1
EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is dated as of May 19,
1996 between H. Wayne Huizenga, a resident of the State of Florida ("Investor"),
and Republic Environmental Systems, Inc., a Delaware corporation ("RESI" and,
together with its successors and permitted assigns, the "Issuer"). Issuer and
Investor may hereinafter be referred to collectively as the "Parties" or
individually as a "Party."
RECITALS
Subject to the terms and conditions of this Agreement, Investor desires to
purchase, and Issuer desires to issue and sell to Investor, 2,000,000 shares of
Issuer's common stock, par value $.01 per share (the "Common Stock"), and
warrants to purchase an additional 6,000,000 shares of Common Stock.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND PURCHASE OF COMMON STOCK AND WARRANTS
1.1 ISSUANCE AND PURCHASE OF COMMON STOCK AND WARRANTS. Subject to the
terms and conditions of this Agreement, Issuer will issue and sell to Investor
and Investor will purchase from Issuer for an aggregate purchase price of
$5,250,000 (the "Purchase Price") (i) 2,000,000 shares of Common Stock (the
"Shares") and (ii) warrants to purchase (a) 2,000,000 shares of Common Stock at
a purchase price of $2.625 per share, exercisable in whole or in part at any
time and from time to time from the Closing Date until 6:00 p.m. on the date two
years from the Closing Date (the "Series A Warrants"), (b) 2,000,000 shares of
Common Stock at a purchase price of $3.125 per share, exercisable in whole or in
part at any time and from time to time from the Closing Date until 6:00 p.m. on
the date three years from the Closing Date (the "Series B Warrants"), and (c)
2,000,000 shares of Common Stock at a purchase price of $3.875 per share,
exercisable in whole or in part at any time and from time to time from the
Closing Date until 6:00 p.m. on the date four years from the Closing Date (the
"Series C Warrants" and, together with the Series A Warrants and the Series B
Warrants, the "Warrants"), pursuant to the warrant certificates to be issued to
Investor in the form of Exhibits 1.1(A), 1.1(B) and 1.1(C), respectively (the
"Warrant Certificates").
1.2 LEGEND. Any certificate or certificates representing the Shares, the
Warrants and any Common Stock issued upon exercise of any Warrants (the "Warrant
Shares") and any certificates issued in respect of the foregoing shall bear the
following legend unless and until removal thereof is permitted pursuant to the
terms of this Agreement:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER ANY
APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER OR UNDER APPLICABLE STATE
SECURITIES LAWS.
1
2
ARTICLE II
CLOSING
2.1 CLOSING. The closing of the transactions contemplated herein (the
"Closing") shall take place on the Closing Date at the offices of Alliance
Holding Corporation, 10055 Sweet Valley Drive, Valley View, Ohio 44125 or such
other place as the parties may agree. At the Closing, (a) Investor shall pay to
Issuer, by wire transfer of immediately available funds to an account designated
in writing by Issuer, the Purchase Price; (b) Issuer shall issue to Investor the
Shares, and deliver to Investor certificates for the Shares duly registered in
the name of Investor; (c) Issuer shall issue to Investor the Warrants and
deliver the Warrant Certificates to Investor; and (iv) all other agreements and
other documents referred to in this Agreement shall be executed and delivered
(to the extent not completed prior to the Closing Date).
2.2 TERMINATION.
(a) Events of Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned at any time prior to the
Effective Time, as follows:
(i) by written agreement of the Parties;
(ii) by Issuer or Investor if the transactions contemplated by this
Agreement have not been consummated on or before September 30, 1996;
provided, however, that the right to terminate this Agreement shall not
be available to a Party whose failure to fulfill any obligation under
this Agreement has been the cause, or resulted in, the failure of the
Effective Time to occur on or before such date;
(iii) by Issuer, upon a breach of any representation, warranty,
covenant or agreement on the part of Investor set forth in this
Agreement, or if any representation or warranty of Investor shall have
become untrue, in either case such that the conditions set forth in
Section 9.3 would not be satisfied by September 30, 1996 (a "Terminating
Investor Breach"); provided, however, that if such Terminating Investor
Breach is cured by Investor within 60 calendar days after notice thereof
through the continuous exercise of its best efforts, then Issuer may not
terminate this Agreement under this Section 2.2(a)(iii); or
(iv) by Investor, upon a breach of any representation, warranty,
covenant or agreement on the part of Issuer set forth in this Agreement,
or if any representation or warranty of Issuer shall have become untrue,
in either case such that the conditions set forth in Section 9.2 would
not be satisfied (a "Terminating Issuer Breach"); provided, however,
that if such Terminating Issuer Breach is cured by Issuer within 60
calendar days after notice thereof through the continuous exercise of
its best efforts, then Investor may not terminate this Agreement under
this Section 2.2(a)(iv).
(b) Effect of Termination.
(i) If this Agreement is validly terminated pursuant to Section
2.2(a) hereof, this Agreement will terminate and no Party hereto will
have any liability to the other Parties hereto except that any such
termination shall be without prejudice to any claim which either Party
may have against the other for breach of this Agreement (or any
representations, warranty, covenant, or agreement included herein).
(ii) All reasonable out-of-pocket expenses incurred in connection
with this Agreement and the transactions contemplated hereby by a
nonbreaching Party who terminates this Agreement pursuant to Section
2.2(a) hereof will be reimbursed promptly by the breaching Party.
2
3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ISSUER
As a material inducement to Investor entering into this Agreement and
purchasing the Shares and Warrants, Issuer represents and warrants to Investor
as follows:
3.1 CORPORATE STATUS. Issuer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Issuer
has all requisite corporate power and authority to own or lease, as the case may
be, its properties and to carry on its business as now conducted. Issuer and its
Subsidiaries are qualified or licensed to conduct business in all jurisdictions
where its or their ownership or lease of property and the conduct of its or
their business requires such qualification or licensing, except to the extent
that failure to so qualify or be licensed would not have a Material Adverse
Effect on Issuer. There is no pending or threatened proceeding for the
dissolution, liquidation or insolvency of Issuer or any of its Subsidiaries.
