EXHIBIT (c)(3)
STOCKHOLDERS' AGREEMENT
BY AND AMONG
BIRD ENVIRONMENTAL GULF COAST, INC.;
GTS DURATEK, INC.;
GTSD SUB II, INC.;
▇▇▇ ▇. ▇▇▇▇▇;
▇▇▇▇ ▇. ▇▇▇▇▇;
▇▇▇▇▇ ▇. ▇▇▇▇▇; AND
▇▇▇ ▇. ▇▇▇▇▇ III
DATED AS OF NOVEMBER 29, 1995
TABLE OF CONTENTS
ARTICLE I: DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II: REPRESENTATIONS AND WARRANTIES OF
THE MINORITY SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Authority of Minority Shareholders; Title to Stock. . . . . . 5
Section 2.2 Organization, Standing, Authority and Capitalization
of Company. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4 No Other Pending Transactions . . . . . . . . . . . . . . . . 8
Section 2.5 Company's Names, Business, and Location of Company Assets . . 8
Section 2.6 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.7 Financial Statements. . . . . . . . . . . . . . . . . . . . . 9
Section 2.8 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . 9
Section 2.9 Absence of Certain Changes, Events or Conditions. . . . . . . 9
Section 2.10 Litigation and Other Proceedings. . . . . . . . . . . . . . .10
Section 2.11 Licenses and Approvals. . . . . . . . . . . . . . . . . . . .11
Section 2.12 Legal Compliance. . . . . . . . . . . . . . . . . . . . . . .11
Section 2.13 Material Contracts and Agreements. . . . . . . . . . . . . . 11
Section 2.14 Title Matters. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.15 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.16 Employee Benefit Plans and Workers' Compensation Matters. . .12
Section 2.17 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.18 Condition of Company Assets. . . . . . . . . . . . . . . . . 13
Section 2.19 Intellectual Property. . . . . . . . . . . . . . . . . . . . 14
Section 2.20 Environmental Matters. . . . . . . . . . . . . . . . . . . . 14
Section 2.21 Customers and Suppliers. . . . . . . . . . . . . . . . . . . 17
Section 2.22 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . 17
Section 2.23 No Material Adverse Change. . . . . . . . . . . . . . . . . .18
Section 2.24 Books and Records. . . . . . . . . . . . . . . . . . . . . . 18
Section 2.25 Disaster. . . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 2.26 No Burdensome Agreements; Transactions with Affiliates. . . .18
Section 2.27 Due Diligence Review. . . . . . . . . . . . . . . . . . . . .19
Section 2.28 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE III: REPRESENTATIONS AND WARRANTIES
OF GTSD and GTSD SUB. . . . . . . . . . . . . . . . . . . . . .19
Section 3.1 Organizational Matters; Authority. . . . . . . . . . . . . . 19
Section 3.2 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . .20
Section 3.3 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 3.4 Access to Information. . . . . . . . . . . . . . . . . . . . 20
Section 3.5 Disclosure of Current Material Plans. . . . . . . . . . . . .20
Section 3.6 Disclosure of Certain Financial Information. . . . . . . . . 21
ARTICLE IV: COVENANTS AND OTHER AGREEMENTS. . . . . . . . . . . . . . . . . 21
Section 4.1 Consents; Cause Conditions to be Satisfied. . . . . . . . . .21
Section 4.2 Non-Interference Agreement. . . . . . . . . . . . . . . . . .21
Section 4.3 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.4 Release from Liability . . . . . . . . . . . . . . . . . . . 23
Section 4.5 Termination of Certain Agreements. . . . . . . . . . . . . . 23
Section 4.6 Vote Stock on Certain Matters. . . . . . . . . . . . . . . . 23
Section 4.7 Investment by GTSD in Company. . . . . . . . . . . . . . . . 24
Section 4.8 Willingness and Ability to Perform Covenants. . . . . . . . .24
Section 4.9 Good Faith Performance in the Future. . . . . . . . . . . . .24
Section 4.10 Due Diligence Report. . . . . . . . . . . . . . . . . . . . .25
Section 4.11 Guaranty Agreement. . . . . . . . . . . . . . . . . . . . . .25
Section 4.12 Mitigation of Indemnified Losses. . . . . . . . . . . . . . .25
Section 4.13 Schedule Disclosures. . . . . . . . . . . . . . . . . . . . .25
Section 4.14 Tax Sharing Arrangement. . . . . . . . . . . . . . . . . . . 26
ARTICLE V: INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.1 Indemnification by the Minority Shareholders. . . . . . . . .26
Section 5.2 Indemnification by GTSD and GTSD Sub. . . . . . . . . . . . .26
Section 5.3 Procedures for Third Party Claims. . . . . . . . . . . . . . 27
Section 5.4 Limits for Recovery of Losses. . . . . . . . . . . . . . . . 27
Section 5.5 Waiver of Contribution. . . . . . . . . . . . . . . . . . . .28
Section 5.6 Holdback, Right of Setoff. . . . . . . . . . . . . . . . . . 28
ARTICLE VI: SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VII: RESTRICTIONS ON TRANSFER; VOLUNTARY
TRANSFER; INVOLUNTARY TRANSFER. . . . . . . . . . . . . . . . .29
Section 7.1 Restrictions on Transfer. . . . . . . . . . . . . . . . . . .29
Section 7.2 Right of First Refusal Upon Voluntary Transfer of
Shares by Minority Shareholders. . . . . . . . . . . . . . . 29
Section 7.3 Option Upon Involuntary Transfer. . . . . . . . . . . . . . .30
Section 7.4 Right of First Offer Upon Transfer of Shares by GTSD. . . . .30
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Section 7.5 Permitted Transfers. . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VIII: BUYOUT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.1 Put Rights of Minority Shareholders. . . . . . . . . . . . . 32
Section 8.2 Call Rights of the Company and GTSD Sub. . . . . . . . . . . 33
Section 8.3 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . .34
Section 8.4 Payment of the Purchase Price. . . . . . . . . . . . . . . . 35
ARTICLE IX: OTHER RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.1 Legend on Certificates. . . . . . . . . . . . . . . . . . . .36
Section 9.2 Actions Requiring Vote or Consent of the
Minority Shareholders. . . . . . . . . . . . . . . . . . . . 36
Section 9.3 Composition of Board of Directors. . . . . . . . . . . . . . 37
Section 9.4 Formation of Management Committee. . . . . . . . . . . . . . 37
ARTICLE X: TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XI: MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.1 No Assignment. . . . . . . . . . . . . . . . . . . . . . . .38
Section 11.2 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 11.3 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 11.4 Parties in Interest. . . . . . . . . . . . . . . . . . . . .38
Section 11.5 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 38
Section 11.6 Construction. . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.7 Additional Documents. . . . . . . . . . . . . . . . . . . . 39
Section 11.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .39
Section 11.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 41
Section 11.10 Governing Law. . . . . . . . . . . . . . . . . . . . . . . .41
Section 11.11 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . .42
Section 11.12 Specific Performance. . . . . . . . . . . . . . . . . . . . 42
Section 11.13 Severability. . . . . . . . . . . . . . . . . . . . . . . . 42
Section 11.14 No Drafting Presumption. . . . . . . . . . . . . . . . . . .43
Section 11.15 Incorporation by Reference; Use of Certain Terms. . . . . . 43
Section 11.16 Amendment and Waiver. . . . . . . . . . . . . . . . . . . . 43
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STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (the "Agreement") is made as of this
29th day of November, 1995 by and among Bird Environmental Gulf Coast, Inc.,
a Texas corporation (the "Company"); GTS Duratek, Inc., a Delaware
corporation ("GTSD"), GTSD Sub II, Inc., a Maryland corporation and a
wholly-owned subsidiary of GTSD ("GTSD Sub"), ▇▇▇ ▇. ▇▇▇▇▇ ("▇. ▇▇▇▇▇"), ▇▇▇▇
▇. ▇▇▇▇▇ ("▇. ▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇. ▇▇▇▇▇") and ▇▇▇ ▇. ▇▇▇▇▇ III
("▇▇▇▇▇"). For purposes of this Agreement, ▇. ▇▇▇▇▇, ▇. ▇▇▇▇▇, ▇. ▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇ be collectively referred to as "Minority Shareholders" and may be
individually referred to as a "Minority Shareholder."
W I T N E S S E T H:
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, GTSD Sub is purchasing from Bird Environmental Technologies, Inc.,
a Delaware corporation ("BETI"), all of the outstanding capital stock of the
Company owned by BETI, which represents 80% of the issued and outstanding
stock of the Company, upon the terms and provisions set forth in a Stock
Purchase Agreement of even date herewith by and among the Company, BETI, Bird
Corporation, a Massachusetts corporation ("Bird"), GTSD Sub and GTSD (the
"Stock Purchase Agreement").
WHEREAS, contemporaneously with the execution and delivery of this
Agreement and the Stock Purchase Agreement, effective as of the date hereof,
(i) the Company will have executed with each of ▇. ▇▇▇▇▇, ▇. ▇▇▇▇▇ and ▇▇▇▇▇
employment agreements (the "Employment Agreements"), (ii) the Company and ▇.
▇▇▇▇▇ will have executed and delivered that certain technology license
agreement (the "License Agreement") pursuant to which ▇. ▇▇▇▇▇ will license
to the Company and to GTSD the technologies specified therein and (iii) the
Company and ▇. ▇▇▇▇▇ will have executed and delivered that separate agreement
(the "▇▇▇▇▇ Agreement"). This Agreement, the Employment Agreements, the
License Agreement and the ▇▇▇▇▇ Agreement shall be collectively referred to
herein as the "Minority Shareholders Agreements".
WHEREAS, a significant inducement for GTSD Sub to purchase the
capital stock of the Company from BETI is its ability to enter into this
Agreement pursuant to the terms and conditions set forth herein and to enter
into the other Minority Shareholders Agreements on the terms and conditions
specified therein.
WHEREAS, with respect to this Agreement, GTSD Sub and the Minority
Shareholders wish to enter into this Agreement among themselves to assure
continuity in the ownership and management of the Company, to set forth their
rights and obligations as stockholders of the Company and to provide a market
and a purchase price for the shares of stock owned by them upon the
occurrence of certain events.
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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:
ARTICLE I: DEFINITIONS
In addition to those terms defined elsewhere herein, when used
herein, the following capitalized terms shall have the meanings indicated:
"AFFILIATE" of a specified person means a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the person specified.
"APPLICABLE AUTHORITY" shall mean any foreign, federal, state or
local governmental or quasi-governmental instrumentality, agency, department,
bureau, board or commission having authority or purporting to have authority
over the Company, any of the Company Assets, or the operation of the
Company's Business, including any entity with licensing or regulatory
authority concerning the Company and the operation of the Company's Business.
"APPLICABLE LAWS" shall mean all foreign, federal, state and local
laws, regulations, rules, orders, decrees, ordinances or judgments applicable
to the Company, the Company Assets, or the operation of the Company's
Business, including all laws concerning the licensing and regulation of the
Company and the conduct of the Company's Business.
"BIRD INSTRUMENTS" shall mean the following documents to which the
Minority Shareholders, certain of their Affiliates and certain Affiliates of
Bird are parties: (a) that certain Pre-Incorporation Agreement dated August
9, 1991; (b) that certain Stock Option Agreement dated August 9, 1991; (c)
that certain Voting Agreement dated August 9, 1991; (d) that certain Stock
Purchase Agreement dated August 9, 1991; (e) that certain Amendment Agreement
dated August 9, 1991; and (e) that certain Agreement dated June 18, 1994,
forms of which documents are attached hereto as APPENDIX I.
