<PAGE> 1
As filed with the Securities and Exchange Commission on December 20, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------
THE CERPLEX GROUP, INC.
(Exact name of issuer as specified in its charter)
DELAWARE 33-0411354
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
1382 BELL AVENUE
TUSTIN, CA 92780
(Address of principal executive offices) (Zip Code)
----------
RESTATED 1993 STOCK OPTION PLAN
(Full title of the plans)
WILLIAM A. KLEIN
CHIEF EXECUTIVE OFFICER
THE CERPLEX GROUP, INC.
1382 BELL AVENUE
TUSTIN, CA 92780
(Name and address of agent for service)
(714) 258-5600
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ -------- ---
Restated 1993 Stock Option Plan:
- --------------------------------
<S> <C> <C> <C> <C>
Options to Purchase
Common Stock 1,500,000 N/A N/A N/A
Common Stock, $0.001 par value 1,500,000 $1.09 $1,635,000 $495.45
==========================================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Restated 1993 Stock Option
Plan by reason of any stock dividend, stock split, recapitalization or
other similar transaction effected without the receipt of consideration
which results in an increase in the number of the Registrant's outstanding
shares of Common Stock.
(2) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933, as amended (the "1993 Act"), on the basis of the
average of the high and low price per share of the Common Stock of The
Cerplex Group, Inc. on December 19, 1996 as reported on the Nasdaq National
Market.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The Cerplex Group, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "SEC"):
a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 filed with the SEC pursuant to
Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "1934 Act") on April 16, 1996;
b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996;
c) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996;
d) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 29, 1996;
e) The definitive Proxy Statement of the Registrant in connection
with the Annual Meeting of Security Holders held on August 22,
1996;
f) The Registrant's Current Report on Form 8-K dated April 8,
1996;
g) The Registrant's Current Report on Form 8-K and 8-K/A dated
May 24, 1996;
h) The Registrant's Current Report on Form 8-K dated June 11,
1996;
i) The Registrant's Current Report on Form 8-K dated September
24, 1996;
j) The Registrant's Current Report on Form 8-K dated October 15,
1996;
k) The Registrant's Current Report on Form 8-K dated December 13,
1996;
l) The Registrant's Registration Statement No. 333-12581 on Form
S-3 filed with the SEC on September 24, 1996; and
m) The Registrant's Registration Statement No. 00-23602 on Form
8-A filed with the SEC on March 9, 1994, in which there is
described the terms, rights and provisions applicable to the
Registrant's outstanding Common Stock.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
II-1.
<PAGE> 3
Item 4. Description of Capital Stock
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Under Section 145 of the Delaware General Corporation Law, as amended
(the "Delaware Law"), the Registrant has broad powers to indemnify its directors
and officers against liabilities they may incur in such capacities, including
liabilities under the 1933 Act. The Registrant's Bylaws provide that the
Registrant will indemnify its directors and officers to the fullest extent
permitted by law and require the Registrant to advance litigation expenses upon
receipt by the Registrant of an undertaking by the director or officer to repay
such advances if it is ultimately determined that the director or officer is not
entitled to indemnification. The Bylaws further provide that rights conferred
under such Bylaws shall not be deemed to be exclusive of any other right such
persons may have or acquire under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
The Registrant's Restated Certificate of Incorporation provides that,
pursuant to Delaware Law, its directors shall not be liable for monetary damages
for breach of the directors' fiduciary duty of care to the Registrant and its
stockholders. This provision in the Restated Certificate of Incorporation does
not eliminate the duty of care, and in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Delaware Law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the
Registrant or its stockholders, for acts or omissions not in good faith or
involving intentional misconduct or knowing violations of law, for actions
leading to improper personal benefit to the director and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware Law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
In addition, the Registrant has entered into agreements to indemnify
its directors in addition to the indemnification provided for in the Restated
Certificate of Incorporation and Bylaws.
Item 7. Exemption from Registration Claimed
Not Applicable.
II-2.
<PAGE> 4
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Title Method of Filing
------ ----- ----------------
<S> <C> <C>
4.1 Stock Purchase Agreement dated as of November 19, Incorporated herein by reference to
1993 by and among the Registrant, the stockholders of Exhibit 4.1 to the Company's
the Registrant identified in Part A of Schedule I thereto Registration Statement on Form S-1
and the purchasers of shares of the Registrant's Series (File No. 33-75004) which was
A Preferred Stock identified in Schedule I thereto declared effective by the Commission
(including the Schedules thereto; Exhibits omitted). on April 8, 1994.
4.2 Registration Rights Agreement dated as of November Incorporated herein by reference to
19, 1993, by and among the Registrant, the investors Exhibit 4.2 to the Company's
listed on Schedule A thereto and the security holders of Registration Statement on Form S-1
the Registrant listed on Schedule B thereto, together (File No. 33-75004) which was
with Amendment No.1. declared effective by the Commission
on April 8, 1994.
4.3 Co-Sale Agreement dated as of November 19, 1993, by Incorporated herein by reference to
and among the Registrant, the managers listed on Exhibit 4.3 to the Company's
Schedule A thereto and the investors listed on Schedule Registration Statement on Form S-1
B thereto. (File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
4.4 Warrant Agreement dated as of November 19, 1993, by Incorporated herein by reference to
and among the Registrant and the purchasers listed in Exhibit 4.4 to the Company's
Annex 1 thereto. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
4.5 Placement Agent Warrant Purchase Agreement dated Incorporated herein by reference to
as of November 19, 1993, between the Registrant and Exhibit 4.5 to the Company's
Donaldson, Lufkin & Jenrette Securities Corporation. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
4.6 Observation Rights Agreement dated as of November Incorporated herein by reference to
19, 1993, between the Registrant and certain stock Exhibit 4.6 to the Company's
purchasers. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
</TABLE>
II-3.
<PAGE> 5
<TABLE>
<CAPTION>
Exhibit
Number Title Method of Filing
------ ----- ----------------
<S> <C> <C>
4.7 Observation Rights Agreement dated as of November Incorporated herein by reference to
19, 1993, between the Registrant and certain note Exhibit 4.7 to the Company's
purchasers. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
4.8 Note Purchase Agreement dated as of November 19, Incorporated herein by reference to
1993 (the "Note Purchase Agreement"), by and among Exhibit 4.8 to the Company's
the Registrant and The Northwestern Mutual Life Registration Statement on Form S-1
Insurance Company, John Hancock Mutual Life (File No. 33-75004) which was
Insurance, Registrant and Bank of Scotland London declared effective by the Commission
Nominees Limited. on April 8, 1994.
4.9 Amendment No. 2 to Registration Rights Agreement Incorporated herein by reference to
dated as of April 6, 1994, by and among the Registrant Exhibit 4.9 to the Company's
and certain of its Securities holders. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
4.10 Amendment to Note Purchase Agreement, dated as of Incorporated herein by reference to
October 27, 1994, by and among the Company, Exhibit 4.10 to the Company's
Northwestern Mutual Life Insurance Company, John Annual Report on Form 10-K for
Hancock Mutual Life Insurance Company and North the fiscal year ended December 31,
Atlantic Smaller Companies Trust P.L.C. (collectively, 1995.
the "Noteholders").
4.11 Waiver and Amendment Agreement dated April 15, Incorporated herein by reference to
1996 by and among Company, The Northwestern Exhibit 4.11 to the Company's
Mutual Life Insurance Company, John Hancock Mutual Annual Report on Form 10-K for
Life Insurance Company and North Atlantic Smaller the fiscal year ended December 31,
Companies Investment Trust PLC. 1995.
4.12 Warrant Agreement dated as of April 15, 1996 by and Incorporated herein by reference to
among Company, The Northwestern Mutual Life Exhibit 4.12 to the Company's
Insurance Company, John Hancock Mutual Life Annual Report on Form 10-K for
Insurance Company and North Atlantic Smaller the fiscal year ended December 31,
Companies Investment Trust PLC. 1995.
4.13 First Amendment to Warrant Agreement dated April Incorporated herein by reference to
15, 1996 by and among Company and each of the Exhibit 4.13 to the Company's
holders of warrants listed on Schedule A thereto, with Annual Report on Form 10-K for
respect to that certain Warrant Agreement dated the fiscal year ended December 31,
November 19, 1993. 1995.
</TABLE>
II-4.
<PAGE> 6
<TABLE>
<CAPTION>
Exhibit
Number Title Method of Filing
------ ----- ----------------
<S> <C> <C>
4.14 First Amendment to Observation Rights Agreement Incorporated herein by reference to
dated as of April 15, 1996 between Company and Exhibit 4.14 to the Company's
certain note purchasers. Annual Report on Form 10-K for
the fiscal year ended December 31,
1995.
