<PAGE> 1
As filed with the Securities and Exchange Commission on August 20, 1997
Registration No. 333-28425
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT NO. 1
TO
FORM S-2
REGISTRATION STATEMENT
Under the
Securities Act of 1933
THE CERPLEX GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 33-0411354
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1382 BELL AVENUE
TUSTIN, CALIFORNIA 92780
(714) 258-5600
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
STEPHEN J. HOPKINS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE CERPLEX GROUP, INC.
1382 BELL AVENUE
TUSTIN, CALIFORNIA 92780
(714) 258-5600
(Name, Address, Including Zip Code, and Telephone Number
Including Area Code, of Agent for Service)
---------------------
Copies to:
FREDERIC A. RANDALL, JR., ESQ.
BROBECK, PHLEGER & HARRISON LLP
4675 MACARTHUR COURT, SUITE 1000
NEWPORT BEACH, CALIFORNIA 92660
(714) 752-7535
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 37,112,579 shares (1) $0.615 (2) $15,067,974 (3) $323.40 (4)
===============================================================================================================
</TABLE>
(1) Includes the resale of Common Stock, the resale of Common Stock
issuable upon the exercise of outstanding warrants and the resale of
Common Stock issuable upon the conversion of Series B Preferred Stock.
Also includes 12,611,808 shares of Common Stock carried forward from
the Company's Registration Statement on Form S-3 described below. The
number of shares of Common Stock issuable, and the number of shares of
Common Stock registered hereunder, may be increased as a result of
stock dividends or stock splits with respect to the Company's Common
Stock, or as a result of the application of the antidilution provisions
of the outstanding warrants.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, as amended,
based on the average of the bid and asked price per share of the
Company's Common Stock on May 28, 1997, as reported on the
Over-The-Counter Bulletin Board.
(3) The Proposed Maximum Aggregate Offering Price is determined by
multiplying the Proposed Maximum Offering Price Per Unit by 24,500,771
shares of Common Stock, which represents the number of shares
registered hereby net of the 12,611,808 shares of Common Stock being
carried forward from the Form S-3 Registration Statement.
(4) Does not include the filing fee of $4,242.65 previously paid in
connection with the initial filing of this Registration Statement with
respect to 22,765,458 shares of the Company's Common Stock or the
filing fee of $23,658 previously paid in connection with the Company's
Form S-3 Registration Statement with respect to 12,611,808 shares of
Common Stock being carried forward hereunder.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended (the "1993 Act"), or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
Pursuant to Rule 429 of the 1933 Act, the prospectus contained herein
is a combined prospectus which relates to the Company's Registration Statement
on Form S-3 (Registration No. 333-12581) filed with the Securities and Exchange
Commission on September 24, 1996 and includes the 12,611,808 shares registered
thereunder.
<PAGE> 2
PROSPECTUS THE CERPLEX GROUP, INC.
37,112,579 SHARES
COMMON STOCK
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-------------------------------
THE COMMON STOCK OFFERED HEREBY HAS A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
-------------------------------
This Prospectus relates to the offer and sale, which is not being
underwritten, of an aggregate of 37,112,579 shares of Common Stock, $.001 par
value per share (the "Shares"), of The Cerplex Group, Inc. ("Cerplex" or the
"Company"). The Shares may be offered from time to time by certain of the
Company's security holders, or by the security holder's pledgees, donees,
transferees or other successors in interest (the "Selling Security Holders") for
their own account.
Such sales may be made on the Over-The-Counter Bulletin Board or otherwise
at prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions. The Shares may be sold by one or
more of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Security Holders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from Selling Security Holders in amounts to be negotiated
immediately prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of Section 2(11) the Securities Act of 1933, as amended (the "Securities
Act"), in connection with such sales. In addition, any securities covered by
this Prospectus which qualify for sale pursuant to Rule 144 may be sold under
Rule 144 rather than pursuant to this Prospectus. The Company has also agreed to
bear certain expenses in connection with the registration and sale of the Shares
offered hereby by the Selling Security Holders (other than broker discounts and
commissions). See "Selling Security Holders" and "Plan of Distribution."
The Company will not receive any part of the proceeds from sales of Shares
by the Selling Security Holders. See "Use of Proceeds."
The Company's Common Stock is traded on the Over-The-Counter Bulletin
Board under the symbol "CPLX." On July 24, 1997, the last reported bid price of
the Company's Common Stock on the Over-The-Counter Bulletin Board was $0.47 per
share.
THE DATE OF THIS PROSPECTUS IS AUGUST 20, 1997.
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, ANY SELLING SECURITY HOLDER OR BY ANY OTHER PERSON. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SHARES TO ANY PERSON OR
BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION MAY NOT
LAWFULLY BE MADE.
THE COMPANY
Cerplex is a leading provider of service outsourcing to the high
technology industry. The Company's core capabilities are electronic parts
repair, spare parts sales and management and value added logistics management.
The Company has developed specialized competencies in these areas, focusing on
computer and peripheral, office automation and telecommunication markets.
Primary services include product repair, remanufacturing and reutilization,
parts sales, guaranteed availability and advanced exchange, returns processing,
and materials management. The Company's network of facilities in the U.S. and
Europe enables it to support the diverse service needs of its global customers.
In the computer marketplace, the Company primarily services display
terminals, printed circuit boards, laptops, inter-networking equipment,
workstations, mass storage devices and power supplies. In the office automation
marketplace, the Company services printers, scanners, fax machines, and high
value products such as copiers, automatic transfer machines, and other
paper-handling equipment. In the telecommunication marketplace, the Company
primarily services simple and complex switching systems, pay phones, video
conferencing products, multiplexers, mobile communications, transmission
equipment, hubs and modems.
The principal executive offices of Cerplex are located at 1382 Bell
Avenue, Tustin, California 92780. Cerplex's telephone number is (714) 258-5600.
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<PAGE> 4
RISK FACTORS
This Prospectus may contain forward-looking statements which involve risks
and uncertainties. Actual results could differ materially from those discussed
in forward-looking statements. Certain of the factors that could cause actual
results to differ materially are discussed below. An investment in the Common
Stock being offered by this Prospectus involves a high degree of risk. In
addition to the other information contained in this Prospectus, prospective
investors should carefully consider the following risk factors before purchasing
the Common Stock offered by this Prospectus.
Losses and Accumulated Deficit. For the six month period ended June 30,
1997 and the year ended December 31, 1996, the Company reported a net loss of
$14.4 million, including an operating loss of $14.9 million. As of June 30,
1997, the Company had an accumulated deficit of $88.8 million. There can be no
assurance that the Company will reduce its operating losses or operate
profitably in the future. Continued losses could materially and adversely affect
the Company's business and the value of, and the market for, the Company's
equity securities.
Dependence on Key Customers. During 1996, Rank Xerox, IBM, BT and
Digital Equipment Corporation accounted for approximately 17%, 12%, 11% and 4%
of revenues, respectively. In the six month period ended June 30, 1997, these
customers accounted for approximately 30%, 6%, 10% and 10% of revenues,
respectively. During 1995 and 1996, IBM significantly decreased orders for
certain programs which materially and adversely affected the Company and its
results of operations. A significant portion of the Company's net sales
attributable to IBM in 1995 were from discontinued operations, and, as such, the
Company expects net sales attributable to IBM to continue to account for a
decreasing percentage of the Company's net sales. During the first half of 1997,
sales to IBM decreased 68% from the first half of 1996. Sales to BT
significantly decreased during 1996 to approximately $21.4 million, representing
a 36% decrease from 1995. During the first half of 1997, sales to BT decreased
29% from the first half of 1996. There can be no assurance that major customers
of the Company will not terminate any or all of their arrangements with the
Company; significantly change, reduce or delay the amount of services ordered
from the Company; or significantly change the terms upon which the Company and
these customers do business. Any such termination, change, reduction or delay
could have a material adverse effect on the Company's business.
Future Capital Needs and Going Concern; Uncertainty of Additional
Financing. The Company's ability to maintain its current revenue base and to
grow its business is dependent on the availability of adequate capital. Without
sufficient capital, the Company's growth may be limited and its existing
operations may be adversely affected. The Company's financial condition and
limited capital has adversely impacted the Company's relationship with certain
customers and may adversely impact its relationship with customers in the
future. During portions of 1996 and 1997, the Company was in default under its
senior credit agreement and subordinated note agreement. The Company has
renegotiated amendments to its senior credit agreement and is negotiating
amendments to its subordinated note agreement. On June 30, 1997, the Company
received waivers with respect to various provisions of the subordinated note
agreement. Such waivers have been extended three times and presently run through
August 20, 1997; however, there is no assurance that the Company will reach an
agreement with respect to the subordinated note agreement. Failure to reach such
an agreement by August 20, 1997 will result in a default under the Company's
senior credit agreement as well, and would cause all such debt in the aggregate
amount of approximately $53 million at June 30, 1997 to become due and payable
on demand. Such defaults may have a material adverse effect on the Company's
ability to continue as a going concern. In order for the Company to continue as
a going concern, it would require its current lenders to give further
extensions and waivers under the aforementioned subordinated and senior
facilities. Absent such extensions and/or other forbearance by its lenders, the
Company would be forced to pursue other options, such as the sale of assets for
cash, refinancing its debt or seeking protection under federal laws. The terms
of the senior credit agreement provide for a limited borrowing base which will
be further reduced through May 1998. The Company is required to use a portion of
cash generated from operations, and from sales of assets to further reduce its
borrowing base under the senior credit agreement. The interest rate payable by
the Company has increased significantly and will be subject to significant
further increases in the event the Company does not repay the senior credit
agreement in full by September 30, 1997. As a result, the Company currently has
limited capital. In addition, the terms of such agreements restrict the
Company's ability to incur additional indebtedness and could adversely affect
the Company's ability to obtain additional financing. General market conditions
and the Company's future performance, including its ability to generate profits
and positive cash flow, will also impact the Company's financial resources. The
failure of the Company to obtain additional capital when needed could have a
material adverse effect on the Company's business and future prospects. The
Company is required to maintain or fulfill certain covenants and obligations in
order to maintain its credit facility. No assurance can be given that the
Company will be able to fulfill such obligations and covenants or to otherwise
maintain its current credit facilities or that additional financing will be
available or, if available, will be on acceptable terms.
