Exhibit 10.19
SECURITIES PURCHASE AGREEMENT
between
TRAILER BRIDGE, INC.,
and
TRANSPORTATION RECEIVABLES 1992, LLC
Dated as of May __, 2002
TABLE OF CONTENTS
Page
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SECTION 1 SALE AND PURCHASE OF SECURITIES..............................1
SECTION 2 CLOSING......................................................1
SECTION 3 DEFINITIONS..................................................1
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY................4
4.1. Corporate Existence, Power and Authority.....................5
4.2. Capital Stock................................................5
4.3. No Defaults or Conflicts.....................................6
4.4. Litigation...................................................6
4.5. Outstanding Securities.......................................6
4.6. Tax Matters..................................................7
4.7. Investment Company...........................................7
4.8. SEC Documents................................................7
4.9. Directors and Officers.......................................8
4.10. No Misleading or Untrue Communication........................8
SECTION 5 REPRESENTATIONS AND WARRANTIES OF Purchasers.................8
5.1. Investment Intent............................................8
5.2. Disclosure Materials; Other Information......................8
SECTION 6 AFFIRMATIVE COVENANTS........................................8
6.1. Maintenance of Existence, Properties and Franchises;
Compliance with Law; Taxes; Insurance......................8
6.2. Reservation of Common Stock..................................9
6.3. Fees and Expenses............................................9
6.4. Listing of Common Stock......................................9
6.5. Further Assurances...........................................9
SECTION 7 CONDITIONS TO Purchaser'S OBLIGATIONS.......................10
7.1. Certificate of Designations.................................10
7.2. Repayment of Interest on the Estate Note....................10
7.3. Board of Directors..........................................10
7.4. Conversion Shares...........................................10
7.5. Accuracy of Representations and Warranties..................10
7.6. Compliance with Agreements..................................10
7.7. Officers' Certificates......................................11
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7.8. Proceedings.................................................11
7.9. Legality; Governmental and Other Authorization..............11
7.10. No Material Adverse Change..................................11
7.11. Opinions of Counsel.........................................11
7.12. Fairness Opinion............................................11
7.13. Registration Rights.........................................11
7.14. Other Documents and Opinions................................12
SECTION 8 INDEMNIFICATION; PAYMENT OF TAXES...........................12
SECTION 9 AMENDMENTS AND WAIVERS......................................13
SECTION 10 EXCHANGE OF SERIES A PREFERRED STOCK, NOTE OR CONVERSION
SHARES; CANCELLATION OF SURRENDERED SHARES; REPLACEMENT.....13
SECTION 11 NOTICES.....................................................14
SECTION 12 MISCELLANEOUS...............................................14
SCHEDULE 1 - ADDRESS FOR PAYMENTS BY WIRE TRANSFER
EXHIBIT A - LOAN AND SECURITY AGREEMENT AND NOTE
EXHIBIT B - CERTIFICATE OF DESIGNATIONS
-ii-
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT, dated as of May ___, 2002
(this "Agreement"), is by and between Trailer Bridge, Inc., a Delaware
corporation (the "Company") and Transportation Receivables 1992, LLC, a Delaware
corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Company desires to issue and sell to Purchaser,
and Purchaser agrees to purchase (i) 19,550 shares of Series A Convertible
Preferred Stock, par value $0.01 per share, of the Company, each share of which
shall by its terms initially be convertible into 100 shares of Common Stock, par
value $0.01 per share, of the Company, and (ii) a $5,000,000 note (the "Note;"
the 19,550 shares of Series A Preferred Stock and the Note together, the
"Securities"), all upon the terms and provisions hereinafter set forth;
WHEREAS, the Estate of ▇. ▇. ▇▇▇▇▇▇ has loaned $3,000,000 to
the Company pursuant to the Term Note dated as of November 30, 2001 (the "Estate
Note");
WHEREAS, in contemplation of the transactions set forth in
this Agreement, Purchaser has loaned $4,000,000 to the Company pursuant to the
Demand Promissory Note dated as of April 2, 2002 (the "Demand Note");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
SALE AND PURCHASE OF SECURITIES
The Company agrees to sell to Purchaser and, subject to the
terms and conditions hereof and in reliance upon the representations and
warranties of the Company contained herein or made pursuant hereto, Purchaser
agrees to purchase from the Company at the Closing, Securities consisting in the
aggregate of (i) 19,550 shares of Series A Preferred Stock and (ii) the Note.
The shares of Series A Preferred Stock being acquired under this Agreement
contain rights and privileges as more fully set forth in the Certificate of
Designations of the Company, in substantially the form attached hereto as
Exhibit B (the "Certificate of Designations"). The Note being acquired under
this Agreement contains rights and privileges as more fully set forth in the
Loan and Security Agreement, in substantially the form attached hereto as
Exhibit A (the "Loan Agreement").