"BIRD LETTER OF INTENT" shall mean the letter of intent dated as of
September 6, 1995 addressed to ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President and
General Counsel of Bird from GTSD.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations thereunder.
"COMPANY ASSETS" shall mean all of the properties and assets owned
or leased by the Company, including without limitation all of the following:
the Property, the Tangible Operating Assets, the Intellectual Property, the
Company Contracts, the Leases, and the Licenses and Approvals (as each term
is defined below).
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"COMPANY'S BUSINESS" shall mean developing and implementing waste
treatment technologies, as such activity was conducted prior to the shutdown
or suspension of its operations as contemplated by the Minority Shareholders'
Letter of Intent.
"COMPANY CONTRACTS" shall mean, collectively, all contracts or
agreements to which the Company is a party or by which the Company or any of
the Company Assets is bound, including personal property leases, franchise,
manufacturer's representative, distributorship, service, supply, maintenance,
employee, leasing and management contracts and agreements affecting or
involving the Property or the Company's Business.
"GAAP" shall mean United States generally accepted accounting
principles, applied on a consistent basis.
"INVENTORY" shall mean all parts, supplies, process additives,
marketing materials and other material held for use, consumption or sale in
the Company's Business.
"KNOWN" or "KNOWLEDGE" (regardless of whether such terms are
capitalized) when used in connection with a statement regarding the existence
or absence of facts, unless a different definition or standard is expressly
set forth in a particular context, are intended by the parties to qualify or
limit such statement to facts actually (and not constructively) known or
believed to exist by the individual or, in the case of a corporation, by its
current officers and directors.
"LEASES" shall mean, collectively, all of the oral or written
leases, subleases, licenses, concession agreements or other use or occupancy
agreements pursuant to which the Company or any other party is entitled to
occupy and use any portion of the Property or pursuant to which Company
leases to or from any other party any real property, including all renewals,
extensions, modifications or supplements to any of the foregoing or
substitutions for any of the foregoing.
"LICENSES AND APPROVALS" shall mean all certificates, licenses,
permits or other approvals required or obtained by the Company in connection
with the use or ownership of the Company Assets, the operation of the
Company's Business or in connection with its use and occupancy of any of the
Property.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien or other charge of any kind, including, without limitation,
any conditional sale or other title retention agreement, any lease in the
nature thereof and the filing of or agreement to give any financing statement
under the Uniform Commercial Code of any jurisdiction and including any lien
or charge arising by statute or other law.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse
effect on the assets, properties, liabilities, business affairs, results of
operations, condition (financial or otherwise) or prospects of the Company,
provided that an effect resulting from the decision to
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shutdown or suspend the operations of the Company as described in the
Minority Shareholders Letter of Intent shall not be deemed to constitute a
Material Adverse Effect.
"MINORITY SHAREHOLDERS' LETTER OF INTENT" shall mean the letter of
intent dated as of September 7, 1995 addressed to ▇. ▇▇▇▇▇, Executive Vice
President of the Company from GTSD.
"ORDINARY COURSE OF BUSINESS" or words of similar import mean
(whether or not capitalized) acts or omissions to act that are consistent
with the past practices of the Company and are taken or omitted to be taken
in the normal course of day-to-day operations of the Company.
"ORGANIZATIONAL DOCUMENTS" shall mean a corporation's Articles or
Certificate of Incorporation and By-Laws, as amended or supplemented.
"PERMITTED LIENS" shall mean (i) Liens for taxes, assessments or
other governmental charges or levies which are not yet due and payable or
which are being contested in good faith by appropriate action and for which a
reserve or other appropriate provision as shall be required in accordance
with GAAP shall have been made by the Company in its Financial Statements (as
hereinafter defined); (ii) statutory Liens of landlords, carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other like
Liens arising by operation of law in the ordinary course of the Company's
Business or incident to the construction or improvement of any property in
respect of obligations that are not yet due or that are being contested in
good faith by appropriate proceedings by or on behalf of the Company and for
which a reserve or other appropriate provision as shall be required in
accordance with GAAP shall have been made by the Company in its Financial
Statements; (iii) Liens incurred or deposits made by the Company in
connection with worker's compensation, unemployment insurance or other social
security arising by operation of law in the ordinary course of the Company's
Business; (iv) Liens incurred or deposits made by the Company to secure the
performance of performance of bids, statutory obligations, surety and appeal
bonds in the ordinary course of the Company's Business; (v) rights of a
common owner of any interest in real estate, rights of way or easements held
by the Company and such common owner as tenants in common or through other
common ownership; (vi) any other minor defects and irregularities of title
and other minor charges or encumbrances that do not (a) materially impair the
ownership, occupation, use or enjoyment of the Company's Assets, (b)
materially impair the value of the Company's Assets or (c) materially impair
the ability of the Company to sell the property affected thereby and (vii)
Liens disclosed on the schedules to this Agreement.
"PERSON" or "PERSON" means an individual, corporation, partnership,
firm, ssociation, joint venture, trust, unincorporated organization,
government, governmental body, agency, political subdivision or other entity.
"PRODUCTS" means all of the products manufactured, distributed,
marketed, sold or packaged in connection with the operation of the Company's
Business.
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"PROPERTY" shall mean, collectively, all of the land and the
improvements thereon, together with any tangible property located thereon
which would constitute a "fixture" under the laws of the State of Maryland
and all personal property owned or leased by Company and used or useful in
connection with the operation of the Company's Business (other than that
personal property included within the definition of "Tangible Operating
Assets") and all of Company's right, title and interest in and to all
privileges, appurtenances, and advantages belonging or in any way
appertaining to any such land, including all easements, rights-of-way, water
and riparian rights, air rights above the land, development rights, and all
rights, title and interest in and to all adjoining streets, roads or alleys
(public or private, open or proposed).
"RESTRICTED AGREEMENT" shall refer to any of the Leases and Company
Contracts (as each is defined in this Article I), to the extent that any such
Lease or Company Contract contains any provision that, as a result of the
consummation of the transactions contemplated by this Agreement, causes one
or more of the following to occur: (i) the Company is deemed to be in
default under such Lease or Company Contract (with or without the giving of
notice and any cure period); (ii) automatically voids such Lease or Company
Contract or renders voidable by any party other than the Company, the Lease
or Company Contract or provides any party other than the Company with a right
to terminate or rescind such Lease or Company Contract; (iii) imposes any
fine, penalty, charge or increase in payments or other charges required to be
made by the Company under such Lease or Company Contract; or (iv) otherwise
modifies any of the material terms of such Lease or Company Contract.
"SHARES" shall mean shares of Stock (as hereinafter defined).
"STOCK" shall mean the outstanding shares of capital stock of the
Company.
"TANGIBLE OPERATING ASSETS" shall mean, collectively, all of the
tangible personal property used or useful in the operation of Company's
Business, wheresoever located, including Inventory, trade fixtures,
stock-in-trade, equipment, and supplies.
ARTICLE II: REPRESENTATIONS AND WARRANTIES OF
THE MINORITY SHAREHOLDERS
Except as disclosed on a schedule in response to a particular
representation or warranty or as otherwise disclosed on the schedules
contemplated by this Article II, each of the Minority Shareholders hereby
represents and warrants jointly and severally, except as otherwise provided
below, to GTSD and GTSD Sub as of the date hereof as follows:
SECTION 2.1 AUTHORITY OF MINORITY SHAREHOLDERS; TITLE TO STOCK.
(a) Each Minority Shareholder represents and warrants (severally and not
jointly and severally with the other Minority Shareholders) that (i) such
Minority Shareholder has all requisite power and authority to execute,
deliver and perform this Agreement and each of the
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instruments, documents, and agreements contemplated herein to be executed and
delivered by the Minority Shareholder pursuant to this Agreement
(collectively, the "Minority Shareholders Instruments"), (ii) when duly
executed and delivered by the Minority Shareholder and the other parties
thereto, each of the Minority Shareholders Instruments will constitute valid
and legally binding obligations of the Minority Shareholder, and (iii) will
be enforceable against him in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to the rights of creditors generally.
(b) Each Minority Shareholder represents and warrants (severally and not
jointly and severally with the other Minority Shareholders) that such
Minority Shareholder owns 5% of the issued and outstanding capital stock of
the Company free and clear of any Liens, rights of first refusal or
restriction of any kind, except as may arise under the Bird Instruments or
under federal or applicable state securities laws. The Minority Shareholder
owns the number of Shares set forth on SCHEDULE 2.1(b) hereto. Each Minority
Shareholder represents and warrants (severally and not jointly and severally
with other Minority Shareholders) that such Minority Shareholder is neither a
party to or bound by any options, calls, contracts of commitments of any
character relating to any of the Stock or any other equity or debt security
issued or to be issued by the Company, except as may arise under the Bird
Instruments.
SECTION 2.2 ORGANIZATION, STANDING, AUTHORITY AND CAPITALIZATION
OF COMPANY.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas and has all requisite
corporate power and authority to carry on the Company's Business as it is now
being conducted, to own the Company Assets (including the Property) and to
own or lease each of the other properties and assets it now owns or leases.
True, complete and correct copies of the Organizational Documents of the
Company have been delivered to GTSD and the Organizational Documents are in
full force and effect. The Company is not in violation, breach or default of
any of the provisions of its Organizational Documents. The Company is duly
qualified to do business in the jurisdictions set forth in SCHEDULE 2.2(a)
attached hereto which jurisdictions represent all of the jurisdictions where
the Company is required to be qualified as the result of the location of its
assets or the conduct of the Company's Business.
(b) The Company has all requisite corporate power and authority to
execute, deliver and perform this Agreement and each of the instruments,
documents, and agreements contemplated herein to be executed and delivered by
Company pursuant to this Agreement (collectively, the "Company Instruments").
The execution, delivery and performance of this Agreement and of the Company
Instruments have been duly authorized and approved by all necessary corporate
action, and this Agreement and the Company Instruments, when duly executed
and delivered by the Company and the other parties thereto, will constitute
valid and legally binding obligations of Company, enforceable against the
Company in accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to the rights of
creditors generally.
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(c) The authorized capital stock of Company consists entirely of 3,000
shares of common stock, $0.01 par value, of which 700 shares are issued and
outstanding. Three hundred (300) shares of capital stock of the Company are
held in the Company's treasury and no shares of capital stock are reserved
for issuance. All outstanding shares of capital stock of the Company have
been duly authorized and are validly issued and are fully paid and
non-assessable with no personal liability attaching to the ownership thereof.
To the Minority Shareholders' knowledge, the Company is not a party to or
bound by any options, warrants, rights, calls or other preemptive rights 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.
(d) The designations, powers, preferences, rights, qualifications,
limitations and restrictions in respect of each class and series of
authorized capital stock of the Company are as set forth in the
Organizational Documents of the Company, copies of which have been furnished
to GTSD.
(e) To the Minority Shareholders' knowledge, there are not any
outstanding registration rights with respect to any shares of capital stock
of the Company.
(f) To the Minority Shareholders' knowledge, the Company does not have
any obligation (contingent or other) to purchase, redeem or otherwise acquire
any of its capital stock or any interest therein or to pay any dividend or
make any other distribution in respect thereof.