Impact of Series B Preferred Stock. In June 1996, the Company issued
8,000 shares of Series B Preferred Stock at $1,000 per share in a private
placement. The Series B Preferred Stock is convertible into Common Stock of the
Company at the option of each holder at the lower of $5.07 per share or 80% of
the average closing bid price over a ten-day period ending three days prior to
the date of conversion. The Series B Preferred Stock has certain rights,
privileges and preferences, including preferential voting rights and a $2,000
per share preference in the event of a sale of the Company. The Board of
Directors may not pay dividends to the holders of the Company's Common Stock
unless and until the Board has paid an equivalent dividend to the holders of
Series B Preferred Stock based upon the number of shares of Common Stock into
which each share of Series B Preferred Stock is convertible. As of June 30,
1997, 7,343 shares of the Series B Preferred Stock had been converted into
approximately 20,725,147 shares of Common Stock. Due in part to the decreases in
the trading price of the Company's Common Stock, the conversion rights of the
Series B Preferred Stock have resulted in, and may in the future result in,
dilution to the holders of Common Stock.
3
<PAGE> 5
Dispute with Lucent Technologies. The Company acquired inventory
consisting of used telephones from Lucent. At December 31, 1996, the Company had
$5.9 million of inventory, production cost commitments and assets, related to
the telephones acquired from Lucent, which were subsequently sold to a Company
that specializes in worldwide corporate bartering. In June 1996, the Company
executed a promissory note bearing interest at 9.75% in the amount of $4.6
million payable on September 15, 1996 in favor of Lucent, reflecting a portion
of the amount invoiced to the Company by Lucent. Lucent has invoiced the Company
for an additional $0.6 million. Due to the quality of the inventory and the lack
of availability of spare parts to effect repairs, the Company believes it has
claims against Lucent. The Company currently does not intend to pay the Lucent
note or other Lucent invoices. If the Company is required to pay the Lucent note
and other Lucent invoices in full, it would have a material adverse effect on
the Company's financial resources. On October 7, 1996, the Company filed a
lawsuit against Lucent in the Orange County Superior Court seeking to have the
Lucent note declared invalid. On November 6, 1996, Lucent filed a
cross-complaint seeking payment of the Lucent Note, alleging damages for breach
of contract and seeking a constructive trust on any proceeds from the sale of
the telephones. The Company's failure to have the Lucent note declared invalid,
or the loss to Lucent of any of the material claims asserted by the Company,
could materially and adversely affect the Company.
Risk of Excess and Unusable Inventory; Decreased Value of Assets. At
June 30, 1997, inventory constituted approximately 11% of the Company's assets.
Any decrease in the demand for the Company's repair services could result in an
additional portion of the Company's inventory becoming excess, obsolete or
otherwise unusable. During the last few years, the Company wrote down a
significant amount of inventory and a significant amount of other assets,
including receivables, securities and goodwill. The Company wrote down $1.6
million in goodwill in the second quarter of 1997, mainly due to continued
declining sales of its Leeds, England and Redmond, Washington operations.
Changes in the Company's business, as well as the business of third parties,
could adversely affect the value of assets remaining, possibly resulting in
write-offs. The existence, amounts and timing of any such additional write-offs
will be dependent upon various factors including, without limitation, the volume
and profitability of future operations, market conditions as well as the
operations of the above-mentioned third parties. In addition, the Company became
entitled to receive an aggregate of approximately 370,000 shares of Common Stock
of Pen Interconnect, Inc. in connection with the sale of its InCirT division
which were valued at $5.40 per share. The trading price of such shares has
subsequently decreased substantially and the Company wrote off $1.1 million in
the fourth quarter of 1996 and $500,000 in the second quarter of 1997. There can
be no assurance that the Company will not be required to write down additional
amounts of its investment with respect to such shares in the future. In October
1996, the Company entered into an agreement to sell its phone inventory
purchased from Lucent to Atwood Richards, Inc. ("ARI"). The consideration paid
to the Company from ARI was up to $7.5 million in trade credits. The Company has
no prior experience in using trade credits and there can be no assurance the
Company will realize the value of the trade credits. The Company wrote down the
book value of the trade credits to $3 million in the fourth quarter of 1996 and
to $2 million in the second quarter of 1997. There can be no assurance that the
Company will not be required to write down significant amounts of its inventory
or other assets in the future, which could have a material adverse effect on the
Company's business and results of operations.
Dependence on Customers in the Electronics Industry. The Company is
dependent upon the continued growth, viability and financial stability of its
customers and potential customers in the electronics industry, particularly the
computer industry. The computer industry has been characterized by rapid
technological change, compressed product life cycles and pricing and margin
pressures. The factors affecting segments of the electronics industry in
general, and the Company's OEM customers in particular, could have an adverse
effect on the Company's business. During 1995 and 1996, several of the Company's
customers experienced severe financial difficulty resulting in significant
losses to the Company as a result of write downs of receivables and other
assets. There
4
<PAGE> 6
can be no assurance that existing customers or future customers will not
experience financial difficulty, which could have a material adverse effect on
the Company's business.
Reliance on Short-Term Purchase Orders. The Company's customer
contracts are typically subject to termination on short notice at the customer's
discretion and purchase orders under such contracts typically only cover
services over a 90-day period. The termination of any material contracts or any
substantial decrease in the orders received from major customers could have a
material adverse effect on the Company's business.
Competition. The Company competes with the in-house repair centers of
original equipment manufacturers ("OEM'S") and third party maintainers
organizations ("TPM'S") for repair services. There is no assurance that these
entities will choose to outsource their repair needs. In certain instances,
these entities compete directly with the Company for the services of unrelated
OEM'S and TPM'S. In addition to competing with OEM'S and TPM'S, the Company also
competes for depot repair business with a small number of independent
organizations similar in size to the Company and a large number of smaller
companies. Many of the companies with which the Company competes have
significantly greater financial resources than the Company. There can be no
assurance that the Company will be able to compete effectively in its target
markets.
Expansion of International Sales. During the six months ended June 30,
1997, approximately 64% of the Company's sales were international. During 1996,
approximately 41% of the Company's sales were international. There can be no
assurance that the Company will be able to successfully market, sell and deliver
its products and services in these markets. In addition to the uncertainty as to
the Company's ability to expand its international presence, there are certain
risks inherent in doing business on an international level, such as unexpected
changes in regulatory requirements, export restrictions, tariffs and other trade
barriers, difficulties in staffing and managing foreign operations, longer
payment cycles, problems in collecting accounts receivable, political
instability, fluctuations in currency exchange rates and potentially adverse tax
consequences, which could adversely impact the success of the Company's
international operations. There can be no assurance that one or more of such
factors will not have a material adverse effect on the Company's international
operations and, consequently, on the Company's business, operating results and
financial condition.
Dependence on Acquisition Strategy. Certain of the Company's repair
programs result in decreasing net sales as the installed base of the particular
products under such programs decreases over time. An important component of the
Company's strategy to maintain its revenue and to grow its business has been the
acquisition of repair programs and complementary businesses. Competition for
these types of transactions is likely to intensify. The Company's ability to
effect any transactions requiring capital will be limited by the Company's lack
of working capital and by the terms of the Company's senior credit facility and
subordinated notes. The Company is no longer permitted under the terms of its
credit facility to engage in acquisitions. There can be no assurance that the
Company will be able to acquire additional repair programs or complementary
businesses in the future or, if acquired, that such operations will prove to be
profitable.
Discontinued Operations; Change in Strategy. In September 1995, Cerplex
adopted a plan to discontinue its end-of-life programs, a line of business which
historically generated a significant percentage of the Company's total sales,
but which experienced declining sales. Net sales from end-of-life programs
declined from approximately $33 million in 1994 to $20 million in 1995 and
further declined to $9.2 million in 1996. Sales from the end-of-life program
during 1997 were not material. In connection with discontinuing its end-of-life
business, the Company changed certain elements of its business strategy and is
undergoing changes in management and operations, is developing a direct sales
force and terminating the majority of its outside sales representatives, is
reducing its emphasis on inventory acquisitions and is focusing on targeted
customers in specific industries. There can be no assurance that such changes
will positively impact the Company's business and results of operations in the
short or long term.
Risk Associated with the Ability of Existing Stockholders to Control
the Company. As of July 31, 1997, the officers, directors, principal
stockholders and their affiliates owned greater than a majority of the
outstanding common stock. Although there are currently no voting agreements or
similar arrangements among such
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stockholders, if they were to act in concert, they would be able to elect a
majority of the Company's directors, determine the outcome of most corporate
actions requiring stockholder approval and otherwise control the business
affairs of the Company. The Board of Directors of the Company has the authority
under the Company's Restated Certificate of Incorporation to issue shares of the
Company's authorized preferred stock in one or more series and to fix the
rights, preferences, privileges and restrictions granted to or imposed upon any
unissued shares of preferred stock. The issuance of preferred stock may
adversely affect the voting and dividend rights, rights upon liquidation and
other rights of the holders of common stock. The issuance of preferred stock and
the control by existing stockholders, if they were to act in concert, may have
the effect of delaying, deferring or preventing a change in control of the
Company.
In April 1997, William A. Klein acquired 3,663,898 shares of Common
Stock upon the conversion of Series B Preferred Stock, Richard C. Davis acquired
166,667 shares of Common Stock upon the conversion of Series B Preferred Stock
and the Sprout Growth, II L.P. acquired 7,563,333 shares of Common Stock upon
the conversion of Series B Preferred Stock. In addition, DLJ Capital Corporation
converted 231 shares of Preferred Stock into 770,000 shares of Common Stock.
Dependence on Key Personnel. The Company's future success depends, to a
large extent, upon the efforts and abilities of key employees. Competition for
qualified personnel in the industry is intense. The loss of services of certain
of these key employees could have a material adverse effect on the Company's
business. During the last year, the Company has lost the services of several of
its key executive officers and members of management. While the Company has
filled several positions, including hiring a new Chief Executive Officer,
Stephen J. Hopkins, the Company is currently searching for certain other key
managers.