3.2 CORPORATE POWER AND AUTHORITY. Issuer has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby. Issuer has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and delivered by
Issuer and constitutes a legal, valid and binding obligation of Issuer,
enforceable against Issuer in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
3.4 NO VIOLATION. The execution and delivery by Issuer of this Agreement
and the Warrant Certificates, the consummation of the transactions contemplated
hereby or thereby, and the compliance by Issuer with the terms and provisions
hereof or thereof, will not (a) result in a violation or breach of, or
constitute, with or without due notice or lapse of time or both, a material
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any Contract to which
Issuer is a party or by which Issuer or any material portion of Issuer's
properties or assets may be bound, (b) violate any Requirement of Law applicable
to Issuer or any material portion of Issuer's properties or assets or (c) result
in the imposition of any Lien upon any of the properties or assets of Issuer;
except where any of the foregoing would not have a Material Adverse Affect on
Issuer.
3.5 CONSENTS/APPROVALS. No consent, approval, waiver or other action by any
Person under any Contract to which either Issuer or any of its Subsidiaries is a
party, or by which any of their respective properties or assets are bound, is
required or necessary for the execution, delivery or performance by Issuer of
this Agreement and the consummation of the transactions contemplated hereby,
except (a) as required under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 as amended and the rules and regulations promulgated thereunder (the "HSR
Act"), (b) as required by the Securities Act, the Exchange Act and state
securities or "blue sky" laws, (c) as required by the Delaware General
Corporation Law (the "DGCL") and (d) where the failure to obtain such consents,
filings, authorizations, approvals or waivers or make such filings would not
prevent or delay the consummation of the transactions contemplated by this
Agreement or otherwise prevent Issuer from performing its obligations hereunder.
3.6 CAPITALIZATION. The authorized capital stock of Issuer consists of
20,000,000 shares of Common Stock. As of the date hereof, after giving effect to
the Stock Split, 10,809,638 shares of Common Stock are validly issued and
outstanding, fully paid and non-assessable. Except (a) for 493,800 shares of
Common Stock, after giving effect to the Stock Split, reserved for issuance
pursuant to certain options or warrants issued pursuant to Issuer's 1995 Stock
Option Plan, (b) as contemplated by this Agreement, the Merger Agreement and the
MGD Purchase Agreement (defined herein) and (c) in connection with the
distribution of Issuer's Common Stock to holders of Republic Waste Industries,
Inc. common stock in April 1995, there are (y) no rights, options, warrants,
convertible securities, subscription rights or other agreements, calls, plans,
contracts or commitments of any kind relating to the issued and unissued capital
stock of, or other equity interest in, Issuer outstanding or authorized and (z)
no contractual obligations of Issuer to repurchase, redeem or
3
4
otherwise acquire any shares of Issuer Common Stock. Upon delivery to Investor
of the certificates for the Shares and the Warrant Certificates and payment of
the Purchase Price, Investor will acquire good, valid and marketable title to
and beneficial and record ownership of the Shares and the Warrants, and the
Shares will be validly issued, fully paid and non-assessable. Issuer has
reserved 6,000,000 shares of Common Stock for issuance upon exercise of the
Warrants and, upon exercise of the Warrants in accordance with this Agreement
and the Warrant Certificate (including, without limitation, payment in full of
the exercise price), the Warrant Shares will be validly issued, fully paid and
non-assessable.
3.7 SEC REPORTS AND NASDAQ COMPLIANCE. Since April 1995, Issuer has made
all filings (the "SEC Reports") required to be made by it under the Securities
Act and the Exchange Act. The SEC Reports, when filed, complied in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act and the securities laws, rules and regulations of any state and pursuant to
any Requirements of Law and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Issuer has delivered or made
accessible to Investors true, accurate and complete copies of the SEC Reports
which were filed with the SEC since January 1, 1996. Issuer has taken all
necessary actions to ensure its continued inclusion in, and the continued
eligibility of the Common Stock for trading on the Nasdaq National Market under
all currently effective and currently proposed inclusion requirements.
3.8 GOVERNING DOCUMENTS. Issuer has delivered or made available to Investor
true, accurate and complete copies of Issuer's Certificate of Incorporation and
Bylaws in effect as of the date hereof.
3.9 SUBSIDIARIES. Except as set forth on Exhibit 21.1 to Issuer's
Registration Statement on Form 10, File No. 0-25890, Issuer does not own,
directly or indirectly, any outstanding voting securities of or other interests
in, and does not control, any corporation, partnership, joint venture or other
business entity.
3.10 FINANCIAL STATEMENTS. Each of the balance sheets included in the SEC
Reports (including any related notes and schedules) fairly presents in all
material respects the consolidated financial position of Issuer and its
Subsidiaries as of its date, and each of the other financial statements included
in the SEC Reports (including any related notes and schedules) fairly presents
in all material respects the consolidated results of operations or other
information therein of Issuer and its Subsidiaries for the periods or as of the
dates therein set forth in accordance with GAAP consistently applied during the
periods involved (except that the interim reports are subject to normal
recording adjustments which might be required as a result of year-end audit and
except as otherwise stated therein).
3.11 MATERIAL CHANGES. Except as set forth in the SEC Reports or Schedule
3.11 hereto, since December 31, 1995, there has been no Material Adverse Change
in Issuer. Except as set forth in the SEC Reports or Schedule 3.11 hereto or as
otherwise contemplated herein, since December 31, 1995, (a) there has not been
(i) any direct or indirect redemption, purchase or other acquisition by Issuer
of any shares of the Common Stock or (ii) declaration, setting aside or payment
of any dividend or other distribution by Issuer with respect of the Common
Stock.
3.12 NO COMMISSIONS. Issuer has not incurred any obligation for any
finder's or broker's or agent's fees or commissions in connection with the sale
of the Shares and the Warrants.
3.13 INAPPLICABILITY OF SECTION 203 OF DGCL. The Board of Directors of
Issuer has approved the execution and delivery by Issuer of this Agreement and
the Warrant Certificate, and the consummation of the transactions contemplated
by this Agreement and the Warrant Certificate and the other transactions
contemplated hereby and thereby, and such approval is sufficient to render
inapplicable to Investor and/or any affiliates or associates (as those terms are
defined in Section 203 of the DGCL of Investor and/or all or any combination of
such persons the provisions of Section 203 of DGCL that restrict business
combinations (as defined in Section 203 of DGCL) between an interested
stockholder and Issuer.
4
5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTOR
As a material inducement to Issuer entering into this Agreement and issuing
the Shares and Warrants, Investor represents and warrants to Issuer as follows:
4.1 POWER AND AUTHORITY. Investor is an individual residing in the State of
Florida with competence and authority under applicable law to execute and
deliver, and to perform his obligations under, this Agreement and consummate the
transactions contemplated hereby, and has all necessary authority to execute,
deliver and perform this Agreement and the transactions contemplated hereby.