(g) The Minority Shareholders have no knowledge of any voting
agreements, voting trusts, stockholders' agreements, proxies or other
agreements or understandings that are currently in effect, other than the
Bird Instruments, or that are currently contemplated with respect to the
voting of any capital stock of the Company, other than as contemplated hereby.
(h) To the Minority Shareholders' knowledge, all of the outstanding
securities of the Company were issued in compliance with all applicable
federal and state securities laws.
(i) To the Minority Shareholders' knowledge, there are not any
outstanding contractual obligations (contingent or otherwise) of the Company
that would prohibit or restrict the Company's ability to declare or pay
dividends or to repurchase or redeem the Company's capital stock.
(j) To the Minority Shareholders' knowledge, there have been no changes
to the capitalization of the Company, or any recapitalizations of the
Company, since December 31, 1994 other than advances provided to the Company
by Bird or its Affiliates.
SECTION 2.3 NO CONFLICTS.
Neither the execution and delivery of this Agreement nor the carrying
out of the transactions contemplated hereby (except for capital expenditures
or other actions to be taken as contemplated by Section 4.7) or under any of
the Company Instruments, will: (a) with or
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without notice or the passage of time or both, result in any violation,
termination or modification of, or be in conflict with, (i) the
Organizational Documents of the Company, (ii) any License and Approval, Lease
or Company Contract (other than the Bird Instruments), or any other
instrument or agreement to which the Company is a party or by which the
Company is bound, or (iii) any law, rule, regulation, ordinance, writ,
injunction, judgment, decree or order applicable to the Company, (b) result
in the creation of any Lien upon the Property or any of the other Company
Assets or in the acceleration of any indebtedness or other obligation of the
Company; or (c) require the filing, declaration or registration with, or
permit, consent or approval of, or the giving of any notice to, any
Applicable Authority or any other third party, excluding, those that have
already been obtained prior to the execution and delivery of this Agreement.
SECTION 2.4 NO OTHER PENDING TRANSACTIONS.
Except for the transactions contemplated by this Agreement: (i) neither
the Minority Shareholders nor, to the Minority Shareholders' knowledge, the
Company is a party to or bound by or the subject of any agreement, commitment
or undertaking with respect to the sale of all or any part of the Stock of
the Company, except as may arise under the Bird Instruments; and (ii) the
Company is not a party to or bound by or the subject of any agreement,
undertaking or commitment to merge or consolidate with, or acquire all or
substantially all of the property and assets of, any other person,
corporation, or entity, or to sell, lease or exchange all or substantially
all of the Company Assets to any other person, corporation, or entity.
SECTION 2.5 COMPANY'S NAMES, BUSINESS, AND LOCATION OF COMPANY ASSETS.
The Company has conducted business under the name "Bird Environmental
Gulf Coast, Inc." and no other names. The Company is in the business of
developing and implementing waste treatment technologies. The Company has
not engaged in, does not currently engage in, or currently have any intention
of engaging in, any other business other than as described in the preceding
sentence. The Company's chief executive office and principal place of
business is located at ▇▇▇▇ ▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. All of the
Company Assets are located at same address as its chief executive office and
the Company does not currently have any places of business other than at such
address. Set forth on SCHEDULE 2.5 attached hereto is a complete and
accurate listing of all locations at which the Company has conducted
operations or owned or leased property since its formation.
SECTION 2.6 SUBSIDIARIES.
The Company does not own, or have any contract or other right to
acquire, directly or indirectly, any capital stock or other equity securities
of any Person, nor does the Company have any direct or indirect equity or
ownership interest in any business other than the Company's Business.
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SECTION 2.7 FINANCIAL STATEMENTS.
(a) As used herein, the term "Financial Statements" shall mean and
include the following: (i) the audited balance sheet of the Company on a
consolidated basis as of December 31, 1994 and the unaudited balance sheet of
the Company on a consolidated basis as of August 31, 1995, and (ii) the
related consolidated statements of income, changes in stockholders' equity
and cash flow for the related annual and eight month periods ended December
31, 1994 and August 31, 1995, respectively.
(b) To the Minority Shareholders' actual or constructive knowledge, the
Financial Statements: (i) were prepared in accordance with GAAP consistently
applied throughout the periods covered thereby, subject, in the case of
interim financial statements to normal recurring year-end adjustments and
accruals and the omission of certain footnote disclosures; (ii) present
fairly the financial condition and the results of operations, changes in
stockholders' equity, and cash flow of the Company as at the respective dates
of and for the periods referred to in such financial statements; and (iii)
are true, complete and correct in all material respects. Copies of the
Financial Statements have been delivered by the Minority Shareholders to GTSD.
SECTION 2.8 NO UNDISCLOSED LIABILITIES.
Except as set forth on SCHEDULE 2.8 attached hereto, the Company does
not have any liabilities or obligations of any nature (whether known or
unknown, matured or unmatured, disputed or undisputed, liquidated or
unliquidated, fixed or contingent, secured or unsecured) except for (i)
liabilities or obligations reflected or reserved against in the Financial
Statements, (ii) current liabilities incurred in the ordinary course of
business (which shall include the current liabilities listed on SCHEDULE 2.8A
attached hereto which were incurred during the shutdown of the Company's
operations) since the respective dates thereof and (iii) liabilities required
to be paid or funded by Bird as contemplated by the Bird Letter of Intent.
SECTION 2.9 ABSENCE OF CERTAIN CHANGES, EVENTS OR CONDITIONS.
To the Minority Shareholders' knowledge, except as set forth in SCHEDULE
2.9 attached hereto, since August 31, 1995:
(a) the Company has not incurred any debt, obligation or liability
except for normal debts, obligations and liabilities incurred in the ordinary
course of business (which shall include the current liabilities listed on
SCHEDULE 2.8A attached hereto which were incurred during the shutdown of the
Company's operations) and except for advances from Bird to cover shortages of
working capital and the Company Assets have not been subjected to any Liens
other than Permitted Liens and those liens described on SCHEDULE 2.9(a)
attached hereto;
(b) no material Company Assets have been sold or transferred;
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(c) there has not been any change in the Company's authorized or issued
capital stock; grant of any stock option or right to purchase shares of
capital stock of the Company; issuance of any security convertible into such
capital stock; grant of any registration rights; purchase, redemption,
retirement or other acquisition by the Company of any shares of any such
capital stock; or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock;
(d) there has not been any payment by the Company of any bonuses or
other compensation (other than salaries)and there has not been any increase
of any salaries by the Company, to any stockholder, director, officer, or
employee (except in the ordinary course of business) or entry into any
employment, severance, or similar contract or agreement with any director,
officer or employee;
(e) there has not been any damage to or destruction or loss of any
asset or property of the Company, whether or not covered by insurance,
materially and adversely affecting the properties, assets, business,
financial condition or prospects of the Company taken as a whole; and
(f) no agreements have been entered into, whether in writing or
otherwise, to take any of the actions set forth in this Section 2.9.
SECTION 2.10 LITIGATION AND OTHER PROCEEDINGS.
(a) Except as set forth on SCHEDULE 2.10 attached hereto, there is no
litigation, arbitration, mediation, or other investigation or proceeding
pending nor, to the Minority Shareholders' knowledge, threatened, against or
relating to the Company, the Company Assets, the Company's Business, or the
transactions contemplated by this Agreement. Except as disclosed on SCHEDULE
2.10 attached hereto, the Company is not subject to, or bound by, any order
of any court or Applicable Authority entered in any judicial, administrative
or other proceeding to which it is or was a party. Except as set forth on
SCHEDULE 2.10 attached hereto, no matter set forth on SCHEDULE 2.10 attached
hereto would, if adversely decided, have a Material Adverse Effect on the
business, operations, condition (financial or otherwise), liabilities,
assets, earnings, working capital or prospects of the Company.
(b) There is no litigation, arbitration, mediation, or other
investigation or proceeding pending nor, to the Minority Shareholders'
knowledge, threatened, against or relating to any of the Minority
Shareholders which seeks to prohibit, restrict or delay performance of this
Agreement and there is no judgment, decree, injunction, ruling or order of
any Court, Applicable Authority or arbitrator outstanding against any of the
Minority Shareholders having any such effect.
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SECTION 2.11 LICENSES AND APPROVALS.
Attached hereto as SCHEDULE 2.11 is a complete and accurate list of all
of the Licenses and Approvals held by the Company. The Company has provided
GTSD with true, correct and complete copies of all of the Licenses and
Approvals or given GTSD access thereto. To the Minority Shareholders' actual
or constructive knowledge, the Company owns or possesses and holds free from
restrictions or conflicts with the rights of others all franchises, licenses,
permits, consents, approvals and other authority (governmental or otherwise),
and all rights and privileges with respect to the foregoing, as are necessary
for the conduct of its business as now being conducted, and as proposed to be
conducted, except where the failure to own or possess and hold such
franchises, licenses, permits, consents, approvals and other authority
(governmental or otherwise) would not have a Material Adverse Effect. All of
the Licenses and Approvals are in full force and effect and the Company is
not in violation with respect to any of them. To the Minority Shareholders
actual or constructive knowledge, no proceedings are pending or, to the
Minority Shareholders' knowledge, threatened by any Applicable Authority to
revoke or limit the scope of any of the Licenses and Approvals. Except as
noted on SCHEDULE 2.11 attached hereto, none of the Licenses and Approvals
would be rendered ineffective or be required to be reissued as a result of
the consummation of the transactions contemplated hereby or by the
transactions contemplated by the Stock Purchase Agreement, except if such
Licenses and Approvals would be rendered ineffective or be required to be
reissued as a result of actions within the exclusive control of GTSD or its
Affiliates.
SECTION 2.12 LEGAL COMPLIANCE.
Except as set forth on SCHEDULE 2.12 attached hereto and except for
matters covered by Sections 2.15, 2.16 and 2.20 hereto (which matters are
addressed exclusively in such respective sections), to the Minority
Shareholders' knowledge, the Company's Business is being conducted in
compliance with all Applicable Laws and neither the Company nor any of the
Minority Shareholders has received notice from any Applicable Authority that
the Company, the Company's Business or the Company Assets is not in
compliance with any Applicable Laws.
SECTION 2.13 MATERIAL CONTRACTS AND AGREEMENTS.
Listed on SCHEDULE 2.13 is a listing of all material, executory
contracts, agreements, leases, indentures or instruments of the Company. With
respect to such material contracts, agreements, leases, indentures or
instruments of the Company, the Company and, to the Minority Shareholders'
knowledge, each other party thereto have in all material respects performed
all the obligations required to be performed by them to date, have received
no notice of default and are not in default, in any material respect, (with
due notice or lapse of time or both) under any material contract, agreement,
indenture or other instrument now in effect to which the Company is a party
or by which it or its property may be bound. The Minority Shareholders have
no knowledge of any breach and have received no written notice of any
anticipated breach by the other party to any material contract or commitment
to which the Company is a party. To the
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Minority Shareholders' actual or constructive knowledge, except as noted on
SCHEDULE 2.13 attached hereto, none of the Company's material contracts or
agreements constitute a Restricted Agreement or would require the consent or
approval of any party thereto, other than Company, or the consent or approval
of any third party in connection with the consummation of the transactions
contemplated hereby and by the Stock Purchase Agreement.
SECTION 2.14 TITLE MATTERS.