4.15 Third Amendment to Registration Rights Agreement Incorporated herein by reference to
dated as of April 15, 1996 by and among Company, the Exhibit 4.15 to the Company's
investors of Company listed on Schedule A thereto and Annual Report on Form 10-K for
the security holders of Company listed on Schedule B the fiscal year ended December 31,
thereto. 1995.
4.16 Warrant Agreement dated April 15, 1996 by and among Incorporated herein by reference to
Company, Wells Fargo Bank, National Association, Exhibit 4.16 to the Company's
Sumitomo Bank of California, BHF Bank Annual Report on Form 10-K for
Aktiengesellschaft and Comerica Bank-California. the fiscal year ended December 31,
1995.
4.17 Stock Purchase Agreement dated June 10, 1996 by and Incorporated herein by reference to
among the Company and the investors listed on Exhibit 4.17 to the Company's
Schedule A thereto. Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996.
4.18 Fourth Amendment to Registration Rights Agreement Incorporated herein by reference to
dated June 10, 1996 by and among the Company, the Exhibit 4.18 to the Company's
investors listed on Schedule A thereto, the security Quarterly Report on Form 10-Q for
holders of the Company listed on Schedule B thereto, the quarter ended June 30, 1996.
the banks listed on Schedule C thereto and each of the parties
listed on Schedule D thereto.
4.19 Certificate of Designation of Preferences of Series B Incorporated herein by reference to
Preferred Stock of The Cerplex Group, Inc. Exhibit 3.3 filed to the Company's
Quarterly Report on Form 10-Q for
the quarter ended September 29,
1996.
4.20 Waiver and Amendment Agreement dated as of Incorporated herein by reference to
October 31, 1996 by and among the Company, The Exhibit 4.20 to the Company's
Northwestern Mutual Life Insurance Company, John Quarterly Report on Form 10-Q for
Hancock Mutual Life Insurance Company and North the quarter ended September 29,
Atlantic Smaller Companies Investment Trust PLC, 1996.
which waiver is made with reference to the Note Purchase
Agreement, as amended, and Warrant Agreement dated April 15,
1996.
4.21 Waiver and Amendment Agreement dated as of December 9, 1996 Filed herein.
by and among the Company and the Noteholders, which
waiver is made with reference to the Note Purchase
Agreement, as amended.
</TABLE>
II-5.
<PAGE> 7
<TABLE>
<CAPTION>
Exhibit
Number Title Method of Filing
------ ----- ----------------
<S> <C> <C>
5.1 Opinion of Brobeck, Phleger & Harrison. Filed herein.
23.1 Consent of Independent Accountants-- KPMG Peat Filed herein.
Marwick LLP.
23.2 Consent of Brobeck, Phleger & Harrison is contained in Filed herein.
Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4 of Filed herein.
this Registration Statement.
99.1 Restated 1993 Stock Option Plan, as amended (the Incorporated herein by reference to
"Restated Plan"). Exhibit 10.9 to the Company's
Quarterly Report on Form 10-Q for
the quarter ended September 29,
1996.
99.2 Form of Notice of Grant of Stock Option. Incorporated herein by reference to
Exhibit 99.2 to the Company's
Registration Statement on Form S-8
(File No. 33-84946) which was filed
with the SEC on October 11, 1994.
99.3 Form of Stock Option Agreement. Incorporated herein by reference to
Exhibit 99.3 to the Company's
Registration Statement on Form S-8
(File No. 33-84946) which was filed
with the SEC on October 11, 1994.
99.4 Addendum to Stock Option Agreement (Special Tax Incorporated herein by reference to
Elections). Exhibit 99.4 to the Company's
Registration Statement on Form S-8
(File No. 33-84946) which was filed
with the SEC on October 11, 1994.
99.5 Addendum to Stock Option Agreement (Limited Stock Incorporated herein by reference to
Appreciation Rights). Exhibit 99.5 to the Company's
Registration Statement on Form S-8
(File No. 33-84946) which was filed
with the SEC on October 11, 1994.
99.6 Addendum to Stock Option Agreement (Financial Incorporated herein by reference to
Assistance). Exhibit 99.6 to the Company's
Registration Statement on Form S-8
(File No. 33-84946) which was filed
with the SEC on October 11, 1994.
</TABLE>
II-6.
<PAGE> 8
<TABLE>
<CAPTION>
Exhibit
Number Title Method of Filing
------ ----- ----------------
<S> <C> <C>
99.7 Addendum to Stock Option Agreement (Change in Incorporated herein by reference to
Control). Exhibit 99.7 to the Company's
Registration Statement on Form S-8
(File No. 33-84946) which was filed
with the SEC on October 11, 1994.
99.8 Form of Stock Purchase Agreement. Incorporated herein by reference to
Exhibit 99.8 to the Company's
Registration Statement on Form S-8
(File No. 33-84946) which was filed
with the SEC on October 11, 1994.
99.9 Form of Notice of Grant of Automatic Stock Option Filed herein.
(Initial Grant).
99.10 Form of Notice of Grant of Automatic Stock Option Filed herein.
(Annual Grant).
99.11 Form of Automatic Stock Option Agreement. Filed herein.
</TABLE>
Item 9. Undertakings
A. The undersigned Registrant hereby undertakes: (1) to file, during
any period in which offers or sales are being made, a post-effective amendment
to this registration statement (i) to include any prospectus required by Section
10(a)(3) of the 1933 Act, (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that clauses (1)(i) and (1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference
into the registration statement; (2) that for the purpose of determining any
liability under the 1933 Act each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and (3) to remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the Restated 1993 Stock Option Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers or controlling persons of the
Registrant pursuant to the indemnity provisions summarized in Item 6, or
otherwise, the Registrant has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities
II-7.
<PAGE> 9
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Tustin, State of California, on this 20th day of
December, 1996.
THE CERPLEX GROUP, INC.
By /s/ JAMES R. ECKSTAEDT
---------------------------------------
James R. Eckstaedt
Senior Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of The Cerplex Group, Inc., a
Delaware corporation, do hereby constitute and appoint William A. Klein and
James R. Eckstaedt, and each of them, the lawful attorneys and agents, with full
power and authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, and any one of them, determines may
be necessary or advisable or required to enable said corporation to comply with
the 1933 Act, and any rules or regulations or requirements of the SEC in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, and any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William A. Klein President, Chief Executive December 20, 1996
- --------------------------- Officer and Chairman of the
William A. Klein Board
</TABLE>
II-8.
<PAGE> 10
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Richard C. Davis President of International December 20, 1996
- --------------------------- Operations and Director
Richard C. Davis
/s/ James R. Eckstaedt Senior Vice President and Chief December 20, 1996
- --------------------------- Financial Officer (Principal
James R. Eckstaedt Accounting Officer)
/s/ Robert Finzi Director December 20, 1996
- ---------------------------
Robert Finzi
/s/ Jerome Jacobson Director December 20, 1996
- ---------------------------
Jerome Jacobson
/s/ Patrick S. Jones Director December 20, 1996
- ---------------------------
Patrick S. Jones
/s/ Myron Kunin Director December 20, 1996
- ---------------------------
Myron Kunin
</TABLE>
II-9
<PAGE> 11
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
THE CERPLEX GROUP, INC.
<PAGE> 12
EXHIBIT INDEX
Exhibit Number Exhibit
- -------------- -------
4.21 Waiver and Amendment Agreement dated as of December 9, 1996
by and among the Company and the Noteholders.
5.1 Opinion of Brobeck, Phleger & Harrison.
23.1 Consent of Independent Accountants - KPMG Peat Marwick LLP.
23.2 Consent of Brobeck, Phleger & Harrison is contained in
Exhibit 5.1.
24.1 Power of Attorney. Reference is made to page II-4 of this
Registration Statement.
99.9 Form of Notice of Grant of Automatic Stock Option (Initial
Grant).
99.10 Form of Notice of Grant of Automatic Stock Option (Annual
Grant).
99.11 Form of Automatic Stock Option Agreement.
<PAGE> 1
Exhibit 4.21
THE CERPLEX GROUP, INC.
WAIVER AND AMENDMENT AGREEMENT
DATED DECEMBER 9, 1996
$17,250,000
SERIES A SENIOR SUBORDINATED NOTES DUE NOVEMBER 19, 2001
<PAGE> 2
WAIVER AND AMENDMENT AGREEMENT
WAIVER AND AMENDMENT AGREEMENT (this "Agreement"), dated December 9,
1996, by and among THE CERPLEX GROUP, INC., a Delaware corporation (together
with its successors and assigns, the "Company"), THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY and NORTH ATLANTIC
SMALLER COMPANIES INVESTMENT TRUST PLC (collectively, the "Noteholders").