4.2 NO VIOLATION. The execution and delivery by Investor of this Agreement
and the consummation of the transactions contemplated hereby, and the compliance
by Investor with the terms and provisions hereof, will not (a) result in a
violation or breach of, or constitute, with or without due notice or lapse of
time or both, a material default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any Contract to which Investor is a party or by which Investor or any
material portion of Investor's properties or assets may be bound, (b) violate
any Requirement of Law applicable to Investor or any material portion of
Investor's properties or assets or (d) result in the imposition of any Lien upon
any of the properties or assets of Investor; except where any of the foregoing
would not have a Material Adverse Affect on Investor.
4.3 CONSENTS/APPROVALS. No consent, approval, waiver or other action by any
Person under any Contract to which Investor is a party, or by which any of
Investor's respective properties or assets are bound, is required or necessary
for the execution, delivery or performance by Investor of this Agreement and the
consummation of the transactions contemplated hereby, except (a) as required
under the HSR Act, (b) as required by the Securities Act, the Exchange Act and
state securities or "blue sky" laws, (c) as required by the DGCL and (d) where
the failure to obtain such consents, filings, authorizations, approvals or
waivers or make such flings would not prevent or delay the consummation of the
transactions contemplated by this Agreement or otherwise prevent Investor from
performing Investor's obligations hereunder or have a Material Adverse Effect on
Investor.
4.4 ENFORCEABILITY. This Agreement has been duly executed and delivered by
Investor and constitutes a legal, valid and binding obligation of Investor,
enforceable against Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and general equitable principles regardless of
whether enforceability is considered in a proceeding at law or in equity.
4.5 INVESTMENT INTENT. Investor is acquiring the Shares and Warrants
hereunder for Investor's own account and with no present intention of
distributing or selling the Shares or any interest in the Warrants or the
Warrant Shares in violation of the Securities Act or any applicable state
securities law. Investor agrees that Investor will not sell or otherwise dispose
of any of the Shares or any interest in the Warrants or Warrant Shares unless
such sale or other disposition has been registered or qualified (as applicable)
under the Securities Act and applicable state securities laws or, in the opinion
of Investors' counsel delivered to Issuer (which opinion shall be reasonably
satisfactory to Issuer) such sale or other disposition is exempt from such
registration or qualification (as applicable). Investor understands that the
sale of the Shares and Warrants acquired by Investor hereunder and any issuance
of Warrants Shares have not been registered under the Securities Act but are
issued through transactions exempt from the registration and prospectus delivery
requirements of Section 4(2) of the Securities Act, and that the reliance of
Issuer on such exemption from registration is predicated in part on these
representations and warranties of Investor. Investor acknowledges that pursuant
to Section 1.2 a restrictive legend consistent with the foregoing has been or
will be placed on the certificates representing the Shares, the Warrant
Certificates and on certificates representing any Warrant Shares until such
legend is permitted to be removed under appropriate law.
4.6 INVESTOR KNOWLEDGE. Investor is an accredited investor as such term is
defined in Rule 501 of the General Rules and Regulations under the Securities
Act, and has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of the investment to be
made by him
5
6
hereunder. Investor acknowledges that no representations or warranties of any
type or description have been made to Investor by any Person with regard to
Issuer or any of its Subsidiaries, or any of their respective businesses,
properties or prospects or the investment contemplated herein, other than the
representations and warranties set forth in Article III hereof.
4.7 NO COMMISSIONS. Investor has not incurred any obligation for any
finder's or broker's or agent's fees or commissions in connection with the
purchase of the Shares and Warrants.
ARTICLE V
COVENANTS
5.1 FILINGS. Each of Investor and Issuer shall make on a prompt and timely
basis all governmental or regulatory notifications and filings required to be
made by it for the consummation of the transactions contemplated hereby.
5.2 PUBLIC ANNOUNCEMENTS. Except as required by law or the policies or
rules of the Nasdaq National Market, the form and content of all press releases
or other public communications of any sort relating to the subject matter of
this Agreement, and the method of their release, or publication thereof, shall
be subject to the prior approval of the parties hereto, which approval shall not
be unreasonably withheld or delayed.
5.3 FURTHER ASSURANCES. Each Party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.
5.4 COOPERATION. Each of Issuer and Investor agree to cooperate with the
other in the preparation and filing of all forms, notifications, reports and
information, if any, required or reasonably deemed advisable pursuant to any
Requirement of Law or the rules of the Nasdaq National Market in connection with
the transactions contemplated by this Agreement and to use their respective best
efforts to agree jointly on a method to overcome any objections by any
Governmental Authority to any such transactions. Except as may be specifically
required hereunder, neither of the Parties or their respective Affiliates shall
be required to agree to take any action that in the reasonable opinion of such
Party would result in or produce a Material Adverse Effect on such Party.
5.5 ACCESS TO INFORMATION. From the date hereof to the Effective Time,
Issuer shall, and shall cause its Subsidiaries and its and their directors,
officers, employees, auditors, counsel and agents to, afford Investor and his
employees, counsel and agents reasonable access at all reasonable times to its
properties, offices and other facilities, to its officers and employees and to
all books and records, and shall furnish such persons with all financial,
operating and other data and information as may be reasonably requested. No
information provided to, or obtained by, Investor shall affect any
representation or warranty in this Agreement although Investor agrees to give
notice to Issuer of any such information which would constitute a breach of its
respective representations and warranties hereunder. Investor agrees to maintain
the confidentiality of all such information which is non-public and agrees not
to disclose such information to any person other than its representatives and
advisors who agree to be bound by the terms of this Section 5.5 and to use
information only for purposes or evaluating the transactions contemplated
hereby; provided, however, such restriction shall not apply to any information
which (a) is in the public domain prior to the time of disclosure or thereafter
enters the public domain through no actions on the part of Investor or (b) is
obtained by Investor from a third party that is not known to Investor to be
subject to a confidentiality agreement with respect to such information.
5.6 NOTIFICATION OF CERTAIN MATTERS. Each Party shall give prompt notice to
the other Party of the occurrence, or non-occurrence, of any event which would
be likely to cause any representation or warranty herein to be untrue or
inaccurate, or any covenant, condition or agreement herein not to be complied
with or satisfied.
