute, law, ordinance, rule, regulation, judgment, decree, order, injunction,
writ, permit or license of any court or governmental authority applicable to
Parent or any of its subsidiaries or any of their respective properties or
assets or (iii) any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument, obligation
or agreement of any kind to which Parent or any of its subsidiaries is now a
party or by which Parent or any of its subsidiaries or any of their respective
properties or assets may be bound or affected. The consummation by Parent and
Subsidiary of the transactions contemplated hereby will not result in any
violation, conflict, breach, termination, acceleration or creation of liens
under any of the terms, conditions or provisions described in clauses (i)
through (iii) of the preceding sentence, subject (x) in the case of the terms,
conditions
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or provisions described in clause (ii) above, to obtaining (prior to the
Effective Time) the Parent Required Statutory Approvals and the Parent
Stockholder's Approval and (y) in the case of the terms, conditions or
provisions described in clause (iii) above, to obtaining (prior to the Effective
Time) consents required from commercial lenders, lessors or other third parties
as specified on the Parent Disclosure Schedule. Excluded from the foregoing
sentences of this paragraph (b), insofar as they apply to the terms, conditions
or provisions described in clauses (ii) and (iii) of the first sentence of this
paragraph (b), are such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens, security interests, charges or encumbrances
that would not, in the aggregate, have a material adverse effect on the
business, operations, properties, assets, condition (financial or other) results
of operations of Parent and its subsidiaries, taken as a whole.
(c) Except for (i) the filings by Parent required by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (ii) the filing
of the Joint Proxy Statement/Prospectus (as defined in Section 4.9) with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Securities Act of
1933, as amended (the "Securities Act"), and the declaration of the
effectiveness thereof by the SEC and filings with various state blue sky
authorities, (iii) the making of the Merger Filing with the Secretary of State
of the State of Delaware in connection with the Merger, and (iv) any required
filings with or approvals from applicable state environmental authorities,
public service commissions and public utility commissions (the filings and
approvals referred to in clauses (i) through (iv) are collectively referred to
as the "Parent Required Statutory Approvals"), no declaration, filing or
registration with, or notice to, or authorization, consent or approval of, any
governmental or regulatory body or authority is necessary for the execution and
delivery of this Agreement by Parent or Subsidiary or the consummation by Parent
or Subsidiary of the transactions contemplated hereby, other than such
declarations, filings, registrations, notices, authorizations, consents or
approvals which, if not made or obtained, as the case may be, would not, in the
aggregate, have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
Parent and its subsidiaries, taken as a whole.
SECTION 4.5. REPORTS AND FINANCIAL STATEMENTS. Since January 1, 1994,
Parent has filed with the SEC all forms, statements, reports and documents
(including all exhibits, post-effective amendments and supplements thereto)
required to be filed by it under each of the Securities Act, the Exchange Act
and the respective rules and regulations thereunder, all of which, as amended if
applicable, complied when filed in all material respects with all applicable
requirements of the appropriate act and the rules and regulations thereunder.
Parent has previously delivered to the Company copies (including all exhibits,
post-effective amendments and supplements thereto) of its (a) Annual Reports on
Form 10-K for the fiscal year ended December 31, 1995 and for the immediately
preceding fiscal year, as filed with the SEC, (b) proxy and information
statements relating to (i) all meetings of its stockholders (whether annual or
special) and (ii) actions by written consent in lieu of a stockholders' meeting
from January 1, 1994, until the date hereof, and (c) all other reports,
including quarterly reports, and registration statements filed by Parent with
the SEC since January 1, 1994 (other than registration statements filed on Form
S-8) (the documents referred to in clauses (a), (b) and (c) filed prior to the
date hereof are collectively referred to as the "Parent SEC Reports"). The
Parent SEC Reports are identified on the Parent Disclosure Schedule. As of
their respective dates, the Parent SEC Reports did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim consolidated financial
statements of Parent included in such reports (collectively, the "Parent
Financial Statements") have been prepared in accordance with generally accepted
accounting principles
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applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and fairly present the financial position of Parent and its
subsidiaries as of the dates thereof and the results of their operations and
changes in financial position for the periods then ended, subject, in the case
of the unaudited interim financial statements, to normal year-end and audit
adjustments and any other adjustments described therein.
SECTION 4.6. ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
the Parent SEC Reports or as heretofore disclosed to the Company in writing with
respect to acquisitions or potential transactions or commitments, neither Parent
nor any of its subsidiaries had at December 31, 1995, or has incurred since that
date, any liabilities or obligations (whether absolute, accrued, contingent or
otherwise) of any nature, except: (a) liabilities, obligations or contingencies
(i) which are accrued or reserved against in the Parent Financial Statements or
reflected in the notes thereto or (ii) which were incurred after December 31,
1995, and were incurred in the ordinary course of business and consistent with
past practices; (b) liabilities, obligations or contingencies which (i) would
not, in the aggregate, have a material adverse effect on the business,
operations, properties, assets, condition (financial or other) or results of
operations of Parent and its subsidiaries, taken as a whole, or (ii) have been
discharged or paid in full prior to the date hereof; and (c) liabilities and
obligations which are of a nature not required to be reflected in the
consolidated financial statements of Parent and its subsidiaries prepared in
accordance with generally accepted accounting principles consistently applied
and which were incurred in the ordinary course of business.
SECTION 4.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
most recent Parent SEC Report that contains consolidated financial statements of
Parent, there has not been any material adverse change in the business,
operations, properties, assets, liabilities, condition (financial or other) or
results of operations of Parent and its subsidiaries, taken as a whole, except
for changes that affect the industries in which Parent and its subsidiaries
operate generally.
SECTION 4.8. LITIGATION. Except as disclosed in the Parent SEC Reports,
there are no claims, suits, actions or proceedings pending or, to the knowledge
of Parent, threatened against, relating to or affecting Parent or any of its
subsidiaries, before any court, governmental department, commission, agency,
instrumentality or authority, or any arbitrator that seek to restrain or enjoin
the consummation of the Merger or which could reasonably be expected, either
alone or in the aggregate with all such claims, actions or proceedings, to
materially and adversely affect the business, operations, properties, assets,
condition (financial or other) or results of operations of Parent and its
subsidiaries, taken as a whole. Except as set forth in the Parent SEC Reports,
neither Parent nor any of its subsidiaries is subject to any judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or authority or any arbitrator which prohibits or
restricts the consummation of the transactions contemplated hereby or would have
any material adverse effect on the business, operations, properties, assets,
condition (financial or other) or results of operations of Parent and its
subsidiaries, taken as a whole.
SECTION 4.9. REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information to be supplied by Parent or its subsidiaries for inclusion in (a)
the Registration Statement on Form S-4 to be filed under the Securities Act with
the SEC by Parent in connection with the Merger for the purpose of registering
the shares of Parent Common Stock to be issued in the Merger (the "Registration
Statement") or (b) the proxy statement to be distributed in connection with the
Company's and Parent's meetings of their respective stockholders to vote upon
this Agreement and the transactions contemplated hereby (the "Proxy Statement"
and, together with the prospectus included in the Registration Statement, the
"Joint Proxy Statement/Prospectus") will, in the case of the Proxy Statement or
any amendments thereof or supplements thereto, at the time of the mailing of the
Proxy Statement and any amendments or supplements thereto, and
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at the time of the meetings of stockholders of the Company and Parent to be held
in connection with the transactions contemplated by this Agreement, or, in the
case of the Registration Statement, as amended or supplemented, at the time it
becomes effective and at the time of such meetings of the stockholders of the
Company and Parent, 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 the light of the circumstances under which they
are made, not misleading. The Joint Proxy Statement/Prospectus will, as of its
mailing date, comply as to form in all material respects with all applicable
laws, including the provisions of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder, except that no representation
is made by Parent or Subsidiary with respect to information supplied by the
Company or the stockholders of the Company for inclusion therein.
SECTION 4.10. NO VIOLATION OF LAW. Except as disclosed in the Parent SEC
Reports, neither Parent nor any of its subsidiaries is in violation of, or has
been given notice or been charged with any violation of, any law, statute,
order, rule, regulation, ordinance, or judgment (including, without limitation,
any applicable environmental law, ordinance or regulation) of any governmental
or regulatory body or authority, except for violations which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of Parent and its subsidiaries, taken as a whole. Except
as disclosed in the Parent SEC Reports, as of the date of this Agreement, to the
knowledge of Parent, no investigation or review by any governmental or
regulatory body or authority is pending or threatened, nor has any governmental
or regulatory body or authority indicated an intention to conduct the same,
other than, in each case, those the outcome of which, as far as reasonably can
be foreseen, will not have a material adverse effect on the business,
operations, properties, assets, condition (financial or other) or results of
operations of Parent and its subsidiaries, taken as a whole. Parent and its
subsidiaries have all permits, licenses, franchises, variances, exemptions,
orders and other governmental authorizations, consents and approvals necessary
to conduct their businesses as presently conducted (collectively, the "Parent
Permits"), except for permits, licenses, franchises, variances, exemptions,
orders, authorizations, consents and approvals the absence of which, alone or in
the aggregate, would not have a material adverse effect on the business,
operations, properties, assets, condition (financial or other) or results of
operations of Parent and its subsidiaries, taken as a whole. Parent and its
subsidiaries are not in violation of the terms of any Parent Permit, except for
delays in filing reports or violations which, alone or in the aggregate, would
not have a material adverse effect on the business, operations, properties,
assets, condition (financial or other) or results of operations of Parent and
its subsidiaries, taken as a whole.
SECTION 4.11. COMPLIANCE WITH AGREEMENTS. Except as disclosed in the
Parent SEC Reports, Parent and each of its subsidiaries are not in breach or
violation of or in default in the performance or observance of any term or
provision of, and no event has occurred which, with lapse of time or action by a
third party, could result in a default under (a) the respective charter, by-laws
or other similar organizational instruments of Parent or any of its subsidiaries
or (b) any contract, commitment, agreement, indenture, mortgage, loan agreement,
note, lease, bond, license, approval or other instrument to which Parent or any
of its subsidiaries is a party or by which any of them is bound or to which any
of their property is subject, other than, in the case of clause (b) of this
Section 4.11, breaches, violations and defaults which would not have, in the
aggregate, a material adverse effect on the business, operations, properties,
assets, condition (financial or other) or results of operations of Parent and
its subsidiaries, taken as a whole.
SECTION 4.12. TAXES. (a) Parent and its subsidiaries have (i) duly filed
with the appropriate governmental authorities all Tax Returns (as defined in
Section 4.12(c)) required to be filed by them for all periods ending on or prior
to the Effective Time, other than those Tax Returns the failure of which to file
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would not have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
Parent and its subsidiaries, taken as a whole, and such Tax Returns are true,
correct and complete in all material respects and (ii) duly paid in full or made
adequate provision for the payment of all Taxes (as defined in Section 4.12(b))
for all past and current periods. The liabilities and reserves for Taxes
reflected in the Parent balance sheet included in the latest Parent SEC Report
are adequate to cover all Taxes for all periods ending at or prior to the date
of such balance sheet and there is no liability for Taxes for any period
beginning after such date other than Taxes arising in the ordinary course of
business. There are no material liens for Taxes upon any property or assets of
Parent or any subsidiary thereof, except for liens for Taxes not yet due. There
are no unresolved issues of law or fact arising out of a notice of deficiency,
proposed deficiency or assessment from the Internal Revenue Service (the "IRS")
or any other governmental taxing authority with respect to Taxes of the Parent
or any of its subsidiaries which, if decided adversely, singly or in the
aggregate, would have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
Parent and its subsidiaries, taken as a whole. Neither Parent nor its
subsidiaries has waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency other
than waivers and extensions which are no longer in effect. Neither Parent nor
any of its subsidiaries is a party to any agreement providing for the allocation
or sharing of Taxes with any entity that is not, directly or indirectly, a
wholly-owned corporate subsidiary of Parent other than agreements the
consequences of which are fully and adequately reserved for in the Parent
Financial Statements. Neither Parent nor any of its corporate subsidiaries has,
with regard to any assets or property held, acquired or to be acquired by any of
them, filed a consent to the application of Section 341(f) of the Code.
(b) For purposes of this Agreement, the term "Taxes" shall mean all taxes,
including, without limitation, income, gross receipts, excise, property, sales,
withholding, social security, occupation, use, service, license, payroll,
franchise, transfer and recording taxes, fees and charges, windfall profits,
severance, customs, import, export, employment or similar taxes, charges, fees,
levies or other assessments imposed by the United States, or any state, local or
foreign government or subdivision or agency thereof, whether computed on a
separate, consolidated, unitary, combined or any other basis, and such term
shall include any interest, fines, penalties or additional amounts and any
interest in respect of any additions, fines or penalties attributable or imposed
or with respect to any such taxes, charges, fees, levies or other assessments.
(c) For purposes of this Agreement, the term "Tax Return" shall mean any
return, report or other document or information required to be supplied to a
taxing authority in connection with Taxes.