RECITALS:
A. The Company has entered into those certain separate Note Purchase
Agreements, each dated as of November 19, 1993 (collectively, as amended
pursuant to the terms of each of the amendment agreements set forth in Schedule
A to this Agreement and as in effect prior to the effectiveness of this
Agreement, the "Existing Note Purchase Agreement," and, as amended by this
Agreement, the "Amended Note Purchase Agreement"), with each of the Noteholders,
pursuant to which the Company originally issued and sold to the Noteholders
(i) an aggregate principal amount of Seventeen Million Two
Hundred Fifty Thousand Dollars ($17,250,000) of the Company's Series A
9.00% Senior Subordinated Notes Due November 19, 2001 (as amended, the
"Notes"), and
(ii) an aggregate principal amount of Five Million Seven
Hundred Fifty Thousand Dollars ($5,750,000) of the Company's Series B
9.00% Senior Subordinated Notes Due November 19, 2001 (the "Series B
Notes"). The Company has prepaid the Series B Notes and such Series B
Notes are no longer issued and outstanding.
B. The Noteholders are the current holders of one hundred percent
(100%) of the Notes outstanding as of the Effective Date.
C. Pursuant to a notice to the Noteholders dated September 23, 1996,
the Company notified the Noteholders of certain Defaults and Events of Defaults
under Section 6.3 and Section 6.4 of the Existing Note Purchase Agreement (the
1
<PAGE> 3
"Noticed Events of Default," such term to include, for purposes of avoidance of
doubt, all Defaults and Events of Defaults under Section 6.3 and Section 6.4 of
the Existing Note Purchase Agreement that may have existed prior to the date of
such notice or after the date of such notice and prior to the effective date of
the October 1996 Waiver (as hereinafter defined)) and the Company has requested
that the Noteholders continue the waiver of such Noticed Events of Default
provided for in the October 1996 Waiver until March 31, 1997.
D. Pursuant to a Waiver and Amendment Agreement dated as of October 31,
1996, the Noteholders waived the aforesaid Noticed Events of Default until
November 30, 1996 and, pursuant to a letter agreement dated November 26, 1996,
extended such waiver until December 9, 1996 (the "October 1996 Waiver").
E. The Company has further requested that certain of the provisions in
the Existing Note Purchase Agreement be amended, as more particularly provided
herein.
F. The Noteholders are agreeable, subject to the terms and conditions
set forth below, to granting the aforesaid waivers and modifying the Existing
Note Purchase Agreement as hereinafter set forth, and in connection therewith,
each of the Company and the Noteholders has agreed to amend the Existing Note
Purchase Agreement as set forth herein.
AGREEMENT:
NOW THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS.
The terms used herein and not defined herein shall have the meanings
assigned to such terms in the Existing Note Purchase Agreement. As used in this
Agreement, the following terms have the respective meanings specified below:
"AGREEMENT, THIS" -- means this Waiver and Amendment Agreement, as it
may be amended from time to time.
"AMENDED NOTE PURCHASE AGREEMENT" -- Recital A.
"COMPANY" -- the introductory sentence.
2
<PAGE> 4
"EFFECTIVE DATE" -- Section 5.
"EXISTING NOTE PURCHASE AGREEMENT" -- Recital A.
"1996 WARRANT AGREEMENT" -- Section 3.2.
"NOTEHOLDERS" -- the introductory sentence.
"NOTES" -- Recital A.
"NOTICED EVENTS OF DEFAULT" -- Recital C.
"OCTOBER 1996 WAIVER" -- Recital D.
SECTION 2. WAIVER.
Subject to the satisfaction of the conditions set forth in Section 4,
the Noteholders hereby continue the waiver provided in the October 1996 Waiver
in respect of each of the Noticed Events of Default until March 31, 1997 and
agree that the effectiveness of Section 6.3 and Section 6.4 shall be temporarily
suspended from and including the effective date of the October 1996 Waiver to
and including the earlier to occur of (a) the date that any holder of Senior
Debt takes any action in respect of any default or any event of default under
any Senior Credit Document and (b) March 31, 1997 (the "Reinstatement Date").
After the Reinstatement Date, Section 6.3 and Section 6.4 shall be in full force
and effect. Except for the foregoing express waivers and suspensions, the terms
of this Agreement shall not operate as a waiver of, or otherwise prejudice, the
rights, remedies or powers of the Noteholders under the Note Purchase Agreement,
under the Notes or under applicable law and all of such rights, remedies and
powers are hereby expressly reserved.
SECTION 3. AMENDMENTS TO THE EXISTING NOTE PURCHASE AGREEMENT;
1996 WARRANT AGREEMENT; AFFIRMATION.
3.1 AMENDMENTS TO THE EXISTING NOTE PURCHASE AGREEMENT.
The Company and, subject to the satisfaction of the conditions set
forth in Section 5, each of the Noteholders hereby consent and agree to the
amendments to the Existing Note Purchase Agreement set forth in Exhibit A to
this Agreement. Each such amendment is incorporated herein by reference as if
set forth verbatim in this Agreement.
3
<PAGE> 5
3.2 AMENDMENT TO THE EXISTING 1996 WARRANT AGREEMENT.
In connection with the October 1996 Waiver, that certain Warrant
Agreement (the "1996 Warrant Agreement"), dated as of April 15, 1996, among the
Company and the Noteholders was changed by amending and restating the definition
of "Initial Purchase Price" therein to mean $2.50. For purposes of the avoidance
of doubt and in confirmation of said amendment, each of the Warrant Certificates
(as such term is defined in the 1996 Warrant Agreement) issued under the 1996
Warrant Agreement and currently outstanding as well as Exhibit A to the 1996
Warrant Agreement are hereby further amended and modified by changing the
references therein to "initial purchase price" and "Purchase Price" from "Six
Dollars ($6.00) per share" to "Two Dollars and Fifty Cents ($2.50) per share."
This amendment to each of the Warrant Certificates currently outstanding shall
be effective without any further action required on the part of the Noteholders
or the Company and without the need to submit such Certificates to Company for
any notation of said change thereon or to otherwise exchange such Certificates
for new Warrant Certificates.
3.3 AFFIRMATION OF OBLIGATIONS.
The Company hereby acknowledges and affirms all of its obligations
under the terms of the Existing Note Purchase Agreement, as amended hereby, and
the 1996 Warrant Agreement and the Warrant Certificates issued thereunder, as
amended hereby.
SECTION 4. WARRANTIES AND REPRESENTATIONS.
To induce the Noteholders to enter into this Agreement, the Company
warrants and represents to the Noteholders that as of the Effective Date:
4.1 CORPORATE ORGANIZATION AND AUTHORITY.
The Company:
(a) is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware;
(b) has all legal and corporate power and authority to own and
operate its Properties and to carry on its
4
<PAGE> 6
business as now conducted and as presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and
other governmental authorizations necessary to own and operate its
Properties and to carry on its business as now conducted and as
presently proposed to be conducted, except where the failure to have
such licenses, certificates and permits, either individually or in the
aggregate, would not have, and could not reasonably be expected to
have, a Material Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is
authorized to do business and is in good standing, as a foreign
corporation in each state except where the failure to be so qualified
or licensed and authorized and in good standing, either individually or
in the aggregate, would not have, and could not reasonably be expected
to have, a Material Adverse Effect.
4.2 COMPLIANCE WITH LAW.
The Company:
(a) is not in violation of any law, ordinance, governmental
rule or regulation to which it is subject; and
(b) has not failed to obtain any license, certificate, permit,
franchise or other governmental authorization necessary to the
ownership of its Property or to the conduct of its business;
which violation or failure to obtain, either individually or in the aggregate,
would have, or could reasonably be expected to have, a Material Adverse Effect.
4.3 LEGAL AND AUTHORIZED; OBLIGATIONS ARE ENFORCEABLE.
(a) AUTHORIZATION. The execution and delivery by the Company
of this Agreement and the performance by the Company of its obligations
hereunder and under the Amended Note Purchase Agreement are within the
corporate powers of the Company and do not conflict with, result in any
breach in any of the provisions of, constitute a default under, or
result in the creation of any Lien upon any Property of the Company
under the provisions of, any agreement, charter instrument, bylaw
5
<PAGE> 7
or other instrument to which it is a party or by which it or any of its
Property may be bound.
(b) OBLIGATIONS ARE LEGAL AND ENFORCEABLE. The execution and
delivery by the Company of this Agreement have been duly authorized by
all necessary action on the part of the Company, and this Agreement has
been executed and delivered by one or more duly authorized officers of
the Company. This Agreement and the Amended Note Purchase Agreement
constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms, except that the enforceability thereof may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or other similar laws
affecting the enforceability of creditors' rights generally;
(ii) subject to the availability of equitable
remedies; and
(iii) with respect to indemnity and contribution,
limited by state or federal laws relating to Securities or by
the public policy underlying such laws.
4.4 PENDING LITIGATION.
Except as set forth in Schedule 4.4, there are no proceedings, actions
or investigations pending or, to the knowledge of the Company, threatened
against or affecting the Company in any court or before any Governmental
Authority or arbitration board or tribunal that, either individually or in the
aggregate, would have or could reasonably be expected to have a Material Adverse
Effect. The Company is not in default with respect to any judgment, order, writ,
injunction or decree of any court, Governmental Authority or arbitration board
or tribunal that, either individually or in the aggregate, would have or could
reasonably be expected to have a Material Adverse Effect.