5.7 INFORMATION STATEMENT. As promptly as practicable after the execution
of this Agreement, Issuer shall prepare and file with the SEC, in compliance
with applicable laws and regulations, an information
6
7
statement on Schedule 14C under the Exchange Act in connection with approving
the transactions contemplated hereby (the "Information Statement"), and shall
use its best efforts to have the Information Statement and/or any amendment or
supplement thereto approved by the SEC. Investor shall furnish all information
concerning itself to Issuer as Issuer may reasonably request in connection with
the preparation of the Information Statement. As promptly as practicable after
approval by the SEC, Issuer shall mail the Information Statement to its
stockholders.
5.8 WRITTEN CONSENT/STOCKHOLDER'S MEETING. In the event that this Agreement
and the transactions contemplated hereby have not been approved by the written
consent of RESI stockholders pursuant to the DGCL and its Certificate of
Incorporation and Bylaws on or before September 1, 1996, Issuer shall call and
hold a special meeting of its stockholders as promptly as practicable for the
purpose of voting upon the approval of this Agreement and the transactions
contemplated hereby. Issuer shall comply with all Requirements of Law applicable
to such meeting. Issuer shall use its best efforts to solicit from its
stockholders proxies in favor of approval of this Agreement and the transactions
contemplated hereby, and shall take all other action necessary or advisable to
obtain the vote or consent of stockholders required by the DGCL to obtain such
approvals, unless otherwise necessary due to the applicable fiduciary duties of
the directors of Issuer, as determined by such directors in good faith after
consultation with and based upon the advice of independent legal counsel (who
may be Issuer's regularly engaged independent legal counsel) and financial
advisors. In connection with the foregoing, Issuer shall cooperate and consult
with Investor.
5.9 HSR ACT AND OTHER ACTIONS. Each of the Parties shall (i) make promptly
its respective filings, and thereafter make any other required submissions under
the HSR Act with respect to the transactions contemplated hereby, and (ii) use
its reasonable best efforts to take, or cause to be taken, all appropriate
actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated herein; including, without limitation, using its
reasonable best efforts to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with Issuer and its Subsidiaries as are necessary for the
consummation of the transactions contemplated hereby. The Parties also agree to
use best efforts to defend all lawsuits or other legal proceedings challenging
this Agreement or the consummation of the transactions contemplated hereby and
to lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the Parties to consummate the transactions contemplated
hereby.
5.10 CONDUCT OF ISSUER'S BUSINESS PENDING THE CLOSING. Issuer covenants and
agrees that, between the date of this Agreement and the Closing, unless Investor
shall have consented in writing (such consent not to be unreasonably withheld),
(i) the businesses of each of Issuer and its Subsidiaries shall in all material
respects be conducted only in, and each of Issuer and its Subsidiaries shall not
take any material action except in, the ordinary course of business, consistent
with past practice and (ii) Issuer shall use its reasonable best efforts to
preserve intact its business organization, to keep available the services of its
and its Subsidiaries' current officers, employees and consultants and to
preserve its and its Subsidiaries' present relationships with customers,
suppliers and other Persons with which it or any of its Subsidiaries has
significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, neither Issuer nor any of its
Subsidiaries shall, between the date of this Agreement and the Closing, directly
or indirectly do or propose or agree to do any of the following without the
prior written consent of Investor, which consent shall not unreasonably be
withheld:
(a) amend or otherwise change its Certificate of Incorporation or
Bylaws, or equivalent organizational documents;
(b) except pursuant to this Agreement, the Stock Purchase Agreement
dated as of the date hereof (the "MGD Purchase Agreement") between Issuer
and MGD Holding Ltd., a Bermuda corporation ("MGD"), and the Merger
Agreement (hereinafter defined), issue, sell, pledge, dispose of, grant,
encumber or authorize the issuance, sale, pledge, disposition, grant or
encumbrance of any shares of capital stock or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of
capital stock of, or any other ownership interest in, any of them;
provided, however, Issuer may, consistent with past practices, grant
options to its employees under existing employee benefit plans;
7
8
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock;
(d) except pursuant to the Stock Split, reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly,
any of its capital stock;
(e) except pursuant to the Merger Agreement, (i) acquire, directly or
indirectly (including, without limitation, for cash or shares of stock), by
merger, consolidation, or acquisition of stock or assets any interest in
any corporation, partnership or other business organization or division
thereof or any assets, or make any investment (other than in the ordinary
course of business) either by purchase of stock or securities,
contributions of capital (other than to wholly-owned Subsidiaries) or
property transfer, or, except in the ordinary course of business, purchase
any property or assets of any other Person, (ii) incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or endorse
or otherwise as an accommodation become responsible for, the obligations of
any person, or make any loans or advances, except in the ordinary course of
business and consistent with past practice, (iii) make any significant
capital expenditures, except in the ordinary course of business, (iv) sell,
pledge or otherwise dispose of or encumber any assets or the stock of any
Subsidiary except in the ordinary course of business consistent with past
practices or (v) enter into any contract or agreement other than in the
ordinary course of business;
(f) increase the compensation payable or to become payable to its
officers or employees, except for increases in the ordinary course of
business consistent with past practices, or, except as presently bound to
do, grant any severance or termination pay to, or enter into any employment
or severance agreement with, any director, officer or other employee of it
or any of its Subsidiaries, or establish, adopt, enter into or amend in any
material respect or take any action to accelerate any rights or benefits
which any collective bargaining, bonus, profit sharing, trust,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any directors,
officers or employees;
(g) take any action other than in the ordinary course of business and
in a manner consistent with past practice with respect to accounting
policies or procedures;
(h) pay, discharge or satisfy any existing material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction
in the ordinary course of business and consistent with past practice or
liabilities reflected or reserved against in the consolidated financial
statements of Issuer and its Subsidiaries or incurred after the date hereof
in the ordinary course of business;
(i) agree, in writing or otherwise, to take any of the foregoing
actions or any action which would make any representation or warranty in
Article III untrue or incorrect in any material respect; or
(j) cause any modification or amendment to, or lapse of coverage
under, any of its insurance policies, except in the ordinary course of
business consistent with past practices.
5.11 STOCK SPLIT. The Parties hereby acknowledge that the Common Stock
share amounts and the exercise prices under the Warrants set forth herein have
been adjusted to give effect to the Stock Split. In the event the Stock Split is
not effected on or before the Closing Date, the Parties agree that the Common
Stock share amounts and the exercise prices under the Warrants set forth herein,
shall be readjusted as follows: (i) with the exception of the Common Stock Share
amounts relating to the number of authorized and outstanding shares of Common
Stock, all Common Stock share amounts shall be divided by two and (ii) all
exercises prices under the Warrants shall be multiplied by two.