No Assurance of Public Market for Common Stock; Possible Volatility of
Stock Price. Prior to the Company's initial public offering, there was no public
market for the Common Stock. On February 20, 1997, the Company was removed from
the NASDAQ National Market System and commenced trading on the OTC Bulletin
Board. There can be no assurance of an active trading market for the Company's
Common Stock. In addition, the trading price of the Common Stock has been, and
in the future could be, subject to significant fluctuations in response to
variations in quarterly operating results, the gain or loss of significant
contracts, changes in management or new products or services by the Company or
its competitors, general trends in the industry and other events or factors. In
addition, the stock market has experienced extreme price and volume fluctuations
which have particularly affected the market price for many companies in similar
industries and which have often been unrelated to the operating performance of
these companies. These broad market fluctuations may adversely affect the market
price of the Company's Common Stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
Shares by the Selling Security Holders. See "Selling Security Holders."
SELLING SECURITY HOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each of the Selling Security Holders. Except as indicated
in the footnotes below, none of the Selling Security Holders has had a material
relationship with the Company within the past three years other than as a result
of the ownership of the Shares or other securities of the Company. Because the
Selling Security Holders may offer some, all, or none of the Shares which they
hold, or have the right to acquire, pursuant to the offering contemplated by
this Prospectus, and because there are currently no agreements, arrangements or
understandings with respect to the sale of any of the Shares, no estimate can be
given as to the amount of Shares that will be held by the Selling Security
Holders after completion of this offering. See "Plan of Distribution."
During the period the Registration Statement is in effect, each Selling
Security Holder shall be entitled to sell any and all of such Selling Security
Holder's Shares.
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The Company has agreed to bear certain expenses (other than broker
discounts and commissions, if any, and expenses of counsel and other advisors to
the Selling Security Holders) in connection with the registration of the Shares
by the Selling Security Holders.
The Shares offered by this Prospectus may be offered from time to time
by the Selling Security Holders named below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT OF NUMBER OF
BENEFICIALLY OUTSTANDING SHARES REGISTERED
SELLING SECURITY HOLDERS OWNED(1)(2)(3) SHARES(1)(3) FOR SALE HEREBY
- ------------------------ -------------- ------------ ---------------
<S> <C> <C> <C>
Leo and Nicole Arnaboldi JTWROS(4).................... 2,000 * 2,000
Bessemer Venture Partners II, L.P..................... 390,344 1.14% 390,344
Perry H. Braun(4)..................................... 800 * 800
Robert H. Buescher.................................... 1,000 * 1,000
Canaan Venture Offshore Limited Partnership........... 279,179 * 279,179
C. Samantha Chen...................................... 300 * 300
Chestnut Pacific Ltd. Partners(7)..................... 287,685 * 287,685
Citibank, N.A.(5)..................................... 2,110,313 5.81% 2,110,313 (6)(8)
Common Fund Equity Fund(7)............................ 136,467 * 136,467
Hoyt Davidson(4)...................................... 3,000 * 3,000
Richard R. Davis...................................... 1,000 * 1,000
Richard C. Davis(9)(10)............................... 845,871 2.47% 845,871
Peter K. Deeks(4)..................................... 3,000 * 3,000
David L. Dennis(4).................................... 2,667 * 2,667
Thomas S. DePre(4).................................... 2,000 * 2,000
Robert E. Diemar(4)................................... 1,500 * 1,500
DLJ Capital Corporation(11)........................... 8,590,492 (12) 25.06% 856,268 (6)
Malcolm and Emily Fairbairn........................... 112,458 * 112,458
Robert Finzi(13)...................................... 43,500 * 3,500
Mark K. Gornley(4).................................... 3,000 * 3,000
John Hancock Mutual Life Insurance Company(14)........ 1,132,391 3.20% 1,132,391 (6)
Deepak Kamra.......................................... 4,000 * 4,000
William A. Klein(10)(15).............................. 8,654,281 25.29% 4,760,383
Klein 1994 Charitable Remainder Trust................. 1,271,299 3.72% 1,271,299 (16)
The Klein Foundation(17).............................. 180,000 * 180,000
Klein Investments Family Limited Partnership.......... 2,442,599 7.14% 2,442,599 (18)
Richard E. Kroon...................................... 5,200 * 5,200
Myron Kunin(19)....................................... 982,642 2.87% 952,642
Mark Lanigan(4)....................................... 2,133 * 2,133
N.V. Mahuma........................................... 60,104 * 60,104
Andrea Martin......................................... 10,000 * 10,000
Brian J. McLoughlin(4)................................ 1,300 * 1,300
Nintin T. Mehta....................................... 666,667 1.95% 666,667
Michael R. Nicolais(4)................................ 3,400 * 3,400
North Atlantic Smaller Companies Trust PLC(14)........ 65,218 * 65,218 (6)
Peak Investment Limited Partnership(7)................ 2,245,150 (20) 6.56% 2,358,580
Pleiades Investment Partners.......................... 816,747 (21) 2.39% 873,462
Gautam A. Prakash..................................... 666 * 666
Larry E. Reeder(22)................................... 5,200 * 5,200
John K. Rodakis....................................... 667 * 667
Thomas F. Ruhm........................................ 266 * 266
Scorpion Offshore Investment Fund(7).................. 1,793,953 (23) 5.24% 1,853,364
James T. Sington(4)................................... 1,600 * 1,600
Sprout Growth II, L.P.(24)............................ 8,410,398 24.58% 8,410,401
Standard Global Equity Partners L.P.(7)............... 788,754 2.31% 788,754
Standard Pacific Capital Offshore Fund Ltd.(7)........ 312,212 * 312,212
The Northwestern Mutual Life Insurance Company(14).... 1,157,391 2.46% 1,157,391 (6)
The & Trust(7)........................................ 110,536 * 110,536
Kenneth A. Tucker(4).................................. 3,000 * 3,000
Whitman Partners, L.P................................. 391,240 (25) 1.14% 3,285,373
</TABLE>
7
<PAGE> 9
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT OF NUMBER OF
BENEFICIALLY OUTSTANDING SHARES REGISTERED
SELLING SECURITY HOLDERS OWNED(1)(2)(3) SHARES(1)(3) FOR SALE HEREBY
- ------------------------ -------------- ------------ ---------------
<S> <C> <C> <C>
Theodore J. Wisniewski(26)............................ 841,384 2.46% 841,384
Unallocated Shares(27)................................ 510,035
----------- -----------
45,176,974 37,112,579
=========== ===========
</TABLE>
- ---------------
* Less than 1% as of July 27, 1997.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Except as otherwise
indicated, shares of Common Stock subject to options, warrants and
shares of Series B Preferred Stock which are currently exercisable or
convertible or which will become exercisable or convertible within
sixty (60) days after July 27, 1997 are deemed outstanding for
computing beneficial ownership of the person holding such option,
warrant or share of Series B Preferred Stock, but are not outstanding
for computing the beneficial ownership of any other person or entity.
The shares of Series B Preferred Stock are currently convertible into
shares of Common Stock.
(2) The conversion rate for the Series B Preferred Stock fluctuates based
on the trading price of the Company's Common Stock. For the purposes of
computing the beneficial ownership of, and number of shares registered
for sale by, the holders of the Series B Preferred Stock, each
outstanding share of Series B Preferred Stock is assumed to be
convertible into 3,289 shares of Common Stock.
(3) Information is as of July 27, 1997.
(4) Selling Security Holder is an employee, officer and/or affiliate of DLJ
Capital Corporation ("DLJCC") and purchased Series A Preferred Stock in
connection with the Company's private placement of Series A Preferred
Stock and subordinated notes on November 19, 1993 (the "1993 Private
Placement"), which stock was converted into Common Stock at the
Company's initial public offering. DLJCC's relationship with the
Company is disclosed in footnote (11) below.
(5) Selling Security Holder is a senior debt holder of the Company pursuant
to that certain Credit Agreement dated October 12, 1994, as amended.
(6) Includes the resale of Common Stock issuable upon the exercise of
outstanding warrants. The number of shares of Common Stock issuable,
and the number of shares of Common Stock registered hereunder, may be
increased as a result of the application of the antidilution provisions
of the outstanding warrants.
(7) Selling Security Holder is a holder of outstanding shares of Series B
Preferred Stock.
(8) Includes a warrant to purchase 31,250 shares of Common Stock
transferred to Selling Security Holder by Sumitomo Bank of California,
a warrant to purchase 31,250 shares of Common Stock transferred to
Selling Security Holder by Comerica Bank-California, a warrant to
purchase 218,750 shares of Common Stock transferred to Selling Security
Holder by BHF-Bank Aktiengelselschaft and a warrant to purchase 218,750
shares of Common Stock transferred to Selling Security Holder by Wells
Fargo Bank, N.A.
(9) Selling Security Holder is President of International Operations and a
director of the Company.
(10) The Company subleases certain real property for its operations in
Irvine, California and in Newburgh, New York from WC Cartwright
Corporation, a California corporation ("WC Cartwright"). Messrs. Klein
and Davis and Ms. Carolyn Klein (the spouse of Mr. Klein) are officers,
directors and principal shareholders of WC Cartwright.
(11) Selling Security Holder is a wholly-owned subsidiary of Donaldson,
Lufkin & Jenrette Incorporated ("DLJ"). Donaldson, Lufkin & Jenrette
Securities Corporation, which is also a wholly-owned subsidiary of DLJ,
served as an underwriter in the Company's initial public offering on
April 8, 1994 and the placement agent in the Company's 1993 Private
Placement.
(12) Does not include 770,000 shares of Common Stock Selling Security Holder
shall receive as a result of having converted shares of Series B
Preferred Stock.
(13) Selling Security Holder is a director of the Company; a Vice President
of the Sprout Group, a division of DLJCC; and a general partner of a
general partner of Sprout Growth II, L.P. ("Sprout Growth"). DLJCC is
the managing general partner of Sprout Growth. DLJCC's relationship
with the Company is disclosed in footnote (11).
(14) Selling Security Holder is a subordinated debt holder of the Company
pursuant to that certain Note Purchase Agreement dated November 19,
1993, as amended.
(15) Selling Security Holder is the Company's President, Chief Executive
Officer and Chairman of the Board.
(16) Consists of the shares of Common Stock issued to selling Security
Holder upon the conversion of 427, 32, 25 and 16 shares of Series B
Preferred Stock transferred to Selling Security Holder by Scorpion
Offshore Investment Fund, Common Fund Equity Fund, Chestnut Pacific
Ltd. Partners and The & Trust, respectively. The trustees for this
Selling Security Holder are William A. Klein (whose relationship to the
Company is disclosed in footnotes (10) and (15)) and his wife, Carolyn
Klein.