The Company has good and marketable title to the Company Assets owned by
it, free and clear of all Liens except Permitted Liens and certain subsurface
rights (the "Subsurface Rights") to the Company's real property. The
Subsurface Rights will not in any material way adversely affect the Company's
use or enjoyment of its real property and will not in any material way
adversely affect the Company's operations. The Company does not lease any
real property. None of the Properties owned by the Company is subject to any
Liens (excluding Permitted Liens) which could reasonably be expected to
materially and adversely affect the assets, Properties, business, affairs,
results of operations, condition (financial or otherwise) or prospects of the
Company.
SECTION 2.15 LABOR MATTERS.
To the Minority Shareholders' knowledge, the Company has complied in all
material respects with all applicable federal and state laws relating to the
employment of labor including the provisions thereof relating to wages,
hours, collective bargaining and the payment of social security and taxes and
is not liable for any arrears of wages or any tax or any penalty for failure
to comply with any of the foregoing. No labor dispute, strike, work
stoppage, employee action or labor relations problem of any kind which has
affected or may affect the Company has occurred since the inception of the
Company or, to the Minority Shareholders' knowledge, is currently pending or
threatened. Each Minority Shareholder represents severally (and not jointly
and severally) that he has no knowledge of any managerial or supervisory
employees of Company who are planning or intend to terminate their
relationship with the Company or do not intend to continue in the employ of
the Company (other than as a result of normal retirement) from and after the
date hereof.
SECTION 2.16 EMPLOYEE BENEFIT PLANS AND WORKERS' COMPENSATION MATTERS.
(a) The Minority Shareholders have provided to GTSD copies of all of the
Company's employee benefit plans currently in effect and, to the Minority
Shareholders' knowledge, such employee benefit plans comply in all material
respects with all applicable laws relating thereto.
(b) SCHEDULE 2.16 attached hereto contains the most recent quarterly
listing of workers' compensation claims and a schedule of workers'
compensation claims of the Company for the last three fiscal years.
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SECTION 2.17 INSURANCE.
To the Minority Shareholders' knowledge, the Company maintains and has
maintained all such general liability, pollution liability, product
liability, fire, casualty and motor vehicle insurance as is necessary to
adequately insure and protect the property and assets of the Company. To the
Minority Shareholders' knowledge, all such insurance policies continue to be
in full force and effect, and the Company is in compliance with all
requirements and provisions thereof. True and correct copies of all insurance
policies relating to such coverage have been provided by the Company or the
Minority Shareholders to GTSD. To the Minority Shareholders' knowledge, no
notice of cancellation has been given to or received by the Company with
respect to any of its insurance policies, and no such policies are subject to
any retroactive rate or audit adjustments or coinsurance arrangements. The
Company has posted all completion performance and other bonds and
indemnities, if any, required for all current projects and for the conduct of
its business in the ordinary course. The Minority Shareholders have provided
GTSD with a list of all property damage and personal injury claims asserted
against the Company with respect to the Company's Business during the past
five (5) years involving any claim in excess of $10,000. To the Minority
Shareholders' knowledge, the Company has not received any notice from any
insurance company or insurance board of underwriters of the existence of any
default or unsafe condition with respect to the Property that remains
unsatisfied or uncured as of the date hereof.
SECTION 2.18 CONDITION OF COMPANY ASSETS.
(a) The Company Assets include all assets, properties, licenses and
other agreements necessary for the continued conduct of Company's Business
after the execution of this Agreement and the closing of the transactions
contemplated by the Stock Purchase Agreement in substantially the same manner
as conducted prior thereto.
(b) The Company or the Minority Shareholders have delivered to GTSD a
complete and accurate list of all of the Tangible Operating Assets of the
Company. All of the Tangible Operating Assets were in good operating
condition, normal wear and tear excepted at the time of the shutdown of the
Company's operations, except for repairs and capital expenditures
contemplated by SCHEDULE 4.7 hereto, and were in a condition which was
adequate for the conduct of the Company's Business. EXCEPT AS EXPRESSLY SET
FORTH IN THIS ARTICLE II, NEITHER THE COMPANY NOR ANY MINORITY SHAREHOLDER
MAKE ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE COMPANY'S TANGIBLE
OPERATING ASSETS, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, ALL SUCH
EXPRESS OR IMPLIED WARRANTIES (OTHER THAN THOSE SET FORTH IN THIS ARTICLE II)
BEING HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED.
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SECTION 2.19 INTELLECTUAL PROPERTY.
(a) SCHEDULE 2.19 hereto contains a complete and accurate list of all
patents, trademarks, servicemarks and copyrights (registered or
unregistered), trade names, assumed names, brand names, licenses and all
applications therefor, owned, used or filed by the Company. The Company has
sufficient trademarks, trade names, service marks, patent rights, copyrights,
manufacturing processes, formulae, applications, trade secrets, know how,
licenses, approvals and governmental authorizations (or rights
thereto)(collectively, the "Intellectual Property") to conduct its business
as conducted prior to the shutdown of the Company's operations. Except as
set forth in SCHEDULE 2.19 attached hereto, the patents, trademarks and the
copyrights that constitute Intellectual Property are valid, subsisting and
enforceable, and the patents, registered trademarks and registered copyrights
are duly recorded in the name of Company.
(b) The Company has the sole and exclusive ownership and right, free
from any Liens, to use the Intellectual Property and the consummation of the
transactions contemplated hereby will not alter or impair any such rights.
Except as set forth in SCHEDULE 2.19 attached hereto, within the last five
years, no claims have been asserted by any entity or person with respect to,
or challenging or questioning, the ownership, validity, enforceability or use
of the Intellectual Property. The use or other exploitation of such
Intellectual Property by the Company does not infringe the rights of any
other entity or person. To the Minority Shareholders' knowledge, no entity
or person is infringing the rights of the Company with respect to such
Intellectual Property. SCHEDULE 2.19 attached hereto sets forth a complete
and accurate list of all license agreements between Company and third-parties
with respect to the use of the Intellectual Property.
SECTION 2.20 ENVIRONMENTAL MATTERS.
(a) As used in this Environmental Matters Section, the following terms
shall have the definitions indicated:
(i) "Company's Properties" means any real property or facility
currently owned, leased or operated by the Company or previously owned,
leased or operated by the Company or any predecessor thereto.
(ii) "Environmental Law" means any statute, regulation, rule, code,
common law, order or judgment of any applicable federal, state, local or
foreign jurisdiction relating to pollution, hazardous substances, hazardous
wastes, petroleum or otherwise relating to protection of the environment,
natural resources or human health, including, by way of example and not by
way of limitation, the Clean Air Act ("CAA"); Clean Water Act ("CWA");
Resource Conservation and Recovery Act ("RCRA"); Comprehensive Environmental
Response Compensation, and Liability Act ("CERCLA"); Emergency Planning and
Community Right-to-Know Act ("EPCRA"); Federal Insecticide, Fungicide and
Rodenticide Act; Safe Drinking Water Act ("SDWA"); Toxic Substances Control
Act ("TSCA"); Hazardous Materials Transportation
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Act ("HMTA"); Occupational Safety and Health Act ("OSHA"); and Endangered
Species Act of 1973, each as currently amended;
(iii) "Regulated Substances" means any substance regulated under
Environmental Laws, including but not limited to: asbestos and
asbestos-containing materials ("ACMs"), polychlorinated biphenyls ("PCBs");
urea-formaldehyde in any of its forms; petroleum and its fractions;
radioactive materials; and any substances defined as "hazardous waste,"
"hazardous substances," "pollutants or contaminants," "toxic substances,"
"hazardous chemicals," "hazardous air pollutants," "toxic chemicals" or
"hazardous materials" under the CAA, CWA, RCRA, CERCLA, EPCRA, SDWA, TSCA,
HMTA or OSHA.
(iii) "Environmental Condition" means
(a) the Release of any Regulated Substances into the
environment in an amount and under circumstances that would require notice,
removal or remediation, or constitute a basis for a claim or cause of action;
(b) the environmental, health or safety aspects of the
transportation, storage, treatment, handling, use or disposal of materials in
connection with the operations or past operations of the Company's business;
or
(c) the violation, or alleged violation, of any Environmental
Law, order, permit or license of or from any governmental authority, agency
or court relating to environmental, health or safety matters; and
(iv) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment of any Regulated Substance, other than
pursuant to a permit therefor or in an amount or under circumstances which
would not have required notice, removal or remediation.
(b) To the actual or constructive knowledge of the Minority
Shareholders, except as set forth in SCHEDULE 2.20, there has been no Release
at, on, under or from any of the Company's Properties that would have a
Material Adverse Effect.
(c) To the actual or constructive knowledge of the Minority
Shareholders, except as set forth on SCHEDULE 2.20, there has been no Release
at, on, under or from any of the Company's Properties that has migrated or
threatens to migrate onto or under any properties of a third party and that
would have a Material Adverse Effect, and, to the Minority Shareholders'
knowledge, except as set forth on SCHEDULE 2.20 there has been no Release at,
on, under or from any nearby properties that has migrated or threatens to
migrate onto or under the Company's Properties and that would have a Material
Adverse Effect.
-15-
(d) To the actual or constructive knowledge of the Minority
Shareholders, no PCBs, asbestos or ACMs, urea-formaldehyde or unpermitted
radioactive materials are located on the Company's Properties the presence or
removal of which would have a Material Adverse Effect.
(e) To the actual or constructive knowledge of the Minority
Shareholders and except as set forth in SCHEDULE 2.20, no storage tanks,
underground or otherwise, are or have been located on any of the Company's
Properties. To the knowledge of the Minority Shareholders, none of the
storage tanks set forth in SCHEDULE 2.20 is leaking or has ever leaked
regulated substances, or quantities thereof, that would have a Material
Adverse Effect.
(f) To the actual or constructive knowledge of the Minority
Shareholders, and except as set forth in SCHEDULE 2.20, the Company has
complied with all Environmental Laws with respect to any operations now or
previously conducted by the Company, except for matters of non-compliance
that would not have a Material Adverse Effect. To the actual or constructive
knowledge of the Minority Shareholders, and except as set forth in SCHEDULE
2.20, the Company has no existing or potential liability under any
Environmental Laws that would have a Material Adverse Effect.
(g) To the actual or constructive knowledge of the Minority
Shareholders, and except as set forth in SCHEDULE 2.20, the Company has not
received any notice, letter, citation, order, warning, complaint, inquiry,
information request or demand that remains unresolved alleging that: (i) it
has violated or is in violation of any Environmental Law; (ii) there has been
a Release at or from the Company's Properties, or any property where the
company's wastes or products have been sent; or (iii) it may be or is liable,
in whole or in part, for the costs of cleaning up, remediating, removing or
responding to a Release, except with respect to each of the foregoing clauses
(i) through and including (iii), matters that would not have a Material
Adverse Effect.
(h) To the knowledge of the Minority Shareholders, no other party has
received any notice, demand, suit, inquiry or information request pursuant to
CERCLA or any comparable state law relating to the Company, the Company's
Properties or any property where the Company's wastes or products have been
sent.
(i) None of the Company's Properties is listed on any regulatory list
of contaminated properties, including but not limited to the National
Priorities List promulgated pursuant to CERCLA, the CERCLIS or any federal,
state or local counterpart.