Except as previously disclosed to the Noteholders, the Company has not
received any notice of termination of any material contract, lease or other
agreement or suffered any material damage, destruction or loss (whether or not
covered by insurance) or had any employee strike, work-stoppage, slowdown or
lock-out or any substantial, non-frivolous threat
6
<PAGE> 8
directed to it of any imminent strike, work-stoppage, slowdown or lock-out.
4.5 GOVERNMENTAL CONSENT.
Neither the nature of the Company, nor of any of its businesses or
Properties, nor any relationship between the Company and any other Person, nor
any circumstance in connection herewith or in connection with the execution and
delivery of this Agreement is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of the Company as a condition to the
execution and delivery thereof.
4.6 NO DEFAULTS.
(a) NO OTHER DEFAULTS. No Defaults or Events of Default exist,
other than the Noticed Events of Default.
(b) FINANCING DOCUMENTS. No event has occurred and no
condition exists that, upon the execution, delivery and effectiveness
of this Agreement would constitute a Default or an Event of Default.
(c) CHARTER INSTRUMENT, OTHER AGREEMENTS. The Company is not
in violation in any respect of any term of any charter instrument or
bylaw. Except as set forth in Schedule 4.6, the Company is not in
violation in any material respect of any term in any agreement or other
instrument to which it is a party or by which it or any of its Property
may be bound, which would have, or could reasonably be expected to
have, a Material Adverse Effect.
SECTION 5. CONDITIONS.
The waiver by the Noteholders set forth in Section 2 and the consent of
the Noteholders to the amendments described in Section 3 shall become effective
on December 9, 1996 (the "Effective Date") if all of the following conditions
have on or prior to such date been satisfied:
5.1 EXECUTION AND DELIVERY OF THIS AGREEMENT.
The Company and the Required Holders shall have executed and delivered
counterparts of this Agreement.
5.2 WAIVER BY HOLDERS OF SENIOR DEBT.
7
<PAGE> 9
The Company and each holder of Senior Debt whose consent is required
therefor pursuant to the terms of the Senior Credit Documents shall have
executed and delivered waivers and/or amendments with respect to all events of
default which exist under such Senior Credit Documents. The Company shall have
delivered to each Noteholder a copy of the Second Amendment to Credit Agreement
and Limited Waiver entered into among the Company and the holders of Senior
Debt, together with a certification by a Senior Officer of the Company stating
that such copy is a true and correct copy and such Second Amendment to Credit
Agreement and Limited Waiver cures or waives all events of default which exist
under the Senior Credit Documents as of the date hereof.
5.3 NO DEFAULT; REPRESENTATIONS AND WARRANTIES TRUE.
After giving effect to Section 2, hereof, no Default or Event of
Default under the Amended Note Purchase Agreement shall exist, the warranties
and representations set forth in Section 4 hereof shall be true and correct on
the Effective Date, and the Noteholders shall have received a certificate, dated
as of the Effective Date and signed by a Senior Officer, certifying to such
matters and certifying that all of the conditions specified in this Section 5
have been satisfied.
5.4 AUTHORIZATION OF TRANSACTIONS.
The Company shall have authorized, by all necessary corporate action,
its execution, delivery and performance of this Agreement and the consummation
of all transactions contemplated by this Agreement and evidence of the same
shall have been delivered to the Noteholders. The Noteholders shall have
received a certificate, dated as of the Effective Date and signed by the
Secretary or the Assistant Secretary of the Company, certifying to the
resolutions in respect of such authorization and to such other matters as the
Noteholders shall reasonably request.
5.5 OPINIONS OF COUNSEL.
The Noteholders shall have received from each of (a) Brobeck, Phleger &
Harrison, counsel to the Company, and (b) Hebb & Gitlin, a legal opinion
substantially in the form set forth in Exhibit B1 and Exhibit B2, respectively,
and as to such other matters as the Noteholders may reasonably request.
5.6 EXPENSES.
8
<PAGE> 10
The Company shall have paid all costs and expenses to the Noteholders
relating to this Agreement in accordance with Section 6.6 (including, without
limitation, any attorney's fees and disbursements).
5.7 PROCEEDINGS SATISFACTORY.
All proceedings taken in connection with this Agreement shall be
satisfactory to the Noteholders and their special counsel. The Noteholders and
their special counsel shall have received copies of such documents and papers as
they may reasonably request in connection therewith, in form and substance
satisfactory to them.
SECTION 6. MISCELLANEOUS.
6.1 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND ENFORCED IN
ACCORDANCE WITH, AND GOVERNED BY, INTERNAL NEW YORK LAW.
6.2 DUPLICATE ORIGINALS.
Two or more duplicate originals of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed in one or
more counterparts and shall be effective when at least one counterpart shall
have been executed by each party hereto, and each set of counterparts which,
collectively, show execution by each party hereto shall constitute one duplicate
original.
6.3 EFFECT OF THIS AGREEMENT.
Except as specifically provided in this Agreement, no terms or
provisions of the Existing Note Purchase Agreement have been modified or changed
by this Agreement and the terms and provisions of the Existing Note Purchase
Agreement, as amended hereby, shall continue in full force and effect. This
Agreement and the waivers and amendments contained herein shall have and be in
effect on and after the Effective Date.
9
<PAGE> 11
6.4 WAIVERS AND AMENDMENTS OF THIS AGREEMENT.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, or by any action or inaction, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.
6.5 SECTION HEADINGS.
The titles of the sections hereof appear as a matter of convenience
only, do not constitute a part of this Agreement and shall not affect the
construction hereof.
6.6 COSTS AND EXPENSES.
On the Effective Date, the Company shall pay all costs and expenses of
the Noteholders related hereto, including, but not limited to, the statement for
fees and disbursements of the Noteholders' special counsel presented to the
Company on the Effective Date for matters in connection with this Agreement. The
Company will also pay upon receipt of any statement thereof, each additional
statement for fees and disbursements of the Noteholders' special counsel
rendered after the Effective Date in connection with this Agreement. The
obligations of the Company under this Section 6.6 shall survive the payment or
prepayment of the Notes and the termination of the Amended Note Purchase
Agreement.
6.7 SURVIVAL.
All warranties, representations, certifications and covenants made by
the Company hereunder or in any certificate or other instrument delivered
pursuant hereto or thereto shall be considered to have been relied upon by the
Noteholders and shall survive the execution of this Agreement, regardless of any
investigation made by or on behalf of the Noteholders. All statements in any
such certificate or other instrument shall constitute warranties and
representations of the Company hereunder.
[REMAINDER OF PAGE INTENTIONALLY BLANK. NEXT PAGE IS SIGNATURE PAGE.]
10
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on their behalf by a duly authorized officer or agent thereof, as the
case may be, as of the date first above written.
THE CERPLEX GROUP, INC.
By
--------------------------------
Name:
Title:
Accepted:
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By
---------------------------------------
Name:
Title:
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
By
---------------------------------------
Name:
Title:
NORTH ATLANTIC SMALLER COMPANIES INVESTMENT TRUST PLC
By
---------------------------------------
Name:
Title:
<PAGE> 13
[Signature page to the WAIVER AND AMENDMENT AGREEMENT among THE CERPLEX
GROUP, INC. and the Noteholders listed therein.]
S-2
<PAGE> 14
SCHEDULE A
Amendment No. 1 to Note Purchase Agreement dated as of May 26, 1994.
Amendment No. 2 to Note Purchase Agreement dated as of July 29, 1994.
Amendment Agreement dated as of October 27, 1994.
Waiver and Amendment Agreement dated as of April 15, 1996.
Waiver and Amendment Agreement dated as of October 31, 1996 (as extended by that
certain letter agreement dated November 26, 1996).
Schedule A-1
<PAGE> 15
SCHEDULE 4.4
PENDING AND THREATENED LITIGATION
[To be provided by the Company]
Schedule 4.4-1
<PAGE> 16
SCHEDULE 4.6
VIOLATIONS OF AGREEMENTS AND INSTRUMENTS
[To be provided by the Company]
Schedule 4.6-1
<PAGE> 17
EXHIBIT A
AMENDMENTS TO EXISTING NOTE PURCHASE AGREEMENT
1. AMENDMENT TO SECTION 6 OF THE EXISTING NOTE PURCHASE AGREEMENT.
Section 6 of the Existing Note Purchase Agreement is hereby amended by adding
the following Section 6.18 and Section 6.19 immediately following Section 6.17
in the Existing Note Purchase Agreement:
"6.18 MINIMUM PROFITABILITY. The Company shall not permit
Consolidated Net Income (as defined in the Wells Fargo Credit
Agreement) for the fiscal quarter of the Company ending December 31,
1996 to be less than ($7,000,000).