The aggregate purchase price to be paid to the Company by
Purchaser for the 19,550 shares of Series A Preferred Stock at the Closing shall
be $2,000,000 and the purchase price to be paid to the Company by Purchaser for
the Note at the Closing shall be $5,000,000, all to be paid in accordance with
Section 2(b).
CLOSING
Subject to the terms and conditions hereof, the closing of the purchase and sale
of the Securities to be purchased by Purchaser (the "Closing") will take place
at the offices of the Company at
10:00 A.M., New York City time, on May ___, 2002, or such other time and date as
shall be mutually agreed to by the Company and Purchaser (such time and date is
herein referred to as the "Closing Date").
Subject to the terms and conditions hereof, at the Closing (i)
the Company will deliver to Purchaser (A) a certificate registered in
Purchaser's name evidencing the number of shares of Series A Preferred Stock
sold to Purchaser, (B) the Note, and (C) cash in the amount of interest accrued
on the Demand Note and interest accrued on the Estate Note, and (ii)
substantially simultaneously with Purchaser's receipt thereof, Purchaser shall
deliver to the Company (A) the Estate Note and (B) the Demand Note.
DEFINITIONS
For purposes of this Agreement, the following definitions
shall apply (such definitions to be equally applicable to both the singular and
plural forms of the terms defined):
"Common Stock" means the Company's Common Stock, par value
$.01 per share, and shall also include any common stock of the Company hereafter
authorized and any capital stock of the Company of any other class hereafter
authorized which is not preferred as to dividends or assets over any other class
of capital stock of the Company or which has ordinary voting power for the
election of directors of the Company.
"Conversion Shares" means the shares of the Company's Common
Stock obtained or obtainable upon conversion of shares of Series A Preferred
Stock and also shall include any capital stock or other securities into which
such shares of Common Stock are changed and any capital stock or other
securities resulting from or comprising a reclassification, combination or
subdivision of, or a stock dividend on, any such shares of Common Stock. In the
event that any Conversion Shares are sold either in a public offering pursuant
to a registration statement under the Securities Act or pursuant to a Rule 144
Transaction, the transferees of such Conversion Shares shall not be entitled to
any benefits under this Agreement with respect to such Conversion Shares and
such Conversion Shares shall no longer be considered to be "Conversion Shares"
for purposes of any consent or waiver provision of this Agreement.
"GAAP" means the generally accepted accounting principles in
the United States.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all liabilities of such Person for borrowed money or for the
deferred purchase price of property or services, excluding, any (i) trade
account payables arising in the ordinary course of business and (ii) other
accrued current liabilities incurred in the ordinary course of business,
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit, banker's acceptance or other
similar credit transaction; (b) all obligations of such Person evidenced by
bonds, debentures or other similar instruments; (c) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade accounts payable
arising in the ordinary course of business; (d) all obligations of such Person
under any capitalized leases; (e) all Indebtedness referred to in the preceding
clauses of other Persons and all dividends of other Persons, the payment of
which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be
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secured by) any Lien upon property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness (the amount of such
obligation being deemed to be the lesser of the value of such property or asset
or the amount of the obligation so secured); (f) all guarantees of Indebtedness
referred to in this definition by such Person; and (g) all obligations under or
in respect of currency agreements and interest rate protection obligations of
such Person.
"Indemnified Parties" has the meaning set forth in Section
8(a) hereof.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, preference, priority, restriction, or security
interest of any kind or nature whatsoever, any filing of a financing statement
as debtor under the Uniform Commercial Code or any similar statute and any
agreement to give or make any of the foregoing.
"Person" or "person" means an individual, corporation,
partnership, limited liability company, firm, association, joint venture, trust,
unincorporated organization, government, governmental body, agency, political
subdivision or other entity.
"Purchaser" means Transportation Receivables 1992, LLC or any
Person to which Transportation Receivables 1992, LLC may have transferred record
and/or beneficial ownership of shares of Series A Preferred Stock, the Note or
Conversion Shares.
"Rule 144 Transaction" means a transfer of Conversion Shares,
(A) complying with Rule 144 under the Securities Act as such Rule is in effect
on the date of such transfer (but not including a sale other than pursuant to
"brokers' transactions" as defined in clauses (1) and (2) of paragraph (g) of
such Rule as in effect on the date hereof) and (B) occurring at a time when
Conversion Shares are registered pursuant to Section 12 of the Securities
Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules, regulations and interpretations thereunder.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules, regulations and interpretations thereunder.
"Series A Preferred Stock" means the Company's Series A
Convertible Preferred Stock, par value $0.01 per share, which will have the
rights, powers and privileges on the Closing Date as more fully set forth in the
Certificate of Designations.