8
9
ARTICLE VI
DEFINITIONS
6.1 DEFINED TERMS. As used herein the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
Exchange Act, as in effect on the date hereof.
"Agreement" means this Stock Purchase Agreement.
"Closing" has the meaning set forth in Section 2.1 of this Agreement.
"Closing Date" shall mean the tenth day following the satisfaction or
waiver of the conditions set forth in Article IX or such date as otherwise
agreed upon by the Parties.
"Common Stock" has the meaning set forth in the Recitals of this Agreement.
"Contract" means any agreement, indenture, lease, sublease, license,
sublicense, promissory note, evidence of indebtedness, insurance policy,
annuity, mortgage, restriction, commitment, obligation or other contract,
agreement or instrument (whether written or oral).
"Controlling Person" has the meaning set forth in Section 8.2 of this
Agreement. "DGCL" has the meaning set forth in Section 3.5 of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time as consistently applied throughout
the specified period and in the comparable period in the immediately preceding
year.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any entity or official exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
"Holder" has the meaning set forth in Section 7.1 of this Agreement.
"HSR Act" has the meaning set forth in Section 3.5 of this Agreement.
"Huizenga" has the meaning set forth in the Preamble of this Agreement.
"Indemnified Party" has the meaning set forth in Section 8.3 of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 8.3 of this
Agreement.
"Information Statement" has the meaning set forth in Section 5.6 of this
Agreement.
"Investor" has the meaning set forth in the Preamble of this Agreement.
"Issuer" has the meaning set forth in the Preamble of this Agreement.
"Lien" means any mortgage, pledge, security interest, assessment,
encumbrance, lien, lease, sublease, adverse claim, levy, or charge of any kind,
or any conditional Contract, title retention Contract or other contract to give
or refrain from giving any of the foregoing.
"Material Adverse Change or "Material Adverse Effect" means, with respect
to any Person, any change or effect that is or is reasonably likely to be
materially adverse to the financial condition, business, prospects or results of
operations of such Person.
"Merger Agreement" has the meaning set forth in Section 9.2 of this
Agreement.
"MGD" has the meaning set forth in Section 5.10 of this Agreement.
"MGD Purchase Agreement" has the meaning set forth in Section 5.10 of this
Agreement.
9
10
"Person" means any natural person, partnership, corporation, joint stock
company, estate, trust, unincorporated association, proprietorship, union,
association, arbitrator, board, bureau, instrumentality, self-regulatory
organization, joint venture, Governmental Authority or other entity, of whatever
nature.
"Purchase Price" has the meaning set forth in Section 1.1 of this
Agreement.
"Register", "registered" and "registration" refer to a registration of the
offering and sale of Common Stock effected by preparing and filing a
registration statement in compliance with the Securities Act and the declaration
or ordering of the effectiveness of such registration statement.
"Registrable Common Stock" shall mean and include (a) the Common Stock of
Issuer as authorized on the date of this Agreement, (b) any other capital stock
of any class or classes (however designated) of Issuer, authorized on or after
the date hereof, the holders of which shall have the right either to all or a
share of the balance of current dividends and liquidating distributions after
the preference of any preferred stock, or the holders of which shall ordinarily,
in the absence of contingencies, be entitled to vote for the election of a
majority of directors of Issuer (even though the right so to vote has been
suspended by the happening of such a contingency) and (c) any other securities
into which or for which any of the securities described in (a) or (b) may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
"Registrable Securities" means (a) all Common Stock now or hereafter owned
by Investor or any other shares of Registrable Common Stock or other securities
issued in respect of such shares by way of a stock dividend or stock split or in
connection with a combination or subdivision of shares, recapitalization, merger
or consolidation or reorganization, and (b) any of the Shares or Warrant Shares,
and any other shares of Registrable Common Stock or other securities issued in
respect of the Shares or Warrant Shares by way of stock dividend or stock split
or in connection with any combination or subdivision of shares,
recapitalization, merger or consolidation or reorganization; provided, however,
as to any particular Registrable Securities, such Registrable Securities will
cease to be Registrable Securities when they have been sold pursuant to an
effective registration statement or in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect thereto are removed upon the consummation of such sale and the
purchaser and seller receive an opinion of counsel from the seller or the
purchaser, which opinion shall be in form and substance reasonably satisfactory
to the other party and Issuer and their respective counsel, to the effect that
such stock in the hands of the purchaser is freely transferable without
restriction or registration under the Securities Act in any public or private
transaction.
"Registration Expenses" has the meaning set forth in Section 7.3 of this
Agreement.
"Requirement of Law" means as to any Person, the articles of incorporation,
bylaws or other organizational or governing documents of such Person, and any
domestic or foreign and federal, state or local law, rule, regulation, statute
or ordinance or determination of any arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
properties or to which such Person or any of its property is subject.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" has the meaning set forth in Section 3.7 of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Series A Warrants" has the meaning set forth in Section 1.1 of this
Agreement.
"Series B Warrants" has the meaning set forth in Section 1.1 of this
Agreement.
"Series C Warrants" has the meaning set forth in Section 1.1 of this
Agreement.
"Shares" has the meaning set forth in Section 1.1 of this Agreement.
"Shelf Registration Statement" has the meaning set forth in Section 7.2 of
this Agreement.
10
11
"Stock Split" shall mean the two for one stock split to be effected on June
30, 1996 by means of a stock dividend of one share of Common Stock for each
share of Common Stock held of record on June 14, 1996.
"Subsidiary" means each of those Persons of which another person, directly
or indirectly owns beneficially securities having more than 50% of the voting
power in the election of directors (or persons fulfilling similar functions or
duties) of the owned Person (without giving effect to any contingent voting
rights).
"Terminating Investor Breach" has the meaning set forth in Section 2.2.
"Terminating Issuer Breach" has the meaning set forth in Section 2.2.
"Warrant Certificates" has the meaning set forth in Section 1.1 of this
Agreement.
"Warrant Shares" has the meaning set forth in Section 1.2 of this
Agreement.
"Warrants" has the meaning set forth in Section 1.1 of this Agreement.
6.2 OTHER DEFINITIONAL PROVISIONS.
(a) All references to "dollars" or "$" refer to currency of the United
States of America.
(b) Terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(c) All matters of an accounting nature in connection with this
Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP.
(d) As used herein, the neuter gender shall also denote the masculine
and feminine, and the masculine gender shall also denote the neuter and
feminine, where the context so permits.