6.19 MINIMUM RATIO OF ACCOUNTS RECEIVABLE TO LOANS. The
Company shall not permit the ratio of (i) the sum of (a) the aggregate
amount of all Accounts Receivable (as defined in the Wells Fargo Credit
Agreement) of the Company and the Subsidiaries as of the last day of
any fiscal quarter of the Company and (b) the book value as defined by
GAAP of all Inventory (as defined in the Wells Fargo Credit Agreement)
of the Company and the Subsidiaries as of such day to (ii) the
aggregate principal amount of all outstanding Wells Fargo Credit
Agreement Debt as of such day to be less than 0.80:1.00."
2. AMENDMENT TO SECTION 7.1.
(a) Clause (j) of Section 7.1 of the Existing Note Purchase
Agreement is hereby amended by deleting the word "and" at the end of
such clause.
(b) Clause (k) of Section 7.1 of the Existing Note Purchase
Agreement is hereby amended by deleting the period at the end of such
clause and substituting "; and" in lieu thereof.
(c) Section 7.1 of the Existing Note Purchase Agreement is
hereby by adding the following clause (l) immediately following clause
(k) in Section 7.1 of the Existing Note Purchase Agreement:
Exhibit A - 1
<PAGE> 18
"(l) MONTHLY FINANCIAL STATEMENTS -- as soon as
available and in any event prior to December 10, 1996 with
respect to the month ended October 31, 1996 and within 30 days
after the end of each month thereafter, commencing with the
month ended November 30, 1996, the consolidated balance sheet
of the Company and the Subsidiaries as at the end of such
month, the related consolidated statements of income,
stockholders' equity and cash flows of the Company and the
Subsidiaries for such month, and an income statement for such
month showing the results of operations for each division of
the Company and the Subsidiaries, all in reasonable detail and
certified by the chief financial officer of the Company that
they fairly present the financial condition of the Company and
the Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal
year-end adjustments."
3. AMENDMENT TO SECTION 8.1(C).
The following is hereby added to the end of Section 8.1(c) of the
Existing Note Purchase Agreement: "or Section 6.18 or Section 6.19."
Exhibit A - 2
<PAGE> 19
EXHIBIT B1
FORM OF OPINION OF COUNSEL TO THE COMPANY
[Letterhead of Brobeck, Phleger & Harrison LLP]
[Effective Date]
To Each of the Persons
Listed on Annex 1 Hereto
Re: The Cerplex Group, Inc.,
a Delaware corporation (the "Company")
Ladies and Gentlemen:
Reference is made to the Waiver and Amendment Agreement dated December
9, 1996 (the "Amendment"), among the Company and each of the Persons listed
under Part A of Annex 1 hereto (the "Noteholders"), which waives and amends
certain of the provisions of, as specified in the Amendment, those certain Note
Purchase Agreements, each dated as of November 19, 1993, as amended
(collectively, as in effect immediately prior to the effectiveness of the
Amendment, the "Existing Note Purchase Agreement," and, as amended by the
Amendment, the "Amended Note Purchase Agreement"), between the Company and each
of the Persons listed on Annex 1 thereto, relating to, among other things, the
purchase and sale of the Company's Series A 9.00% Senior Subordinated Notes due
November 19, 2001 (the "Notes"). The capitalized terms used herein and not
defined herein have the meanings specified in the Amendment and the Amended Note
Purchase Agreement, as the case may be.
We have acted as special counsel to the Company in connection with the
Amendment and the transactions contemplated thereby. This opinion is being
delivered to you in compliance with Section 5.5 of the Amendment.
In connection with this opinion letter, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of such documents,
corporate records, certificates, including certificates of public officials, and
other
Exhibit B1 -1
<PAGE> 20
instruments as we have deemed necessary or advisable for purposes of this
opinion, including those relating to the authorization, execution and delivery
of the Amendment. In addition, we have examined the following documents:
(a) an executed copy of the Existing Note Purchase Agreement;
(b) the Notes;
(c) an executed copy of the Amendment;
(d) an executed certificate of a Senior Officer of the
Company, delivered pursuant to Section 5.3 of the Amendment;
(e) an executed certificate of the Secretary of the Company,
delivered pursuant to Section 5.4 of the Amendment;
(f) the bylaws of the Company, the records of proceedings of
the board of directors of the Company and a certified copy of the
Restated Certificate of Incorporation of the Company, all as in effect
on the date hereof;
(g) a long-form good standing certificate with respect to the
Company from the Secretary of State of the State of Delaware and
foreign good standing certificates with respect to the Company from
each of the states set forth in Annex 2 hereto; and
(h) originals, or copies certified or otherwise identified to
our satisfaction, of such other documents, records, instruments and
certificates of public officials as we have deemed necessary or
appropriate to enable us to render this opinion.
We have assumed, with your consent, (i) the genuineness of all
signatures (other than signatures of officers of the Company), (ii) the
authenticity of all documents submitted to us as originals, and (iii) the
conformity to original documents of all documents submitted to us as certified,
conformed or photostatic copies. As to any facts material to the opinions
hereinafter expressed which we did not independently establish or verify, we
have relied, without investigation, upon
Exhibit B1 -2
<PAGE> 21
certificates, statements and representations of representatives of the Company;
and we have no actual knowledge of any material inaccuracies in any of the facts
contained therein. In making our examination of the documents executed by
Persons other than the Company, we have assumed that each such Person had the
power to enter into and perform all its obligations thereunder and the due
authorization of, and the due execution and delivery of, such documents by each
such Person, and that such documents have been duly authorized, executed and
delivered by, and are binding upon and enforceable against, such Person.
As used in this opinion, the phrase "to the best of our knowledge"
means as to matters of fact that, based on the actual knowledge of individual
attorneys within the firm responsible for handling matters for the Company and
after an examination of documents referred to herein and after inquiries of
certain officers of the Company, we find no reason to believe that the opinions
expressed are factually incorrect; but beyond that we have made no factual
investigation for the purposes of rendering this opinion.
This opinion relates solely to the laws of the States of California and
New York, the General Corporation Law of the State of Delaware and applicable
Federal laws of the United States, and we express no opinion with respect to the
effect or applicability of the laws of other jurisdictions.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business and own its Property.
2. The Company has duly qualified and is in good standing as a foreign
corporation in each jurisdiction where the character of its Properties or the
nature of its activities makes such qualification necessary, except where the
failure to so qualify and be in good standing would not have a material adverse
effect on the Company or affect the validity of the Amendment.
3. The Company has the requisite corporate power and authority to
execute and deliver the Amendment and to perform its obligations under the
Amendment and the Amended Note Purchase Agreement and the Notes.
Exhibit B1-3
<PAGE> 22
4. The Amendment has been duly authorized by all necessary corporate
action on the part of the Company, and has been executed and delivered by one or
more duly authorized officers of the Company. Each of the Amendment, the Amended
Note Purchase Agreement, the 1996 Warrant Agreement, as amended by the
Amendment, and the Notes is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
5. All consents, approvals and authorizations of, and all designations,
declarations, filings, registrations, qualifications and recordations with,
Federal, California, New York and Delaware Governmental Authorities required on
the part of the Company in connection with the execution and delivery of the
Amendment has been obtained.
6. Except as set forth in Annex 3 hereto, to the best of our knowledge,
there are no material proceedings, actions or investigations pending against or
affecting the Company in any court or before any Governmental Authority or
arbitration board or tribunal.
7. The execution and delivery of the Amendment and the performance by
the Company of the obligations under the Amendment, the Amended Note Purchase
Agreement, the 1996 Warrant Agreement, as amended by the Amendment, and the
Notes will not conflict with, constitute a violation of, result in a breach of
any provision of, constitute a default under, or result in the creation or
imposition of any Lien upon any of its Property pursuant to the Restated
Certificate of Incorporation or bylaws of the Company, any applicable statute,
rule, regulation, or, to the best of our knowledge, judgment or decree to which
the Company is subject.
Each of the opinions set forth above is subject to the following
qualifications, assumptions, limitations and exceptions:
(a) The opinions expressed above are subject to the effect of any
bankruptcy, insolvency, reorganization, fraudulent conveyance, preference,
equitable subordination, moratorium, bulk sales, marshalling or other similar
laws affecting the enforcement of creditors' rights generally.
(b) The opinions expressed above are subject to the effect of general
principles of equity, whether applied by a court of law or equity.
Exhibit B1 -4
<PAGE> 23
(c) We express no opinion herein with respect to matters of local,
county or municipal law, or with respect to the laws, regulations or ordinances
of local agencies within the States of New York and California. Subject to the
foregoing, any reference herein to "law" means, unless specifically limited, the
Constitution, statutes and regulations of the States of New York and California
and the United States and judicial decisions of the courts thereof. Furthermore,
we express no opinion with respect to Federal or state anti-fraud or anti-trust
laws, or environmental or pollution control laws.