(j) To the actual or constructive knowledge of the Minority
Shareholders, the Company has secured and maintains all permits, licenses,
approvals and registrations required by any Environmental Law as a result of
the ownership or use of the Company's Properties or as a result of the
operations on the Company's Properties, except for those which if not held by
the Company would not have a Material Adverse Effect and except for permits
for work to be commenced as contemplated by SCHEDULE 4.7 hereto.
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(k) The Company has disclosed, prior to the date of this Agreement, its
waste practices, its use of Regulated Substances and has disclosed all
reports, audits assessments, studies, inspections, evaluations, surveys,
remedial action plans or other similar documents relating to any
Environmental Condition material to the Company's Properties or operations.
(l) To the actual or constructive knowledge of the Minority
Shareholders, and except as set forth in SCHEDULE 2.20, no location to which
the Company transported or caused to be transported any Regulated Substances
for storage, recycling, treatment or disposal is or has been the subject of
any cleanup or remediation of such location pursuant to any Environmental Law
that would have a Material Adverse Effect.
(m) To the actual or constructive knowledge of the Minority
Shareholders, the Company's Properties are not subject to any Lien in favor
of any governmental entity or other party for any liability, costs, or
damages incurred by such governmental entity or other party in response to a
Release, except for Permitted Liens and Liens that would not have a Material
Adverse Effect.
SECTION 2.21 CUSTOMERS AND SUPPLIERS.
The Company or the Minority Shareholders have delivered to GTSD a
complete and accurate list of the Company's ten largest customers and
suppliers (measured by dollar volume of purchases and sales, as applicable)
and the dollar amount of the Company's Business which each customer and
supplier represented during the fiscal year ended 1994 and the eight months
ended August 31, 1995. Neither the Company nor any of the Minority
Shareholders has received any oral or written notice that any such supplier
or any customer of Company does not plan to continue to do business with
Company, or plans to reduce its supplies to or volume of orders from the
Company or will not do business on substantially the same terms and
conditions with the Company subsequent to the date hereof and following the
closing of the transactions contemplated by the Stock Purchase Agreement as
such supplier or customer did with the Company before such date.
SECTION 2.22 ACCOUNTS RECEIVABLE.
All accounts receivable of the Company that are reflected in the
Financial Statements (the "Accounts Receivable") represent valid obligations
arising from sales actually made or services actually performed in the
ordinary course of business. Unless paid prior to the date hereof, the
Accounts Receivable are or will be as of the date hereof current and
collectible net of the respective reserves shown in the Financial Statements
(which reserves are adequate and calculated consistent with past practice).
Subject to such reserves, each of the Accounts Receivable either has been or
will be collected in full, without any set-off, within ninety days after the
day on which it becomes due and payable.
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SECTION 2.23 NO MATERIAL ADVERSE CHANGE.
Since August 31, 1995, there has not been any material adverse change in
the Company Assets or the Company's financial condition, customer or business
prospects other than changes resulting from the shutdown or suspension of
operations of the Company as described in the Minority Shareholders Letter of
Intent.
SECTION 2.24 BOOKS AND RECORDS.
To the knowledge of the Minority Shareholders, the books of account,
minute books, stock record books, and other records of the Company, all of
which have been made available to GTSD, are complete and correct in all
material respects and have been maintained in accordance with sound business
practices. The minute books of the Company contain accurate and complete
records of substantially all meetings held of, and corporate action taken by,
the stockholders, the Boards of Directors, and committees of the Boards of
Directors of the Company. All of such books and records are in the
possession of the Company or Bird.
SECTION 2.25 DISASTER.
Neither the Company's Business nor the Property is currently affected
(or has been affected at any time since August 31, 1995) by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), of a kind which (individually
or in the aggregate) has, or could have, a Material Adverse Effect.
SECTION 2.26 NO BURDENSOME AGREEMENTS; TRANSACTIONS WITH AFFILIATES.
To the Minority Shareholders' knowledge, except as disclosed on SCHEDULE
2.26, the Company is not a party to, or bound by (nor is any of its
properties affected by), any commitment, contract or agreement, any term of
which materially adversely affects, or which the Company expects in the
future to materially adversely affect, the assets, properties, business,
affairs, results of operations, condition (financial or otherwise) or
prospects of the Company. Except as disclosed on SCHEDULE 2.26, the Company
is not a party to any contract or agreement with any Affiliate of the Company
or with any of the Minority Shareholders. The terms of any contracts or
agreements between the Company and any of its Affiliates or any of the
Minority Shareholders are no less favorable to the Company than those which
might have been obtained, at the time such contract or agreement was entered
into, from a person who was not such an Affiliate or Minority Shareholder.
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SECTION 2.27 DUE DILIGENCE REVIEW.
The Company and the Minority Shareholders have made available for GTSD's
review all information reasonably requested by GTSD in connection with GTSD's
due diligence examination.
SECTION 2.28 DISCLOSURE.
All agreements, schedules, exhibits, documents, certificates, reports or
written statements furnished to GTSD by or on behalf of the Company or the
Minority Shareholders in connection with this Agreement or the transactions
contemplated hereby, taken as a whole, are true, complete and accurate in all
respects, and no representation or warranty made in this Agreement or
information furnished pursuant hereto to GTSD (including information
contained in the schedules or documents referred to herein), when taken as a
whole, contains any untrue statement of a material fact or fails to include a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they are made, not
misleading. Neither the Company nor any Minority Shareholder has failed to
disclose to GTSD any facts material to the business, operations, condition
(financial or otherwise), liabilities, assets, earnings, working capital or
prospects of the Company, the Company's Business or the Company Assets.
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF GTSD AND GTSD SUB
GTSD and GTSD Sub hereby jointly and severally represents and warrants
to each of the Minority Shareholders as of the date hereof as follows:
SECTION 3.1 ORGANIZATIONAL MATTERS; AUTHORITY.
(a) GTSD is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. GTSD Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland.
(b) GTSD and GTSD Sub have all requisite corporate power and authority
to execute, deliver and perform this Agreement and each of the instruments,
documents, and agreements contemplated herein to be executed and delivered by
GTSD and GTSD Sub pursuant to this Agreement to which each is a party to
(collectively, the "GTSD Instruments"). The execution, delivery and
performance of this Agreement and of the GTSD Instruments by GTSD and GTSD
Sub have been duly authorized and approved by all necessary corporate action
and this Agreement and the GTSD Instruments, when duly executed and delivered
by GTSD and GTSD Sub, as applicable, will constitute valid and legally
binding obligations of GTSD and GTSD Sub, as applicable, enforceable against
each that is a party thereto in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to the rights of creditors generally.
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SECTION 3.2 NO CONFLICTS.
Neither the execution and delivery of this Agreement nor the carrying
out of the transactions contemplated hereby or under any of the GTSD
Instruments will: (a) with or without notice or the passage of time or both,
result in any violation, termination or modification of, or be in conflict
with, (i) the Organizational Documents of GTSD or GTSD Sub, (ii) any law,
rule, regulation, ordinance, writ, injunction, judgment, decree or order
applicable to GTSD or GTSD Sub, or (iii) any material loan agreement,
indenture, license, lease or other contract or instrument, (b) result in the
creation of any Lien upon the property or assets of GTSD or GTSD Sub or in
the acceleration of any indebtedness or other obligation of GTSD or GTSD Sub;
or (c) require the filing, declaration or registration with, or permit,
consent or approval of, or the giving of any notice to, any Applicable
Authority, excluding, those that have already been obtained prior to the date
hereof.
SECTION 3.3 LITIGATION.
There is no litigation, arbitration, mediation, or other investigation
or proceeding pending or, to GTSD's and GTSD Sub's knowledge, threatened or
in prospect, against GTSD or GTSD Sub with respect to the transactions
contemplated by this Agreement.
SECTION 3.4 ACCESS TO INFORMATION.
GTSD and GTSD Sub hereby acknowledge and represent that they have been
afforded the opportunity to ask questions of, and receive information from,
the Minority Shareholders and the Company, and have availed themselves of the
opportunity to do so to the extent they so desired. As contemplated by the
Minority Shareholders Letter of Intent, GTSD and GTSD Sub acknowledge and
agree that they have been given the opportunity to conduct a comprehensive
due diligence review of the business and operations of the Company, including
aspects of environmental compliance by the Company and such other due
diligence inquiries with respect to the Company, the Company's Business, the
Company Assets and the Minority Shareholders as they have deemed necessary in
connection with the transactions contemplated by this Agreement. This
Section 3.4 shall in no way act as a waiver to, or diminish or adversely
effect, the rights of GTSD or GTSD Sub to indemnification for a breach of the
representations and warranties contained in Article II by the Minority
Shareholders.
SECTION 3.5 DISCLOSURE OF CURRENT MATERIAL PLANS.
Neither GTSD nor GTSD Sub have any plans to terminate, for any reason
whatsoever, any Minority Shareholder from any position as an officer,
director, or employee of the Company held by him pursuant to his Employment
Agreement with the Company executed contemporaneously herewith. GTSD has
disclosed to, or discussed with, the Minority Shareholders all present plans
and proposals for material changes in the business, operations and personnel
of the Company following the execution and delivery of this Agreement.
Neither
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GTSD nor GTSD Sub have, or are considering, any plans or proposals for the
Company to enter into any contract or arrangement (other than this Agreement)
with GTSD, GTSD Sub or any of their respective Affiliates other than
contracts or arrangements with terms no less favorable to the Company than
could be obtained at the time from an unaffiliated third party.
SECTION 3.6 DISCLOSURE OF CERTAIN FINANCIAL INFORMATION.
The balance sheet of GTSD on a consolidated basis as of September 30,
1995 and the related consolidated statements of income, changes in
stockholders equity and cash flow for the nine and three month periods ended
September 30, 1995 contained in GTSD's Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission (i) were prepared in accordance
with GAAP consistently applied throughout the periods covered thereby,
subject to normal recurring year-end adjustments and accruals and the
omission of certain footnote disclosure, (ii) present fairly the financial
condition and the results of operations, changes in stockholders' equity and
cash flow of the Company as at the respective dates of and for the periods
referred to in such financial statements and (iii) are true, complete and
correct in all material respects.
ARTICLE IV: COVENANTS AND OTHER AGREEMENTS
SECTION 4.1 CONSENTS; CAUSE CONDITIONS TO BE SATISFIED.
The Company and the Minority Shareholders agree to take all necessary
corporate or other action, and will use their reasonable best efforts to
complete all filings and obtain, or assist GTSD and GTSD Sub in obtaining,
such licenses, permits, consents, waivers, approvals, and authorizations of
third parties and Applicable Authorities as may be necessary or appropriate
in connection with the transactions contemplated by the Stock Purchase
Agreement and the ownership or use of the Company Assets or the operation of
the Company's Business.
SECTION 4.2 NON-INTERFERENCE AGREEMENT.