SECTION 4.13. EMPLOYEE BENEFIT PLANS; ERISA. (a) Except as disclosed in
the Parent SEC Reports, at the date hereof, Parent and its subsidiaries do not
maintain or contribute to or have any obligation or liability to or with respect
to any material employee benefit plans, programs, arrangements or practices
(such plans, programs, arrangements or practices of Parent and its subsidiaries
being referred to as the "Parent Plans"), including employee benefit plans
within the meaning set forth in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or other similar material
arrangements for the provision of benefits (excluding any "Multi-employer Plan"
within the meaning of Section 3(37) of ERISA or a "Multiple Employer Plan"
within the meaning of Section 413(c) of the Code). The Parent Disclosure
Schedule lists all Multi-employer Plans to which any of them makes contributions
or has any obligation or liability to make contributions. Neither Parent nor
any of its subsidiaries maintains or has any liability with respect to any
Multiple Employer Plan. Neither Parent nor any of its subsidiaries has any
obligation to create or contribute to any additional such plan, program,
arrangement or practice or to amend any such plan, program, arrangement or
practice so as to increase benefits or contributions
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thereunder, except as required under the terms of the Parent Plans, under
existing collective bargaining agreements or to comply with applicable law.
(b) Except as disclosed in the Parent SEC Reports, (i) there have been no
prohibited transactions within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code with respect to any of the Parent Plans that could
result in penalties, taxes or liabilities which, singly or in the aggregate,
could have a material adverse effect on the business, operations, properties,
assets, condition (financial or other) or results of operations of Parent and
its subsidiaries, taken as a whole, (ii) except for premiums due, there is no
outstanding material liability, whether measured alone or in the aggregate,
under Title IV of ERISA with respect to any of the Parent Plans, (iii) neither
the Pension Benefit Guaranty Corporation nor any plan administrator has
instituted proceedings to terminate any of the Parent Plans subject to Title IV
of ERISA other than in a "standard termination" described in Section 4041(b) of
ERISA, (iv) none of the Parent Plans has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of each
of the Parent Plans ended prior to the date of this Agreement, (v) the current
present value of all projected benefit obligations under each of the Parent
Plans which is subject to Title IV of ERISA did not, as of its latest valuation
date, exceed the then current value of the assets of such plan allocable to such
benefit liabilities by more than the amount, if any, disclosed in the Parent SEC
Reports as of March 31, 1996, based upon reasonable actuarial assumptions
currently utilized for such Parent Plan, (vi) each of the Parent Plans has been
operated and administered in all material respects in accordance with applicable
laws during the period of time covered by the applicable statute of limitations,
(vii) each of the Parent Plans which is intended to be "qualified" within the
meaning of Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified and such determination has not been modified,
revoked or limited by failure to satisfy any condition thereof or by a
subsequent amendment thereto or a failure to amend, except that it may be
necessary to make additional amendments retroactively to maintain the
"qualified" status of such Parent Plans, and the period for making any such
necessary retroactive amendments has not expired, (viii) with respect to Multi-
employer Plans, neither Parent nor any of its subsidiaries has made or suffered
a "complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in Sections 4203, 4204 and 4205 of ERISA and, to the best
knowledge of Parent and its subsidiaries, no event has occurred or is expected
to occur which presents a material risk of a complete or partial withdrawal
under said Sections 4203, 4204 and 4205, (ix) to the best knowledge of Parent
and its subsidiaries, there are no material pending, threatened or anticipated
claims involving any of the Parent Plans other than claims for benefits in the
ordinary course, (x) Parent and its subsidiaries have no current material
liability under Title IV of ERISA, and Parent and its subsidiaries do not
reasonably anticipate that any such liability will be asserted against Parent or
any of its subsidiaries, and (xi) no act, omission or transaction (individually
or in the aggregate) has occurred with respect to any Parent Plan that has
resulted or could result in any material liability (direct or indirect) of
Parent or any subsidiary under Sections 409 or 502(c)(i) or (l) of ERISA or
Chapter 43 of Subtitle (A) of the Code. None of the Parent Controlled Group
Plans has an "accumulated funding deficiency" (as defined in Section 302 of
ERISA and Section 412 of the Code) or is required to provide security to a
Parent Plan pursuant to Section 401(a)(29) of the Code. Each Parent Plan can be
unilaterally terminated by Parent or a subsidiary at any time without material
liability, other than for amounts previously reflected in the financial
statements (or notes thereto) included in the Parent SEC Reports.
(c) The Parent SEC Reports contain a true and complete summary or list of
or otherwise describe all material employment contracts and other employee
benefit arrangements with "change of control" or similar provisions and all
severance agreements with executive officers.
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(d) There are no agreements which will or may provide payments to any
officer, employee, stockholder, or highly compensated individual which will be
"parachute payments" under Code Section 280G that are nondeductible to Parent or
subject to tax under Code Section 4999 for which Parent or any ERISA Affiliate
would have withholding liability.
SECTION 4.14. LABOR CONTROVERSIES. Except as disclosed in the Parent SEC
Reports, (a) there are no significant controversies pending or, to the knowledge
of Parent, threatened between Parent or its subsidiaries and any representatives
of any of their employees and (b) to the knowledge of Parent, there are no
material organizational efforts presently being made involving any of the
presently unorganized employees of Parent and its subsidiaries except for such
controversies and organizational efforts which, singly or in the aggregate,
could not reasonably be expected to materially and adversely affect the
business, operations, properties, assets, condition (financial or other) or
results of operations of Parent and its subsidiaries, taken as a whole.
SECTION 4.15. ENVIRONMENTAL MATTERS. (a) Except as disclosed in the
Parent SEC Reports, (i) Parent and its subsidiaries have conducted their
respective businesses in compliance with all applicable Environmental Laws
(defined in Section 4.15(b)), including, without limitation, having all permits,
licenses and other approvals and authorizations necessary for the operation of
their respective businesses as presently conducted, (ii) none of the properties
owned by Parent or any of its subsidiaries contain any Hazardous Substance
(defined in Section 4.15(c)) as a result of any activity of Parent or any of its
subsidiaries in amounts exceeding the levels permitted by applicable
Environmental Laws, (iii) neither Parent nor any of its subsidiaries has
received any notices, demand letters or requests for information from any
Federal, state, local or foreign governmental entity or third party indicating
that Parent or any of its subsidiaries may be in violation of, or liable under,
any Environmental Law in connection with the ownership or operation of their
businesses, (iv) there are no civil, criminal or administrative actions, suits,
demands, claims, hearings, investigations or proceedings pending or threatened,
against Parent or any of its subsidiaries relating to any violation, or alleged
violation, of any Environmental Law, (v) no reports have been filed, or are
required to be filed, by Parent or any of its subsidiaries concerning the
release of any Hazardous Substance or the threatened or actual violation of any
Environmental Law, (vi) no Hazardous Substance has been disposed of, released or
transported in violation of any applicable Environmental Law from any properties
owned by Parent or any of its subsidiaries as a result of any activity of Parent
or any of its subsidiaries during the time such properties were owned, leased or
operated by Parent or any of its subsidiaries, (vii) no underground storage
tanks have been installed, closed or removed from any properties owned by Parent
or any of its subsidiaries during, in the case of Parent, the time such
properties were owned, leased or operated by Parent and during, in the case of
each subsidiary, the time such subsidiary has been owned by Parent, (viii) there
is no asbestos or asbestos containing material present in any of the properties
owned by Parent and its subsidiaries, and no asbestos has been removed from any
of such properties during the time such properties were owned, leased or
operated by Parent or any of its subsidiaries, and (ix) neither Parent, its
subsidiaries nor any of their respective properties are subject to any
liabilities or expenditures (fixed or contingent) relating to any suit,
settlement, court order, administrative order, regulatory requirement, judgment
or claim asserted or arising under any Environmental Law, except for violations
of the foregoing clauses (i) through (ix) that, singly or in the aggregate,
would not reasonably be expected to have a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of Parent and its subsidiaries, taken as a whole.
(b) As used herein, "Environmental Law" means any Federal, state, local
or foreign law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, legal doctrine, order,
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judgment, decree, injunction, requirement or agreement with any governmental
entity relating to (x) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource) or to human health or safety or (y)
the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Hazardous Substances, in each case as amended and as in effect on the Closing
Date. The term "Environmental Law" includes, without limitation, (i) the
Federal Comprehensive Environmental Response Compensation and Liability Act of
1980, the Superfund Amendments and Reauthorization Act, the Federal Water
Pollution Control Act of 1972, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976 (including
the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste
Disposal Act and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Occupational Safety
and Health Act of 1970, each as amended and as in effect on the Closing Date,
and (ii) any common law or equitable doctrine (including, without limitation,
injunctive relief and tort doctrines such as negligence, nuisance, trespass and
strict liability) that may impose liability or obligations for injuries or
damages due to, or threatened as a result of, the presence of, effects of or
exposure to any Hazardous Substance.
(c) As used herein, "Hazardous Substance" means any substance presently
or hereafter listed, defined, designated or classified as hazardous, toxic,
radioactive, or dangerous, or otherwise regulated, under any Environmental Law.
Hazardous Substance includes any substance to which exposure is regulated by any
government authority or any Environmental Law including, without limitation, any
toxic waste, pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste, industrial substance or petroleum or any
derivative or by-product thereof, radon, radioactive material, asbestos, or
asbestos containing material, urea formaldehyde foam insulation, lead or
polychlorinated biphenyls.
SECTION 4.16. NON-COMPETITION AGREEMENTS. Neither Parent nor any
subsidiary of Parent is a party to any agreement which purports to restrict or
prohibit in any material respect any of them from, directly or indirectly,
engaging in any business involving the collection, interim storage, transfer,
recovery, processing, recycling, marketing or disposal of rubbish, garbage,
paper, textile wastes, chemical or hazardous wastes, liquid and other wastes or
any other material business currently engaged in by Parent or the Company, or
any corporations affiliated with either of them. None of Parent's officers,
directors or key employees is a party to any agreement which, by virtue of such
person's relationship with Parent, restricts in any material respect Parent or
any subsidiary of Parent from, directly or indirectly, engaging in any of the
businesses described above.
SECTION 4.17. TITLE TO ASSETS. Parent and each of its subsidiaries has
good and marketable title in fee simple to all its real property and good title
to all its leasehold interests and other properties as reflected in the most
recent balance sheet included in the Parent Financial Statements, except for
such properties and assets that have been disposed of in the ordinary course of
business since the date of such balance sheet, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever, except (i) the
lien for current taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value or interfere with the present use of the property subject thereto or
affected thereby, or otherwise materially impair the Parent's business
operations (in the manner presently carried on by the Parent), or (iii) as
disclosed in the Parent SEC Reports, and except for such matters which, singly
or in the aggregate, could not reasonably be expected to materially and
adversely affect the business, operations, properties, assets, condition
(financial or other) or results of operations of Parent
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and its subsidiaries, taken as a whole. All leases under which Parent leases
any real or personal property are in good standing, valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing default or event which with notice or lapse of time or both
would become a default other than failures to be in good standing, valid and
effective and defaults under such leases which in the aggregate will not
materially and adversely affect the business, operations, properties, assets,
condition (financial or other) or results of operations of Parent and its
subsidiaries, taken as a whole.
SECTION 4.18. REORGANIZATION AND POOLING OF INTERESTS. None of the
Parent, Subsidiary or, to their knowledge, any of their affiliates has taken or
agreed or intends to take any action or has any knowledge of any fact or
circumstance that would prevent the Merger from (a) constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code or
(b) being treated for financial accounting purposes as a "pooling of interests"
in accordance with generally accepted accounting principles and the rules,
regulations and interpretations of the SEC (a "Pooling Transaction").
SECTION 4.19. PARENT STOCKHOLDERS' APPROVAL. The affirmative vote of
stockholders of Parent required for approval and adoption of this Agreement and
the Merger is a majority of the shares of Parent Common Stock present in person
or by proxy at a meeting of such stockholders and entitled to vote thereat.
SECTION 4.20. BROKERS AND FINDERS. Except for the fees and expenses
payable to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), which
fees are reflected in its agreement with Parent (a copy of which has been
delivered to the Company), Parent has not entered into any contract, arrangement
or understanding with any person or firm which may result in the obligation of
Parent to pay any finder's fees, brokerage or agent commissions or other like
payments in connection with the transactions contemplated hereby. Except for
the fees and expenses paid or payable to DLJ, there is no claim for payment by
Parent of any investment banking fees, finder's fees, brokerage or agent
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
SECTION 4.21. OPINION OF FINANCIAL ADVISOR. The financial advisor of
Parent, DLJ, has rendered a written opinion to the Board of Directors of Parent
to the effect that the Exchange Ratio is fair from a financial point of view to
Parent.
SECTION 4.22. OWNERSHIP OF COMPANY COMMON STOCK. Neither Parent nor any
of its subsidiaries beneficially owns any shares of Company Common Stock as of
the date hereof.