(17) The trustees for this Selling Security Holder are William A. Klein
(whose relationship to the Company is disclosed in footnotes (10) and
(15)) and his wife, Carolyn Klein.
8
<PAGE> 10
(18) Consists of the shares of Common Stock issued to Selling Security
Holder upon the conversion of the 250 shares of Series B Preferred
Stock transferred to Selling Security Holder by Whitman Partners, L.P.
The trustees for this Selling Security Holder are William A. Klein
(whose relationship to the Company is disclosed in footnotes (10) and
(15)) and his wife, Carolyn Klein.
(19) Selling Security Holder is a director of the Company.
(20) Does not include 113,430 shares of Common Stock Selling Security Holder
shall receive as a result of having converted shares of Series B
Preferred Stock.
(21) Does not include 56,715 shares of Common Stock Selling Security Holder
shall receive as a result of having converted shares of Series B
Preferred Stock.
(22) Selling Security Holder is an employee and/or affiliate of the Sprout
Group, a division of DLJCC. DLJCC's relationship to the Company is
disclosed in footnote (11).
(23) Does not include 59,411 shares of Common Stock Selling Security Holder
shall receive as a result of having converted shares of Series B
Preferred Stock.
(24) DLJCC is the managing general partner of Selling Security Holder.
DLJCC's relationship to the Company is disclosed in footnote (11).
(25) Does not include 2,894,133 shares of Common Stock Selling Security
Holder shall receive as a result of having converted shares of Series B
Preferred Stock.
(26) Selling Security Holder is Senior Vice President Quality Engineering
for the Company.
(27) These shares are registered hereunder but have not been allocated to a
specific Selling Security Holder.
PLAN OF DISTRIBUTION
The Shares offered hereby are being offered directly by the Selling
Security Holders. The Company will not receive any proceeds from the sale of any
of the Shares by the Selling Security Holders. The sale of the Shares may be
effected by the Selling Security Holders on the Over-The-Counter Bulletin Board
or otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The Shares may be sold
by one or more of the following: (a) a block trade in which the broker or dealer
so engaged will attempt to sell the Shares as agent but may position and resell
a portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the Selling Security Holders may arrange for other
brokers or dealers to participate. Brokers or dealers will receive commissions
or discounts from the Selling Security Holders in amounts to be negotiated
immediately prior to the sale. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule
144 rather than pursuant to this Prospectus. The Company has also agreed to bear
certain expenses in connection with the registration and sale of the Shares
offered hereby by the Selling Security Holders (other than broker discounts and
commissions).
The Selling Security Holders and any broker-dealers, agents or
underwriters that participate with the Selling Security Holders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act, and any commissions received by them and
any profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), any person engaged in the
distribution of the Shares may not simultaneously engage in market making
activities with respect to the Common Stock of the Company for a period of two
business days prior to the commencement of such distribution. In addition and
without limiting the foregoing, each Selling Security Holder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including, without limitation, Rules 10b-6 and 10b-7, which
provisions may limit the timing of purchases and sales of shares of the
Company's Common Stock by the Selling Security Holders.
9
<PAGE> 11
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of (i) 3,059,147
shares of Preferred Stock, $.001 par value ("Preferred Stock"), of which 807
shares are outstanding Series B Preferred Stock, and (ii) 60,000,000 shares of
Common Stock, $.001 par value (the "Common Stock").
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Shares of Common Stock do not have
cumulative voting rights with respect to the election of directors.
Subject to preferences that may be applicable to the holders of
outstanding shares of Series B Preferred Stock, if any, the holders of Common
Stock are entitled to receive such lawful dividends as may be declared by the
Board of Directors. In the event of liquidation, dissolution or winding up of
the Company, and subject to the rights of the holders of outstanding shares of
Series B Preferred Stock, if any, the holders of shares of Common Stock shall be
entitled to receive pro rata all of the remaining assets of the Company
available for distribution to its shareholders.
There are no redemption or sinking fund provisions applicable to the
Common Stock. All outstanding shares of Common Stock are fully paid and
nonassessable, and shares of Common Stock to be issued pursuant to the Offering
shall be fully paid and nonassessable. The shares of Common Stock are not
convertible into any other series or class of the Company's securities. Holders
of Common Stock do not have any preemptive rights or rights to subscribe for
additional securities of the Company.
PREFERRED STOCK
The Preferred Stock authorized by the Company's Restated Certificate of
Incorporation may be issued from time to time in one or more series. The Board
of Directors of the Company is authorized to fix or alter the rights,
preferences, privileges and restrictions granted to or imposed upon additional
series of Preferred Stock and the number of shares constituting any such series
and the designation thereof, or of any of them. Subject to compliance with
applicable protective voting rights which have been or may be granted to the
Preferred Stock or series thereof in Certificates of Determination or the
Company's Restated Certificate of Incorporation, but notwithstanding any other
rights of the Preferred Stock or any series thereof, the rights, privileges,
preferences and restrictions of any such additional series may be subordinated
to, pari passu, with (including, without limitation, inclusion in provisions
with respect to liquidation and acquisition preferences, redemption and/or
approval of matters by vote or written consent), or senior to any of those of
any present or future class or series of Preferred or Common Stock.
SERIES B PREFERRED STOCK
Holders of the Series B Preferred Stock are entitled to receive
dividends as may be declared from time to time by the Board. The Board may not
pay dividends to the holders of the Company's Common Stock unless and until the
Board has paid an equivalent dividend, based upon the number of shares of Common
Stock into which each share of Series B Preferred Stock is convertible as of the
record date for the payment of the dividend, to the holders of Series B
Preferred Stock.
In the event of any liquidation, dissolution or winding up of the
Company, the holders of Series B Preferred Stock are entitled to receive, prior
and in preference to any distribution of any assets of the Company
10
<PAGE> 12
to the holders of Common Stock, the amount of $2,000 per share plus all accrued
or declared but unpaid dividends (the "Liquidation Preference").
At any time after September 9, 1996, each share of Series B Preferred
Stock may be converted, at the option of the holder thereof, into the number of
shares of Common Stock equal to $1,000 (the "Original Issue Price") divided by
the lower of (i) 80% of the average closing bid price of the Common Stock for
the 10 trading days ending three days prior to the date of the notice of
conversion or (ii) $5.07 (the "Conversion Price"). Each share of Series B
Preferred Stock shall automatically be converted into the number of shares of
Common Stock determined as provided above, either (i) June 11, 2001, or (ii)
five days after written notice to the holders of Series B Preferred Stock by the
Company that the price of the Common Stock for 30 consecutive trading days has
exceeded $19.13 per share, whichever occurs first. The conversion provisions are
also subject to adjustment in certain circumstances.
The Series B Preferred Stock is not redeemable. Except as otherwise
provided by law, each holder of shares of Series B Preferred Stock shall be
entitled to vote with the holders of Common Stock on an as-converted basis,
assuming a conversion price of $5.40, as a single class on all matters presented
for stockholder vote.
CERTAIN PROVISIONS OF DELAWARE LAW
The Company is a Delaware corporation and is subject to Section 203 of
the Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company for three years
following the date that person became an interested stockholder unless: (i)
before that person became an interested stockholder, the Board of Directors
approved the transaction in which the interested stockholder became an
interested stockholder or approved the business combination; (ii) upon
completion of the transaction that resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the Company outstanding at the time the transaction
commenced (excluding stock held by directors who are also officers of the
Company and by employee stock plans that do not provide employees with the right
to determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer); or (iii) on or following the date on
which that person became an interested stockholder, the business combination is
approved by the Company's Board of Directors and authorized at a meeting of
stockholders by the affirmative vote of the holders of at least 66 2/3% of the
outstanding voting stock of the Company now owned by the interested shareholder.
Under Section 203, these restrictions also do not apply to certain
business combinations proposed by an interested stockholder following the
announcement or notification of one of certain extraordinary transactions
involving the Company and a person who was not an interested stockholder during
the previous three years or who became an interested stockholder with the
approval of a majority of the Company's directors, if that extraordinary
transaction is approved or not opposed by a majority of the directors (but not
less than one) who were directors before any person became an interested
stockholder in the previous three years or who were recommended for election or
elected to succeed such directors by a majority of such directors then in
office.
CERTAIN CHARTER AND BYLAW PROVISIONS
The Company's Bylaws require stockholders to provide advance notice of
any stockholder nominations for directors and of any business to be brought
before any meeting of stockholders. Stockholders are not entitled to cumulative
voting in connection with the election of directors. As a result, a person or a
group controlling the majority of shares of Common Stock can elect all of the
directors.
The Company's Restated Certificate of Incorporation contains certain
provisions permitted under the Delaware General Corporation Law relating to the
liability of directors. These provisions eliminate the directors' liability for
monetary damages for a breach of fiduciary duty, except in certain circumstances
involving wrongful acts, including the breach of a director's duty of loyalty or
acts or omissions which involve intentional misconduct or a knowing violation of
a law. The Company's Restated Certificate of Incorporation also contains
provisions to indemnify its directors and officers to the fullest extent
permitted by the Delaware General Corporation Law.
11
<PAGE> 13
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is U.S. Stock
Transfer Corporation.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Brobeck, Phleger & Harrison LLP, Newport Beach, California. In
addition, certain members and employees of such firm are stockholders of the
Company.