"Tax" or "Taxes" means all federal, state, local or foreign
net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value
added, franchise, bank shares, withholding, payroll, employment, excise,
property, alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges of any nature
whatsoever, whether disputed or not, together with any interest, penalties,
additions to tax or additional amounts with respect thereto.
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"Taxing Authority" means any governmental agency, board,
bureau, body, department or authority of any United States federal, state or
local jurisdiction, or any foreign jurisdiction, having or purporting to
exercise jurisdiction with respect to any Tax. For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as
a whole and not to any particular Section or other
subdivision;
all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with
GAAP consistently applied (except as otherwise
provided herein);
all computations provided for herein, if any, shall be
made in accordance with GAAP consistently applied
(except as otherwise provided herein);
any uses of the masculine, feminine or neuter gender
shall also be deemed to include any other gender,
as appropriate;
the exhibits and schedules to this Agreement shall be
deemed a part of this Agreement; and each of the
representations and warranties of the Company contained
in Section 4 hereof is separate and is not limited,
qualified or modified by the existence, wording or
satisfaction of any other representation or warranty of
the Company in Section 4 or otherwise.
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
The Company represents and warrants to Purchaser as follows,
as of the date hereof and as of the Closing Date:
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Corporate Existence, Power and Authority.
----------------------------------------
The Company is a corporation duly organized, validly existing
and in good standing under the laws of Delaware. The Company is duly qualified,
licensed and authorized to do business and is in good standing in each
jurisdiction in which it owns or leases any property or in which the conduct of
its business requires it to so qualify or be so licensed, except for such
jurisdictions where the failure to so qualify or be so licensed would not have a
material adverse effect on the Company's assets, properties, liabilities,
business, affairs, results of operations, condition (financial or otherwise) or
prospects.
No proceeding has been commenced looking toward the dissolu-
tion or merger of the Company or the amendment of its certificate of incorpora-
tion (other than the Certificate of Designations). The Company is not in
violation in any respect of its certificate of incorporation or bylaws.
The Company has all requisite power, authority, and legal right
to own or to hold under lease and to operate the properties it owns or holds and
to conduct its business as now being conducted. The Company has all requisite
power and authority, and legal right to execute, deliver, consummate the trans-
actions contemplated by and perform its obligations under, this Agreement,
including, without limitation, the issuance by the Company of the Series A
Preferred Stock, the Note and the Conversion Shares as contemplated herein and
in the Certificate of Designations and Loan Agreement. The execution, delivery
and performance of this Agreement by the Company (including, without limitation,
the issuance by the Company of the Series A Preferred Stock, the Note and the
Conversion Shares as contemplated herein and in the Certificate of Designations
and the Loan Agreement) have been duly authorized by all required corporate and
other actions. The Company has duly executed and delivered this Agreement. This
Agreement constitutes the legal, valid and binding obligations of the Company
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to the rights of
creditors generally or under general principles of equity.
Capital Stock.
-------------
As of the date hereof, the authorized capital stock of the
Company consists of 20,000,000 shares of Common Stock and 1,000,000 shares of
Preferred Stock.
As of the date hereof, the only outstanding shares of capital
stock of the Company consist of 9,770,500 shares of Common Stock. The Company
has granted options on an aggregate of 1,100,687 shares of Common Stock at
exercise prices ranging from $2.25 per share to $10.00 per share. There are no
other outstanding options, warrants, subscriptions, rights, convertible
securities or other agreements or plans under which the Company may become
obligated to issue, sell or transfer shares of its capital stock or other
securities.
All of the outstanding shares of capital stock of the Company
are duly authorized, validly issued and outstanding, fully paid and non-
assessable and are listed for trading on the automated quotation system of the
National Association of Securities Dealers. The Conversion Shares will be, when
issued in accordance with the terms of the Certificate of Designations, duly
authorized, validly reserved for issuance, and fully paid and non-assessable.
None of the shares of the Company's capital stock which will be outstanding at
the Closing (i) were or will be subject to preemptive rights when issued or (ii)
provide the holders thereof with any preemptive rights with respect to any
issuances of capital stock, except for any rights or obligations in the
Stockholders' Agreement or Registration Rights Agreement which may be deemed to
be preemptive in nature.
5
The Certificate of Designations has been duly adopted by the Company and is
fully effective as an amendment of the Company's certificate of incorporation.
The Series A Preferred Stock will have all of the rights, priorities and terms
set forth in the Certificate of Designations.
No Defaults or Conflicts.
------------------------
Except as referred to in the Company's annual report for the
year ended December 31, 2001 filed on Form 10-K with the Securities and Exchange
Commission, the Company is not in violation of, or default in any material
respect (and is not in default in any respect regarding any Indebtedness) under,
any indenture, agreement or instrument to which it is a party or by which it or
its properties may be bound. The Company is not in default in any material
respect under any material order, writ, injunction, judgment or decree of any
court or other governmental authority or arbitrator(s).