SECTION 4.23. PARENT DISCLOSURE SCHEDULE. The information set forth in
the Parent Disclosure Schedule does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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ARTICLE V
Representations and Warranties of the Company
The Company represents and warrants to Parent and Subsidiary that, except
as set forth in the disclosure schedule dated as of the date hereof and signed
by an authorized officer of the Company (the "Company Disclosure Schedule"),
each of which exceptions shall specifically identify the relevant Section hereof
to which it relates:
SECTION 5.1. ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority to
own, lease and operate its assets and properties and to carry on its business as
it is now being conducted. The Company is qualified to do business and is in
good standing in each jurisdiction in which the properties owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified and in good
standing will not, when taken together with all other such failures, have a
material adverse effect on the business, operations, properties, assets,
condition (financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole. True, accurate and complete copies of the
Company's Articles of Incorporation and By-laws, in each case as in effect on
the date hereof, including all amendments thereto, have heretofore been
delivered to Parent.
SECTION 5.2. CAPITALIZATION. (a) The authorized capital stock of the
Company consists of 100,000,000 shares of Company Common Stock and 500,000
shares of preferred stock, par value $10.00 per share ("Company Preferred
Stock"). As of June 15, 1996, (i) 25,030,471 shares of Company Common Stock
were issued and outstanding, all of which were validly issued and are fully
paid, nonassessable and free of preemptive rights, (ii) no shares of Company
Common Stock and no shares of Company Preferred Stock were held in the treasury
of the Company, (iii) 1,001,866 shares of Company Common Stock were reserved for
issuance upon exercise of options issued and outstanding pursuant to the
Company's 1989 Stock Option Plan, as amended, (iv) 1,461,360 shares of Company
Common Stock were reserved for issuance upon exercise of options issued and
outstanding pursuant to the Company's 1994 Long-Term Incentive Plan, (v) 607,266
shares of Company Common Stock were reserved for issuance pursuant to the
Company's 1991 Employee Stock Purchase Plan, (vi) 2,389,610 shares of Company
Common Stock were reserved for issuance upon conversion of outstanding
convertible debentures of the Company, (vii) 103,264 shares of Company Common
Stock were reserved for issuance upon exercise of outstanding warrants, (viii)
no shares of Company Preferred Stock were issued and outstanding and (ix) 83,435
shares of Company Preferred Stock were reserved for issuance upon exercise of
Rights ("Preferred Stock Purchase Rights") issued pursuant to that certain
Rights Agreement dated as of December 1, 1991 between the Company and First
City, Texas -Houston, N.A., a national banking association, as amended by
Amendment No. 1 thereto between the Company and Chemical Bank, a New York State
banking corporation, (the "Preferred Stock Rights Agreement"). Except as set
forth in the preceding sentence, no other Awards (as such term is defined in the
Company's 1994 Long-Term Incentive Plan) were issued and outstanding as of June
15, 1996. A true and correct copy of the Preferred Stock Rights Agreement has
been made available to Parent. Assuming conversion of all outstanding
convertible debentures of the Company and the exercise of all outstanding
options, warrants or rights (other than the Preferred Stock Purchase Rights
issued under the Preferred Stock Rights Agreement) to purchase Company Common
Stock, as of June 15, 1996, there would be 29,988,071 shares of Company Common
Stock issued and outstanding.
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(b) Except as disclosed in the Company SEC Reports (as defined in Section
5.5), as of the date hereof there were no outstanding subscriptions, options,
calls, contracts, commitments, understandings, restrictions, arrangements,
rights or warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement and also including any
rights plan or other anti-takeover agreement, obligating the Company or any
subsidiary of the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of the capital stock of the Company or
obligating the Company or any subsidiary of the Company to grant, extend or
enter into any such agreement or commitment. There are no voting trusts,
proxies or other agreements or understandings to which the Company or any
subsidiary of the Company is a party or is bound with respect to the voting of
any shares of capital stock of the Company other than voting agreements executed
in connection with this Agreement.
SECTION 5.3. SUBSIDIARIES. Each direct and indirect corporate
subsidiary of the Company is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has the
requisite power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted. Each
subsidiary of the Company is qualified to do business, and is in good standing,
in each jurisdiction in which the properties owned, leased or operated by it or
the nature of the business conducted by it makes such qualification necessary,
except where the failure to be so qualified and in good standing will not, when
taken together with all such other failures, have a material adverse effect on
the business, operations, properties, assets, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole.
All of the outstanding shares of capital stock of each corporate subsidiary of
the Company are validly issued, fully paid, nonassessable and free of preemptive
rights and are owned directly or indirectly by the Company free and clear of any
liens, claims, encumbrances, security interests, equities, charges and options
of any nature whatsoever. There are no subscriptions, options, warrants,
rights, calls, contracts, voting trusts, proxies or other commitments,
understandings, restrictions or arrangements relating to the issuance, sale,
voting, transfer, ownership or other rights with respect to any shares of
capital stock of any corporate subsidiary of the Company, including any right of
conversion or exchange under any outstanding security, instrument or agreement.
SECTION 5.4. AUTHORITY; NON-CONTRAVENTION; APPROVALS. (a) The Company
has full corporate power and authority to enter into this Agreement and, subject
to the Company Stockholders' Approval (as defined in Section 7.3(a)) and the
Company Required Statutory Approvals (as defined in Section 5.4(c)), to
consummate the transactions contemplated hereby. The Board of Directors of the
Company has at a meeting duly called and held and at which a quorum was present
and acting throughout, by the requisite affirmative vote of the directors of the
Company, (i) determined that the Merger is in the best interests of the Company
and its stockholders, (ii) approved this Agreement and the Merger and (iii)
determined that such approval satisfies the requirements of subparagraph A.2 of
Article Eighth of the Company's Certificate of Incorporation and, as a result,
renders inapplicable to the Merger and this Agreement the other provisions of
paragraph A of Article Eighth. No other corporate proceedings on the part of
the Company are necessary to authorize the execution and delivery of this
Agreement or, except for the Company Stockholders' Approval, the consummation by
the Company of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Company, and, assuming the due authorization,
execution and delivery hereof by Parent and Subsidiary, constitutes a valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that such enforcement may be subject to (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and (b)
general equitable principles. Without limitation of the foregoing, each of the
covenants and obligations of the Company set forth in
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Sections 6.1, 6.5, 7.1, 7.2, 7.3, 7.6, 7.7, 7.8, 7.10, 7.12 and 7.14 is valid,
legally binding and enforceable (subject as aforesaid) notwithstanding the
absence of the Company Stockholders' Approval.
(b) The execution and delivery of this Agreement by the Company do not
violate, conflict with or result in a breach of any provision of, or constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company or any of its
subsidiaries under any of the terms, conditions or provisions of (i) the
respective charters or by-laws of the Company or any of its subsidiaries, (ii)
any statute, law, ordinance, rule, regulation, judgment, decree, order,
injunction, writ, permit or license of any court or governmental authority
applicable to the Company or any of its subsidiaries or any of their respective
properties or assets, or (iii) any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which the Company or any of
its subsidiaries is now a party or by which the Company or any of its
subsidiaries or any of their respective properties or assets may be bound or
affected. The consummation by the Company of the transactions contemplated
hereby will not result in any violation, conflict, breach, termination,
acceleration or creation of liens under any of the terms, conditions or
provisions described in clauses (i) through (iii) of the preceding sentence,
subject (x) in the case of the terms, conditions or provisions described in
clause (ii) above, to obtaining (prior to the Effective Time) the Company
Required Statutory Approvals and the Company Stockholders' Approval and (y) in
the case of the terms, conditions or provisions described in clause (iii) above,
to obtaining (prior to the Effective Time) consents required from commercial
lenders, lessors or other third parties as specified in the Company Disclosure
Schedule. Excluded from the foregoing sentences of this paragraph (b), insofar
as they apply to the terms, conditions or provisions described in clauses (ii)
and (iii) of the first sentence of this paragraph (b), are such violations,
conflicts, breaches, defaults, terminations, accelerations or creations of
liens, security interests, charges or encumbrances that would not, in the
aggregate, have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
the Company and its subsidiaries, taken as a whole.
(c) Except for (i) the filings by the Company required by the HSR Act,
(ii) the filing of the Joint Proxy Statement/Prospectus with the SEC pursuant to
the Exchange Act, (iii) the making of the Merger Filing with the Secretary of
State of the State of Delaware in connection with the Merger and (iv) any
required filings with or approvals from applicable state environmental
authorities, public service commissions and public utility commissions (the
filings and approvals referred to in clauses (i) through (iv) are collectively
referred to as the "Company Required Statutory Approvals"), no declaration,
filing or registration with, or notice to, or authorization, consent or approval
of, any governmental or regulatory body or authority is necessary for the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, other than such
declarations, filings, registrations, notices, authorizations, consents or
approvals which, if not made or obtained, as the case may be, would not, in the
aggregate, have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
the Company and its subsidiaries, taken as a whole.
SECTION 5.5. REPORTS AND FINANCIAL STATEMENTS. Since January 1, 1994,
the Company has filed with the SEC all material forms, statements, reports and
documents (including all exhibits, post-effective amendments and supplements
thereto) required to be filed by it under each of the Securities Act, the
Exchange Act and the respective rules and regulations thereunder, all of which,
as amended if applicable,
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complied when filed in all material respects with all applicable requirements of
the appropriate act and the rules and regulations thereunder. The Company has
previously delivered to Parent copies (including all exhibits, post-effective
amendments and supplements thereto) of its (a) Annual Reports on Form 10-K for
the year ended December 31, 1995, and for the immediately preceding fiscal
year, as filed with the SEC, (b) proxy and information statements relating to
(i) all meetings of its stockholders (whether annual or special) and (ii)
actions by written consent in lieu of a stockholders' meeting from January 1,
1994, until the date hereof, and (c) all other reports, including quarterly
reports, and registration statements filed by the Company with the SEC since
January 1, 1994 (other than registration statements filed on Form S-8) (the
documents referred to in clauses (a), (b) and (c) filed prior to the date hereof
are collectively referred to as the "Company SEC Reports"). The Company SEC
Reports are identified on the Company Disclosure Schedule. As of their
respective dates, the Company SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim consolidated financial
statements of the Company included in such reports (collectively, the "Company
Financial Statements") have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and fairly present the financial position of
the Company and its subsidiaries as of the dates thereof and the results of
their operations and changes in financial position for the periods then ended,
subject, in the case of the unaudited interim financial statements, to normal
year-end and audit adjustments and any other adjustments described therein.
SECTION 5.6. ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
the Company SEC Reports or as heretofore disclosed to Parent in writing with
respect to acquisitions or potential transactions or commitments, neither the
Company nor any of its subsidiaries had at December 31, 1995, or has incurred
since that date, any liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of any nature, except (a) liabilities, obligations or
contingencies (i) which are accrued or reserved against in the Company Financial
Statements or reflected in the notes thereto or (ii) which were incurred after
December 31, 1995, and were incurred in the ordinary course of business and
consistent with past practices, (b) liabilities, obligations or contingencies
which (i) would not, in the aggregate, have a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole or
(ii) have been discharged or paid in full prior to the date hereof, and (c)
liabilities and obligations which are of a nature not required to be reflected
in the consolidated financial statements of the Company and its subsidiaries
prepared in accordance with generally accepted accounting principles
consistently applied and which were incurred in the ordinary course of business.
SECTION 5.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
most recent Company SEC Report that contains consolidated financial statements
of the Company, there has not been any material adverse change in the business,
operations, properties, assets, liabilities, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole,
except for changes that affect the industries in which the Company and its
subsidiaries operate generally.
SECTION 5.8. LITIGATION. Except as referred to in the Company SEC
Reports, there are no claims, suits, actions or proceedings pending or, to the
knowledge of the Company, threatened against, relating to or affecting the
Company or any of its subsidiaries, before any court, governmental department,
commission, agency, instrumentality or authority, or any arbitrator that seek to
restrain the consummation of the Merger or which could reasonably be expected,
either alone or in the aggregate with all such claims,
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actions or proceedings, to materially and adversely affect the business,
operations, properties, assets, condition (financial or other) or results of
operations of the Company and its subsidiaries, taken as a whole. Except as
referred to in the Company SEC Reports, neither the Company nor any of its
subsidiaries is subject to any judgment, decree, injunction, rule or order of
any court, governmental department, commission, agency, instrumentality or
authority, or any arbitrator which prohibits or restricts the consummation of
the transactions contemplated hereby or would have any material adverse effect
on the business, operations, properties, assets, condition (financial or other)
or results of operations of the Company and its subsidiaries, taken as a whole.