(d) We express no opinion as to the enforceability of any provisions
contained in the Amendment, the Amended Note Purchase Agreement or the Notes (i)
providing for an increase in the rate of interest or imposing a late charge or
penalty in the event of delinquency or default, (ii) imposing a prepayment
charge, fee or penalty based upon a percentage or fraction of the amount prepaid
or the amount outstanding under the Amended Note Purchase Agreement and the
Notes, (iii) purporting to waive statutory rights, including the right to
receive notice or to be allowed to cure, reinstate or redeem in the event of a
default, (iv) purporting to allow any party to exercise any rights without
presentment, demand, protest or notice required by applicable law to any other
person or entity signatory thereto or bound thereby, (v) purporting to establish
evidentiary standards, (vi) providing for a waiver of the benefits of any
statute of limitations or any applicable bankruptcy or insolvency law or a
waiver of any rights under any applicable statues or rules hereafter enacted or
promulgated, or (vii) the enforceability of any provisions dictating the
governing law of the Amendment, the Amended Note Purchase Agreement and the
Notes.
(e) The opinions expressed above are subject to the effect of judicial
decisions which may permit the introduction of extrinsic evidence to interpret
the terms of written contracts.
(f) We express no opinion as to the enforceability under certain
circumstances or provisions which purport to indemnify a party against, or
require contributions toward, that party's liability for its own wrongful or
negligent act, or where indemnification or contribution is contrary to public
policy. In this regard, we advise you that in the opinion of the Securities and
Exchange Commission indemnification of directors, officers and controlling
persons of any issuer against liabilities
Exhibit B1-5
<PAGE> 24
arising under the Securities Act of 1933, as amended, is against public policy
and is therefore unenforceable.
(g) The opinions expressed above are subject to the effect of generally
applicable rules of law that:
(i) limit or affect the enforcement of provisions of a
contract that purport to require waiver of the obligations of good faith, fair
dealing, diligence and reasonableness;
(ii) limit the availability of a remedy under certain
circumstances where another remedy has been elected;
(iii) limit the enforceability of provisions releasing,
exculpating or exempting a party from, or requiring indemnification of a party
for, liability for its own action or inaction, to the extent the action or
inaction involves gross negligence, recklessness, willful misconduct or unlawful
conduct;
(iv) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorney fees and other costs;
(v) may permit a party who has materially failed to render or
offer performance required by the contract to cure that failure unless (A)
permitting a cure would unreasonably hinder the aggrieved party from making
substitute arrangements for performance, or (B) it was important in the
circumstance to the aggrieved party that performance occur by the date stated in
the contract; and
(vi) limit or affect the enforcement of provisions of a
contract purporting to restrict access to legal or equitable remedies.
This opinion is rendered as of the date hereof, and we disclaim any
undertaking to advise you of changes in law or fact which may affect the
continued correctness of our opinion as of any later date. Except as otherwise
expressly set forth below, this opinion is rendered only to the Persons listed
on Annex 1 hereto, and is solely for their benefit in connection with the
transactions referenced herein. Future holders of the Notes may rely on this
opinion as if it were addressed to them. Our opinion is limited to the matters
stated herein, and no opinion is implied or may be inferred beyond the matters
expressly stated herein.
Exhibit B1-6
<PAGE> 25
Very truly yours,
Brobeck, Phleger & Harrison LLP
Exhibit B1 -7
<PAGE> 26
ANNEX 1
PART A
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
North Atlantic Smaller Companies Investment Trust PLC
c/o J.O. Hambro & Co., Ltd.
30 Queen Anne's Gate
London, England SW1H9AL
PART B
Hebb & Gitlin
One State Street
Hartford, Connecticut 06103
Annex 1-1
<PAGE> 27
ANNEX 2
Foreign Good Standing Certificates
Oregon
California
New York
Pennsylvania
Annex 2-1
<PAGE> 28
EXHIBIT B2
FORM OF OPINION OF HEBB & GITLIN
December ___, 1996
To each of the Persons
listed in Annex 1 hereto
Re: The Cerplex Group, Inc., a Delaware corporation (the
"Company")
Ladies and Gentlemen:
Reference is made to the Waiver and Amendment Agreement dated December
9, 1996 (the "Amendment"), among the Company and each of the Persons listed on
Annex 1 hereto (the "Noteholders"), which waives and amends certain of the
provisions, as specified in the Amendment, of those certain Note Purchase
Agreements, each dated as of November 19, 1993, as amended (collectively, as in
effect immediately prior to the effectiveness of the Amendment, the "Existing
Note Purchase Agreement," and, as amended by the Amendment, the "Amended Note
Purchase Agreement"), between the Company and each of the Noteholders, relating
to, among other things, the purchase and sale of the Company's Series A 9.00%
Senior Subordinated Notes due November 19, 2001 (the "Notes"). The capitalized
terms used herein and not defined herein have the meanings specified in the
Amendment and the Amended Note Purchase Agreement, as the case may be.
We have acted as special counsel to the Noteholders in connection with
the transactions contemplated by the Amendment. This opinion is being delivered
pursuant to Section 5.5 of the Amendment.
In acting as such counsel, we have examined:
(a) an executed copy of the Existing Note Purchase Agreement;
(b) the Notes;
(c) an executed copy of the Amendment;
Exhibit B2 - 1
<PAGE> 29
(d) an executed copy of the Warrant Agreement dated as of
April 15, 1996 (the "1996 Warrant Agreement"), among the Company and
each of the Noteholders;
(e) an executed certificate of a Senior Officer of the
Company, delivered pursuant to Section 5.3 of the Amendment and an
executed certificate of the Secretary of the Company, delivered
pursuant to Section 5.4 of the Amendment;
(f) the opinion of Brobeck, Phleger & Harrison, counsel to the
Company, dated the date hereof and delivered to you pursuant to Section
5.5 of the Amendment; and
(k) originals, or copies certified or otherwise identified to
our satisfaction, of such other documents, records, instruments and
certificates of public officials as we have deemed necessary or
appropriate to enable us to render this opinion.
We have assumed the genuineness of all signatures and documents
submitted to us as originals, that all copies submitted to us conform to the
originals, the legal capacity of all natural Persons, and that each Person
executing documents had the power to enter into and perform its obligations
under such documents, and that such documents have been duly authorized,
executed and delivered by, and are binding upon and enforceable against, such
Persons.
In rendering our opinion, we have relied, to the extent we deem
necessary and proper, on:
(A) warranties and representations as to certain factual matters contained in
the Amendment; and
(B) such opinion of Brobeck, Phleger & Harrison with respect
to all questions
(i) governed by California law, and
(ii) concerning the due incorporation, valid
existence, good standing and corporate power and authority of,
and the authorization, execution and delivery of instruments
by, the Company (except that we have made an independent
examination of the
Exhibit B2 - 2
<PAGE> 30
certificate referred to above of the Secretary of the Company
setting forth its bylaws and corporate resolutions authorizing
its participation in the transactions contemplated by the
Amendment);
based on such investigation as we have deemed appropriate, such opinion
is satisfactory in form and scope to us and in our opinion the
Noteholders and we are justified in relying thereon.
Based on the foregoing, we are of the following opinions:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the requisite corporate power and authority to
execute and deliver the Amendment and to perform its obligations thereunder.
3. The Amendment has been duly authorized by all necessary corporate
action on the part of the Company and has been executed and delivered by one or
more duly authorized officers of the Company, and each of the Amendment, the
Amended Note Purchase Agreement, the 1996 Warrant Agreement, as amended by the
Amendment, and the Notes constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
4. No consents, approvals or authorizations of Governmental Authorities
are required under the laws of the United States of America or the State of New
York in connection with the execution and delivery by the Company of the
Amendment. Our opinion in this paragraph 4 is based solely on a review of
generally applicable laws of the United States of America and New York, and not
on any search with respect to, or review of, any orders, decrees, judgments or
other determinations specifically applicable to the Company.
5. The execution and delivery of the Amendment and the performance by
the Company of its obligations under the Amendment, the Amended Note Purchase
Agreement, the 1996 Warrant Agreement, as amended by the Amendment, and the
Notes will not conflict with, constitute a violation of, result in a breach of
any provision of, constitute a default under, or result in the creation or
imposition of any Lien or encumbrance upon
Exhibit B2 - 3
<PAGE> 31
any of its Properties pursuant to the Restated Certificate of Incorporation or
bylaws of the Company.
All opinions contained herein with respect to the enforceability of
documents and instruments are qualified to the extent that:
(a) the availability of equitable remedies, including, without
limitation, specific enforcement and injunctive relief, is subject to
the discretion of the court before which any proceedings therefor may
be brought;
(b) the enforceability of certain terms provided in the
Amendment, the Amended Note Purchase Agreement, the 1996 Warrant
Agreement, as amended by the Amendment, and the Notes may be limited by
applicable bankruptcy, reorganization, arrangement, insolvency,
moratorium or similar laws affecting the enforcement of creditors'
rights generally as at the time in effect; and
(c) rights to indemnification and contribution thereunder may
be limited by applicable law or public policy.