The execution, delivery and performance by the Company of this
Agreement and any of the transactions contemplated hereby do not and will not
(i) violate or conflict with, with or without the giving of notice or the
passage of time or both, any provision of (A) the certificate of incorporation
or bylaws of the Company, (B) any law, rule, regulation or order of any federal,
state, county, municipal or other governmental authority, (C) any judgment,
writ, injunction, decree, award or other action of any court or governmental
authority or arbitrator(s), or (D) any agreement, indenture or other instrument
applicable to the Company or any of its respective properties, (ii) result in
the creation of any Lien upon any of the Company's properties, assets or
revenues, except as provided in the Note and Loan Agreement, (iii) require the
consent, waiver, approval, order or authorization of, or declaration, registra-
tion, qualification or filing with, any Person (whether or not a governmental
authority and including, without limitation, any shareholder approval) (other
than any necessary approvals which have been obtained prior to the Closing
Date), or (iv) cause antidilution clauses of any outstanding securities to
become operative or give rise to any preemptive rights. No provision of any item
referred to in Sections (A) and (C) of the preceding clause (i) materially
adversely affects the assets, properties, liabilities, business, affairs,
results of operations, condition (financial or otherwise) or prospects of the
Company on a consolidated basis or the ability of the Company to perform its
obligations under this Agreement, the Certificate of Designations, the Note and
Loan Agreement, or any of the transactions contemplated hereby or thereby.
Litigation.
----------
There is no action, suit, proceeding, investigation or claim
pending or, to the Company's best knowledge, threatened in law, equity or
otherwise before any court, administrative agency or arbitrator which (i)
questions the validity of this Agreement, the Certificate of Designations, the
Series A Preferred Stock, the Loan Agreement, the Note or the Conversion Shares
or any action taken or to be taken pursuant hereto or thereto, (ii) might
adversely affect the rights, title or interest of the Series A Preferred Stock,
the Note or the Conversion Shares held by Purchaser or (iii) might result in a
material adverse change in the assets, properties, liabilities, business,
affairs, results of operations, condition (financial or otherwise) or prospects
of the Company. There is no action, proceeding, suit or investigation by the
Company currently pending or which the Company intends to initiate.
Outstanding Securities.
----------------------
All securities of the Company have been, and as of the Closing
Date will be, offered, issued, sold and delivered in compliance with, or
pursuant to exemptions from, all applicable federal and state laws, and the
rules
6
and regulations of federal and state regulatory bodies governing the offering,
issuance, sale and delivery of securities.
Tax Matters
-----------
The Company has duly filed all tax reports and returns
required to be filed by it or has requested and obtained appropriate extensions,
including all federal, state, local and foreign tax returns and reports. The
Company has paid in full all taxes required to be paid by it before such payment
became delinquent or has otherwise paid any required interest and penalties
relating thereto or has made adequate provision, in conformity with GAAP
consistently applied, for the payment of such taxes as well as taxes which may
subsequently become due. There are no pending audits of the tax returns of the
Company, and there are no claims which have been or may be asserted relating to
any of the tax returns filed by the Company for any year which if determined
adversely would result in the assertion by any governmental agency of any
material deficiency.
Investment Company
------------------
Immediately following the Closing, after giving effect to the
transactions contemplated hereby, neither the Company nor any person, firm or
entity controlling, controlled by, or under common control with the Company will
be an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
SEC Documents
-------------
The Company has made available to Purchaser true and complete
copies of the latest Form 10-K, any Forms 10-Q and 8-K filed thereafter, all
registration statements effective on of the date hereof and on the Closing Date,
and the Proxy Statement for its latest fiscal year (collectively, the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act, and rules and
regulations of the SEC promulgated thereunder and the SEC Documents did not
contain any 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
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC
Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto at the time of such
inclusion. Such financial statements have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except (a) as may be
otherwise indicated in such financial statements or the notes thereto or (b) in
the case of unaudited interim statements, to the extent they exclude footnotes
or may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited interim statements, to normal year-end audit adjustments).
Neither the Company nor any of its subsidiaries has any material indebtedness,
obligations or liabilities of any kind (whether accrued, absolute, contingent or
otherwise, and whether due or to become due) that would have been required to be
reflected in, reserved against or otherwise described in the financial
statements or in the notes thereto in accordance with GAAP, which was not fully
reflected in, reserved against or otherwise described in the financial
statements or the notes
7
thereto included in the SEC Documents or was not incurred in the ordinary course
of business consistent with the Company's past practices since the last date of
such financial statements.
Directors and Officers.