SECTION 5.9. REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information to be supplied by the Company or its subsidiaries for inclusion in
(a) the Registration Statement or (b) the Proxy Statement will, in the case of
the Proxy Statement or any amendments thereof or supplements thereto, at the
time of the mailing of the Proxy Statement and any amendments or supplements
thereto, and at the time of the meetings of stockholders of the Company and
Parent to be held in connection with the transactions contemplated by this
Agreement or, in the case of the Registration Statement, as amended or
supplemented, at the time it becomes effective and at the time of such meetings
of the stockholders of the Company and Parent, 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 the light of the
circumstances under which they are made, not misleading. The Joint Proxy
Statement/Prospectus will comply, as of its mailing date, as to form in all
material respects with all applicable laws, including the provisions of the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation is made by the Company with respect to
information supplied by Parent, Subsidiary or any stockholder of Parent for
inclusion therein.
SECTION 5.10. NO VIOLATION OF LAW. Except as disclosed in the Company SEC
Reports, neither the Company nor any of its subsidiaries is in violation of or
has been given notice or been charged with any violation of, any law, statute,
order, rule, regulation, ordinance or judgment (including, without limitation,
any applicable environmental law, ordinance or regulation) of any governmental
or regulatory body or authority, except for violations which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole.
Except as disclosed in the Company SEC Reports, as of the date of this
Agreement, to the knowledge of the Company, no investigation or review by any
governmental or regulatory body or authority is pending or threatened, nor has
any governmental or regulatory body or authority indicated an intention to
conduct the same, other than, in each case, those the outcome of which, as far
as reasonably can be foreseen, will not have a material adverse effect on the
business, operations, properties, assets, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole.
The Company and its subsidiaries have all permits, licenses, franchises,
variances, exemptions, orders and other governmental authorizations, consents
and approvals necessary to conduct their businesses as presently conducted
(collectively, the "Company Permits"), except for permits, licenses, franchises,
variances, exemptions, orders, authorizations, consents and approvals the
absence of which, alone or in the aggregate, would not have a material adverse
effect on the business, operations, properties, assets, condition (financial or
other) or results of operations of the Company and its subsidiaries, taken as a
whole. The Company and its subsidiaries are not in violation of the terms of
any Company Permit, except for delays in filing reports or violations which,
alone or in the aggregate, would not have a material adverse effect on the
business, operations, properties, assets, condition (financial or other),
results of operations of the Company and its subsidiaries, taken as a whole.
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SECTION 5.11. COMPLIANCE WITH AGREEMENTS. Except as disclosed in the
Company SEC Reports, the Company and each of its subsidiaries are not in breach
or violation of or in default in the performance or observance of any term or
provision of, and no event has occurred which, with lapse of time or action by a
third party, could result in a default under, (a) the respective charter, by-
laws or similar organizational instruments of the Company or any of its
subsidiaries or (b) any contract, commitment, agreement, indenture, mortgage,
loan agreement, note, lease, bond, license, approval or other instrument to
which the Company or any of its subsidiaries is a party or by which any of them
is bound or to which any of their property is subject, other than, in the case
of clause (b) of this Section 5.11, breaches, violations and defaults which
would not have, in the aggregate, a material adverse effect on the business,
operations, properties, assets, condition (financial or other) or results of
operations of the Company and its subsidiaries, taken as a whole.
SECTION 5.12. TAXES. The Company and its subsidiaries have (i) duly
filed with the appropriate governmental authorities all Tax Returns required to
be filed by them for all periods ending on or prior to the Effective Time, other
than those Tax Returns the failure of which to file would not have a material
adverse effect on the business, operations, properties, assets, condition
(financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole, and such Tax Returns are true, correct and
complete in all material respects, and (ii) duly paid in full or made adequate
provision for the payment of all Taxes for all past and current periods. The
liabilities and reserves for Taxes reflected in the Company balance sheet
included in the latest Company SEC Report are adequate to cover all Taxes for
all periods ending at or prior to the date of such balance sheet and there is no
liability for Taxes for any period beginning after such date other than Taxes
arising in the ordinary course of business. There are no material liens for
Taxes upon any property or asset of the Company or any subsidiary thereof,
except for liens for Taxes not yet due. There are no unresolved issues of law
or fact arising out of a notice of deficiency, proposed deficiency or assessment
from the IRS or any other governmental taxing authority with respect to Taxes of
the Company or any of its subsidiaries which, if decided adversely, singly or in
the aggregate, would have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
the Company and its subsidiaries, taken as a whole. Neither the Company nor its
subsidiaries has waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency other
than waivers and extensions which are no longer in effect. Neither the Company
nor any of its subsidiaries is a party to any agreement providing for the
allocation or sharing of Taxes with any entity that is not, directly or
indirectly, a wholly-owned corporate subsidiary of Company other than agreements
the consequences of which are fully and adequately reserved for in the Company
Financial Statements. Neither the Company nor any of its corporate subsidiaries
has, with regard to any assets or property held, acquired or to be acquired by
any of them, filed a consent to the application of Section 341(f) of the Code.
SECTION 5.13. EMPLOYEE BENEFIT PLANS; ERISA. (a) Except as disclosed in
the Company SEC Reports, at the date hereof, the Company and its subsidiaries do
not maintain or contribute to or have any obligation or liability to or with
respect to any material employee benefit plans, programs, arrangements or
practices (such plans, programs, arrangements or practices of the Company and
its subsidiaries being referred to as the "Company Plans"), including employee
benefit plans within the meaning set forth in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or other similar
material arrangements for the provision of benefits (excluding any "Multi-
employer Plan" within the meaning of Section 3(37) of ERISA or a "Multiple
Employer Plan" within the meaning of Section 413(c) of the Code). The Company
Disclosure Schedule lists all Multi-employer Plans to which any of them makes
contributions or has any obligation or liability to make contributions. Neither
the Company nor any of its subsidiaries maintains or has any liability with
respect to any Multiple Employer Plan. Neither the Company nor any
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of its subsidiaries has any obligation to create or contribute to any additional
such plan, program, arrangement or practice or to amend any such plan, program,
arrangement or practice so as to increase benefits or contributions thereunder,
except as required under the terms of the Company Plans, under existing
collective bargaining agreements or to comply with applicable law.
(b) Except as disclosed in the Company SEC Reports, (i) there have been no
prohibited transactions within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code with respect to any of the Company Plans that could
result in penalties, taxes or liabilities which, singly or in the aggregate,
could have a material adverse effect on the business, operations, properties,
assets, condition (financial or other) or results of operations of the Company
and its subsidiaries, taken as a whole, (ii) except for premiums due, there is
no outstanding material liability, whether measured alone or in the aggregate,
under Title IV of ERISA with respect to any of the Company Plans, (iii) neither
the Pension Benefit Guaranty Corporation nor any plan administrator has
instituted proceedings to terminate any of the Company Plans subject to Title IV
of ERISA other than in a "standard termination" described in Section 4041(b) of
ERISA, (iv) none of the Company Plans has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of each
of the Company Plans ended prior to the date of this Agreement, (v) the current
present value of all projected benefit obligations under each of the Company
Plans which is subject to Title IV of ERISA did not, as of its latest valuation
date, exceed the then current value of the assets of such plan allocable to such
benefit liabilities by more than the amount, if any, disclosed in the Company
SEC Reports as of March 31, 1996, based upon reasonable actuarial assumptions
currently utilized for such Company Plan, (vi) each of the Company Plans has
been operated and administered in all material respects in accordance with
applicable laws during the period of time covered by the applicable statute of
limitations, (vii) each of the Company Plans which is intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified and such determination has not been
modified, revoked or limited by failure to satisfy any condition thereof or by a
subsequent amendment thereto or a failure to amend, except that it may be
necessary to make additional amendments retroactively to maintain the
"qualified" status of such Company Plans, and the period for making any such
necessary retroactive amendments has not expired, (viii) with respect to Multi-
employer Plans, neither the Company nor any of its subsidiaries has made or
suffered a "complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in Sections 4203, 4204 and 4205 of ERISA and, to the best
knowledge of the Company and its subsidiaries, no event has occurred or is
expected to occur which presents a material risk of a complete or partial
withdrawal under said Sections 4203, 4204 and 4205, (ix) to the best knowledge
of the Company and its subsidiaries, there are no material pending, threatened
or anticipated claims involving any of the Company Plans other than claims for
benefits in the ordinary course, (x) the Company and its subsidiaries have no
current material liability under Title IV of ERISA, and the Company and its
subsidiaries do not reasonably anticipate that any such liability will be
asserted against the Company or any of its subsidiaries, and (xi) no act,
omission or transaction (individually or in the aggregate) has occurred with
respect to any Company Plan that has resulted or could result in any material
liability (direct or indirect) of the Company or any subsidiary under Sections
409 or 502(c)(i) or (l) of ERISA or Chapter 43 of Subtitle (A) of the Code.
None of the Company Controlled Group Plans has an "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code) or
is required to provide security to a Company Plan pursuant to Section 401(a)(29)
of the Code. Each Company Plan can be unilaterally terminated by the Company or
a subsidiary at any time without material liability, other than for amounts
previously reflected in the financial statements (or notes thereto) included in
the Company SEC Reports.
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(c) The Company SEC Reports contain a true and complete summary or list of
or otherwise describe all material employment contracts and other employee
benefit arrangements with "change of control" or similar provisions and all
severance agreements with executive officers.
(d) There are no agreements which will or may provide payments to any
officer, employee, stockholder, or highly compensated individual which will be
"parachute payments" under Code Section 280G that are nondeductible to the
Company or subject to tax under Code Section 4999 for which the Company or any
ERISA Affiliate would have withholding liability.
SECTION 5.14. LABOR CONTROVERSIES. Except as disclosed in the Company SEC
Reports, (a) there are no significant controversies pending or, to the knowledge
of the Company, threatened between the Company or its subsidiaries and any
representatives of any of their employees and (b) to the knowledge of the
Company, there are no material organizational efforts presently being made
involving any of the presently unorganized employees of the Company or its
subsidiaries, except for such controversies and organizational efforts, which,
singly or in the aggregate, could not reasonably be expected to materially and
adversely affect the business, operations, properties, assets, condition
(financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole.
SECTION 5.15. ENVIRONMENTAL MATTERS. Except as disclosed in the Company
SEC Reports, (i) the Company and its subsidiaries have conducted their
respective businesses in compliance with all applicable Environmental Laws,
including, without limitation, having all permits, licenses and other approvals
and authorizations necessary for the operation of their respective businesses as
presently conducted, (ii) none of the properties owned by the Company or any of
its subsidiaries contain any Hazardous Substance as a result of any activity of
the Company or any of its subsidiaries in amounts exceeding the levels permitted
by applicable Environmental Laws, (iii) neither the Company nor any of its
subsidiaries has received any notices, demand letters or requests for
information from any Federal, state, local or foreign governmental entity or
third party indicating that the Company or any of its subsidiaries may be in
violation of, or liable under, any Environmental Law in connection with the
ownership or operation of their businesses, (iv) there are no civil, criminal or
administrative actions, suits, demands, claims, hearings, investigations or
proceedings pending or threatened, against the Company or any of its
subsidiaries relating to any violation, or alleged violation, of any
Environmental Law, (v) no reports have been filed, or are required to be filed,
by the Company or any of its subsidiaries concerning the release of any
Hazardous Substance or the threatened or actual violation of any Environmental
Law, (vi) no Hazardous Substance has been disposed of, released or transported
in violation of any applicable Environmental Law from any properties owned by
the Company or any of its subsidiaries as a result of any activity of the
Company or any of its subsidiaries during the time such properties were owned,
leased or operated by the Company or any of its subsidiaries, (vii) no
underground storage tanks have been installed, closed or removed from any
properties owned by the Company or any of its subsidiaries during, in the case
of the Company, the time such properties were owned, leased or operated by the
Company and during, in the case of each subsidiary, the time such subsidiary has
been owned by the Company, (viii) there is no asbestos or asbestos containing
material present in any of the properties owned by the Company and its
subsidiaries, and no asbestos has been removed from any of such properties
during the time such properties were owned, leased or operated by the Company or
any of its subsidiaries, and (ix) neither the Company, its subsidiaries nor any
of their respective properties are subject to any material liabilities or
expenditures (fixed or contingent) relating to any suit, settlement, court
order, administrative order, regulatory requirement, judgment or claim asserted
or arising under any Environmental Law, except for violations of the foregoing
clauses (i) through (ix) that, singly or in the aggregate, would not reasonably
be expected to have a material adverse effect on the
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business, operations, properties, assets, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole.
SECTION 5.16. NON-COMPETITION AGREEMENTS. Except as disclosed in the
Company SEC Reports, neither the Company nor any subsidiary of the Company is a
party to any agreement which purports to restrict or prohibit in any material
respect any of them or any corporation affiliated with any of them from,
directly or indirectly, engaging in any business involving the collection,
interim storage, transfer, recovery, processing, recycling, marketing or
disposal of rubbish, garbage, paper, textile wastes, chemical or hazardous
wastes, liquid and other wastes or any other material business currently engaged
in by Parent or the Company, or any corporations affiliated with either of them.