GTSD, GTSD Sub and the Minority Shareholders mutually covenant and agree
that neither they nor any Affiliate of any of them will, at any time after
the date hereof, directly or indirectly, for whatever reason, whether for
their own account or for the account of any other person, firm, corporation
or other organization: (i) solicit, deal with or otherwise interfere with
any of the Company's Business or Company's existing or potential contracts or
relationships with any affiliate, employee, officer, director or any
independent contractor whether or not the person is employed by or associated
with the Company on the date hereof or at any time thereafter; (ii) solicit,
accept, deal with or otherwise interfere with the continuance of supplies to
the Company (or the terms relating to such supplies), from any suppliers who
have been supplying goods, materials or services to the Company at any time
during the last five years prior to the date of this Agreement; (iii)
solicit, accept, deal with or otherwise interfere with the Company's Business
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or Company's existing or potential contracts or relationships with any
independent contractor, customer, client or consultant of the Company, or any
person who is a bona fide or prospective independent contractor, customer,
client or consultant thereof; or (iv) solicit or otherwise interfere with any
existing or proposed contract between the Company and any other party
whatsoever. Notwithstanding anything herein to the contrary, GTSD or its
officers, directors, employees, agents or Affiliates may call on, deal with
and conduct business with the Company's customers, clients, suppliers,
vendors, consultants or independent contractors in connection with GTSD's or
its Affiliates' business without violating the terms of this Section 4.2,
provided that such dealings do not have a Material Adverse Effect on the
Company.
SECTION 4.3 CONFIDENTIALITY.
(a) The Minority Shareholders agree that, as the direct and indirect
owners of Stock of the Company and as a result of their involvement with the
Company, they possess certain data and knowledge of the operations of the
Company which are proprietary in nature and confidential. Each Minority
Shareholder covenants and agrees that he will not, at any time that he owns
Stock of the Company and for a period of three (3) years thereafter, reveal,
divulge or make known to any person (other than GTSD) or use for his own
account or for the account of any person, firm, corporation or other
organization, any confidential or proprietary information, method, record,
data, trade secret, pricing policy, bid amount, bid strategy, rate structure,
personnel policy, method or practice of soliciting or obtaining or doing
business by the Company, or any other confidential or proprietary information
whatsoever relating to the Company or its Affiliates, whether or not obtained
with the knowledge and permission of GTSD or its Affiliates.
(b) GTSD and GTSD Sub agree that, as the indirect and direct owners of
Stock of the Company and as a result of their involvement with the Company,
they possess certain data and knowledge of the operations of the Company
which are proprietary in nature and confidential. GTSD and GTSD Sub covenant
and agree that they will not, until the earlier of (i) the termination of
this Agreement and (ii) GTSD or any Affiliate no longer owns Stock of the
Company and any non-compete period applicable to GTSD or any Affiliate
resulting from the sale of the Stock to a third party has expired, reveal,
divulge or make known to any person (other than the Minority Shareholders) or
use for its own account or for the account of any person, firm, corporation
or other organization, any confidential or proprietary information, method,
record, data, trade secret, pricing policy, bid amount, bid strategy, rate
structure, personnel policy, method or practice of soliciting or obtaining or
doing business by the Company or its Affiliates, whether or not obtained with
the knowledge of the Minority Shareholders. Notwithstanding anything herein
to the contrary, GTSD or its Affiliates may use such confidential or
proprietary data provided such use does not have a Material Adverse Effect on
the Company.
(c) The foregoing provisions shall not be applicable to any disclosure
or use of confidential information or knowledge that can be demonstrated to
have (i) been publicly known prior to the date of this Agreement, (ii) become
well known by publication or otherwise not due
-22-
to the unauthorized act or omission on the part of GTSD, GTSD Sub or the
Minority Shareholders or their Affiliates, or (iii) been supplied to either
the Minority Shareholders, GTSD or GTSD Sub by a third party without
violation of the rights of the Company, GTSD, GTSD Sub, the Minority
Shareholders or any other party, as applicable.
SECTION 4.4 RELEASE FROM LIABILITY.
The Minority Shareholders hereby covenant and agree to release (i) the
Company, GTSD and GTSD's Affiliates from any and all obligations and
liabilities in connection with the Bird Instruments, the License Agreement
between ▇. ▇▇▇▇▇ and the Company dated April 1, 1993, the Employment Letter
between the Company and ▇. ▇▇▇▇▇ dated August 9, 1991, and the Employment
Letter between the Company and ▇. ▇▇▇▇▇ dated July 1, 1994, payment of
severance benefits to any of the Minority Shareholders, whether arising under
such individual's current employment agreements and arrangements with the
Company, Bird, BETI, or any other subsidiary of Bird, or otherwise, which
liabilities or obligation arise as a result of or in connection with the
transactions contemplated by the Stock Purchase Agreement and (ii) GTSD and
GTSD's Affiliates (other than the Company) from any and all other obligations
or liabilities except for obligations or liabilities arising from the terms
and conditions of this Agreement and the other Minority Shareholders
Agreements. The Minority Shareholders hereby acknowledge and agree that the
only of obligations or liabilities of GTSD and its Affiliates (other than the
Company) to the Minority Shareholders are those that arise from the terms and
conditions of this Agreement and the other Minority Shareholder Agreements.
SECTION 4.5 TERMINATION OF CERTAIN AGREEMENTS.
The Minority Shareholders covenant and agree that contemporaneous with
the execution and delivery of this Agreement, they will have terminated the
Bird Instruments, the License Agreement between ▇. ▇▇▇▇▇ and the Company
dated April 1, 1993, the Employment Letter between the Company and ▇. ▇▇▇▇▇
dated August 9, 1991 and the Employment Letter between the Company and ▇.
▇▇▇▇▇ dated July 1, 1994 and hereby covenant and agree to release the
Company, GTSD and its Affiliates from any and all obligations and liabilities
under such agreements.
SECTION 4.6 VOTE STOCK ON CERTAIN MATTERS.
(a) Contemporaneous with the execution and delivery of this Agreement,
GTSD Sub and the Minority Shareholders agree to vote the shares of Stock
owned by them, or to sign a consent of stockholders of the Company, to
convert the Company to a corporation incorporated under the laws of the State
Maryland, to merge the Company into a newly formed Maryland corporation to
accomplish the same result (provided that the stock ownership of the Minority
Shareholders shall be the same in such new corporation) or take any other
action to cause the Company to be incorporated in, and governed by the
corporate laws of, the State of Maryland
-23-
provided that the Company's Organizational Documents following such
reincorporation or merger are substantially in the form of those included in
APPENDIX II hereto.
(b) GTSD, GTSD Sub and the Minority Shareholders agree that following
the merger of the Company into the newly formed Maryland corporation as
contemplated by Section 4.6(a), this Agreement shall survive such merger,
shall be in full force and effect thereafter and the newly formed Maryland
corporation into which the Company is merged shall by virtue of such merger
become a party to this Agreement and assume all of the rights, liabilities
and obligations of the Company under this Agreement.
SECTION 4.7 INVESTMENT BY GTSD IN COMPANY.
GTSD Sub hereby covenants and agrees to invest funds in the Company for
capital improvements and start-up expenses, as required, in accordance with
SCHEDULE 4.7 attached hereto. GTSD Sub will also invest funds in the Company
for ongoing operations or working capital, as needed, to fund the growth of
the business in accordance with SCHEDULE 4.7, but GTSD Sub may, in its sole
discretion, decline to provide the specified funds for ongoing operations or
working capital per SCHEDULE 4.7 if the Company has incurred a net loss
during any twelve (12) month period following commencement of the Company's
operations. The investment by GTSD Sub in the Company will be in the form of
preferred stock of the Company having the relative rights, designations and
preferences as described in APPENDIX II hereto (the "Preferred Stock"). In
the event that GTSD Sub provides funds to the Company in excess of the
amounts specified in SCHEDULE 4.7 due to the fact that such amounts were
underestimated, such additional investment by GTSD Sub will take the form of
additional shares of Preferred Stock. All obligations to invest funds by
GTSD Sub in the Company pursuant to this Section 4.7 shall be guaranteed by
GTSD.
SECTION 4.8 WILLINGNESS AND ABILITY TO PERFORM COVENANTS.
None of the parties hereto are, or will become, parties to any
commitment, contract or agreement other arrangement any term of which
materially adversely affects or which could reasonably be expected to
materially adversely affect, the willingness or ability of such party to
perform its respective obligations under this Agreement or contemplated
hereby.
SECTION 4.9 GOOD FAITH PERFORMANCE IN THE FUTURE.
Each of the parties hereto hereby covenants and agrees to perform its
respective obligations under this Agreement, and to cause the business and
affairs of the Company to be conducted (insofar as it is within its control),
in good faith and without oppression so as not to deprive any of the other
parties hereto of the reasonable benefits of this Agreement or of their
reasonable expectations as stockholders of the Company. GTSD and GTSD Sub
further covenant and agree that all contracts and other arrangements between
the Company and
-24-
Affiliates of either of them will be disclosed to the Minority Shareholders
prior to implementation or modification and, in any case, will be on terms no
less favorable to the Company than would be available from unaffiliated third
parties.
SECTION 4.10 DUE DILIGENCE REPORT.
GTSD and GTSD Sub covenant and agree that they have delivered, or made
available, to the Minority Shareholders, a true and complete copy of the
environmental report on the Company's Properties prepared by the
environmental consultant retained by GTSD and the Minority Shareholders
acknowledge that they have received such report.
SECTION 4.11 GUARANTY AGREEMENT.
GTSD covenants and agrees that contemporaneously with the execution and
delivery of this Agreement it will also execute and deliver to the Minority
Shareholders the Guaranty Agreement in the form attached hereto as SCHEDULE
4.11. GTSD hereby covenants and agrees to guarantee the payment of the Bonus
Payments pursuant to the Employment Agreements, but only to the extent that
GTSD or an Affiliate thereto, has received distributions from the Company
(other than distributions for redemptions of Preferred Stock). Such guaranty
will be reflected in the Guaranty Agreement.
SECTION 4.12 MITIGATION OF INDEMNIFIED LOSSES.
Each party hereto covenants and agrees that with respect to any Losses
(as defined below) that it incurs for which it is entitled to indemnification
pursuant to Article V hereto, it will use its best efforts to mitigate such
Losses by pursuing valid claims against, or seeking recoveries from,
appropriate third parties, and the amount of any recoveries by the party
incurring such Loss shall reduce on a dollar for dollar basis the amount of
the Loss for purposes of the indemnification pursuant to Article V.
SECTION 4.13 SCHEDULE DISCLOSURES.
The parties agree that any fact or circumstance disclosed in schedules
to this Agreement as an exception to a particular representation or warranty
shall also be deemed for all purposes to be a disclosed and agreed to
exception with respect to any other representation or warranty herein to
which the fact or circumstance disclosed may be deemed to be pertinent. The
parties further agree that any disclosed exception to a particular
representation or warranty in the Stock Purchase Agreement shall also
constitute a disclosed and agreed to exception with respect to all
representations or warranties in this Agreement to which the fact or
circumstance disclosed in or in connection with the Stock Purchase Agreement
may be deemed to be pertinent.
-25-
SECTION 4.14 TAX SHARING ARRANGEMENT.
GTSD covenants and agrees to enter into a tax sharing arrangement with
the Company, reasonably acceptable to the Minority Shareholders, within a
reasonable time following the date hereof, whereby GTSD would reimburse the
Company for any tax benefits that it derives as a consolidated group from
losses incurred by the Company.
ARTICLE V: INDEMNIFICATION
SECTION 5.1 INDEMNIFICATION BY THE MINORITY SHAREHOLDERS.