----------------------
To the Company's best knowledge, none of the officers or
directors or significant employees or consultants of the Company, has,
individually or collectively, other than affiliates of the Company or Purchaser
a material interest in any entity which is a competitor, customer or supplier of
the Company, or has any existing contractual relationship as a customer or
supplier with the Company other than affiliates of the Company or Purchaser.
No Misleading or Untrue Communication.
-------------------------------------
The Company and, to the knowledge of the Company, any person
representing the Company, or any other person selling or offering to sell the
Securities in connection with the transactions contemplated by this Agreement,
have not made, at any time, any oral communication in connection with the offer
or sale of the same which contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements, in
the light of the circumstances under which they were made, not misleading.
REPRESENTATIONS AND
WARRANTIES OF PURCHASERS
Purchaser represents and warrants to the Company as follows:
Investment Intent.
-----------------
Purchaser is capable of evaluating the risk of its investment
in the Securities and in the Conversion Shares, and is able to bear the economic
risk of such investment. Purchaser is purchasing the Securities for its own
account for investment and not with a present view to any distribution thereof
in violation of applicable securities laws. If Purchaser should in the future
decide to dispose of any of its shares of Series A Preferred Stock, the Note or
Conversion Shares, it is understood that it may do so only in compliance with
the Securities Act, applicable state and federal securities laws, and this
Agreement.
Disclosure Materials; Other Information
---------------------------------------
Purchaser has received all information regarding the Company
that Purchaser has requested. Purchaser has either attended or been given
reasonable access to a senior officer of the Company for the purpose of asking
questions of, and receiving answers from, such officer concerning the business
of the Company and the terms and conditions of the offering of the Series A
Preferred Stock and the Note.
AFFIRMATIVE COVENANTS
The Company covenants and agrees as follows:
Maintenance of Existence, Properties and Franchises; Compliance with
--------------------------------------------------------------------
Law; Taxes; Insurance.
---------------------
The Company will:
8
maintain its corporate existence, rights and other franchises
in full force and effect;
maintain its tangible assets in good repair, working order and
condition so far as necessary or advantageous to the proper
carrying on of its businesses;
comply with all applicable laws and with all applicable
orders, rules, rulings, certificates, licenses, regulations,
demands, judgments, writs, injunctions and decrees, provided,
that such compliance shall not be necessary so long as (i)
the applicability or validity of any such law, order, rule,
ruling, certificate, license, regulation, demand, judgment,
writ, injunction or decree shall be contested in good faith by
appropriate proceedings and (ii) failure to so comply will not
have a material adverse effect on the assets, properties,
liabilities, business, affairs, results of operations,
condition (financial or otherwise) or prospects of the Company
on a consolidated basis; and
pay when due all Taxes imposed upon its properties, assets or
income and all claims or Indebtedness which might become a
Lien upon such properties or assets; provided, that payment
of any such Tax shall not be necessary so long as (i) the
applicability or validity thereof shall be contested in good
faith by appropriate proceedings and a reserve, if
appropriate, shall have been established with respect thereto
and (ii) failure to make such payment will not have a material
adverse effect on the assets, properties, liabilities,
business, affairs, results of operations, condition (financial
or otherwise) or prospects of the Company on a consolidated
basis.
Reservation of Common Stock.
---------------------------
There has been reserved, and the Company shall at all times
keep reserved, free from preemptive rights, out of its authorized Common Stock a
number of shares of Common Stock sufficient to provide for the exercise of the
conversion rights provided in the Certificate of Designations.
Fees and Expenses.
-----------------
At he Closing, the Company shall pay the legal, due diligence,
and administrative fees, expenses and disbursements of Purchaser in connection
with the preparation, execution, and performance of this Agreement and the
transactions contemplated hereby.
Listing of Common Stock.
-----------------------
The Company will use its best efforts to maintain the listing
of the Common Stock on the Nasdaq Small-Cap Market, the NASDAQ National Market,
the American Stock Exchange, or the New York Stock Exchange, and shall as soon
as reasonably practicable following the Closing apply to list the Conversion
Shares on such market. The Company will comply in all respects with the
Company's reporting, filing, and other obligations under the bylaws or rules of
the such market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other principal market, it will include in such
application the Conversion Shares, and will take such other action as is
necessary or desirable in the opinion of the Purchaser to cause the Conversion
Shares to be listed on such other market as promptly as possible.
Further Assurances.
------------------
From time to time, upon Purchaser's or any transferee's (a)
reasonable request, the Company shall promptly and duly execute and deliver any
and all such further instruments and documents as such Purchaser or such
transferee as the case may be, may reasonably deem
9
necessary or desirable to obtain the full benefits of the obligations of the
Company under this Agreement and the other rights and powers herein granted, and
(b) reasonable instructions, the Company shall execute and cause to be filed any
document or filing presented to the Company in proper form for signing or
filing, in each case as such Purchaser or such transferee may reasonably deem
necessary or desirable in light of and in connection with the Company's
obligations under this Agreement to further effectuate the intent hereunder, and
the Company shall pay or cause to be paid any filing or other fees in connection
therewith.