None of the Company's officers, directors or key employees is a party to any
agreement which, by virtue of such person's relationship with the Company,
restricts in any material respect the Company or any subsidiary or affiliate of
the Company from, directly or indirectly, engaging in any of the businesses
described above.
SECTION 5.17. TITLE TO ASSETS. The Company and each of its subsidiaries
has good and marketable title in fee simple to all its real property and good
title to all its leasehold interests and other properties, as reflected in the
most recent balance sheet included in the Company Financial Statements, except
for properties and assets that have been disposed of in the ordinary course of
business since the date of such balance sheet, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever, except (i) the
lien for current taxes, payments of which are not yet delinquent, (ii) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject thereto or
affected thereby, or otherwise materially impair the Company's business
operations (in the manner presently carried on by the Company) or (iii) as
disclosed in the Company SEC Reports, and except for such matters which, singly
or in the aggregate, could not reasonably be expected to materially and
adversely affect the business, operations, properties, assets, condition
(financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole. All leases under which the Company or any of
its subsidiaries leases any real or personal property are in good standing,
valid and effective in accordance with their respective terms, and there is not,
under any of such leases, any existing default or event which with notice or
lapse of time or both would become a default other than failures to be in good
standing, valid and effective and defaults under such leases which in the
aggregate will not materially and adversely affect the business, operations,
properties, assets, condition (financial or other) or results of operations of
the Company and its subsidiaries, taken as a whole.
SECTION 5.18. REORGANIZATION AND POOLING OF INTERESTS. Neither the
Company nor, to the knowledge of the Company, any of its affiliates has taken or
agreed or intends to take any action or has any knowledge of any fact or
circumstance that would prevent the Merger from (a) constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code or
(b) being treated for financial accounting purposes as a Pooling Transaction.
SECTION 5.19. COMPANY STOCKHOLDERS' APPROVAL. The affirmative vote of
stockholders of the Company required for approval and adoption of this Agreement
and the Merger is a majority of the outstanding shares of Company Common Stock
entitled to vote thereon.
SECTION 5.20. BROKERS AND FINDERS. Except for the fees and expenses
payable to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill"), which
fees are reflected in its agreement with the Company (a copy of which has been
delivered to Parent), the Company has not entered into any contract, arrangement
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or understanding with any person or firm which may result in the obligation of
the Company to pay any finder's fees, brokerage or agent commissions or other
like payments in connection with the transactions contemplated hereby. Except
for the fees and expenses paid or payable to Merrill, there is no claim for
payment by the Company of any investment banking fees, finder's fees, brokerage
or agent commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.
SECTION 5.21. OPINION OF FINANCIAL ADVISOR. The financial advisor of the
Company, Merrill, has rendered a written opinion to the Board of Directors of
the Company to the effect that the Exchange Ratio is fair from a financial point
of view to the stockholders of the Company.
SECTION 5.22. AMENDMENT TO PREFERRED STOCK RIGHTS AGREEMENT. (a) The
Board of Directors of the Company has taken all necessary action to amend the
Preferred Stock Rights Agreement so that none of the execution and delivery of
this Agreement, the conversion of shares of Company Common Stock into the right
to receive Parent Common Stock in accordance with Article III of this Agreement,
and the consummation of the Merger or any other transaction contemplated hereby
(but specifically not including any acquisition of beneficial ownership of
Common Stock other than through the execution and delivery of this Agreement,
the consummation of the Merger or the execution of the voting agreements
described in the recitals to this Agreement) will cause (i) the Preferred Stock
Purchase Rights issued pursuant to the Preferred Stock Rights Agreement to
become exercisable under the Preferred Stock Rights Agreement, (ii) Parent or
any of Parent's direct or indirect subsidiaries to be deemed an "Acquiring
Person" (as such term is defined in the Preferred Stock Rights Agreement), (iii)
any such event to be deemed a "Section 11(a)(ii) Event" or a "Section 13 Event"
(as such terms are defined in the Preferred Stock Rights Agreement) or (iv) the
"Stock Acquisition Date" (as such term is defined in the Preferred Stock Rights
Agreement) to occur upon any such event.
(b) The "Expiration Date" (as such term is defined in the Preferred Stock
Rights Agreement) of the Preferred Stock Purchase Rights will occur immediately
prior to the Effective Time.
(c) The "Distribution Date" (as such term is defined in the Preferred Stock
Rights Agreement) has not occurred.
SECTION 5.23. COMPANY DISCLOSURE SCHEDULE. The information set forth in
the Company Disclosure Schedule does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
ARTICLE VI
Conduct of Business Pending the Merger
SECTION 6.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
Except as otherwise contemplated by this Agreement or disclosed in Section 6.1
of the Company Disclosure Schedule, after the date hereof and prior to the
Closing Date or earlier termination of this Agreement, unless Parent shall
otherwise agree in writing, the Company shall, and shall cause its subsidiaries
to:
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(a) conduct their respective businesses in the ordinary and usual course
of business and consistent with past practice;
(b) not (i) amend or propose to amend their respective charter or by-laws,
(ii) split, combine or reclassify their outstanding capital stock or (iii)
declare, set aside or pay any dividend or distribution payable in cash, stock,
property or otherwise, except for the payment of dividends or distributions by
a wholly-owned subsidiary of the Company;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge
or dispose of, any additional shares of, or any options, warrants or rights of
any kind to acquire any shares of their capital stock of any class or any debt
or equity securities convertible into or exchangeable for such capital stock,
except that (i) the Company may issue shares upon conversion of convertible
securities and exercise of options and warrants outstanding on the date hereof
and (ii) the Company may issue shares of Company Common Stock in connection
with acquisitions of assets or businesses pursuant to the proviso of Section
6.1(d);
(d) not (i) incur or become contingently liable with respect to any
indebtedness for borrowed money other than (A) borrowings in the ordinary
course of business or (B) borrowings to refinance existing indebtedness on
terms which are reasonably acceptable to Parent or (C) as set forth in the
proviso in this Section 6.1(d), (ii) redeem, purchase, acquire or offer to
purchase or acquire any shares of its capital stock or any options, warrants or
rights to acquire any of its capital stock or any security convertible into or
exchangeable for its capital stock, (iii) take any action that would jeopardize
the treatment of the Merger as a pooling of interests under Opinion No. 16 of
the Accounting Principles Board ("APB No. 16"), (iv) take or fail to take any
action which action or failure to take action would cause the Company or its
stockholders (except to the extent that any stockholders receive cash in lieu
of fractional shares and except to the extent of Stockholders in special
circumstances) to recognize gain or loss for federal income tax purposes as a
result of the consummation of the Merger or would otherwise cause the Merger
not to qualify as a reorganization under Section 368 of the Code, (v) make any
acquisition of any assets or businesses other than expenditures for current
assets in the ordinary course of business and expenditures for fixed or capital
assets in the ordinary course of business and consistent with the Company's
capital budget disclosed in Section 6.1 of the Company Disclosure Schedule and
other than as set forth in the proviso in this Section 6.1(d), (vi) sell,
pledge, dispose of or encumber any material assets or businesses other than
sales in the ordinary course of business or (vii) enter into any binding
contract, agreement, commitment or arrangement with respect to any of the
foregoing; provided, however, that notwithstanding the foregoing (other than
subsections (iii) and (iv) of this Section 6.1(d)), the Company shall not be
prohibited from acquiring any assets or businesses or issuing Company Common
Stock or incurring or assuming indebtedness in connection with such
acquisitions so long as (x) the aggregate value of consideration paid or
payable in connection with all such acquisitions, including any funded
indebtedness assumed and any Company Common Stock (valued for purposes of this
limitation at a price per share equal to the price of the Company Common Stock
on the date an agreement in respect of an acquisition is entered into) issued
or issuable in connection with such acquisitions, does not exceed $80 million
(excluding any acquisitions for which a letter of intent has been executed and
which are identified on the Company Disclosure Schedule), (y) the aggregate
value of consideration paid or payable for any one such acquisition, including
any funded indebtedness assumed and any Company Common Stock (valued for
purposes of this limitation at a price per share equal to the price of the
Company Common Stock on the date an agreement in
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respect of an acquisition is entered into) issued or issuable in connection
with such acquisition, does not exceed $20 million (excluding any acquisitions
for which a letter of intent has been executed and which are identified on the
Company Disclosure Schedule) and (z) the Company will not acquire or agree to
acquire any assets or businesses if such acquisition or agreement may
reasonably be expected to delay the consummation of the Merger;
(e) use all reasonable efforts to preserve intact their respective
business organizations and goodwill, keep available the services of their
respective present officers and key employees, and preserve the goodwill and
business relationships with customers and others having business relationships
with them and not engage in any action, directly or indirectly, with the intent
to adversely impact the transactions contemplated by this Agreement;
(f) subject to restrictions imposed by applicable law, confer on a regular
and frequent basis with one or more representatives of Parent to report
operational matters of materiality and the general status of ongoing
operations;
(g) not enter into or amend any employment, severance, special pay
arrangement with respect to termination of employment or other similar
arrangements or agreements with any directors, officers or key employees,
except in the ordinary course and consistent with past practice; provided,
however, that the Company and its subsidiaries shall in no event enter into any
written employment agreement;
(h) not adopt, enter into or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation, health
care, employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee or retiree, except as
required to comply with changes in applicable law;
(i) use commercially reasonable efforts to maintain with financially
responsible insurance companies insurance on its tangible assets and its
businesses in such amounts and against such risks and losses as are consistent
with past practice; and
(j) not make, change or revoke any material Tax election or make any
material agreement or settlement regarding Taxes with any taxing authority.
SECTION 6.2. CONDUCT OF BUSINESS BY PARENT AND SUBSIDIARY PENDING THE
MERGER. Except as otherwise contemplated by this Agreement, after the date
hereof and prior to the Closing Date or earlier termination of this Agreement,
unless the Company shall otherwise agree in writing, Parent shall, and shall
cause its subsidiaries to:
(a) conduct their respective businesses in the ordinary and usual course
of business and consistent with past practice;
(b) not (i) amend or propose to amend their respective charter (except for
the amendment by Parent of its Certificate of Incorporation to increase the
number of authorized shares of Parent Common Stock) or by-laws, (ii) split,
combine or reclassify (whether by stock dividend or otherwise) their
outstanding capital stock, or (iii) declare, set aside or pay any dividend or
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distribution payable in cash, stock, property or otherwise, except for the
payment of dividends or distributions by a wholly-owned subsidiary of Parent;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any additional shares of, or any options, warrants or
rights of any kind to acquire any shares of their capital stock of any class or
any debt or equity securities convertible into or exchangeable for such capital
stock, except that (i) Parent may issue shares upon conversion of convertible
securities and exercise of options outstanding on the date hereof, (ii) Parent
may issue options (and shares upon exercise of such options) pursuant to its
employee stock option plans in effect on the date hereof in the ordinary course
of business and consistent with past practices and (iii) Parent may issue
shares of capital stock (or warrants or options to acquire capital stock) in
connection with acquisitions of assets or businesses pursuant to the proviso of
Section 6.2(d);
(d) not (i) incur or become contingently liable with respect to any
indebtedness for borrowed money other than (A) borrowings in the ordinary
course of business, (B) borrowings to refinance existing indebtedness on terms
which are reasonably acceptable to the Company, or (C) as set forth in the
proviso in this Section 6.2(d), (ii) redeem, purchase, acquire or offer to
purchase or acquire any shares of its capital stock or any options, warrants or
rights to acquire any of its capital stock or any security convertible into or
exchangeable for its capital stock, (iii) take any action that would jeopardize
the treatment of the Merger as a pooling of interests under APB No. 16, (iv)
take or fail to take any action which action or failure to take action would
cause Parent or its stockholders to recognize gain or loss for federal income
tax purposes as a result of the consummation of the Merger or would otherwise
cause the Merger not to qualify as a reorganization under Section 368 of the
Code, (v) sell, pledge, dispose of or encumber any material assets or
businesses other than sales in the ordinary course of business, (vi) make any
acquisition of any assets or businesses other than expenditures for current
assets in the ordinary course of business and expenditures for fixed or capital
assets in the ordinary course of business and other than as set forth in the
proviso of this Section 6.2(d) or (vii) enter into any binding contract,
agreement, commitment or arrangement with respect to any of the foregoing;
provided, however, that notwithstanding the foregoing (other than subsections
(iii) and (iv) of this Section 6.2(d)), Parent shall not be prohibited from
acquiring any assets or businesses or issuing capital stock (or warrants or
options to acquire capital stock) or incurring or assuming indebtedness in
connection with such acquisitions so long as (x) the aggregate value of
consideration paid or payable in connection with all such acquisitions,
including any funded indebtedness assumed and any Parent Common Stock (valued
for purposes of this limitation at a price per share equal to the price of
Parent Common Stock on the date an agreement in respect of an acquisition is
entered into) issued or issuable in connection with such acquisitions, does not
exceed $160 million (excluding any acquisitions for which a letter of intent
has been executed and which are identified on the Parent Disclosure Schedule),
(y) the aggregate value of consideration paid or payable for any one such
acquisition, including any funded indebtedness assumed and any Parent Common
Stock (valued for purposes of this limitation at a price per share equal to the
price of Parent Common Stock on the date an agreement in respect of an
acquisition is entered into) issued or issuable in connection with such
acquisition, does not exceed $40 million (excluding any acquisitions for which
a letter of intent has been executed and which are identified on the Parent
Disclosure Schedule) and (z) Parent will not acquire or agree to acquire any
assets or businesses if such acquisition or agreement may reasonably be
expected to delay the consummation of the Merger;
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(e) use all reasonable efforts to preserve intact their respective
business organizations and goodwill, keep available the services of their
respective present officers and key employees, and preserve the goodwill and
business relationships with customers and others having business relationships
with them and not engage in any action, directly or indirectly, with the intent
to adversely impact the transactions contemplated by this Agreement;
(f) subject to restrictions imposed by applicable law, confer on a
regular and frequent basis with one or more representatives of the Company to
report operational matters of materiality and the general status of ongoing
operations; and
(g) use commercially reasonable efforts to maintain with financially
responsible insurance companies insurance on its tangible assets and its
businesses in such amounts and against such risks and losses as are consistent
with past practice.