EXPERTS
The consolidated financial statements of The Cerplex Group, Inc. as of
December 31, 1996 and 1995, and for each of the years in the three-year period
ended December 31, 1996, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
INFORMATION WITH RESPECT TO THE REGISTRANT
A copy of the Company's latest Form 10-K and the Company's latest Form
10-Q is being provided herewith without charge to each person to whom a copy of
this prospectus is being delivered.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Exchange Act,
and in accordance therewith files annual and quarterly reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information may be
inspected, and copies of such material may be obtained at prescribed rates, at
the Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W.,
Washington D.C. 20549, as well as at the Commission's Regional Offices at 7
World Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission
maintains a web site (http://www.sec.gov) which contains reports, proxy and
information statements and other information regarding registrants that file
electronically, such as Cerplex. The Common Stock of the Company is traded on
the Over-The-Counter Bulletin Board. Reports, proxy statements and other
information concerning the Company may be inspected at the National Association
of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-2 (herein, together with all amendments and exhibits referred to as the
"Registration Statement") under the Securities Act with respect to the Common
Stock offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information pertaining to the Company and the Shares, reference is made to the
Registration Statement and the exhibits thereto, which may be inspected without
charge at, and copies thereof may be obtained at prescribed rates from, the
Office of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are hereby incorporated
by reference in this Prospectus: (i) the Annual Report of the Company on Form
10-K for the fiscal year ended December 29, 1996; (ii) the Quarterly Report of
the Company on Form 10-Q for the quarter ended June 30, 1997; (iii) the
Quarterly Report of the Company on Form 10-Q for the quarter ended March 29,
1997 and (iv) the Proxy Statement of the Company in connection with the Annual
Meeting of Security Holders to be held on June 10, 1997.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement incorporated herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any
12
<PAGE> 14
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated herein by reference (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such document). Requests for such documents
should be submitted in writing to Chief Executive Officer at The Cerplex Group,
Inc., 1382 Bell Avenue, Tustin, CA 92780 or by telephone at (714) 258-5600.
13
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
broker-dealer discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts are estimated
except the Securities and Exchange Commission registration fee. All of the
expenses below will be paid by the Company.
<TABLE>
<CAPTION>
ITEM
- ----
<S> <C>
Registration Fee.................................................... $ 4,242.65
Printing and engraving expenses..................................... 2,000.00
Legal fees and expenses............................................. 20,000.00
Accounting fees and expenses........................................ 3,000.00
Transfer Agent and Registrar fees................................... 2,000.00
Miscellaneous....................................................... 5,000.00
---------
Total........................................................... $36,242.65
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware Law, the Company has broad powers to
indemnify its directors and officers against liabilities they may incur in such
capacities, including liabilities under the Securities Act. The Company's Bylaws
(the "Bylaws") provide that the Company shall indemnify its directors and
officers to the fullest extent permitted by law and requires the Company to
advance litigation expenses upon receipt by the Company of an undertaking by the
director or officer to repay such advances if it is ultimately determined that
the director 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 Company's Certificate of Incorporation (the "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 Company and its stockholders. This provision in the 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 Company for acts or omissions not in good faith or
involving intentional misconduct, for 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 directors'
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. The Certificate of Incorporation further
provides that the Company shall indemnify its directors and officers to the
fullest extent permitted by law, and requires the Company to advance litigation
expenses in the case of stockholder derivative actions or other actions, against
an undertaking by the director to repay such advances if it is ultimately
determined that the director is not entitled to indemnification. The Certificate
of Incorporation also provides that rights conferred under such Certificate of
Incorporation shall not be deemed to be exclusive of any other right such
persons may have or acquire under any statute, the Certificate of Incorporation,
the Bylaws, agreement, vote of stockholders or disinterested directors, or
otherwise.
The Company has in place a directors' and officers' liability insurance
policy that, subject to the terms and conditions of the policy, insures the
directors and officers of the Company against losses arising from any wrongful
act (as defined by the policy) in his or her capacity as a director or officer.
The policy reimburses the Company for amounts which the Company lawfully
indemnifies or is required or permitted by law to indemnify its directors and
officers.
In addition, the Company has entered into agreements to indemnify its
directors and certain of its officers in addition to the indemnification
provided for in the Certificate of Incorporation and Bylaws. These agreements
will, among other things, indemnify the Company's directors and certain of its
officers for certain expenses (including attorneys' fees), judgments, fines and
settlement amounts incurred by such person in any action or
II-1
<PAGE> 16
proceeding, including any action by or in the right of the Company, on account
of services as a director or officer of the Company or as a director or officer
of any subsidiary of the Company, or as a director or officer of any other
company or enterprise that the person provides services to at the request of the
Company.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER TITLE METHOD OF FILING
- ------ ----- ----------------
<S> <C> <C>
2.1 Agreement of Merger dated as of August 30, 1993, Incorporated herein by reference to
by and among Cerplex Incorporated, Diversified Exhibit 2.1 to the Company's
Manufacturing Services, Inc. ("DMS"), EMServe, Registration Statement on Form S-1
Inc. ("EMServe"), InCirT Technology Incorporated (File No. 33-75004) which was
("InCirT") and Testar, Inc. ("Testar"). declared effective by the Commission
on April 8, 1994.
2.2 Agreement and Plan of Merger dated November Incorporated herein by reference to
12, 1993, between The Cerplex Group Subsidiary, Exhibit 2.2 to the Company's
Inc. and Registrant (conformed copy to original). Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
2.3 Certificate of Ownership and Merger of Registrant Incorporated herein by reference to
with and into The Cerplex Group Subsidiary, Inc. Exhibit 2.2 to the Company's
dated as of November 12, 1993. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
2.4 Asset Purchase Agreement effective December 17, Incorporated herein by reference to
1993 by and between Certech Technology, Inc., a Exhibit 2.4 to the Company's
wholly-owned subsidiary of the Registrant Registration Statement on Form S-1
("Certech"), and Spectradyne, Inc. ("Spectradyne"). (File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
2.5 Purchase and Sale Agreement dated as of July 29, Incorporated herein by reference to
1994, by and among The Cerplex Group, Inc., Exhibit 2 to the Form 8-K filed July
Cerplex Limited, BT Repair Services Limited and 29, 1994.
BT.
2.6 Contract for repair, calibration and warehousing of Incorporated herein by reference to
certain items of BT Equipment dated as of July 29, Exhibit 10 to the Form 8-K filed July
1994, among The Cerplex Group and Cerplex 29, 1994.
Limited and BT.
2.7 Formation and Contribution Agreement effective Incorporated herein by reference to
December 1, 1994 by and among Exhibit 2.7 to the Company's Annual
Modcomp/Cerplex L.P., Modular Computer Report on Form 10-K for the fiscal
Systems, Inc., Cerplex Subsidiary, Inc. and The year ended January 1, 1995.
Cerplex Group, Inc.
2.8 Contingent Promissory Note dated December 1, Incorporated herein by reference to
1994 issued by Modcomp/Cerplex L.P. to Modular Exhibit 2.8 to the Company's Annual
Computer Systems, Inc. Report on Form 10-K for the fiscal
year ended January 1, 1995.
2.9 Limited Partnership Agreement of Incorporated herein by reference to
Modcomp/Cerplex L.P. effective December 1, 1994. Exhibit 2.8 to the Company's Annual
Report on Form 10-K for the fiscal
year ended January 1, 1995.
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2.10 Put/Call Option Agreement effective December 1, Incorporated herein by reference to
1994 by and among Cerplex Subsidiary, Inc., The Exhibit 2.8 to the Company's Annual
Cerplex Group, Inc., Modular Computer Systems, Report on Form 10-K for the fiscal
Inc. and Modcomp Joint Venture Inc. year ended January 1, 1995.
2.11 Stock Purchase Agreement dated as of June 29, Incorporated herein by reference to
1995 by and among The Cerplex Group, Inc., Tu Exhibit 2.11 to the Company's
Nguyen and Phuc Le. Quarterly Report on Form 10-Q for
the quarter ended October 1, 1995.
2.12 Letter Agreement dated April 5, 1996 by and Incorporated herein by reference to
among Modular Computer Systems, Inc., Modcomp Exhibit 2.12 to the Company's
Joint Venture, Inc., AEG Aktiengesellschaft, the Annual Report on Form 10-K for
Company, Cerplex Subsidiary, Inc. and the fiscal year ended December 31,
Modcomp/Cerplex L.P. 1995.
2.13 Stock Purchase Agreement dated as of May 24, Incorporated herein by reference to
1996, by and among The Cerplex Group, Inc., Exhibit 2.13 to the Company's
Cerplex Limited, Rank Xerox - The Document Current Report on Form 8-K dated
Company SA and Rank Xerox Limited (conformed May 24, 1996.
copy to original).
2.14 Contract of Warranty dated as of May 24, 1996, by Incorporated herein by reference to
and among The Cerplex Group, Inc., Cerplex Exhibit 2.14 to the Company's
Limited, Rank Xerox - The Document Company Current Report on Form 8-K dated
SA and Rank Xerox Limited (conformed copy to May 24, 1996.
the original).
2.15 Supply and Services Agreement dated as of May 24, Incorporated herein by reference to
1996, by and among The Cerplex Group, Inc., Exhibit 2.15 to the Company's
Cerplex Limited, Rank Xerox - The Document Current Report on Form 8-K dated
Company SA and Rank Xerox Limited (conformed May 24, 1996.
copy to the original).
2.16 Stock Purchase Agreement dated March 28, 1997 Incorporated herein by reference to
relating to all of the outstanding stock of Peripheral Exhibit 2.13 to the Company's
Computer Support, Inc. among the Company, PCS Annual Report on Form 10-K for
Acquisition Co., Inc., and Lincolnshire Equity the fiscal year ended December 31,
Partners, L.P. 1996.
2.17 Asset Purchase Agreement dated August 6, 1997 by and Incorporated herein by reference to
among the Company, Cerplex Subsidiary, Inc., Modcomp Exhibit 2.17 to the Company's
Joint Venture, Inc., Modcomp/Cerplex L.P. and CSP Inc. Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997.
3.1 Restated Certificate of Incorporation of the Incorporated herein by reference to
Registrant. Exhibit 3.1 to the Company's
Registration Statement on From S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
3.2 Bylaws of the Registrant Incorporated herein by reference to
Exhibit 3.2 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
3.3 Certificate of Amendment of the Restated Incorporated herein by reference to
Certificate of Incorporation of the Registrant Exhibit 3.3 to the Company's
(filed June 16, 1997). Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997.
4.1 Stock Purchase Agreement dated as of November Incorporated herein by reference to
19, 1993 by and among the Registrant, the Exhibit 4.1 to the Company's
stockholders of the Registrant identified in Part A Registration Statement on Form S-1
of Schedule I thereto and the purchasers of shares (File No. 33-75004) which was
of the Registrant's Series A Preferred Stock declared effective by the Commission
identified in Schedule I thereto (including the on April 8, 1994.
Schedules thereto; Exhibits omitted).