CONDITIONS TO PURCHASER'S
OBLIGATIONS
Purchaser's obligation to purchase Securities hereunder is
subject to satisfaction of the following conditions at the Closing (any of which
may be waived by Purchaser in writing); provided that Section 7.1 is a condition
to the obligations to consummate the transaction provided for herein of each of
Purchasers and the Company:
Certificate of Designations.
---------------------------
The Company shall have filed the Certificate of Designations
with the Secretary of State of the State of Delaware, in the form of Exhibit B
hereto.
Repayment of Interest on the Estate Note.
----------------------------------------
The Company shall, simultaneously with the payment by the
Purchaser for the Securities, repay the accrued interest owed by the Company to
the Estate of ▇. ▇. ▇▇▇▇▇▇ pursuant to the Estate Note and the Collateral listed
on Schedule C to the Loan and Security Agreement between the Estate of ▇. ▇.
▇▇▇▇▇▇ as Lender and Trailer Bridge, Inc. as Borrower, dated as of November 30,
2001, shall be free and clear of any and all Liens or claims of others.
Board of Directors.
------------------
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. shall have been elected as members of the board of directors of the
Company.
Conversion Shares.
-----------------
The Conversion Shares shall have been listed for trading on
NASDAQ.
Accuracy of Representations and Warranties.
------------------------------------------
The representations and warranties of the Company contained in
this Agreement or in any certificate or document delivered pursuant hereto shall
be correct and complete on and as of the Closing Date with the same effect as
though made on and as of the Closing Date (after giving effect to the
transactions contemplated by this Agreement).
Compliance with Agreements.
--------------------------
The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in this
Agreement and any other document contemplated hereby or thereby which are
required to be performed or complied with by the Company on or before the
Closing Date.
10
Officers' Certificates.
----------------------
Purchaser shall have received a certificate dated the Closing
Date and signed by the President or by the Chief Executive Officer of the
Company, to the effect that the conditions of Sections 7.1, 7.2, 7.3, 7.4, 7.5,
7.6, 7.8, 7.9 (second sentence only), and 7.10 hereof have been satisfied.
Proceedings.
-----------
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement, and all documents incident thereto,
shall be in form and substance reasonably satisfactory to Purchaser and its
counsel, and Purchaser shall have received all such originals or certified or
other copies of such documents as Purchaser or its counsel may reasonably
request.
Legality; Governmental and Other Authorization.
----------------------------------------------
The purchase of and payment for the Securities shall not be
prohibited by any law or governmental order, rule, ruling, regulation, release,
interpretation or opinion applicable to Purchaser and shall not subject
Purchaser to any penalty, tax, liability or other onerous condition. Any
necessary consents, approvals, licenses, permits, orders and authorizations of,
and any filings, registrations or qualifications with, any governmental or
administrative agency or other Person, with respect to the transactions
contemplated by this Agreement shall have been obtained or made and shall be in
full force and effect. The Company shall have delivered to Purchaser, upon its
reasonable request setting forth what is required, factual certificates or other
evidence, in form and substance reasonably satisfactory to Purchaser and its
counsel, to enable Purchaser to establish compliance with this condition.
No Material Adverse Change.
--------------------------
There shall have been no material adverse change in the
assets, properties, liabilities, business, affairs, results of operations,
condition (financial or otherwise) or prospects of the Company on a consolidated
basis since December 31, 2001, except fo the continuing operating losses of the
Company as disclosed to the Purchaser.
Opinions of Counsel.
-------------------
Purchaser shall have received opinions, dated the Closing Date
and addressed to Purchaser, of ▇▇▇▇▇ & Lardner and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger,
P.A., which opinions shall be in a form and substance acceptable to the
Purchaser.
Fairness Opinion.
----------------
Purchaser shall have received an opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇, in a form and substance acceptable to Purchaser, that the
transactions contemplated by this Agreement are fair to Purchaser from a
financial point of view.
Registration Rights.
-------------------
Purchaser and the Company shall have entered into a
registration rights agreement, in a form and substance acceptable to Purchaser.
11
Other Documents and Opinions.
----------------------------
Purchaser shall have received such other documents and
opinions, in form and substance reasonably satisfactory to Purchaser and its
counsel, relating to matters incident to the transactions contemplated hereby as
Purchaser may reasonably request.