SECTION 6.3. CONTROL OF THE COMPANY'S OPERATIONS. Nothing contained in
this Agreement shall give to Parent, directly or indirectly, rights to control
or direct the Company's operations prior to the Effective Time. Prior to the
Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
SECTION 6.4. CONTROL OF PARENT'S OPERATIONS. Nothing contained in this
Agreement shall give to the Company, directly or indirectly, rights to control
or direct Parent's operations prior to the Effective Time. Prior to the
Effective Time, Parent shall exercise, consistent with the terms and conditions
of this Agreement, complete control and supervision of its operations.
SECTION 6.5. ACQUISITION TRANSACTIONS. (a) After the date hereof and
prior to the Effective Time or earlier termination of this Agreement, the
Company shall not, and shall not permit any of its subsidiaries to, initiate,
solicit, negotiate, encourage or provide confidential information to facilitate,
and the Company shall, and shall cause each of its subsidiaries to, cause any
officer, director or employee of, or any attorney, accountant, investment
banker, financial advisor or other agent retained by it, not to initiate,
solicit, negotiate, encourage or provide non-public or confidential information
to facilitate, any proposal or offer to acquire all or any substantial part of
the business and properties of the Company or any capital stock of the Company,
whether by merger, purchase of assets, tender offer or otherwise, whether for
cash, securities or any other consideration or combination thereof (any such
transactions being referred to herein as an "Acquisition Transaction").
(b) Notwithstanding the provisions of paragraph (a) above, (i) the Company
may, in response to an unsolicited written proposal or indication of interest
with respect to a potential or proposed Acquisition Transaction ("Acquisition
Proposal"), furnish (subject to the execution of a confidentiality agreement and
standstill agreement containing provisions substantially similar to the
confidentiality and standstill provisions of the Confidentiality Agreements, as
defined in Section 10.4) confidential or non-public information to a financially
capable corporation, partnership, person or other entity or group (a "Potential
Acquirer") and negotiate with such Potential Acquirer if the Board of Directors
of the Company after consulting with its outside legal counsel, determines in
good faith that the failure to provide such confidential or non-public
information to or negotiate with such Potential Acquirer would constitute a
breach of its fiduciary duty to the Company's stockholders and (ii) the
Company's Board of Directors may take and disclose to the Company's stockholders
a position contemplated by Rule 14e-2 under the Exchange Act. It is understood
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and agreed that negotiations conducted in accordance with this paragraph (b)
shall not constitute a violation of paragraph (a) of this Section 6.5.
(c) The Company shall immediately notify Parent after receipt of any
Acquisition Proposal or any request for nonpublic information relating to the
Company or its subsidiaries in connection with an Acquisition Proposal or for
access to the properties, books or records of the Company or any subsidiary by
any person or entity that informs the Board of Directors of the Company or such
subsidiary that it is considering making, or has made, an Acquisition Proposal.
Such notice to Parent shall be made orally and in writing and shall indicate in
reasonable detail the identity of the offeror and the terms and conditions of
such proposal, inquiry or contact.
ARTICLE VII
Additional Agreements
SECTION 7.1. ACCESS TO INFORMATION. (a) The Company and its subsidiaries
shall afford to Parent and Subsidiary and their respective accountants, counsel,
financial advisors and other representatives (the "Parent Representatives") and
Parent and its subsidiaries shall afford to the Company and its accountants,
counsel, financial advisors and other representatives (the "Company
Representatives") full access during normal business hours throughout the period
prior to the Effective Time to all of their respective properties, books,
contracts, commitments and records (including, but not limited to, Tax Returns)
and, during such period, shall furnish promptly to one another (i) a copy of
each report, schedule and other document filed or received by any of them
pursuant to the requirements of federal or state securities laws or filed by any
of them with the SEC in connection with the transactions contemplated by this
Agreement and (ii) such other information concerning their respective
businesses, properties and personnel as Parent or Subsidiary or the Company, as
the case may be, shall reasonably request; provided, however, that no
investigation pursuant to this Section 7.1 shall amend or modify any
representations or warranties made herein or the conditions to the obligations
of the respective parties to consummate the Merger. Parent and its subsidiaries
shall hold and shall use their reasonable best efforts to cause the Parent
Representatives to hold, and the Company and its subsidiaries shall hold and
shall use their reasonable best efforts to cause the Company Representatives to
hold, in strict confidence all non-public documents and information furnished to
Parent and Subsidiary or to the Company, as the case may be, in connection with
the transactions contemplated by this Agreement, except that (i) Parent,
Subsidiary and the Company may disclose such information as may be necessary in
connection with seeking the Parent Required Statutory Approvals and Parent
Stockholders' Approval, the Company Required Statutory Approvals and the Company
Stockholders' Approval and (ii) each of Parent, Subsidiary and the Company may
disclose any information that it is required by law or judicial or
administrative order to disclose.
(b) In the event that this Agreement is terminated in accordance with its
terms, each party shall promptly redeliver to the other all non-public written
material provided pursuant to this Section 7.1 and shall not retain any copies,
extracts or other reproductions in whole or in part of such written material.
In such event, all documents, memoranda, notes and other writings prepared by
Parent or the Company based on the information in such material shall be
destroyed (and Parent and the Company shall use their respective reasonable best
efforts to cause their advisors and representatives to similarly destroy their
documents, memoranda and notes), and such destruction (and reasonable best
efforts) shall be certified in writing by an authorized officer supervising such
destruction.
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(c) The Company shall promptly advise Parent and Parent shall promptly
advise the Company in writing of any change or the occurrence of any event after
the date of this Agreement having, or which, insofar as can reasonably be
foreseen, in the future may have, any material adverse effect on the business,
operations, properties, assets, condition (financial or other) or results of
operations of the Company and its subsidiaries or Parent and its subsidiaries,
as the case may be, taken as a whole.
SECTION 7.2. REGISTRATION STATEMENT AND PROXY STATEMENT. Parent and the
Company shall file with the SEC as soon as is reasonably practicable after the
date hereof the Joint Proxy Statement/Prospectus and shall use all reasonable
efforts to have the Registration Statement declared effective by the SEC as
promptly as practicable. Parent shall also take any action required to be taken
under applicable state blue sky or securities laws in connection with the
issuance of Parent Common Stock pursuant hereto. Parent and the Company shall
promptly furnish to each other all information, and take such other actions, as
may reasonably be requested in connection with any action by any of them in
connection with the preceding sentence. The information provided and to be
provided by Parent and the Company, respectively, for use in the Joint Proxy
Statement/Prospectus shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 7.3. STOCKHOLDERS' APPROVALS. (a) The Company shall, as promptly
as practicable, submit this Agreement and the transactions contemplated hereby
for the approval of its stockholders at a meeting of stockholders and, subject
to the fiduciary duties of the Board of Directors of the Company under
applicable law, shall use its reasonable best efforts to obtain stockholder
approval and adoption (the "Company Stockholders' Approval") of this Agreement
and the transactions contemplated hereby. Such meeting of stockholders shall be
held as soon as practicable following the date upon which the Registration
Statement becomes effective. Subject to the fiduciary duties of the Board of
Directors of the Company under applicable law, the Company shall, through its
Board of Directors, recommend to its stockholders approval of the transactions
contemplated by this Agreement.
(b) Parent shall, as promptly as practicable, submit this Agreement and the
transactions contemplated hereby for the approval of its stockholders at a
meeting of stockholders and, subject to the fiduciary duties of the Board of
Directors of Parent under applicable law, shall use its reasonable best efforts
to obtain stockholder approval and adoption (the "Parent Stockholders'
Approval") of this Agreement and the transactions contemplated hereby. Such
meeting of stockholders shall be held as soon as practicable following the date
on which the Registration Statement becomes effective. Parent shall, through
its Board of Directors, subject to the fiduciary duties of the members thereof,
(i) recommend to its stockholders approval of the transactions contemplated by
this Agreement and (ii) authorize and cause an officer of Parent to vote
Parent's shares of Subsidiary Common Stock for adoption and approval of this
Agreement and the transactions contemplated hereby and shall take all additional
actions as the sole stockholder of Subsidiary necessary to adopt and approve
this Agreement and the transactions contemplated hereby.
SECTION 7.4. COMPLIANCE WITH THE SECURITIES ACT. Parent and the Company
shall each use its reasonable best efforts to cause each principal executive
officer, each director and each other person who is an "affiliate," as that
term is used in paragraphs (c) and (d) of Rule 145 under the Securities Act, of
Parent or the Company, as the case may be, to deliver to Parent and the Company
on or prior to the Effective Time a written agreement (an "Affiliate Agreement")
to the effect that such person will not offer to sell, sell or otherwise dispose
of any shares of Parent Common Stock issued in the Merger, except, in each case,
pursuant to an effective registration statement or in compliance with Rule 145,
as amended from time to time, or in
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a transaction which, in the opinion of legal counsel satisfactory to Parent, is
exempt from the registration requirements of the Securities Act and, in any
case, until after the results covering 30 days of post-Merger combined
operations of Parent and the Company have been filed with the SEC, sent to
stockholders of Parent or otherwise publicly issued.
SECTION 7.5. EXCHANGE LISTING. Parent shall use its reasonable best
efforts to effect, at or before the Effective Time, authorization for listing on
the New York Stock Exchange Inc. (the "NYSE"), upon official notice of
issuance, of the shares of Parent Common Stock to be issued pursuant to the
Merger or to be reserved for issuance upon exercise of stock options or warrants
or the conversion of convertible securities.
SECTION 7.6. EXPENSES AND FEES. (a) All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses, except that those expenses incurred
in connection with printing and filing the Joint Proxy Statement/Prospectus
shall be shared equally by Parent and the Company.
(b) The Company agrees to pay to Parent a fee equal to $39,000,000 if:
(i) the Company terminates this Agreement pursuant to clause (iv) or
(v) of Section 9.1(a); or
(ii) Parent terminates this Agreement pursuant to clause (v) of Section
9.1(b);
provided, however, that if the provisions of paragraph 5 of the Confidentiality
Agreement between Parent as Recipient and the Company as Protected Party have
lapsed and are no longer in force and effect as a result of the proviso set
forth in paragraph 5 of such Confidentiality Agreement and Parent has taken
actions that would otherwise be prohibited by paragraph 5 of such
Confidentiality Agreement prior to the time that Parent is entitled to receive
the payment required by this Section 7.6(b), Parent shall not be entitled to
receive such payment if such payment shall later become payable pursuant to the
terms of this Section 7.6(b); and, provided, further, that if Parent has
received the payment required by this Section 7.6(b), the proviso set forth in
paragraph 5 of such Confidentiality Agreement shall no longer be effective.
(c) Parent agrees to pay to the Company a fee equal to $39,000,000 if the
Company terminates this Agreement pursuant to clause (vi) of Section 9.1(a).
SECTION 7.7. AGREEMENT TO COOPERATE. (a) Subject to the terms and
conditions herein provided and subject to the fiduciary duties of the respective
boards of directors of the Company and Parent, each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including using its reasonable efforts to obtain
all necessary or appropriate waivers, consents or approvals of third parties
required in order to preserve material contractual relationships of the Company
and its subsidiaries, all necessary or appropriate waivers, consents and
approvals and SEC "no-action" letters to effect all necessary registrations,
filings and submissions and to lift any injunction or other legal bar to the
Merger (and, in such case, to proceed with the Merger as expeditiously as
possible).
(b) Without limitation of the foregoing, each of Parent and the Company
undertakes and agrees to file as soon as practicable after the date hereof a
Notification and Report Form under the HSR Act with the
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Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division"). Each of Parent and the
Company shall (i) use its reasonable efforts to comply as expeditiously as
possible with all lawful requests of the FTC or the Antitrust Division for
additional information and documents and (ii) not extend any waiting period
under the HSR Act or enter into any agreement with the FTC or the Antitrust
Division not to consummate the transactions contemplated by this Agreement,
except with the prior written consent of the other parties hereto.