(e) The words "hereof," "herein" and "hereunder," and words of similar
import, when used in this Agreement shall refer to this Agreement as a
whole (including any exhibits or schedules hereto) and not to any
particular provision of this Agreement.
ARTICLE VII
REGISTRATION RIGHTS
Investor shall have the following registration rights with respect to the
Registrable Securities owned by him:
7.1 TRANSFER OF REGISTRATION RIGHTS. Investor may assign the registration
rights with respect to the Shares and the Warrant Shares to any party or parties
to which he may from time to time transfer the Shares or Warrant Shares. Upon
assignment of any registration rights pursuant to this Section 7.1, Investor
shall deliver to Issuer a notice of such assignment which includes the identity
and address of any assignee (collectively, Investor and each such subsequent
holder is referred to as a "Holder").
7.2 REQUIRED REGISTRATION. As promptly as practicable after the Closing,
Issuer agrees to register all of the Shares and all of the Warrant Shares
pursuant to a registration statement on Form S-3 (the "Shelf Registration
Statement"). Issuer shall use its best efforts to cause the Shelf Registration
Statement to be declared effective as quickly as practicable and to maintain the
effectiveness of the Shelf Registration Statement until such time as Issuer
reasonably determines based on an opinion of counsel that the Holders
will be eligible to sell all of the Shares then owned by the Holders without the
need for continued registration of the Shares in the three-month period
immediately following the termination of the effectiveness of the Shelf
Registration Statement. Issuer's obligations contained in this Section 7.2 shall
terminate on the second anniversary of the earlier of (i) the expiration of the
Series C Warrants or (ii) the date on which all of the Warrants have been
exercised.
11
12
7.3 REGISTRATION PROCEDURES.
(a) In case of each registration, qualification or compliance effected
by Issuer subject to this Article VII, Issuer shall keep Holder advised in
writing as to the initiation of each such registration, qualification and
compliance and as to the completion thereof. In addition, Issuer shall at
its own expense:
(i) subject to this Section 7.3, before filing a registration or
prospectus or any amendment or supplements thereto, furnish to counsel
selected by Holder copies of all such documents proposed to be filed and
the portions of such documents provided in writing by Holder for use
therein, subject to such Holder's approval, and for which Holder shall
indemnify Issuer;
(ii) prepare and file with the SEC such amendments and supplements
to the Shelf Registration Statement as may be necessary to keep the
Shelf Registration Statement effective and comply with provisions of the
Securities Act with respect to the disposition of all securities covered
thereby during such period;
(iii) update, correct, amend and supplement the Shelf Registration
Statement as necessary;
(iv) if such offering is to be underwritten, in whole or in part,
enter into a written agreement in form and substance reasonably
satisfactory to the managing underwriter and the registering Holder;
(v) furnish to Holder such number of prospectuses, including
preliminary prospectuses, and other documents that are included in the
Shelf Registration Statement as Holder may reasonably request from time
to time;
(vi) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions of the United States as Holder may request to enable it to
consummate the disposition in such jurisdiction of the Registrable
Securities (provided that Issuer will not be required to (A) qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Article VII, or (B)
consent to general service of process in any such jurisdiction);
(vii) notify Holder, at any time when the prospectus included in
the Shelf Registration Statement relating to the Registrable Securities
is required to be delivered under the Securities Act, of the happening
of any event which would cause such prospectus to contain an untrue
statement of a material fact or omit any fact necessary to make the
statement therein in light of the circumstances under which they are
made not misleading and, at the request of Holder, prepare a supplement
or amendment to such prospectus, so that, as thereafter delivered to
purchasers of such shares, such prospectus will not contain any untrue
statements of a material fact or omit to state any fact necessary to
make the statements therein in light of the circumstances under which
they are made not misleading;
(viii) use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar
securities issued by Issuer are then listed and obtain all necessary
approvals from the NASD for trading thereon;
(ix) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of the Shelf
Registration Statement;
(x) upon the sale of any Registrable Securities pursuant to the
Shelf Registration Statement, remove all restrictive legends from all
certificates or other instruments evidencing such Registrable Securities
(to the extent permitted by the Securities Act);
(xi) furnish at the request of Holder, on the date that the
Registrable Securities are delivered to the underwriter for sale in
connection with a registration pursuant to this Section 7.3, if such
Registrable Securities are being sold through an underwriter, or if such
Registrable Securities are not being sold through an underwriter, on the
date that the Shelf Registration Statement becomes effective, an opinion
dated as of such date of the counsel representing Issuer for purposes of
12
13
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to such
underwriter, if any and to Holder; and
(xii) make available for inspection by Holder, any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant or any other agent retained by
Holder or such underwriter, all financial and other records, pertinent
corporate documents and properties of Issuer, and cause Issuer's
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney, accountant or agent
in connection with the Shelf Registration.
(b) Except as required by law, all expenses incurred by Issuer in
complying with this Article VII, including but not limited to, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel and accountants for Issuer, blue sky fees and
expenses (including fees and disbursements of counsel related to all blue
sky matters) ("Registration Expenses") incurred in connection with any
registration, qualification or compliance pursuant this Article VII shall
be borne by Issuer. All underwriting discounts and selling commissions
applicable to a sale incurred in connection with any registration of
Registrable Securities and the legal fees of Holder shall be borne by
Holder.
7.4 FURTHER INFORMATION. If Registrable Securities owned by Holder are
included in any registration, such Holder shall use reasonable efforts to
cooperate with Issuer and shall furnish Issuer such information regarding itself
as Issuer may reasonably request and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION GENERALLY. Issuer, on the one hand, and Investor, on
the other hand (each an Indemnifying Party as defined below), shall indemnify
the other from and against any and all losses, damages, liabilities, claims,
charges, actions, proceedings, demands, judgments, settlement costs and expenses
of any nature whatsoever (including, without limitation, attorneys' fees and
expenses) or deficiencies resulting from any breach of a representation,
warranty or covenant by the Indemnifying Party and all claims, charges, actions
or proceedings incident to or arising out of the foregoing.