INDEMNIFICATION; PAYMENT OF TAXES
The Company shall pay to Purchaser or its officers, directors,
employees, agents, stockholders, members, partners, successors, or assigns (the
"Indemnified Parties") an amount sufficient to indemnify such persons against
all reasonable costs and expenses (including reasonable attorneys' fees and
expenses and reasonable costs of investigation) and damages and liabilities
incurred by the Indemnified Parties pursuant to any third-party investigation or
proceeding against any or all of the Company or the Indemnified Parties, arising
out of or in connection with this Agreement and Purchaser's purchase of the
Securities (or any transaction contemplated hereby or any other document or
instrument executed herewith or pursuant hereto), whether or not the
transactions contemplated by this Agreement are consummated, which investigation
or proceeding requires the participation of the Indemnified Parties or is
commenced or filed against the Indemnified Parties because of this Agreement,
Purchaser's purchase of the Securities or any of the transactions contemplated
hereby (or any other document or instrument executed herewith or therewith or
pursuant hereto or thereto), other than any investigation or proceeding in which
it is finally determined that there was (i) gross negligence or willful
misconduct on the part of the Indemnified Parties or (ii) a material breach by
Purchaser of any of its representations or warranties contained herein, in any
case, which was not made by Purchaser in reliance upon any of the Company's
representations, warranties, covenants or agreements in this Agreement or in any
other documents or instruments contemplated hereby or executed herewith or
pursuant hereto. The Company shall assume the defense, and shall appoint counsel
of its choice reasonably satisfactory to Purchaser to represent the Indemnified
Parties, in connection with investigating, defending or preparing to defend any
such action, suit, claim or proceeding (including any inquiry or investigation);
provided, however, that any such Indemnified Party shall have the right (without
releasing the Company from any of its obligations hereunder) to employ its own
counsel and either to direct its own defense or to participate in the Company's
defense, but the fees and expenses of such counsel shall be at the expense of
such person unless (i) the employment of such counsel shall have been authorized
in writing by the Company in connection with such defense, (ii) the Company
shall not have provided its counsel to take charge of such defense or (iii)
there may be defenses available to such Indemnified Party which are different
from or additional to those available to the Company, then in any of such events
referred to in clauses (i), (ii) or (iii) such reasonable counsel fees and
expenses (but only for one counsel for the Indemnified Parties) shall be borne
by the Company. Any settlement of any such action, suit, claim or proceeding
shall require the consent of both the Company and such Indemnified Party
(neither of which shall unreasonably withhold its consent).
The Company agrees to pay, or to cause to be paid, all
documentary, stamp and other similar Taxes, levied under the laws of the United
States of America, any state or local Taxing Authority thereof or therein or any
other applicable jurisdiction in connection with the issuance and sale of the
Securities, the conversion of Series A Preferred Stock into Conversion Shares
and the execution and delivery of this Agreement and any other documents or
instruments contemplated
12
hereby and any modification of the Certificate of Designations or this Agreement
or any such other documents or instruments and will hold Purchaser harmless
without limitation as to time against any and all liabilities with respect to
all such Taxes.
The obligations of the Company under this Section 8 shall
survive the Closing hereunder and any termination of this Agreement.
AMENDMENTS AND WAIVERS
The terms and provisions of this Agreement may be amended,
waived, modified or terminated only with the written consent of the Company and
the Purchaser.
EXCHANGE OF SERIES A PREFERRED
STOCK, NOTE OR CONVERSION SHARES;
CANCELLATION OF SURRENDERED SHARES;
REPLACEMENT
Subject to Section 6 hereof, at any time at the request of any
holder of shares of Series A Preferred Stock, the Note or Conversion Shares to
the Company at its address provided under Section 11 hereof, the Company at its
expense (other than transfer taxes payable upon the transfer by Purchaser of
shares of Series A Preferred Stock, the Note or Conversion Shares) will issue
and deliver to or upon the order of the holder in exchange therefor a new
certificate or certificates in such amount or amounts as such holder may request
in the aggregate representing the number of shares of Series A Preferred Stock,
the Note or Conversion Shares represented by such surrendered certificates, and
registered in the name of such holder or as such holder may direct.
Any Series A Preferred Stock certificate which is converted
into or exercised for Conversion Shares in whole or in part shall be canceled by
the Company, and no new certificates shall be issued in lieu of any shares of
Series A Preferred Stock which have been converted into or exercised for
Conversion Shares. The Company shall issue a new certificate with respect to any
shares of Series A Preferred Stock which were not converted into or exercised
for Conversion Shares, and were represented by a certificate which was converted
in part.
Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of any share certificate and, in the case
of any such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory to the Company (if requested by the Company and
unsecured in the case of Purchaser), or in the case of any such mutilation, upon
surrender of such share certificate (which surrendered share certificate shall
be canceled by the Company), the Company will issue a new share certificate of
like tenor in lieu of such lost, stolen, destroyed or mutilated share
certificate, as if the lost, stolen, destroyed or mutilated share certificate
were then surrendered for exchange.