(c) In the event any litigation is commenced by any person or entity
relating to the transactions contemplated by this Agreement, including any
Acquisition Transaction, Parent shall have the right, at its own expense, to
participate therein, and the Company will not settle any such litigation without
the consent of Parent, which consent will not be unreasonably withheld.
SECTION 7.8. PUBLIC STATEMENTS. The parties shall consult with each
other prior to issuing any press release or any written public statement with
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such press release or written public statement prior to such
consultation.
SECTION 7.9. OPTION PLANS. Prior to the Effective Time, the Company and
Parent shall take such action as may be necessary to cause each unexpired and
unexercised option to purchase shares of Company Common Stock (each a "Company
Option") to be automatically converted at the Effective Time into an option
(each a "Parent Option") to purchase a number of shares of Parent Common Stock
equal to the number of shares of Company Common Stock that could have been
purchased under the Company Option multiplied by the Exchange Ratio, at a price
per share of Parent Common Stock equal to the option exercise price determined
pursuant to the Company Option divided by the Exchange Ratio and subject to the
same terms and conditions as the Company Option. The date of grant of a
substituted Parent Option shall be the date on which the corresponding Company
Option was granted. At the Effective Time, all references in the stock option
agreements to the Company shall be deemed to refer to Parent. Parent shall
assume all of the Company's obligations with respect to Company Options as so
amended and shall, from and after the Effective Time, make available for
issuance upon exercise of the Parent Options all shares of Parent Common Stock
covered thereby and amend its Registration Statement on Form S-8 or file a new
registration statement to cover the additional shares of Parent Common Stock
subject to Parent Options granted in replacement of Company Options.
SECTION 7.10. NOTIFICATION OF CERTAIN MATTERS. Each of the Company,
Parent and Subsidiary agrees to give prompt notice to each other of, and to use
their respective reasonable best efforts to prevent or promptly remedy, (i) the
occurrence or failure to occur or the impending or threatened occurrence or
failure to occur, of any event which occurrence or failure to occur would be
likely to cause any of its representations or warranties in this Agreement to be
untrue or inaccurate in any material respect at any time from the date hereof to
the Effective Time and (ii) any material failure on its part to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 7.10 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
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SECTION 7.11. DIRECTORS' AND OFFICERS' INDEMNIFICATION. (a) The
indemnification provisions of the Certificate of Incorporation of the Surviving
Corporation as in effect at the Effective Time 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 at
the Effective Time were directors, officers, employees or agents of the Company,
unless such modification is required by law.
(b) After the Effective Time, each of Parent and the Surviving Corporation
shall, to the fullest extent permitted under applicable law, indemnify and hold
harmless, each present and former director, officer, employee and agent of the
Company or any of its subsidiaries (each, together with such person's heirs,
executors or administrators, an "indemnified Party" and collectively, the
"indemnified Parties") against any costs or expenses (including attorneys fees),
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any actual or threatened claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of, relating to or in connection with any action or
omission occurring prior to the Effective Time (including, without limitation,
acts or omissions in connection with such persons serving as an officer,
director or other fiduciary in any entity if such service was at the request or
for the benefit of the Company) or arising out of or pertaining to the
transactions contemplated by this Agreement. In the event of any such actual
or threatened claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), (i) the Company or Parent and the Surviving
Corporation, as the case may be, shall pay the reasonable fees and expenses of
counsel selected by the indemnified Parties, which counsel shall be reasonably
satisfactory to the Parent and the Surviving Corporation, promptly after
statements therefor are received and shall pay all other reasonable expenses in
advance of the final disposition of such action, (ii) the Parent and the
Surviving Corporation will cooperate and use all reasonable efforts to assist in
the vigorous defense of any such matter, and (iii) to the extent any
determination is required to be made with respect to whether an indemnified
Party's conduct complies with the standards set forth under the DGCL and the
Parent's or the Surviving Corporation's respective charters or By-Laws such
determination shall be made by independent legal counsel acceptable to the
Parent or the Surviving Corporation, as the case may be, and the indemnified
Party; provided, however, that neither Parent nor the Surviving Corporation
shall be liable for any settlement effected without its written consent (which
consent shall not be unreasonably withheld) and, provided, further, that if
Parent or the Surviving Corporation advances or pays any amount to any person
under this paragraph (b) and if it shall thereafter be finally determined by a
court of competent jurisdiction that such person was not entitled to be
indemnified hereunder for all or any portion of such amount, such person shall
repay such amount or such portion thereof, as the case may be, to Parent or the
Surviving Corporation, as the case may be. The indemnified Parties as a group
may not retain more than one law firm to represent them with respect to each
matter unless there is, under applicable standards of professional conduct, a
conflict on any significant issue between the positions of any two or more
indemnified Parties.
(c) In the event the Surviving Corporation or Parent or any of their
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of the Surviving
Corporation or Parent shall assume the obligations set forth in this Section
7.11.
(d) For a period of six years after the Effective Time, Parent shall cause
to be maintained in effect the current policies of directors' and officers'
liability insurance maintained by the Company and its subsidiaries (provided
that Parent may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions that are no less advantageous in any
material respect to the indemnified
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Parties and which coverages and amounts shall be no less than the coverages and
amounts provided at that time for Parent's directors and officers) with respect
to matters rising before the Effective Time, provided that Parent shall not be
required to pay an annual premium for such insurance in excess of two times the
current annual premium paid by the Company for its existing coverage (the
"Cap"); and provided, further, that if equivalent coverage cannot be obtained,
or can be obtained only by paying an annual premium in excess of the Cap, Parent
shall only be required to obtain as much coverage as can be obtained by paying
an annual premium equal to the Cap.
(e) Parent shall pay all reasonable expenses, including reasonable
attorneys' fees, that may be incurred by any indemnified Person in enforcing the
indemnity and other obligations provided in this Section 7.11.
(f) The rights of each indemnified Party hereunder shall be in addition to
any other rights such indemnified Party may have under the charter or bylaws of
the Company, under the DGCL or otherwise. The provisions of this Section 7.11
shall survive the consummation of the Merger and expressly are intended to
benefit each of the indemnified Parties.
SECTION 7.12. CORRECTIONS TO THE JOINT PROXY STATEMENT/PROSPECTUS AND
REGISTRATION STATEMENT. Prior to the date of approval of the Merger by their
respective stockholders, each of the Company, Parent and Subsidiary shall
correct promptly any information provided by it to be used specifically in the
Joint Proxy Statement/Prospectus and Registration Statement that shall have
become false or misleading in any material respect and shall take all steps
necessary to file with the SEC and have declared effective or cleared by the SEC
any amendment or supplement to the Joint Proxy Statement/Prospectus or the
Registration Statement so as to correct the same and to cause the Joint Proxy
Statement/Prospectus as so corrected to be disseminated to the stockholders of
the Company and Parent, in each case to the extent required by applicable law.
SECTION 7.13. EFFECT ON ACCOUNTING TREATMENT. Each of the parties hereto
agrees that, notwithstanding anything to the contrary contained in the
Agreement, nothing contained in or contemplated by this Agreement shall require
any of the parties hereto to take any action which would jeopardize the
treatment of the Merger as a pooling of interests under APB No. 16.
SECTION 7.14. AMENDMENT OF CERTAIN ACQUISITION AGREEMENTS. The Company
shall use its reasonable best efforts to amend the agreements listed on Schedule
5.2 of the Company Disclosure Schedule to eliminate the rights of the other
parties to such agreements to receive Company Common Stock, such amendments to
be on terms that are reasonably acceptable to Parent.
ARTICLE VIII
Conditions
SECTION 8.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions:
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(a) this Agreement and the transactions contemplated hereby shall have
been approved and adopted by the requisite vote of the stockholders of the
Company and Parent under applicable law and applicable listing requirements;
(b) the shares of Parent Common Stock issuable in the Merger and those to
be reserved for issuance upon exercise of stock options or warrants or the
conversion of convertible securities shall have been authorized for listing on
the NYSE upon official notice of issuance;
(c) the waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or been terminated;
(d) the Registration Statement shall have become effective in accordance
with the provisions of the Securities Act, and no stop order suspending such
effectiveness shall have been issued and remain in effect and no proceeding for
that purpose shall have been instituted by the SEC or any state regulatory
authorities;
(e) no preliminary or permanent injunction or other order or decree by any
federal or state court which prevents the consummation of the Merger shall have
been issued and remain in effect (each party agreeing to use its reasonable
efforts to have any such injunction, order or decree lifted);
(f) no action shall have been taken, and no statute, rule or regulation
shall have been enacted, by any state or federal government or governmental
agency in the United States which would prevent the consummation of the Merger
or make the consummation of the Merger illegal;
(g) all governmental waivers, consents, orders and approvals legally
required for the consummation of the Merger and the transactions contemplated
hereby, and all consents from lenders required to consummate the Merger, shall
have been obtained and be in effect at the Effective Time, except where the
failure to obtain the same would not be reasonably likely to have a material
adverse effect on the business, operations, properties, assets, liabilities,
condition (financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole, following the Effective Time;
(h) Coopers & Lybrand L.L.P., certified public accountants for Parent,
shall have delivered a letter, dated the Closing Date, addressed to Parent, in
form and substance reasonably satisfactory to Parent, to the effect that the
Merger will qualify for a pooling of interests accounting treatment if
consummated in accordance with this Agreement; and
(i) Arthur Andersen LLP, certified public accountants for the Company,
shall have delivered a memorandum dated the Closing Date, addressed to the
Company, in form and substance reasonably satisfactory to the Company, stating
that the Merger will qualify for a pooling of interests accounting treatment if
consummated in accordance with this Agreement.
SECTION 8.2. CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. Unless waived by the Company, the obligation of the Company to effect
the Merger shall be subject to the fulfillment at or prior to the Closing Date
of the following additional conditions:
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(a) Parent and Subsidiary shall have performed in all material respects
their agreements contained in this Agreement required to be performed on or
prior to the Closing Date and the representations and warranties of Parent and
Subsidiary contained in this Agreement shall be true and correct in all
material respects on and as of the date made and (except to the extent that
such representations and warranties speak as of an earlier date) on and as of
the Closing Date as if made at and as of such date, and the Company shall have
received a certificate of the Chairman of the Board and Chief Executive
Officer, the President or a Vice President of Parent and of the President and
Chief Executive Officer or a Vice President of Subsidiary to that effect;
(b) the Company shall have received an opinion of Baker & Botts, L.L.P., in
form and substance reasonably satisfactory to the Company, dated the Closing
Date, to the effect that the Company and holders of Company Common Stock
(except to the extent any stockholders receive cash in lieu of fractional
shares) will recognize no gain or loss for federal income tax purposes as a
result of consummation of the Merger;
(c) since the date hereof, there shall have been no changes that
constitute, and no event or events (including, without limitation, litigation
developments) shall have occurred which have resulted in or constitute, a
material adverse change in the business, operations, properties, assets,
condition (financial or other) or results of operations of Parent and its
subsidiaries, taken as a whole, except for changes that affect the industries
in which Parent and its subsidiaries operate generally; and
(d) all governmental waivers, consents, orders, and approvals legally
required for the consummation of the Merger and the transactions contemplated
hereby shall have been obtained and be in effect at the Closing Date except for
such waivers, consents, orders and approvals the failure of which to have been
obtained would not have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
Parent and its subsidiaries, taken as a whole, following the Effective Time,
and no governmental authority shall have promulgated after the date hereof any
statute, rule or regulation which, when taken together with all such
promulgations, would materially impair the value to Parent of the Merger.
SECTION 8.3. CONDITIONS TO OBLIGATIONS OF PARENT AND SUBSIDIARY TO EFFECT
THE MERGER. Unless waived by Parent and Subsidiary, the obligations of Parent
and Subsidiary to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the additional following conditions:
(a) the Company shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or prior to
the Closing Date and the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date made and on and as of the Closing Date as if made at and
as of such date, and Parent shall have received a Certificate of the President
and Chief Executive Officer or of a Vice President of the Company to that
effect;
(b) Parent shall have received an opinion of Andrews & Kurth L.L.P., in
form and substance reasonably satisfactory to Parent, dated the Closing Date,
to the effect that Parent and Subsidiary will recognize no gain or loss for
federal income tax purposes as a result of consummation of the Merger;
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(c) the Affiliate Agreements required to be delivered to Parent pursuant
to Section 7.4 shall have been furnished as required by Section 7.4;
(d) since the date hereof, there shall have been no changes that
constitute, and no event or events (including, without limitation, litigation
developments) shall have occurred which have resulted in or constitute, a
material adverse change in the business, operations, properties, assets,
condition (financial or other) or results of operations of the Company and its
subsidiaries, taken as a whole, except for changes that affect the industries
in which the Company and its subsidiaries operate generally; and
(e) all governmental waivers, consents, orders and approvals legally
required for the consummation of the Merger and the transactions contemplated
hereby shall have been obtained and be in effect at the Closing Date except for
such waivers, consents, orders and approvals the failure of which to have been
obtained would not have a material adverse effect on the business, operations,
properties, assets, condition (financial or other) or results of operations of
the Company and its subsidiaries, taken as a whole, following the Effective
Time, and no governmental authority shall have promulgated after the date
hereof any statute, rule or regulation which, when taken together with all such
promulgations, would materially impair the value to Parent of the Merger.