Except in reliance on such opinion of Brobeck, Phleger & Harrison, we
express no opinion as to the law of any jurisdiction other than the federal law
of the United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware.
Future holders of the Notes may rely on this opinion as if it were
addressed to them.
Very truly yours,
Exhibit B2 - 4
<PAGE> 32
ANNEX 1
ADDRESSEES
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, Massachusetts 02117
North Atlantic Smaller Companies Trust PLC
c/o J.O. Hambro & Co., Ltd.
30 Queen Anne's Gate
London, England SW1H9AL
<PAGE> 1
EXHIBIT 5.1
Opinion of Brobeck, Phleger & Harrison
December 20, 1996
The Cerplex Group, Inc.
1382 Bell Avenue
Tustin Avenue, California 92780
Re: The Cerplex Group, Inc. (the "Company")
Registration Statement for an increase of
1,500,000 Shares of Common Stock
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended, of the additional
1,500,000 shares of Common Stock available for issuance under the Company's
Restated 1993 Stock Option Plan, as amended. We advise you that, in our opinion,
when such shares have been issued and sold pursuant to the applicable provisions
of the Company's Restated 1993 Stock Option Plan and in accordance with the
Registration Statement, such shares will be validly issued, fully paid and
nonassessable shares of the Company's Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Accountants - KPMG Peat Marwick LLP
The Board of Directors
The Cerplex Group, Inc.:
We consent to incorporation by reference in the registration statement (No.
333-84946) on Form S-8 of The Cerplex Group, Inc. of our report dated
February 28, 1996, except the last paragraph of Note 9(a) and Note 9(b) and Note
18 which are as of April 15, 1996, relating to the consolidated balance sheets
of The Cerplex Group, Inc. and subsidiaries as of December 31, 1995 and 1994,
and the related consolidated statements of operations, stockholders'
equity(deficit) and cash flows for each of the years in the three-year period
ended December 31, 1995, and the related schedule, which report appears in the
December 31, 1995 annual report on Form 10-K of The Cerplex Group, Inc.
/s/ KPMG Peat Marwick LLP
Orange County, California
December 20, 1996
<PAGE> 1
Exhibit 99.9
INITIAL GRANT
THE CERPLEX GROUP, INC.
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of The Cerplex Group, Inc. (the
"Corporation"):
Optionee:_____________________________________________________
Grant Date:___________________________________________________
Exercise Price: $_______________________per share
Number of Option Shares: 20,000 shares
Expiration Date:______________________________________________
Type of Option: Non-Statutory Stock Option
Date Exercisable: Immediately Exercisable
Vesting Schedule: The Option Shares shall be unvested and
subject to repurchase by the Corporation at the Exercise Price
paid per share. Optionee shall acquire a vested interest in,
and the Corporation's repurchase right will accordingly lapse
with respect to the Option Shares in forty-eight (48) equal
successive monthly installments upon Optionee's completion of
each month of service as a member of the Corporation's Board
of Directors (the "Board") measured from the Grant Date. In no
event shall any additional Option Shares vest after Optionee's
cessation of Board service.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the automatic option grant
program under the Cerplex Group, Inc. Restated 1993 Stock Option Plan (the
"Plan"). Optionee further agrees to be bound by the terms of the Plan and the
terms of the Option as set forth in the Automatic Stock Option Agreement
attached hereto as Exhibit A.
Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
<PAGE> 2
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO A REPURCHASE
RIGHT EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF SUCH RIGHT
SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION
EXERCISE.
No Employment or Service Contract. Nothing in this Notice or
in the Plan shall confer upon Optionee any right to continue in service as a
Board member for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
retaining Optionee) and the Corporation's stockholders or of Optionee, which
rights are hereby expressly reserved by each, to terminate Optionee's service as
a Board member at any time for any reason, with or without cause in accordance
with the provisions of applicable law.
Definitions. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Automatic Stock
Option Agreement.
________________, 199__
Date
THE CERPLEX GROUP, INC.
By:__________________________________
Title:_______________________________
_____________________________________
OPTIONEE
Address:_____________________________
_____________________________________
ATTACHMENTS
Exhibit A - Automatic Stock Option Agreement
Exhibit B - Plan Summary and Prospectus
2.
<PAGE> 3
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
<PAGE> 4
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE> 1
Exhibit 99.10
ANNUAL GRANT
THE CERPLEX GROUP, INC.
NOTICE OF GRANT OF NON-EMPLOYEE DIRECTOR
AUTOMATIC STOCK OPTION
Notice is hereby given of the following option grant (the
"Option") to purchase shares of the Common Stock of The Cerplex Group, Inc. (the
"Corporation"):
Optionee:_____________________________________________________
Grant Date:___________________________________________________
Exercise Price: $__________________________ per share
Number of Option Shares: 10,000 shares
Expiration Date:______________________________________________
Type of Option: Non-Statutory Stock Option
Date Exercisable: Immediately Exercisable
Vesting Schedule: The Option Shares shall be unvested and
subject to repurchase by the Corporation at the Exercise Price
paid per share. Optionee shall acquire a vested interest in,
and the Corporation's repurchase right will accordingly lapse
with respect to the Option Shares in forty-eight (48) equal
successive monthly installments upon Optionee's completion of
each month of service as a member of the Corporation's Board
of Directors (the "Board") measured from the Grant Date. In no
event shall any additional Option Shares vest after Optionee's
cessation of Board service.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the automatic option grant
program under the Cerplex Group, Inc. Restated 1993 Stock Option Plan (the
"Plan"). Optionee further agrees to be bound by the terms of the Plan and the
terms of the Option as set forth in the Automatic Stock Option Agreement
attached hereto as Exhibit A.
<PAGE> 2
Optionee hereby acknowledges receipt of a copy of the official
prospectus for the Plan in the form attached hereto as Exhibit B. A copy of the
Plan is available upon request made to the Corporate Secretary at the
Corporation's principal offices.
REPURCHASE RIGHT. OPTIONEE HEREBY AGREES THAT ALL OPTION
SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO A REPURCHASE
RIGHT EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF SUCH RIGHT
SHALL BE SPECIFIED IN A STOCK PURCHASE AGREEMENT, IN FORM AND SUBSTANCE
SATISFACTORY TO THE CORPORATION, EXECUTED BY OPTIONEE AT THE TIME OF THE OPTION
EXERCISE.
No Employment or Service Contract. Nothing in this Notice or
in the Plan shall confer upon Optionee any right to continue in service as a
Board member for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
retaining Optionee) and the Corporation's stockholders or of Optionee, which
rights are hereby expressly reserved by each, to terminate Optionee's service as
a Board member at any time for any reason, with or without cause in accordance
with the provisions of applicable law.
Definitions. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Automatic Stock
Option Agreement.
_______________, 199__
Date
THE CERPLEX GROUP, INC.
By:__________________________________
Title:_______________________________
OPTIONEE
Address:_____________________________
_____________________________________
ATTACHMENTS
Exhibit A - Automatic Stock Option Agreement
Exhibit B - Plan Summary and Prospectus
2.
<PAGE> 3
EXHIBIT A
AUTOMATIC STOCK OPTION AGREEMENT
<PAGE> 4
EXHIBIT B
PLAN SUMMARY AND PROSPECTUS
<PAGE> 1
Exhibit 99.11
THE CERPLEX GROUP, INC.
AUTOMATIC STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented an automatic option grant program
under the Plan pursuant to which eligible non-employee members of the Board will
automatically receive special option grants at periodic intervals over their
period of Board service in order to provide such individuals with a meaningful
incentive to continue to serve as members of the Board.
B. Optionee is an eligible non-employee Board member, and this
Agreement is executed pursuant to, and is intended to carry out the purposes of,
the Plan in connection with the automatic grant of an option to purchase shares
of Common Stock under the Plan.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, a Non-Statutory Option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5, 6 or 7.
3. LIMITED TRANSFERABILITY. This option, together with the special
stock appreciation right provided under Paragraph 7(b), shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.
4. EXERCISABILITY/VESTING.
(a) This option shall be immediately exercisable for any or all
of the Option Shares, whether or not the Option Shares are vested in accordance
with the Vesting Schedule and shall remain so exercisable until the Expiration
Date or sooner termination of the option term under Paragraph 5, 6 or 7.