The certificates issued evidencing shares of Series A
Preferred Stock or Common Stock shall bear the following legend:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933 and may be offered or
sold only if registered under the Securities Act of 1933 or if an
exemption from registration is available."
13
Such legend shall be removed at the request of the Purchaser accompanied by an
opinion of counsel to the effect that such shares may be sold pursuant to an
effective registration statement or pursuant to paragraph (k) of Rule 144 under
the Securities Act.
NOTICES
All notices, requests, demands, consents and other communica-
tions hereunder shall be in writing and shall be delivered by hand or shall be
sent by telex or telecopy (confirmed by registered, certified or overnight mail
or courier, postage and delivery charges prepaid), (i) if to the Company, to
Trailer Bridge, Inc., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Chief
Executive Officer, with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, or (ii) if to Purchaser, to Transportation
Receivables 1992, LLC, c/o Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., or at such other address as a party may
from time to time designate as its address in writing to the other party to
this Agreement. Whenever any notice is required to be given hereunder, such
notice shall be deemed given and such requirement satisfied only when such
notice is delivered or, if sent by telex or telecopier, when received.
MISCELLANEOUS
This Agreement and, upon Closing hereunder, the Certificate of
Designations, together with any further agreements entered into by Purchaser and
the Company at the Closing hereunder, contain the entire agreement between
Purchaser and the Company, and supersede any prior oral or written agreements,
commitments, terms or understandings, regarding the subject matter hereof.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provision of law which may render any provision hereof
prohibited or unenforceable in any respect.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, whether so
expressed or not; provided, that (a) the Company may not assign any of its
rights, duties or obligations under this Agreement, except with Purchaser's
written consent, and (b) Purchaser may assign any of its rights, duties or
obligations under this Agreement to a transferee, provided further that such
transferee is reasonably acceptable to the Company and that such transferee
agrees in writing to assume the obligations of Purchaser under this Agreement.
In addition to any assignment by operation of law, Purchaser
may assign, in whole or in part, any or all of its rights (and/or obligations)
under this Agreement to any transferee of any or all of its Series A Preferred
Stock, Note or Conversion Shares, and (unless such assignment expressly provides
otherwise) any such assignment shall not diminish the rights such Purchaser
would otherwise have under this Agreement or with respect to any remaining
Series A Preferred Stock, Note or Conversion Shares held by such Purchaser.
No course of dealing and no delay on the part of any party
hereto in exercising any right, power, or remedy conferred by this Agreement
shall operate as a waiver thereof or otherwise prejudice such party's rights,
powers and remedies. No single or partial exercise of any right, power or
14
remedy conferred by this Agreement shall preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The headings and
captions in this Agreement are for convenience of reference only and shall not
define, limit or otherwise affect any of the terms or provisions hereof.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida (other than any conflict of
laws rule which might result in the application of the laws of any other
jurisdiction).
The parties to this Agreement shall bear their respective
expenses incurred in connection with the preparation, execution and performance
of this Agreement and the transactions contemplated hereby, including, without
limitation, all fees and expenses of agents, representatives, counsel and
accountants.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
THE COMPANY AND PURCHASER HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT, THE CERTIFICATE OF DESIGNATIONS, THE SHARES OF SERIES A
PREFERRED STOCK, THE NOTE OR THE CONVERSION SHARES, OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND PURCHASER FURTHER WARRANT
AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS
OF) THIS AGREEMENT, THE CERTIFICATE OF DESIGNATIONS, THE SHARES OF SERIES A
PREFERRED STOCK, THE NOTE, OR THE CONVERSION SHARES. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY
THE COURT.
All fees, costs and expenses (including reasonable attorneys'
fees and expenses) incurred by the prevailing party in any judicial action or
proceeding seeking to enforce the terms of this Agreement shall be paid by the
non-prevailing party in such action.
[remainder of page intentionally left blank]
15
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
TRAILER BRIDGE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP & CFO
Accepted and agreed to as of the
date first above written by the undersigned Purchaser:
TRANSPORTATION RECEIVABLES 1992, LLC
By The Estate of ▇. ▇. ▇▇▇▇▇▇, Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Co-Executor
By: /s/ ▇. ▇▇▇▇▇▇▇▇ Meyercord
--------------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Co-Executor
16
SCHEDULE 1
----------
Address for Payments by Wire Transfer:
Name: Estate of ▇.▇. ▇▇▇▇▇▇
Bank Info: M & T Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Account Number: 8889901974
ABA: ▇▇▇▇▇▇▇▇▇
Name: Transportation Receivables 1992, LLC
Bank Info:
Account Number:
ABA:
EXHIBIT A
LOAN AND SECURITY AGREEMENT and NOTE
EXHIBIT B
CERTIFICATE OF DESIGNATIONS