8.2 INDEMNIFICATION RELATING TO REGISTRATION RIGHTS.
(a) With respect to any registration, qualification or compliance
effected or to be effected pursuant to Article VII of this Agreement,
Issuer shall indemnify each Holder of Registrable Securities whose
securities are included or are to be included therein, each of such
Holder's directors and officers, each underwriter (as defined in the
Securities Act) of the securities sold by such Holder, and each Person who
controls (within the meaning of the Securities Act) any such Holder or
underwriter (a "Controlling Person") from and against all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments,
settlement costs and expenses of any nature whatsoever (including, without
limitation, attorneys' fees and expenses) or deficiencies of any such
Holder or any such underwriter or Controlling Person concerning:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification or
the like) incident to any such registration, qualification or
compliance;
(ii) any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statement
therein, in the light of the circumstances under which it was made, not
misleading; or
(iii) any violation by Issuer of the Securities Act or any rule or
regulation promulgated thereunder applicable to Issuer, or of any blue
sky or other state securities laws or any rule or regulation promulgated
thereunder applicable to Issuer,
13
14
in each case, relating to any action or inaction required of Issuer in
connection with any such registration, qualification or compliance, and
subject to Section 8.3 below will reimburse each such Person entitled to
indemnity under this Section 8.2 for all legal and other expenses
reasonably incurred in connection with investigating or defending any such
loss, damage, liability, claim, charge, action, proceeding, demand,
judgment, settlement or deficiency; provided, however, the foregoing
indemnity and reimbursement obligation shall not be applicable to the
extent that any such matter arises out of or is based on any untrue
statement (or alleged untrue statement) or omission (or alleged omission)
made in reliance upon and in conformity with written information furnished
to Issuer by or on behalf of such Holder specifically for use in such
prospectus, offering circular or other document.
(b) With respect to any registration, qualification or compliance
effected or to be effected pursuant to this Agreement, each Holder of
Registrable Securities whose securities are included or are to be included
therein, shall indemnify Issuer from and against all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments,
settlement costs and expenses of any nature whatsoever (including, without
limitation, attorneys' fees and expenses) or deficiencies of Issuer
concerning:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification or
the like) incident to any such registration, qualification or
compliance;
(ii) any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statement
therein, in the light of the circumstances under which it was made, not
misleading; or
(iii) any violation by such Holder of the Securities Act or any
rule or regulation promulgated thereunder applicable to Issuer or such
Holder or of any blue sky or other state securities laws or any rule or
regulation promulgated thereunder applicable to Issuer or such Holder,
in each case, relating to any action or inaction required of such Holder in
connection with any such registration, qualification or compliance, and
subject to Section 8.3 below will reimburse Issuer for all legal and other
expenses reasonably incurred in connection with investigating or defending
any such loss, damage, liability, claim, charge, action, proceeding,
demand, judgment, settlement or deficiency; provided, however, the
foregoing indemnity and reimbursement obligation shall only be applicable
to the extent that any such matter arises out of or is based on any untrue
statement (or alleged untrue statement) or omission (or alleged omission)
made in reliance upon and in conformity with written information furnished
to Issuer by or on behalf of Holder specifically for use in such
prospectus, offering circular or other document; provided further, the
obligations of Holder hereunder shall be limited to an amount equal to the
proceeds to Holder of Registrable Securities sold as contemplated
hereunder.
8.3 INDEMNIFICATION PROCEDURES. Each Person entitled to indemnification
under this Section (an "Indemnified Party") shall give notice as promptly as
reasonably practicable to each party required to provide indemnification under
this Section (an "Indemnifying Party") of any action commenced against or by it
in respect of which indemnity may be sought hereunder, but failure to so notify
an Indemnifying Party shall not relieve such Indemnifying Party from any
liability that it may have otherwise than on account of this indemnity agreement
so long as such failure shall not have materially prejudiced the position of the
Indemnifying Party. Upon such notification, the Indemnifying Party shall assume
the defense of such action if it is a claim brought by a third party, and after
such assumption the Indemnifying Party shall not be entitled to reimbursement of
any expenses incurred by it in connection with such action except as described
below. In any such action, any Indemnified Party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the contrary or (ii) the named
parties in any such action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
or conflicting interests between them. The Indemnifying Party shall not be
liable for any settlement of any proceeding effected without its written consent
(which shall not be unreasonably withheld or delayed by such
14
15
Indemnifying Party), but if settled with such consent or if there be final
judgment for the plaintiff, the Indemnifying Party shall indemnify the
Indemnified Party from and against any loss, damage or liability by reason of
such settlement or judgment.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE CLOSING. The
respective obligations of each party to effect the Closing shall be subject to
the fulfillment of the following conditions any and all of which may be waived,
in whole or in part, to the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been approved and
adopted by the vote of the holders of a majority of the voting power of the
shares of Common Stock of Issuer entitled to vote in accordance with the
Certificate of Incorporation and Bylaws of Issuer and the DGCL;
(b) No Order. No Governmental Authority or other agency or commission
or federal or state court of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction, or other order (whether temporary,
preliminary or permanent) which is in effect and which materially
restricts, prevents or prohibits consummation of the Closing or any
transaction contemplated by this Agreement; provided, however, that each of
the Parties agree that it will use its best efforts to fulfill its
obligations under Section 5.9 and, in addition, each of the Parties will
use its reasonable best efforts to cause any such decree, judgment,
injunction or other order to be vacated or lifted; and
(c) HSR Act. Any waiting period (and any extension thereof) applicable
to the consummation of the Closing under the HSR Act shall have expired or
been terminated.
(f) Authorized Share Increase. The stockholders of RESI shall have
voted upon and approved, either at a meeting or by written consent in
accordance with the DGCL and RESI's Certificate of Incorporation and
Bylaws, an amendment to RESI's Certificate of Incorporation to increase in
the number of authorized shares of Common Stock from 20,000,000 to
200,000,000.
9.2 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF INVESTOR. The obligations
of Investor to proceed with the Closing is also subject to the following
conditions any and all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
(a) Representations and Warranties. Each of the representations and
warranties of Issuer contained in this Agreement shall be true and correct
in all material respects as of the Closing Date as though made on and as of
the Closing Date, except that those representations and warranties which
address matters only as of a particular date shall remain true and correct
as of such date. Investor shall have received a certificate of the chief
executive officer and chief financial officer of Issuer to such effect.
(b) Agreement and Covenants. Issuer shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing. Investor shall have received a certificate of the chief executive
officer and chief financial officer of Investor to such effect.
(c) Merger Agreement. The mergers contemplated by that certain
Agreement and Plan of Merger dated as of even date herewith among Issuer,
Republic/CSC Acquisition Corporation, Republic/CSU Acquisition Corporation,
Alliance Holding Corporation, Century Surety Company and Commercial Surety
Agency, Inc. (the "Merger Agreement") shall be closed contemporaneously
with the Closing of the transactions contemplated by this Agreement.