The Minority Shareholders hereby jointly and severally covenant and
agree to indemnify GTSD, GTSD Sub and their officers, directors, stockholders
beneficially owning individually or as a group (within the meaning of Section
13(d) of the Securities Exchange Act of 1934, as amended) ten percent (10%)
or more of the capital stock of GTSD (such person shall be referred to herein
as a "Principal Stockholder"), and their respective successors and assigns
and hold each of them harmless against and with respect to any and all
liabilities, losses, damages, claims, deficiencies, costs and expenses,
interest, awards, judgments and penalties (including, without limitation,
reasonable legal costs and expenses) actually suffered or incurred by them,
(hereinafter, a "Loss"), arising out of or resulting from:
(a) the breach of any representation or warranty by the Minority
Shareholders contained herein or in any document delivered hereunder; or
(b) the breach of any covenant or agreement by the Minority
Shareholders contained herein.
Notwithstanding the foregoing, the Minority Shareholders hereby jointly
and severally covenant and agree to indemnify the indemnified parties
specified in this Section 5.1 and their respective successors and assigns and
hold each of them harmless against and with respect to 75% of any Losses
arising out of or resulting from the breach of any representation or warranty
contained in Sections 2.11, 2.18 and 2.20 hereto.
SECTION 5.2 INDEMNIFICATION BY GTSD AND GTSD SUB.
GTSD and GTSD Sub hereby jointly and severally covenant and agree to
indemnify the Minority Shareholders and their successors and assigns and hold
each of them harmless against and with respect to any and all Losses, arising
out of or resulting from:
(a) the breach of any representation or warranty by GTSD or GTSD Sub
contained herein or in any document delivered hereunder; or
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(b) the breach of any covenant or agreement by GTSD or GTSD Sub
contained herein or in any document delivered hereunder.
SECTION 5.3 PROCEDURES FOR THIRD PARTY CLAIMS.
Promptly after the assertion by any third party of any claim against any
party entitled to be indemnified under this Article V (the "Indemnitee")
that, in the judgment of such Indemnitee, may result in the incurrence by
such Indemnitee of Losses for which such Indemnitee would be entitled to
indemnification pursuant to this Agreement, such Indemnitee shall deliver to
the other party or parties who has indemnified such Losses hereunder
("Indemnitor") a written notice describing such claim. Such Indemnitor may
participate in and, at its option upon acknowledgment of Indemnitee's right
to indemnification for such matter, assume the defense of the Indemnitee
against such claim, including the employment of counsel, who shall be
reasonably satisfactory to such Indemnitee. In such case, any Indemnitee
shall have the right to employ separate counsel in any such action or claim
and to participate in the defense thereof, but the fees and expenses of such
counsel shall not be at the expense of the Indemnitor unless (i) the
Indemnitor shall have failed, within a reasonable time after having been
notified by the Indemnitee of the existence of such claim as provided in the
preceding sentence, to assume the defense of the such claim, (ii) the
employment of such counsel has been specifically authorized in writing by the
Indemnitor or (iii) the named parties to any such action (including impleaded
parties) include both such Indemnitee and the Indemnitor and such Indemnitee
shall have been advised in writing by Indemnitor's counsel that there may be
conflicting interests between Indemnitee and the Indemnitor in the legal
defense thereof. No Indemnitor shall be liable to indemnify any Indemnitee
for any compromise or settlement of any such action or claim effected without
the consent of the Indemnitor.
SECTION 5.4 LIMITS FOR RECOVERY OF LOSSES.
(a) Notwithstanding anything herein to the contrary, the Minority
Shareholders, either individually or collectively, shall not be liable for
any Losses of GTSD, GTSD Sub, their directors or officers or a Principal
Stockholder of GTSD under this Article V unless and until the aggregate
amount of all Losses hereunder by such persons collectively equals or exceeds
$100,000, in which event the Minority Shareholders shall be jointly and
severally liable (except as otherwise expressly provided herein) for all
Losses in the aggregate greater than $100,000, subject to the limit provided
in Section 5.4(b).
(b) The limit for recovery of any Losses of GTSD, GTSD Sub, their
directors or officers or a Principal Stockholder of GTSD under this Agreement
shall be the amount of the Bonus Payments to which the Minority Shareholders
are entitled, whether or not distributed, pursuant to their Employment
Agreements in the case of ▇. ▇▇▇▇▇, ▇. ▇▇▇▇▇ and ▇▇▇▇▇ and, in the case of ▇.
▇▇▇▇▇, pursuant to his Agreement with the Company dated the date hereof and
attached hereto as APPENDIX III.
-27-
(c) In the event that the aggregate amount of Losses for which GTSD,
GTSD Sub, their directors or officers or a Principal Stockholder of GTSD
seeks indemnification hereunder exceeds the aggregate limit for recovery of
such Losses pursuant to the preceding paragraph, then the put rights of the
Minority Shareholders pursuant to Section 8.1 hereof shall be suspended until
such time as GTSD or GTSD Sub, as applicable, has received distributions
representing its share of the Company's profits, or there are sufficient
lawful funds to make distributions representing its share of the Company's
profits (in either case, in excess of any liquidation preference of the
Preferred Stock) equal to the amount that the aggregate Losses of GTSD, GTSD
Sub, their officers or directors or the Principal Stockholders of GTSD exceed
the limit for recovery of such Losses pursuant to the preceding paragraph.
(d) This Article V provides the sole and exclusive remedies of GTSD,
GTSD Sub and their officers and directors and the Principal Stockholders of
GTSD against the Minority Shareholders under this Agreement, except for
equitable remedies that may be available.
SECTION 5.5 WAIVER OF CONTRIBUTION.
None of the Minority Shareholders shall have any right to seek
contribution from the Company in the event that any of the Minority
Shareholders is required to make any payments under this Article V.
SECTION 5.6 HOLDBACK, RIGHT OF SETOFF.
The Minority Shareholders agree that, upon a final, non-appealable
adjudication or a final, non-appealable arbitrator's determination that the
Minority Shareholders are liable for indemnity payments, the Company, GTSD or
GTSD Sub may hold back and set off the amount of any claim made by such party
against the Minority Shareholders under Article V of this Agreement against
the amount that may otherwise be due to the Minority Shareholders as a Bonus
Payment pursuant to their Employment Agreements in the case of ▇. ▇▇▇▇▇, ▇.
▇▇▇▇▇ and ▇▇▇▇▇ and in the case of ▇. ▇▇▇▇▇ pursuant to his agreement with
the Company attached hereto as APPENDIX III. GTSD and GTSD Sub agree that
they will not seek or exercise any right to hold back or set off the amount
of any claim against any Minority Shareholders for indemnity or for any other
claim unless and until such liability of the Minority Shareholders to GTSD or
GTSD Sub is determined by a final, non-appealable adjudication or arbitral
award.
ARTICLE VI: SURVIVAL
Except for actions based upon a claim of fraud (which shall survive
without limitation), all representations and warranties made pursuant to or
in connection with this Agreement shall survive the date hereof, but shall
terminate two and one-half (2-1/2) years after the date hereof; provided,
that there shall be no such termination with respect to any representation or
warranty as to which a bona fide claim has been asserted in writing and on
which a judicial or arbitration proceeding has been commenced prior to such
date. All covenants and agreements of the parties
-28-
contained (other than those in Articles II and III and unless expressly
provided otherwise) shall survive and terminate in accordance with Article X.
ARTICLE VII: RESTRICTIONS ON TRANSFER; VOLUNTARY TRANSFER;
INVOLUNTARY TRANSFER
SECTION 7.1 RESTRICTIONS ON TRANSFER.
Except as provided under Section 7.2 below, no Minority Shareholder
shall sell, transfer, give, pledge, encumber or otherwise dispose of (a
"Transfer") any Shares without the written consent of (i) the Company and
(ii) GTSD Sub, which consent may be withheld for any reason or for no reason,
except in accordance with the terms of this Agreement, except for Permitted
Transfers. Any attempted Transfer in violation of this Agreement shall be
null and void and not recognized for any purpose. Notwithstanding anything
contained herein to the contrary, no Shares may be transferred by the
Minority Shareholders to any Person (including, without limitation, a
trustee, grantor or beneficiary of any trust, or a proposed transferee under
Section 7.2 hereof) unless such person is or becomes a party to this
Agreement by delivering a copy of this Agreement to the Company bearing the
signature of such person on a counterpart signature page and agrees to be
bound by all of the provisions of this Agreement.
SECTION 7.2 RIGHT OF FIRST REFUSAL UPON VOLUNTARY TRANSFER OF SHARES BY
MINORITY SHAREHOLDERS.
A Minority Shareholder may Transfer his Shares without restriction
provided that he has held the Shares for four (4) years from the date hereof
and he complies with the provisions of this Section 7.2, or, if prior to four
(4) years from the date hereof, the Transfer is a Permitted Transfer. If a
Minority Shareholder desires to Transfer all or any number of shares of Stock
to any other party in a bona fide transaction other than a Permitted
Transfer, such Minority Shareholder (a "Transferring Shareholder") shall be
obligated to offer those Shares (the "Offered Shares") for purchase by the
Company and GTSD Sub as hereinafter provided.
(a) NOTICE OF TRANSFER. The Transferring Shareholder shall give
written notice of the proposed Transfer (the "TRANSFER NOTICE") to the
Company and GTSD Sub, stating the date the Transfer Notice is mailed or sent
to the Company and GTSD Sub, the number of Offered Shares the Transferring
Stockholder wishes to Transfer, the name and address of the proposed
transferee, and, if the proposed transfer is a sale, the per-share price
offered by the proposed transferee and the other terms of the transfer.
(b) COMPANY'S OPTION TO PURCHASE. The Company may purchase all or
any of the Offered Shares for the price and upon the other terms hereinafter
provided by giving written
-29-
notice to the Transferring Shareholder within twenty (20) days after the date
of the Transfer Notice stating the number of Offered Shares which the Company
desires to purchase.
(c) GTSD SUB'S OPTION TO PURCHASE. (i) If any Offered Shares are
not to be purchased by the Company pursuant to Section 7.2(b), GTSD Sub may
purchase such Offered Shares for the price and upon the other terms
hereinafter provided, by giving written notice to the Transferring
Shareholder within thirty (30) days after the date of the Transfer Notice of
the number of Offered Shares that GTSD Sub desires to purchase.
(d) SALE TO THIRD PARTY. If all of the Offered Shares are not
purchased by the Company and/or GTSD Sub pursuant to Sections 7.2(b) and (c)
above, then the Transferring Shareholder may sell the Offered Shares to the
proposed transferee upon terms and conditions no more favorable to the
proposed transferee than those specified in the Transfer Notice, subject to
the remaining provisions of this Agreement, including, without limitation,
that the proposed transferee shall become a party to this Agreement.
(e) REOFFER ON FAILURE TO SELL. If the Transferring Shareholder
fails to consummate a Transfer to the proposed transferee within sixty (60)
days after the expiration of GTSD Sub's option described in Section 7.2(c)
above, then no sale or transfer of the Offered Shares may be made thereafter
to the proposed transferee or to any other transferee without again complying
with the provisions of this Section 7.2.
SECTION 7.3 OPTION UPON INVOLUNTARY TRANSFER.
If any shares of Stock are transferred by operation of law to any person
other than the Company or GTSD Sub except by means of a Permitted Transfer,
such transfer shall be deemed a Transfer. At such time as the Company has
any written notice specifying such a Transfer, a Transfer Notice under
Section 7.2 hereof shall be deemed to have been given, the Company and GTSD
Sub may purchase the Shares upon the same terms as set forth in Section 7.2.
In the event of an involuntary Transfer pursuant to this Section 7.3, the
purchase price for the shares of Stock so transferred shall be deemed to be
the "fair market value" of such shares of Stock as determined in accordance
with Section 8.3 below.