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4.2 Registration Rights Agreement dated as of Incorporated herein by reference to
November 19, 1993, by and among the Registrant, Exhibit 4.2 to the Company's
the investors listed on Schedule A thereto and the Registration Statement on Form S-1
security holders of the Registrant listed on Schedule (File No. 33-75004) which was
B thereto, together with Amendment No. 1. declared effective by the Commission
on April 8, 1994.
4.3 Co-Sale Agreement dated as of November 19, 1993, Incorporated herein by reference to
by and among the Registrant, the managers listed Exhibit 4.3 to the Company's
on Schedule A thereto and the investors listed on Registration Statement on Form S-1
Schedule 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, Incorporated herein by reference to
1993, by and among the Registrant and the Exhibit 4.4 to the Company's
purchasers listed in 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 Incorporated herein by reference to
dated as of November 19, 1993, between the Exhibit 4.5 to the Company's
Registrant and Donaldson, Lufkin & Jenrette Registration Statement on Form S-1
Securities Corporation. (File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
4.6 Observation Rights Agreement dated as of Incorporated herein by reference to
November 19, 1993, between the Registrant and Exhibit 4.6 to the Company's
certain stock purchasers. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
4.7 Observation Rights Agreement dated as of Incorporated herein by reference to
November 19, 1993, between the Registrant and Exhibit 4.7 to the Company's
certain note 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 Incorporated herein by reference to
19, 1993, by and among the Registrant and The Exhibit 4.8 to the Company's
Northwestern Mutual Life Insurance Company, Registration Statement on Form S-1
John Hancock Mutual Life Insurance, Registrant (File No. 33-75004) which was
and Bank of Scotland London Nominees Limited. declared effective by the Commission
on April 8, 1994.
4.9 Amendment No. 2 to Registration Rights Incorporated herein by reference to
Agreement dated as of April 6, 1994, by and among Exhibit 4.9 to the Company's
the Registrant 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.
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4.10 Amendment to Note Purchase Agreement, dated as Incorporated herein by reference to
of October 27, 1994, by and among the Company, Exhibit 4.10 to the Company's
Northwestern Mutual Life Insurance Company, Annual Report on Form 10-K for
John Hancock Mutual Life Insurance Company and the fiscal year ended March 31, 1995.
North Atlantic Smaller Companies Trust P.L.C.
(collectively, 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 Annual Report on Form 10-K for
Mutual Life Insurance Company and North Atlantic the fiscal year ended December 31,
Smaller Companies Investment Trust PLC. 1995.
4.12 Warrant Agreement dated as of April 15, 1996 by Incorporated herein by reference to
and among Company, The Northwestern Mutual Exhibit 4.12 to the Company's
Life Insurance Company, John Hancock Mutual Annual Report on Form 10-K for
Life Insurance Company and North Atlantic the fiscal year ended December 31,
Smaller Companies Investment Trust PLC. 1995.
4.13 First Amendment to Warrant Agreement dated Incorporated herein by reference to
April 15, 1996 by and among Company and each of Exhibit 4.13 to the Company's
the holders of warrants listed on Schedule A Annual Report on Form 10-K for
thereto, with respect to that certain Warrant the fiscal year ended December 31,
Agreement dated November 19, 1993. 1995.
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 Incorporated herein by reference to
Agreement dated as of April 15, 1996 by and Exhibit 4.15 to the Company's
among Company, the investors of Company listed Annual Report on Form 10-K for
on Schedule A thereto and the security holders of the fiscal year ended December 31,
Company listed on Schedule B thereto. 1995.
4.16 Warrant Agreement dated April 15, 1996 by and Incorporated herein by reference to
among Company, Wells Fargo Bank, National Exhibit 4.16 to the Company's
Association, Sumitomo Bank of California, BHF Annual Report on Form 10-K for
Bank Aktiengesellschaft and Comerica Bank- the fiscal year ended December 31,
California. 1995.
4.17 Stock Purchase Agreement dated June 10, 1996 by Incorporated herein by reference to
and among the Company and the investors listed on Exhibit 4.17 to the Company's
Schedule A thereto. Quarterly Report on Form 10-Q
filed August 14, 1996.
4.18 Fourth Amendment to Registration Rights Incorporated herein by reference to
Agreement dated June 10, 1996 by and among Exhibit 4.18 to the Company's
Company, the investors listed on Schedule A Quarterly Report on Form 10-Q
thereto, the security holders of Company listed on filed August 14, 1996.
Schedule B thereto, 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 Incorporated herein by reference to
B Preferred Stock of The Cerplex Group, Inc. Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q filed
August 14, 1996.
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4.20 Waiver and Amendment Agreement dated October Incorporated herein by reference to
31, 1996 by and among the company and the Exhibit 4.17 to the Company's
Noteholders. Annual Report on Form 10-K for
the fiscal year ended December 31,
1996.
4.21 Waiver and Amendment Agreement dated Incorporated herein by reference to
December 9, 1996 by and among the company and Exhibit 4.18 to the Company's
the Noteholders. Annual Report on Form 10-K for
the fiscal year ended December 31,
1996.
4.22 Side Letter dated March 28, 1997 by and among the Incorporated herein by reference to
Company and the Noteholders. Exhibit 4.19 to the Company's
Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.
4.23 Amended and Restated Note Purchase Agreement Incorporated herein by reference to
dated April 9, 1997 by and among the Company Exhibit 4.20 to the Company's
and the Noteholders. Annual Report on Form 10-K for
the fiscal year ended December 31,
1996.
4.24 Second Amendment to Warrant Agreement dated Incorporated herein by reference to
April 9, 1997, by and among the Company and each Exhibit 4.21 to the Company's
of the holders of warrants listed on Schedule A Annual Report on Form 10-K for
thereto, which Second Amendment amends the the fiscal year ended December 31,
Warrant Agreement dated November 19, 1993 as 1996.
amended by the First Amendment to Warrant
Agreement dated April 15, 1996.
4.25 Second Amendment to Warrant Agreement dated Incorporated herein by reference to
April 9, 1997 by and among the Company and each Exhibit 4.22 to the Company's
of the holders of warrants listed on Schedule A Annual Report on Form 10-K for
thereto, which Second Amendment amends the the fiscal year ended December 31,
Warrant Agreement dated April 15, 1996, as 1996.
amended by a Waiver and Amendment Agreement
dated October 31, 1996.
4.26 Amended and Restated Warrant Agreement dated Incorporated herein by reference to
April 9, 1997 by and among the Company; Wells Exhibit 4.23 to the Company's
Fargo Bank, National Association; BHF-Bank Annual Report on Form 10-K for
Aktiengesellschaft; and Citibank, N.A. the fiscal year ended December 31,
1996.
4.27 Fifth Amendment to Registration Rights Incorporated herein by reference to
Agreement dated as of April 9, 1997 by and among Exhibit 4.27 to the Company's
the Company, the investors listed on Schedule A Quarterly Report on Form 10-Q for
thereto, the security holders of the Company listed the quarter ended June 30, 1997.
on Schedule B thereto, the banks listed on Schedule
C thereto, and the parties listed on Schedule D
thereto.
4.28 Waiver Agreement dated as of June 30, 1997 Incorporated herein by reference to
among the Company and the Noteholders. Exhibit 4.28 to the Company's
Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997.
4.29 Side letter dated July 10, 1997 by and among the Incorporated herein by reference to
Company and the Noteholders. Exhibit 4.29 to the Company's
Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997.
4.30 Side letter dated August 6, 1997 by and among the Incorporated herein by reference to
Company and the Noteholders. Exhibit 4.30 to the Company's
Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997.
5.1 Opinion of Brobeck, Phleger & Harrison LLP Filed herein.
10.1 The Registrant's 1990 Stock Option Plan (the "1990 Incorporated herein by reference to
Plan"). Exhibit 10.1 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.2 Form of Stock Option Agreement pertaining to the Incorporated herein by reference to
1990 Plan. Exhibit 10.2 to the Company's
Registration Statement on Form S-1
(File No. 33-75005) which was
declared effective by the Commission
on April 8, 1994.
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10.3 Form of Stock Purchase Agreement pertaining to Incorporated herein by reference to
the 1990 Plan. Exhibit 10.3 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.4 The Registrant's 1993 Stock Option Plan (the "1993 Incorporated herein by reference to
Plan"). Exhibit 10.4 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.5 Form of Stock option Agreement (grants to Incorporated herein by reference to
employees) pertaining to the 1993 Plan. Exhibit 10.5 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.6 Form of Stock Option Agreement (grants to Incorporated herein by reference to
directors and certain officers) pertaining to the 1993 Exhibit 10.6 to the Company's
Plan. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.7 Form of Stock Purchase Agreement for Installment Incorporated herein by reference to
Options pertaining to the 1993 Plan. Exhibit 10.7 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.8 Form of Stock Purchase Agreement for Incorporated herein by reference to
Immediately Exercisable Options pertaining to the Exhibit 10.8 to the Company's
1993 Plan. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.9 The Registrant's Restated 1993 Stock Option Plan Incorporated herein by reference to
(the "Restated Plan"). Exhibit 10.9 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.10 Form of Stock Option Agreement, together with Incorporated herein by reference to
Addenda, pertaining to the Restated Plan. Exhibit 10.10 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
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10.11 Master Task Agreement dated December 1, 1991, Incorporated herein by reference to
by and between International Business Machines Exhibit 10.11 to the Company's
Incorporated ("IBM") and the Registrant, together Registration Statement on Form S-1
with Amendment to Master Agreement and Task (File No. 33-75004) which was
Order. declared effective by the Commission
on April 8, 1994.
10.12 Master Agreement dated May 6, 1992 by and Incorporated herein by reference to
between IBM and the Company. Exhibit 10.12 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.13 Technology Services Agreement effective March 1, Incorporated herein by reference to
1993, by and between Novadyne Computer Systems, Exhibit 10.13 to the Company's
Inc. ("Novadyne") and Cerplex Incorporated (a Registration Statement on Form S-1
California corporation and a predecessor of the (File No. 33-75004) which was
Registrant), together with Amendments Nos. 1 and declared effective by the Commission
2. on April 8, 1994.