<PAGE> 2
(b) Optionee shall, in accordance with the Vesting Schedule, vest in
the Option Shares in one or more installments over his or her period of Board
service. Vesting in the Option Shares may be accelerated pursuant to the
provisions of Paragraph 5, 6 or 7. In no event, however, shall any additional
Option Shares vest following Optionee's cessation of service as a Board member.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a Board
member cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the following
provisions:
(a) Should Optionee cease to serve as a Board member for any reason
while holding this option, then Optionee (or, in the event of Optionee's death
the personal representative of Optionee's estate or the person or persons to
whom the option is transferred pursuant to Optionee's will or in accordance with
the laws of descent and distribution) shall have a twelve (12)-month period
(commencing with the date of such cessation of Board service) in which to
exercise this option, but in no event shall this option be exercisable at any
time after the Expiration Date. During such limited period of exercisability,
this option may not be exercised in the aggregate for more than the number of
Option Shares (if any) in which Optionee is vested on the date Optionee ceases
service as a Board member. Upon the earlier of (i) the expiration of such twelve
(12)-month period or (ii) the specified Expiration Date, the option shall
terminate and cease to be exercisable with respect to any vested Option Shares
for which the option has not been exercised.
(b) Upon Optionee's cessation of Board service, this option shall
immediately terminate and cease to be outstanding with respect to any and all
Option Shares in which Optionee is not otherwise at that time vested in
accordance with the Vesting Schedule.
(c) In the event of a Corporate Transaction or Change in Control,
the provisions of Paragraph 6 or 7 shall govern the period for which this option
is to remain exercisable following Optionee's cessation of Board service and
shall supersede any provisions to the contrary in this paragraph.
6. CORPORATE TRANSACTION.
(a) In the event of a Corporate Transaction, all Option Shares at
the time subject to this option but not otherwise vested shall automatically
vest so that this option shall, immediately prior to the effective date of such
Corporate Transaction, become exercisable for any or all of the Option Shares as
fully-vested shares of Common Stock. Immediately following the Corporate
Transaction, this option shall terminate and cease to be exercisable except to
the extent assumed by the successor corporation (or parent thereof) in
connection with such Corporate Transaction.
2.
<PAGE> 3
(b) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same.
(c) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. CHANGE IN CONTROL/HOSTILE TAKE-OVER.
(a) All Option Shares subject to this option at the time of a Change
in Control but not otherwise vested shall automatically vest so that this option
shall, immediately prior to the effective date of such Change in Control, become
fully exercisable for all of the Option Shares at the time subject to this
option and may be exercised for all or any portion of such shares as
fully-vested shares of Common Stock. This option shall remain exercisable for
such fully-vested Option Shares until the earliest to occur of (i) the
Expiration Date, (ii) the sooner termination of this option in accordance with
Paragraph 5 or 6 or (iii) the surrender of the option in connection with a
Hostile Take-Over.
(b) Provided this option has been outstanding for at least six (6)
months prior to the occurrence of a Hostile Take-Over, Optionee shall have the
unconditional right (exercisable during the thirty (30)-day period immediately
following the consummation of such Hostile Take-Over) to surrender this option
to the Corporation in exchange for a cash distribution from the Corporation in
an amount equal to the excess of (i) the Take-Over Price of the Option Shares at
the time subject to the surrendered option (whether or not those Option Shares
are otherwise at the time vested) over (ii) the aggregate Exercise Price payable
for such shares. This Paragraph 7(b) limited stock appreciation right shall in
all events terminate upon the expiration or sooner termination of the option
term and may not be assigned or transferred by Optionee.
(c) To exercise the Paragraph 7(b) limited stock appreciation right,
Optionee must, during the applicable thirty (30)-day exercise period, provide
the Corporation with written notice of the option surrender in which there is
specified the number of Option Shares as to which the Option is being
surrendered. Such notice must be accompanied by the return of Optionee's copy of
this Agreement, together with any written amendments to such Agreement. The cash
distribution shall be paid to Optionee within five (5) days following such
delivery date, and no approval or consent of the Board shall be required in
connection with such option surrender and cash distribution. Upon receipt of
such cash distribution, this option shall be cancelled with respect to the
Option
3.
<PAGE> 4
Shares subject to the surrendered option (or the surrendered portion) and
Optionee shall cease to have any further right to acquire those Option Shares
under this Agreement. The option shall, however, remain outstanding for the
balance of the Option Shares (if any) in accordance with the terms of this
Agreement, and the Corporation shall issue a new stock option agreement
(substantially in the same form as this Agreement) for those remaining Option
Shares.
8. ADJUSTMENT IN OPTION SHARES. Should any change be made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
9. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) To the extent the option is exercised for vested Option
Shares, execute and deliver to the Corporation a Notice of Exercise for
the Option Shares for which the option is exercised. To the extent this
option is exercised for unvested Option Shares, execute and deliver to
the Corporation a Purchase Agreement.
(ii) Pay the aggregate Exercise Price for the purchased shares
in one or more of the following forms:
(A) cash or check made payable to the Corporation,
(B) shares of Common Stock held by Optionee
(or any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the
Corporation's earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date, or
4.
<PAGE> 5
(C) to the extent the option is exercised for vested
Option Shares, through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
written instructions (I) to a Corporation-designated brokerage
firm to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available
on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus
all applicable Federal, state and local income and employment
taxes required to be withheld by the Corporation by reason of
such exercise and (II) to the Corporation to deliver the
certificates for the purchased shares directly to such
brokerage firm in order to complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of
the Exercise Price must accompany the Notice of Exercise (or
the Purchase Agreement) delivered to the Corporation in
connection with the option exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if
other than Optionee) have the right to exercise this option.
(b) As soon after the Exercise Date as practical, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto. To the extent any such Option
Shares are unvested, the certificates for those Option Shares shall be endorsed
with an appropriate legend evidencing the Corporation's repurchase rights and
may be held in escrow with the Corporation until such shares vest.
(c) In no event may this option be exercised for any
fractional shares.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant to this
option shall relieve the
5.
<PAGE> 6
Corporation of any liability with respect to the non-issuance or sale of the
Common Stock as to which such approval shall not have been obtained. The
Corporation, however, shall use its best efforts to obtain all such approvals.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3 or 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
13. NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
14. CONSTRUCTION. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the terms of the Plan.
15. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
6.
<PAGE> 7
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify The Cerplex Group, Inc. (the "Corporation")
that I elect to purchase shares of the Corporation's Common Stock (the
"Purchased Shares") at the option exercise price of $ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's Restated 1993 Stock Option Plan on , 199 .
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price for any Purchased Shares in which I am vested at the time of exercise of
the Option.
____________________, 199__
Date
_________________________________
Optionee
Address:_________________________
_________________________________
Print name in exact manner
it is to appear on the
stock certificate: _________________________________
Address to which certificate
is to be sent, if different
from address above: _________________________________
_________________________________
Social Security Number: _________________________________
<PAGE> 8
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Automatic Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean a change in ownership or control of
the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders which the Board
does not recommend such stockholders to accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have
been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (A) who were still in office at the time the Board approved such
election or nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
A-1.
<PAGE> 9
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
G. CORPORATION shall mean The Cerplex Group, Inc., a Delaware
corporation.
H. EXERCISE DATE shall mean the date on which the option shall
have been exercised in accordance with Paragraph 10 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per share as
specified in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option
expires as specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as the
price is reported by the National Association of Securities Dealers on
the Nasdaq National Market or any successor system. If there is no
closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any national
stock exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the exchange
which serves as the primary market for the Common Stock, as such price
is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on
the date in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation
exists.
L. GRANT DATE shall mean the date of grant of the option as
specified in the Grant Notice.
M. GRANT NOTICE shall mean the Notice of Grant of Automatic Stock
Option accompanying the Agreement, pursuant to which Optionee has been informed
of the basic terms of the option evidenced hereby.
A-2.
<PAGE> 10
N. HOSTILE TAKE-OVER shall mean a change in ownership of the
Corporation effected through the following transaction:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities pursuant to a tender or exchange
offer made directly to the Corporation's stockholders which the Board
does not recommend such stockholders to accept, and
(ii) more than fifty percent (50%) of the acquired securities
are accepted from holders other than the officers and directors of the
Corporation subject to the short-swing profit restrictions of Section
16 of the 1934 Act.
O. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
P. NON-STATUTORY OPTION shall mean an option not intended to
satisfy the requirements of Code Section 422.
Q. NOTICE OF EXERCISE shall mean the notice of exercise in the
form of Exhibit I.
R. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option.
S. OPTIONEE shall mean the person to whom the option is granted
as specified in the Grant Notice.
T. PLAN shall mean the Corporation's Restated 1993 Stock Option
Plan.
U. PURCHASE AGREEMENT shall mean the stock purchase agreement (in
form and substance satisfactory to the Corporation) which grants the Corporation
the right to repurchase, at the Exercise Price, any and all unvested Option
Shares held by Optionee at the time of Optionee's cessation of Service and which
precludes the sale, transfer or other disposition of any purchased Option Share
while subject to such repurchase right.
V. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting the
Hostile Take-Over.
A-3.