ARTICLE IX
Termination, Amendment and Waiver
SECTION 9.1. TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date, whether before or after approval by the stockholders
of the Company or Parent, by the mutual written consent of the Company and
Parent or as follows:
(a) The Company shall have the right to terminate this Agreement:
(i) if the representations and warranties of Parent and Subsidiary
shall fail to be true and correct in all material respects on and as of
the date made or, except in the case of any such representations and
warranties made as of a specified date, on and as of any subsequent date
as if made at and as of such subsequent date and such failure shall not
have been cured in all material respects within 30 days after written
notice of such failure is given to Parent by the Company;
(ii) if the Merger is not completed by December 31, 1996 (unless
due to a delay or default on the part of the Company);
(iii) if the Merger is enjoined by a final, unappealable court
order not entered at the request or with the support of the Company and
if the Company shall have used reasonable efforts to prevent the entry of
such order;
(iv) if (A) the Company receives an offer or proposal from any
Potential Acquirer (excluding any affiliate of the Company or any group of
which any affiliate of the Company is a member) with respect to a merger,
sale of substantial assets or other business combination involving the
Company, (B) the Company's Board of Directors determines, in good faith
and
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after consultation with an independent financial advisor, that such offer or
proposal (if consummated pursuant to its terms) would result in an Acquisition
Transaction more favorable to the Company's stockholders than the Merger (any
such offer or proposal being referred to as a "Superior Proposal") and resolves
to accept such Superior Proposal and (C) the Company shall have given Parent two
days' prior written notice of its intention to terminate pursuant to this
provision; provided, however, that such termination shall not be effective until
such time as the payment required by Section 7.6(b) shall have been received by
Parent;
(v) if (A) a tender or exchange offer is commenced by a Potential Acquirer
(excluding any affiliate of the Company or any group of which any affiliate of
the Company is a member) for all outstanding shares of Company Common Stock, (B)
the Company's Board of Directors determines, in good faith and after
consultation with an independent financial advisor, that such offer constitutes
a Superior Proposal and resolves to accept such Superior Proposal or recommend
to the stockholders that they tender their shares in such tender or exchange
offer and (C) the Company shall have given Parent two days' prior written notice
of its intention to terminate pursuant to this provision; provided, however,
that such termination shall not be effective until such time as the payment
required by Section 7.6(b) shall have been received by Parent;
(vi) if Parent (A) fails to perform in any material respect any of its
material covenants in this Agreement and (B) does not cure such default in all
material respects within 30 days after notice of such default is given to Parent
by the Company; or
(vii) if the stockholders of Parent fail to approve the Merger at a duly
held meeting of stockholders called for such purpose or any adjournment thereof.
(b) Parent shall have the right to terminate this Agreement:
(i) if the representations and warranties of the Company shall fail to be
true and correct in all material respects on and as of the date made or, except
in the case of any such representations and warranties made as of a specified
date, on and as of any subsequent date as if made at and as of such subsequent
date and such failure shall not have been cured in all material respects within
30 days after written notice of such failure is given to the Company by Parent;
(ii) if the Merger is not completed by December 31, 1996 (unless due to a
delay or default on the part of Parent);
(iii) if the Merger is enjoined by a final, unappealable court order not
entered at the request or with the support of Parent and if Parent shall have
used reasonable efforts to prevent the entry of such order;
(iv) if the Board of Directors of the Company shall have resolved to accept
a Superior Proposal or shall have recommended to the stockholders of the Company
that they tender their shares in a tender or an exchange offer commenced by a
third party (excluding any affiliate of Parent or any group of which any
affiliate of Parent is a member);
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(v) if the Company (A) fails to perform in any material respect any of
its material covenants in this Agreement and (B) does not cure such default in
all material respects within 30 days after notice of such default is given to
the Company by Parent; or
(vi) if the stockholders of the Company fail to approve the Merger at a
duly held meeting of stockholders called for such purpose or any adjournment
thereof.
(c) As used in this Section 9.1, (i) "affiliate" has the meaning assigned
to it in Section 7.4 and (ii) "group" has the meaning set forth in Section 13(d)
of the Exchange Act and the rules and regulations thereunder.
SECTION 9.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement by either Parent or the Company pursuant to the provisions of Section
9.1, this Agreement shall forthwith become void and there shall be no further
obligation on the part of the Company, Parent, Subsidiary or their respective
officers or directors (except as set forth in this Section 9.2, in the second
sentence of Section 7.1(a) and in Sections 7.1(b) and 7.6, all of which shall
survive the termination). Nothing in this Section 9.2 shall relieve any party
from liability for any willful or intentional breach of this Agreement.
SECTION 9.3. AMENDMENT. This Agreement may not be amended except by
action taken by the parties' respective Boards of Directors or duly authorized
committees thereof and then only by an instrument in writing signed on behalf of
each of the parties hereto and in compliance with applicable law. Such
amendment may take place at any time prior to the Closing Date, whether before
or after approval by the stockholders of the Company, Parent or Subsidiary.
SECTION 9.4. WAIVER. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE X
General Provisions
SECTION 10.1. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. No
representations, warranties or agreements in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Merger, and after
effectiveness of the Merger neither the Company, Parent, Subsidiary or their
respective officers or directors shall have any further obligation with respect
thereto except for the representations, warranties and agreements contained in
Articles II, III and X, the last sentence of Section 7.9, and Section 7.11.
SECTION 10.2. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail (return receipt requested) or sent via facsimile to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
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(a) If to Parent or Subsidiary to:
USA Waste Services, Inc.
5400 LBJ Freeway
Suite 300 - Tower One
Dallas, Texas 75240
Attention: Chief Executive Officer
Telecopy: 214-383-7919
with a copy to:
Gregory T. Sangalis
5400 LBJ Freeway
Suite 300 - Tower One
Dallas, Texas 75240
Telecopy: 214-383-7919
(b) If to the Company, to:
Sanifill, Inc.
Suite 700
2777 Allen Parkway
Houston, Texas 77019
Attention: Chief Executive Officer
Telecopy: 713-942-6277
with a copy to:
Steve Walton
Suite 700
2777 Allen Parkway
Houston, Texas 77019
Telecopy: 713-942-6277
SECTION 10.3. INTERPRETATION. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, unless a contrary
intention appears, (i) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision and (ii) reference to any
Article or Section means such Article or Section hereof. No provision of this
Agreement shall be interpreted or construed against any party hereto solely
because such party or its legal representative drafted such provision.
SECTION 10.4. MISCELLANEOUS. This Agreement (including the documents and
instruments referred to herein) (a) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof
(provided, that the provisions of those two certain agreements dated June 17,
1996 by and between the Company and Parent concerning confidentiality and
related matters (the "Confidentiality Agreements"),
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shall remain in effect), (b) is not intended to confer upon any other person any
rights or remedies hereunder, except for rights of indemnified Parties under
Section 7.11 and (c) shall not be assigned by operation of law or otherwise,
except that Subsidiary may assign this Agreement to any other wholly-owned
subsidiary of Parent. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF
DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH
STATE.
SECTION 10.5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 10.6. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and except as set forth in
Sections 7.9 and 7.11, nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
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IN WITNESS WHEREOF, Parent, Subsidiary and the Company have caused this
Agreement to be signed by their respective officers and attested to as of the
date first written above.
USA WASTE SERVICES, INC.
Attest:
/s/ Gregory T. Sangalis /s/ John E. Drury
__________________________ By: _________________________
Secretary Name: John E. Drury
Title: Chief Executive Officer
QUATRO ACQUISITION CORP.
Attest:
/s/ Gregory T. Sangalis /s/ John E. Drury
__________________________ By: __________________________
Secretary Name: John E. Drury
Title: Chief Executive Officer
SANIFILL, INC.
Attest:
/s/ H. Steven Walton /s/ Lorne Bain
___________________________ By: _________________________
Secretary Name: Lorne Bain
Title: Chairman of the Board and
Chief Executive Officer
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EXHIBIT 99.3
------------
FIRST AMENDMENT TO RIGHTS AGREEMENT
This Amendment, dated as of June 22, 1996 (the "Amendment"), is
between Sanifill, Inc., a Delaware corporation (the "Company"), and Chemical
Bank., a New York State banking corporation (the "Rights Agent"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and First City Texas-Houston, N.A., as rights
agent, were parties to a Rights Agreement dated as of December 1, 1991 (the
"Agreement"); and
WHEREAS, the Rights Agent is the successor rights agent to First City
Texas-Houston, N.A.; and
WHEREAS, pursuant to Section 26 of the Agreement, the Company and the
Rights Agent desire to amend the Agreement set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Amendments to Section 1.
(a) The definition of "Beneficial Owner" is amended by adding the
following at the end of the definition:
; and provided, further, that so long as neither Parent, Subsidiary nor any
of their Affiliates or Associates is not otherwise an Acquiring Person,
then Parent, Subsidiary and their Affiliates and Associates shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," any security by
having entered into the Merger Agreement or consummating the transactions
contemplated therein. In interpreting the preceding proviso and other
provisions of this Amendment, it is understood that (i) Parent and
Subsidiary shall be deemed to be the "Beneficial Owner" of and to
"beneficially own" securities as a result of entering into the Stockholders
Voting Agreements and (ii) the obtaining of Beneficial Ownership of a
security following the lapse of the restrictions in paragraph 5 of the
Confidentiality Letter (which lapse occurs by virtue of the proviso to such
paragraph 5) shall not be deemed to be a transaction contemplated by the
Merger Agreement. No Director Stockholder shall be deemed to be the
Beneficial Owner of nor to beneficially own any Common Shares that are
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beneficially owned by either another Director Stockholder or by Parent or
its Affiliates as a result of the Stockholders Voting Agreements.
(b) The following definitions are added to Section 1 of the Agreement:
"Confidentiality Letter" shall mean that letter agreement dated as of June
17, 1996 from the Company to Tex.
"Director Stockholders" (individually, a Director Stockholder) shall mean
those directors of the Company that are parties to the Stockholders Voting
Agreements.
"Merger" shall mean the merger of Purchaser with and into the Company in
accordance with the General Corporation Law of the State of Delaware upon the
terms and subject to the conditions set forth in the Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger, dated as of
June 22, 1996, among Parent, Purchaser, and the Company.
"Parent" shall mean USA Waste Services, Inc., a Delaware corporation.
"Purchaser" shall mean Quatro Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of Parent and any assignee of Purchaser pursuant to
Section 10.4 of the Merger Agreement.
"Stockholders Voting Agreements" shall mean those agreements dated as of
June 22, 1996 among Parent, the Company and the Director Stockholders providing
for among other things, the agreement of the Director Stockholders to vote their
Common Shares in favor of the Merger Agreement.
Section 2. Amendment to Section 7(a).
Section 7(a) is amended by deleting such subsection in its entirety and
substituting the following:
(a) Subject to subsection (e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price (except as
provided in Section 11(q) hereof) with respect to the total number of Preferred
Share Fractions (or Common Shares, other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then exercisable
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(except as provided in Section 11(q) hereof), at or prior to the earliest of (i)
the close of business on December 31, 2001 (the "Final Expiration Date"), (ii)
the consummation of a transaction contemplated by Section 13(d) hereof, (iii)
the time at which the Rights are redeemed or terminated as provided in Section
23 hereof, or (iv) the "Effective Time" as such term is defined in the Merger
Agreement (the earlier of (i), (ii), (iii) and (iv) being herein referred to as
the "Expiration Date").
Section 3. New Section 34.
The following is added as a new Section 34:
Section 34. The Merger. None of the execution or delivery of the
Merger Agreement or the Stockholders Voting Agreements nor the consummation
of the Merger, in each case in accordance with the Merger Agreement, shall
cause (i) Parent or Purchaser or any of their Affiliates to be an Acquiring
Person, (ii) a Stock Acquisition Date to occur (iii) a Distribution Date to
occur (iv) a Section 11(a)(ii) Event to occur or (v) a Section 13 Event to
occur.
Section 4. Severability. If any term, provision, covenant or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 6. Counterparts. This Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 7. Effect of Amendment. Except as expressly modified herein, the
Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed all as of the day and year first above written.
SANIFILL, INC.
By/s/ H. Steven Walton
------------------------
Name: H. Steven Walton
Title: Vice President
CHEMICAL BANK
By/s/ Barbara Cotte Robbins
-------------------------
Name: Barbara Cotte Robbins
Title: Vice President
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