10.14 Technology Services Agreement effective December Incorporated herein by reference to
17, 1993, by and between Spectradyne, Inc. Exhibit 10.14 to the Company's
("Spectradyne") and the Registrant. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.15 Repair Services Agreement dated January 1, 1994 Incorporated herein by reference to
by and between Bull HN Information Systems, Inc. Exhibit 10.24 to the Company's
and the Registrant. Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.16 Form of Indemnity Agreement. Incorporated herein by reference to
Exhibit 10.15 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.17 Lease Agreement dated April 1, 1992 by and Incorporated herein by reference to
between Henry G. Page Jr., and Diversified Exhibit 10.16 to the Company's
Manufacturing Services, Inc. ("DMS"). Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.18 Sublease dated January 1, 1994 by and between Incorporated herein by reference to
Bull and Cerplex Group, Inc. (a Massachusetts Exhibit 10.17 to the Company's
corporation). Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
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10.19 Standard Industrial/Commercial Single-Tenant Incorporated herein by reference to
Lease - Net dated November 29, 1990 by and Exhibit 10.18 to the Company's
among Kilroy Building 73 Partnership, Cerplex Registration Statement on Form S-1
Incorporated and InCirT, together with (File No. 33-75004) which was
Amendment No. 1 declared effective by the Commission
on April 8, 1994.
10.20 Lease dated December 17, 1993 by and between Incorporated herein by reference to
Spectradyne and Certech. Exhibit 10.19 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.21 Sublease dated March 1, 1993 by and between Incorporated herein by reference to
Novadyne and the Registrant together with Lease Exhibit 10.20 to the Company's
Amendment dated July 22, 1991 by and between Registration Statement on Form S-1
McDonnell Douglas Realty Company and (File No. 33-75004) which was
Novadyne. declared effective by the Commission
on April 8, 1994.
10.22 Standard Industrial/Commercial Lease - Net dated Incorporated herein by reference to
September 4, 1991 by and between Proficient Food Exhibit 10.21 to the Company's
Company and W.C. Cartwright Corporation Registration Statement on Form S-1
("Cartwright"), together with Addendum and (File No. 33-75004) which was
Sublease dated September 6, 1991 by and between declared effective by the Commission
Cartwright and the Registrant. on April 8, 1994.
10.23 Sublease dated July 30, 1992 by and between Incorporated herein by reference to
Cartwright and DMS. Exhibit 10.22 to the Company's
Registration Statement on Form S-1
(File No. 33-75004) which was
declared effective by the Commission
on April 8, 1994.
10.24 Credit Agreement dated as of October 12, 1994 Incorporated herein by reference to
(the "Credit Agreement") among The Cerplex Exhibit 10.24 to the Company's
Group, Inc., as Borrower; the lenders listed therein, Annual Report on Form 10-K for
as Lenders; and Wells Fargo Bank, National the fiscal year ended January 1, 1995.
Association, as Administrative Agent; and those
certain exhibits, schedules and collateral documents
to such Credit Agreement.
10.25 Limited Waiver dated as of November 14, 1995 Incorporated herein by reference to
("Waiver") by and among The Cerplex Group, Inc. Exhibit 10.25 to the Company's
(the "Company"), the financial institutions listed on Quarterly Report on Form 10-Q for
the signature pages thereof ("Lenders"), and Wells the quarter ended October 1, 1995.
Fargo Bank, National Association, as administrative
agent for the Lenders ("Administrative Agent"), and
for certain limited purposes, Certech Technology,
Inc., Cerplex Mass., Inc., Cerplex Limited, Apex
Computer Company, Cerplex Subsidiary, Inc. and
Peripheral Computer Support, Inc. (the
"Subsidiaries"), which Waiver is made with
reference to the Credit Agreement.
10.26 The Cerplex Group, Inc. Restated 1993 Stock Incorporated herein by reference to
Option Plan (Restated and Amended as of January Exhibit 10.26 to the Company's
13, 1995). Quarterly Report on Form 10-Q for
the quarter ended October 1, 1995.
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10.27 The Cerplex Group, Inc. Automatic Stock Option Incorporated herein by reference to
Agreement. Exhibit 10.27 to the Company's
Quarterly Report on Form 10-Q for the
quarter ended October 1, 1995.
10.28 First Amendment to Credit Agreement dated April Incorporated herein by reference to
15, 1996 by and among Company, the lenders Exhibit 10.28 to the Company's
whose signatures appear on the signature pages Annual Report on Form 10-K for
thereof, as Lenders; Wells Fargo Bank, National the fiscal year ended December 31,
Association, as Administrative Agent; and the 1995.
Subsidiaries for certain limited purposes.
10.29 Promissory Note dated June 21, 1996 payable by Incorporated herein by reference to
the Company to Lucent Technologies. Exhibit 10.29 to the Company's
Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996.
10.30 Limited Waiver dated as of October 31, 1996 by Incorporated herein by reference to
and among the Company, Lenders and Exhibit 10.29 to the Company's
Administrative Agent, and for certain limited Quarterly Report on Form 10-Q for
purposes, the Subsidiaries, Modcomp/Cerplex L.P., the quarter ended September 29,
Modcomp Joint Venture, Inc., Modular Computer 1996.
Services, Inc., Modular Computer Systems GmbH and
Modcomp France S.A., which waiver is made with
reference to the credit Agreement.
10.31 Extension and Forbearance Agreement dated Incorporated herein by reference to
March 31, 1997 by and among the Company, the Exhibit 10.31 to the Company's
financial institutions listed on the signature Annual Report on Form 10-K for
pages thereof and Wells Fargo Bank, National the fiscal year ended December 31,
Association. 1996.
10.32 Second Amendment to Credit Agreement dated Incorporated herein by reference to
November 30, 1996 (the "Second Amendment") by Exhibit 10.32 to the Company's
and among the Company, the financial institutions Annual Report on Form 10-K for
listed on the signature pages thereof ("Lenders") the fiscal year ended December 31,
and Wells Fargo Bank, National Association, as 1996.
administrative agent for the Lenders, and for
certain limited purposes, Certech Technology,
Inc., Cerplex Mass., Inc., Cerplex Limited,
Apex Computer Company, Cerplex Subsidiary,
Inc., Peripheral Computer Support, Inc.,
Modcomp/Cerplex, L.P., Modcomp Joint Venture,
Inc., Modular Computer Services, Inc.,
Modular Computer Systems GmbH and Modcomp
France S.A., which Second Amendment amends the
Credit Agreement dated October 12, 1994,
as amended.
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10.33 Third Amendment to Credit Agreement dated Incorporated herein by reference to
April 9, 1997 (the "Third Amendment") by and Exhibit 10.33 to the Company's
among the Company, the financial institutions Annual Report on Form 10-K for
listed on the signature pages thereof ("Lenders") the fiscal year ended December 31,
and Wells Fargo Bank, National Association, as 1996.
administrative agent for the Lenders, and for
certain limited purposes, Certech Technology,
Inc., Cerplex Mass., Inc., Cerplex Limited,
Apex Computer Company, Cerplex Subsidiary,
Inc., Peripheral Computer Support, Inc.,
Modcomp/Cerplex, L.P., Modcomp Joint Venture,
Inc., Modular Computer Services, Inc.,
Modular Computer Systems GmbH and Modcomp
France S.A., which Third Amendment amends
the Credit Agreement dated October 12, 1994,
as amended.
10.34 Fourth Amendment to Credit Agreement and Limited Filed herein.
Waiver dated as of May 30, 1997 and entered into
by and among the Company, the financial institutions
listed on the signature pages thereof ("Lenders") and
Wells Fargo Bank, National Association, as administrative
agent for the Lenders, and for certain limited purposes,
Certech Technology, Inc., Cerplex Mass., Inc., Cerplex
Limited, Apex Computer Company, Cerplex Subsidiary, Inc.,
Modcomp/Cerplex L.P., Modcomp Joint Venture, Inc., Modular
Computer Services, Inc., Modular Computer Systems GmbH
and Modcomp France S.A.
10.35 Fifth Amendment to Credit Agreement and Limited Incorporated herein by reference to
Waiver dated June 30, 1997 by and among the Company, Exhibit 10.35 to the Company's
the financial institutions listed on the signature pages Quarterly Report on Form 10-Q for
thereof ("Lenders") and Wells Fargo Bank, National the quarter ended June 30, 1997.
Association, as administrative agent for the Lenders
and, for certain limited purposes, certain subsidiaries
of the Company.
10.36 Sixth Amendment to Credit Agreement and Consent dated Incorporated herein by reference to
August 6, 1997 by and among the Company, the Exhibit 10.36 to the Company's
financial institutions listed on the signature pages Quarterly Report on Form 10-Q for
thereof ("Lenders") and Wells Fargo Bank, National the quarter ended June 30, 1997.
Association as administrative agent for the Lenders
as administrative agent for the Lenders and, for
certain limited purposes, certain subsidiaries of
the Company.
23.1 Consent of KPMG Peat Marwick LLP, Independent Filed herein.
Public Accountants.
23.2 Consent of Brobeck, Phleger & Harrison, LLP. Included in the Opinion of Counsel
filed as Exhibit 5.1 hereto.
24.1 Power of Attorney. Included on p. II-13 of this Registration
Statement.
27.1 Financial Data Schedule. Filed herein.
</TABLE>
ITEM 17. UNDERTAKINGS.
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 Securities 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. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total value of securities offered would
not exceed that which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(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 offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in 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.
II-11
<PAGE> 26
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (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 Securities Act and will be governed by the final
adjudication of such issue.
II-12
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Amendment No. 1 to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Tustin, State of California, on
August 20, 1997.
THE CERPLEX GROUP, INC.