(d) MGD Holdings Ltd. Investment. The purchase of 2,000,000 shares of
the Common Stock by MGD from Issuer, together with certain warrants to
purchase up to 6,000,000 shares of Common Stock,
15
16
pursuant to the MGD Purchase Agreement shall be closed contemporaneously
with the Closing of the transactions contemplated by this Agreement.
9.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF ISSUER. The obligations of
Issuer to proceed with the Closing is also subject to the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Investor contained in this Agreement shall be true and
correct in all material respects as of the Closing as though made on and as
of the Closing, except that those representations and warranties which
address matters only as of a particular date shall remain true and correct
as of such date. Issuer shall have received a certificate of Investor to
such effect.
(b) Agreement and Covenants. Investor shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing. Issuer shall have received a certificate of Investor to such
effect.
ARTICLE X
MISCELLANEOUS
10.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage prepaid), guaranteed overnight delivery,
or facsimile transmission if such transmission is confirmed by delivery by
certified or registered mail (first class postage pre-paid) or guaranteed
overnight delivery, to the following addresses and telecopy numbers (or to such
other addresses or telecopy numbers which such Party shall designate in writing
to the other Party):
(a) if to Issuer to:
Republic Environmental Systems, Inc.
16 Sentry Park West
1787 Sentry Parkway West, Suite 400
Blue Bell, Pennsylvania 19422
Attention: Douglas R. Gowland
Telecopy: 215/283-4809
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, LLP
1900 Pennzoil Place -- South Tower
711 Louisiana Street
Houston, Texas 77002
Attention: Rick L. Burdick, Esq.
Telecopy: (713) 236-0822
(b) if to Investor to:
H. Wayne Huizenga
c/o Huizenga Holdings, Inc.
200 South Andrews Avenue
Ft. Lauderdale, FL 33301
Attention: Richard C. Rochon
Telecopy: (305) 523-0801
16
17
with a copy to:
Akerman, Senterfitt & Eidson, P.A.
One S.E. Third Avenue
Suite 2800
Miami, Florida 33131
Attention: Stephen K. Roddenberry, Esq.
Telecopy: (305) 374-5095
10.2 SURVIVAL. Notwithstanding any knowledge of facts determined or
determinable by Investor by investigation, Investor shall have the right to
fully rely on the representations, warranties, covenants and agreements of
Issuer contained in this Agreement or in any other documents or papers delivered
in connection herewith. Each representation, warranty, covenant and agreement of
the parties set forth in this Agreement is independent of each other
representation, warranty, covenant and agreement. Each representation and
warranty made by any party in this Agreement shall survive the Closing through
the period ending on the date two years from the Closing Date.
10.3 REMEDIES.
(a) Each of Investor and Issuer acknowledge that the other Party would
not have an adequate remedy at law for money damages in the event that any
of the covenants or agreements of such Party in this Agreement was not
performed in accordance with its terms, and it is therefore agreed that
each of Investor and Issuer in addition to and without limiting any other
remedy or right such Party may have, shall have the right to an injunction
or other equitable relief in any court of competent jurisdiction, enjoining
any such breach and enforcing specifically the terms and provisions hereof,
and each of Investor and Issuer hereby waive any and all defenses such
Party may have on the ground of lack of jurisdiction or competence of the
court to grant such an injunction or other equitable relief.
(b) All rights, powers and remedies under this Agreement or otherwise
available in respect hereof at law or in equity shall be cumulative and not
alternative, and the exercise or beginning of the exercise of any thereof
by any Party shall not preclude the simultaneous or later exercise of any
other such right, power or remedy by such Party.
10.4 OTHER REGISTRATION RIGHTS. Issuer shall not grant to any third party
any registration rights more favorable than any of those contained herein, so
long as any of the registration rights under this Agreement remain in effect,
unless the Holders of Registrable Securities are granted rights to participate
together with any such third party in such registration rights.
10.5 ENTIRE AGREEMENT. This Agreement (including the exhibits and schedules
attached hereto) and other documents delivered at the Closing pursuant hereto,
contain the entire understanding of the Parties in respect of the subject matter
hereof and supersede all prior agreements and understandings between or among
the Parties with respect to such subject matter. The exhibits and schedules
hereto constitute a part hereof as though set forth in full above.
10.6 EXPENSES; TAXES. Except as otherwise provided in this Agreement, the
Parties shall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby. Any sales tax, stamp duty, deed transfer or other tax (except taxes
based on the income of Investor) arising out of the sale of the Shares and
Warrants by Issuer to Investor and issuance of Warrant Shares upon exercise of
the Warrants and consummation of the transactions contemplated by this Agreement
shall be paid by Issuer.
10.7 AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written agreement executed by
all of the Parties. No failure to exercise, and no delay in exercising, any
right, power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be
implied from any course of
17
18
dealing between the Parties. No extension of time for performance of any
obligations or other acts hereunder or under any other agreement shall be deemed
to be an extension of the time for performance of any other obligations or any
other acts. The rights and remedies of the Parties under this Agreement are in
addition to all other rights and remedies, at law or equity, that they may have
against each other.
10.8 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and legal assigns. The rights and obligations of this
Agreement may not be assigned by any party without the prior written consent of
the other party.
10.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
10.10 HEADING. The headings contained in this Agreement are for convenience
of reference only and are not to be given any legal effect and shall not affect
the meaning or interpretation of this Agreement.
10.11 GOVERNING LAW; INTERPRETATION. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED FOR ALL PURPOSES BY THE LAWS OF THE STATE OF
FLORIDA APPLICABLE TO CONTRACTS EXECUTED AND TO BE WHOLLY PERFORMED WITHIN SUCH
STATE.
10.12 SEVERABILITY. The parties stipulate that the terms and provisions of
this Agreement are fair and reasonable as of the date of this Agreement.
However, any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. If, moreover, any of those provisions shall for any reason be
determined by a court of competent jurisdiction to be unenforceable because
excessively broad or vague as to duration, geographical scope, activity or
subject, it shall be construed by limiting, reducing or defining it, so as to be
enforceable.
IN WITNESS WHEREOF, the Parties have caused this Stock Purchase Agreement
to be duly executed and delivered this 10th day of June, 1996.
REPUBLIC ENVIRONMENTAL SYSTEMS, INC.
By: /s/ MICHAEL G. DEGROOTE
---------------------------------
Name: Michael G. DeGroote
Title: President and Chief
Executive Officer
/s/ H. WAYNE HUIZENGA
-------------------------------------
H. Wayne Huizenga
18