By /s/ Stephen J. Hopkins
----------------------------------------
Stephen J. Hopkins
President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of The Cerplex Group, Inc., do
hereby constitute and appoint William A. Klein and Robert W. Hughes our true and
lawful attorney-in-fact and agent, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby, ratifying and confirming all that each of
said attorney-in-fact and agent, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 1 TO
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Stephen J. Hopkins President, Chief Executive Officer August 20, 1997
- ------------------------------------------------------
Stephen J. Hopkins
* Director August 20, 1997
- ------------------------------------------------------
Richard C. Davis
/s/ Robert W. Hughes Senior Vice President and Chief August 20, 1997
- ------------------------------------------------------ Financial Officer (Principal Accounting
Robert W. Hughes Officer)
* Director August 20, 1997
- ------------------------------------------------------
Robert Finzi
* Director August 20, 1997
- ------------------------------------------------------
Jerome Jacobson
* Director August 20, 1997
- ------------------------------------------------------
Patrick S. Jones
* Director August 20, 1997
- ------------------------------------------------------
Myron Kunin
*By: /s/ Robert W. Hughes
--------------------------------------------------
Robert W. Hughes, as Attorney-in-Fact
</TABLE>
II-13
<PAGE> 28
THE CERPLEX GROUP, INC.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Numbered
Exhibit Description Page
- ------- ----------- ------------
<S> <C>
5.1 Opinion of Brobeck, Phleger & Harrison LLP............................................
10.34 Fourth Amendment to Credit Agreement and Limited Waiver dated as of May 30, 1997
and entered into by and among the Company, the financial institutions listed on the
signature pages thereof ("Lenders") and Wells Fargo Bank, National Association,
as administrative agent for the Lenders, and for certain limited purposes,
Certech Technology, Inc., Cerplex Mass., Inc., Cerplex Limited, Apex Computer
Company, Cerplex Subsidiary, Inc., Modcomp/Cerplex L.P., Modcomp Joint Venture,
Inc., Modular Computer Services, Inc., Modular Computer Systems GmbH and
Modcomp France S.A....................................................................
23.1 Consent of KPMG Peat Marwick LLP......................................................
23.2 Consent of Brobeck, Phleger & Harrison LLP (Included in the Opinion
of Counsel filed as Exhibit 5.1 hereto)...............................................
24.1 Power of Attorney (Included on page II-13
of this Registration Statement).......................................................
</TABLE>
II-14
<PAGE> 1
EXHIBIT 5.1
August 20, 1997
The Cerplex Group, Inc.
1382 Bell Avenue
Tustin, California 92780
Ladies and Gentlemen:
We have acted as counsel to The Cerplex Group, Inc. (the
"Company"), a Delaware corporation, in connection with its registration of
37,112,579 shares of Common Stock (the "Common Stock") as described in the
Company's Registration Statement on Form S-2, filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Registration Statement").
It is our opinion that the Common Stock, when sold in
accordance with the Registration Statement, will be validly issued, fully paid
and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus which is part of the Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 10.34
E X E C U T I O N C O P Y
THE CERPLEX GROUP, INC.
FOURTH AMENDMENT
TO CREDIT AGREEMENT AND LIMITED WAIVER
This FOURTH AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER (this
"AMENDMENT") is dated as of May 30, 1997 and entered into by and among THE
CERPLEX GROUP, INC., a Delaware corporation ("COMPANY"), the FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF ("LENDERS") and WELLS FARGO
BANK, NATIONAL ASSOCIATION, as administrative agent for Lenders ("ADMINISTRATIVE
AGENT"), and, for purposes of Section 5 hereof, CERTECH Technology, Inc.,
Cerplex Mass., Inc., Cerplex Limited, Apex Computer Company, Cerplex Subsidiary,
Inc., Modcomp/Cerplex L.P., Modcomp Joint Venture, Inc., Modular Computer
Services, Inc., Modular Computer Systems GmbH and Modcomp France S.A.
(collectively, "GUARANTORS"), and is made with reference to that certain Credit
Agreement dated as of October 12, 1994, as amended by that certain First
Amendment to Credit Agreement and Limited Waiver dated as of April 15, 1996,
that certain Second Amendment to Credit Agreement and Limited Waiver dated as of
November 30, 1996 and that certain Third Amendment to Credit Agreement dated as
of April 9, 1997 (as so amended, the "CREDIT AGREEMENT"), by and among Company,
Lenders, Administrative Agent and Guarantors. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement.
RECITALS
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
SECTION 1.1 AMENDMENTS TO SECTION 6; COMPANY'S AFFIRMATIVE COVENANTS.
A. Subsection 6.16 of the Credit Agreement is hereby amended to
read in its entirety as follows:
"6.16 NEW LEADERSHIP; FINANCIAL ADVISOR. Company
shall hire a new chief executive officer no later than June
30, 1997. In addition, Company shall continue to retain the
services of a financial advisor, satisfactory to Lenders,
through the Commitment Termination Date."
<PAGE> 2
SECTION 2. WAIVER
Subject to the terms and conditions set forth herein and in
reliance on the representations of Company herein contained, Lenders hereby
waiver compliance with the provisions of (i) subsection 7.7 of the Credit
Agreement to the extent necessary to permit Company to sell equipment originally
purchased by Company for $680,000 to Hewlett-Packard Company ("HP") for $1.00
pursuant to the exercise by HP of its rights under its contract with Company and
(ii) subsection 6.17 of the Credit Agreement to the extent necessary to permit
Company to file a Registration Statement on Form S-2 with respect to the
warrants issued to Lenders on the Third Amendment Effective Date on or prior to
June 3, 1997.
SECTION 3. CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FOURTH
AMENDMENT EFFECTIVE DATE"):
A. On or before the Fourth Amendment Effective Date, Administrative
Agent shall have received for each Lender counterparts hereof duly executed on
behalf of Company, Administrative Agent, each Lender and each Guarantor.
B. Administrative Agent shall have received:
1. Resolutions of Company's Board of Directors approving and
authorizing the execution, delivery, and performance of this Amendment,
certified as of the Fourth Amendment Effective Date by its corporate
secretary or an assistant secretary as being in full force and effect
without modification or amendment; and
2. Signature and incumbency certificates of the officers of
Company executing this Amendment.
C. Administrative Agent shall have received for distribution to each
Lender, in proportion to that Lender's Pro Rata Share, an amendment fee in an
amount equal to $50,000.
SECTION 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company represents and
warrants to each Lender that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite corporate
power and authority to enter into this Amendment and to carry out the
transactions contemplated by,
<PAGE> 3
and perform its obligations under, the Credit Agreement as amended by this
Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of the Company, as the case may
be.
C. NO CONFLICT The execution and delivery by Company of this Amendment
and the performance of the Amended Agreement do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Certificate or Articles of Incorporation
or Bylaws of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other agency of government binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than any Liens created under any of the Loan Documents
in favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Company of this
Amendment and the performance by Company of the Amended Agreement do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended Agreement have
been duly executed and delivered by Company and are the legally valid and
binding obligations of Company, enforceable against Company in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
<PAGE> 4
Company is a party to the Company Collateral Documents, in
each case as amended through the Fourth Amendment Effective Date, pursuant to
which Company has created Liens in favor of Administrative Agent on certain
Collateral to secure the Obligations. Guarantors are a party to the Guaranty and
the Subsidiary Collateral Documents, in each case as amended through the First
Amendment Effective Date, pursuant to which each Guarantor has (i) guarantied
the Obligations and (ii) created Liens in favor of Administrative Agent on
certain Collateral to secure the obligations of such Guarantor under the
Guaranty. Company and Guarantors are collectively referred to herein as the
"CREDIT SUPPORT PARTIES", and the Guaranty, the Company Collateral Documents and
the Subsidiary Collateral Documents are collectively referred to herein as the
"CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guaranty or secure, as the case may be, to the fullest
extent possible the payment and performance of all "Obligations," "Guarantied
Obligations" and "Secured Obligations," as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including, without
limitation, the payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in respect of the
Obligations of Company now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the Credit Support Documents to which it is a party or
otherwise bound are true, correct and complete in all material respects on and
as of the Fourth Amendment Effective Date to the same extent as though made on
and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
Each Credit Support Party (other than Company) acknowledges
and agrees that (i) notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by the terms of the
Credit Agreement or any other Loan Document to consent to the amendments to the
Credit Agreement effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
<PAGE> 5
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
1. On and after the Fourth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement," "thereunder," "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
2. Without limiting the generality of the provisions of
subsection 10.6 of the Credit Agreement, the waiver set forth shall be
limited precisely as written and relates solely to the noncompliance by
Company with the provisions of subsections 6.17 and 7.7 of the Credit
Agreement in the manner and to the extent described above. Nothing in
this Amendment shall be deemed to:
(a) constitute a waiver of compliance by Company with
respect to (i) subsection 6.17 or 7.7 of the Credit Agreement
in any other instance or (ii) any other term, provision or
condition of the Credit Agreement or any other instrument or
agreement referred to therein; or
(b) prejudice any right or remedy that Administrative
Agent or any Lender may now have (except to the extent such
right or remedy was based upon existing defaults that will not
exist after giving effect to this Amendment) or may have in
the future under or in connection with the Credit Agreement or
any other instrument or agreement referred to therein.
3. Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees and
expenses as described in subsection 10.2 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE
<PAGE> 6
INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
E. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
THE CERPLEX GROUP, INC.
By: ______________________
Title: ______________________
CERTECH TECHNOLOGY, INC. (for
purposes of Section 5 only) as a Credit
Support Party
By: ______________________
Title: ______________________
CERPLEX MASS., INC. (for purposes
of Section 5 only) as a Credit Support
Party
By: ______________________
Title: ______________________
CERPLEX LIMITED (for purposes of
Section 5 only) as a Credit Support Party
By: ______________________
Title: ______________________
<PAGE> 7
APEX COMPUTER COMPANY (for
purposes of Section 5 only) as a Credit
Support Party
By: ______________________
Title: ______________________
CERPLEX SUBSIDIARY, INC. (for
purposes of Section 5 only) as a Credit
Support Party
By: ______________________
Title: ______________________
MODCOMP/CERPLEX L.P. (for
purposes of Section 5 only) as a Credit
Support Party
By: ______________________
Title: ______________________
MODCOMP JOINT VENTURE, INC.
(for purposes of Section 5 only) as a
Credit Support Party
By: ______________________
Title: ______________________
MODULAR COMPUTER SERVICES,
INC. (for purposes of Section 5 only) as a
Credit Support Party
By: ______________________
Title: ______________________
<PAGE> 8
MODULAR COMPUTER SYSTEMS
GMBH (for purposes of Section 5 only) as
a Credit Support Party
By: ______________________
Title: ______________________
MODCOMP FRANCE S.A. (for
purposes of Section 5 only) as a Credit
Support Party
By: ______________________
Title: ______________________
WELLS FARGO BANK, NATIONAL
ASSOCIATION, INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
By: ______________________
Title: ______________________
BHF-BANK AKTIENGESELLSCHAFT,
AS A LENDER
By: ______________________
Title: ______________________
CITIBANK, N.A., AS A LENDER
By: ______________________
Title: ______________________
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
The Cerplex Group, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Orange County, California
August 20, 1997