SECTION 7.4 RIGHT OF FIRST OFFER UPON TRANSFER OF SHARES BY GTSD.
GTSD Sub may Transfer its Shares without restriction provided that it
has complied with the provisions of this Section 7.4. If GTSD Sub desires to
Transfer all or any of its Shares, it shall be obligated to offer those
Shares (the "Offered Shares") for purchase by the Minority Shareholders as
hereinafter provided.
(a) NOTICE OF TRANSFER. GTSD Sub shall give written notice of its
desire to Transfer shares of Stock of the Company (the "GTSD TRANSFER
NOTICE") to the Minority
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Shareholders, stating the date the Transfer Notice is mailed or sent to the
Minority Shareholders and the number of Shares that GTSD Sub desires to
Transfer.
(b) MINORITY SHAREHOLDERS OFFER TO PURCHASE. Any of the Minority
Shareholders desiring to purchase all or any of the Shares offered by GTSD
Sub shall submit to GTSD Sub a written offer specifying the number of Shares
that it wishes to purchase, the purchase price for such shares and the terms
of consideration if other than cash. Any Minority Shareholders desiring to
offer to purchase the Shares of GTSD Sub must provide the written offer to
GTSD Sub within thirty (30) days after the date of the GTSD Transfer Notice.
GTSD Sub may, in its sole and absolute discretion, accept or reject any
written offers received by any of the Minority Shareholders. In the event
that GTSD Sub accepts any of the written offers of the Minority Shareholders,
it shall provide written notice of its acceptance to such Minority
Shareholder and the closing for the Transfer of the Shares pursuant to the
terms of the offer shall occur within thirty (30) days of the written
acceptance of the offer by GTSD Sub.
(c) SALE TO THIRD PARTY. To the extent that GTSD Sub has not
accepted any of the offers of the Minority Shareholders that may have been
submitted pursuant to Section 7.4(b), GTSD Sub may freely Transfer the Shares
of the Company to a third party provided that (i) such third party has agreed
to become a party to this Agreement and (ii) either (x) such third party
agrees to assume the obligations of GTSD and GTSD Sub hereunder, with the
written consent of the Minority Shareholders, which consent will not be
unreasonably withheld, it being agreed that the Minority Shareholders refusal
to consent may be based on their reasonable assessment of the
creditworthiness of such third party and the ability of such third party to
perform its obligations under this Agreement or (y) GTSD reaffirms to the
reasonable satisfaction of the Minority Shareholders that the GTSD Guaranty
Agreement executed in connection herewith shall remain in effect, but shall
by virtue of such affirmation be automatically modified to provide that (i)
GTSD's liability to the Minority Shareholders is secondary to the liability
of the transferee and (ii) the Minority Shareholders are required to pursue
all legal and equitable remedies against such transferee prior to pursuing
such remedies against GTSD.
(d) REOFFER ON FAILURE TO SELL. If GTSD Sub fails to consummate a
Transfer permitted by Section 7.4(c) to a third party within 180 days after
the expiration of the offer period to the Minority Shareholders pursuant to
Section 7.4(b) above, then no Transfer of the Shares owned by GTSD Sub may be
made thereafter to any third party without again complying with the
provisions of this Section 7.4.
SECTION 7.5 PERMITTED TRANSFERS.
Notwithstanding anything in this Agreement to the contrary, each
Minority Shareholder and subsequent transferees of Stock who acquired such
shares in a Permitted Transfer (as defined below) shall be entitled to
Transfer (whether voluntarily or by operation of law) any of such shares of
Stock free of any restriction on Transfer or right of any other person to
purchase such Stock provided that such Transfer is to the following classes
of transferees
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("Permitted Transfers"): (a) another Minority Shareholder and to persons to
whom such other Minority Shareholder could transfer his Shares in a Permitted
Transfer, (b) a Minority Shareholder's parents, brothers, sisters, children,
grandchildren and spouse provided that such Minority Shareholder (or other
Minority Shareholders) retains the right to vote, or to control the vote of,
the Shares so transferred by means of a proxy, voting trust or voting
agreement to the reasonable satisfaction of GTSD and its counsel and (c)
trusts, family partnerships or other entities the equity or beneficial
ownership of which is held by, or for the benefit of, persons to whom the
Minority Shareholder would be entitled to make a direct Transfer which would
be considered a Permitted Transfer provided that such Minority Shareholder
provided that such Minority Shareholder (or other Minority Shareholders)
retains the right to vote, or to control the vote of, the Shares so
transferred by means of a proxy, voting trust or voting agreement or by
means of his position as trustee or otherwise to the reasonable satisfaction
of GTSD and its counsel.
ARTICLE VIII: BUYOUT PROVISIONS
SECTION 8.1 PUT RIGHTS OF MINORITY SHAREHOLDERS.
(a) After four (4) years from the date hereof, each of the Minority
Shareholders shall have the right (but not the obligation) to sell, and GTSD
Sub or the Company shall have the obligation to purchase, all of the Shares
owned by each of the Minority Shareholders pursuant to the terms of this
Article VIII, provided that the Company has had cumulative net income during
such four (4) year period of at least $4,650,000.
(b) In the event that the employment of ▇. ▇▇▇▇▇, ▇. ▇▇▇▇▇ or
▇▇▇▇▇ is terminated pursuant to Sections 4(a)(5) or 4(b)(1) of their
respective Employment Agreements with the Company, then such individual shall
have the right (but not the obligation) to sell, and GTSD Sub or the Company
shall have the obligation to purchase, all of the Shares owned by such
individual upon such individual's termination of employment.
(c) In the event that the employment of both ▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇
are terminated pursuant to Sections 4(a)(5) or 4(b)(1) of their respective
Employment Agreements with the Company, then each of the Minority
Shareholders shall have the right (but not the obligation) to sell, and GTSD
Sub or the Company shall have the obligation to purchase, all of the Shares
owned by each of the Minority Shareholders upon ▇. ▇▇▇▇▇'▇ and ▇. ▇▇▇▇▇'▇
termination of employment.
(d) In the event that the employment of ▇. ▇▇▇▇▇ or ▇. ▇▇▇▇▇ is
terminated pursuant to Section 4(a)(4) of their respective Employment
Agreements with the Company, then such individual shall have the right (but
not the obligation) to sell, and GTSD Sub or the Company shall have the
obligation to purchase, all of the Shares owned by such individual upon
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such individual's termination of employment, provided that the Company has
had cumulative net income during such four (4) year period of at least
$4,650,000.
(e) In the event that the employment of both ▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇
are terminated pursuant to Section 4(a)(4) of their respective Employment
Agreements with the Company, then each of the Minority Shareholders shall
have the right (but not the obligation) to sell, and GTSD Sub or the Company
shall have the obligation to purchase, all of the Shares owned by each of the
Minority Shareholders upon ▇. ▇▇▇▇▇'▇ and ▇. ▇▇▇▇▇'▇ termination of
employment, provided that the Company has had cumulative net income during
such four (4) year period of at least $4,650,000.
(f) The Minority Shareholders may exercise their right to sell
pursuant to Sections 8.1(a), (b), (c), (d) or (e) above by delivering a
written notice to the Company and GTSD Sub stating the number of Shares to be
sold, which shall be on an all-or-nothing basis. The closing of any such
sale and purchase shall take place no later than ninety (90) days after
delivery of such notice to the Company and GTSD Sub.
(g) Upon the exercise by any of the Minority Shareholders to sell
their Shares pursuant to this Section 8.1, the Company and GTSD Sub will
decide between themselves whether the Company or GTSD Sub shall purchase the
shares being sold, provided that the obligation to purchase such Shares shall
ultimately rest on GTSD Sub. GTSD will guarantee any and all of the payment
obligations of the Company or GTSD Sub including the promissory notes to be
issued pursuant to Section 8.4 below.
(h) In the event that a Minority Shareholder exercises his put
rights pursuant to this Section 8.1 by delivering written notice pursuant to
Section 8.1(f), he shall be obligated to sell and the Company or GTSD Sub
shall be obligated to purchase such Shares pursuant to the terms of this
Article VIII.
SECTION 8.2 CALL RIGHTS OF THE COMPANY AND GTSD SUB.
(a) After six (6) years from the date hereof, unless accelerated
pursuant to Section 8.2(b) below, the Company and GTSD Sub shall each have
the right (but not the obligation) to purchase, and the Minority Shareholders
shall have the obligation to sell, all of the Shares owned by each.
(b) In the event that either (i) the net profit before taxes of
the Company is less than the "Low Performance Case" Net Earnings Before Taxes
included on Schedule A of the Employment Agreements during any two (2)
consecutive years or (ii) the Company incurs a net loss in any of the first
four (4) years following the execution of this Agreement, then the right of
the Company or GTSD Sub to purchase the Shares of the Minority Shareholders
pursuant to Section 8.2(a) shall be accelerated to any time after four (4)
years from the date hereof.
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(c) The Company or GTSD Sub may exercise their right to purchase
pursuant to Sections 8.2(a) or (b) above by delivering a written notice to
each of the Minority Shareholders stating the number of shares to be
purchased from each such Minority Shareholder, which shall be on an
all-or-nothing basis. The closing of any such purchase and sale shall take
place no later than ninety (90) days after delivery of such notice to the
Minority Shareholders.
(d) The Company and GTSD Sub will decide between themselves
whether the Company or GTSD Sub shall purchase the Shares pursuant to this
Section 8.2. GTSD will guarantee any and all of the payment obligations of
the Company or GTSD Sub pursuant to this Section 8.2, including the
promissory notes to be issued pursuant to Section 8.4 below.
(e) In the event that either the Company or GTSD Sub exercises its
call rights pursuant to this Section 8.2 by delivering written notice
pursuant to Section 8.2(c), it shall be obligated to purchase and the
Minority Shareholder shall be obligated to sell such Shares pursuant to the
terms of this Article VIII.
(f) Neither the Company nor GTSD Sub shall have the right to
offset any amounts owed to such parties pursuant to Section 5.1(a) hereof
against the purchase price for the Shares pursuant to this Article VIII.
SECTION 8.3 PURCHASE PRICE.
The purchase price for the Shares sold and purchased pursuant to this
Article VIII shall be equal to the then current Fair Market Value (as
hereinafter defined) of such shares. The "Fair Market Value" of a share of
Stock shall be determined by an independent, nationally-recognized, third
party appraiser selected by the parties hereto and such appraiser shall be
qualified to value businesses similar to that of the Company. If the parties
are unable to agree on an appraiser, then GTSD Sub and the Minority
Shareholders acting collectively shall each select an appraiser meeting the
qualifications specified in the preceding sentence, and the appraisers so
selected shall select a single, neutral and independent appraiser meeting the
qualifications specified in the preceding sentence to conduct the appraisal.
The appraisal shall be completed within sixty (60) days of the date that the
appraiser is engaged and the appraisal shall be final and binding on the
parties for the purpose of the pending sale and purchase of Shares, and any
other sales and purchases of Shares occurring during the next six (6) months.
The cost of the appraisal shall be shared equally between GTSD Sub and the
selling Minority Shareholders. For any other transaction occurring within
six (6) months of another transaction, either of the parties to such
subsequent transaction may elect to obtain a new appraisal for the Fair
Market Value of the shares of Stock by the method specified herein provided
that the entire cost of such appraisal shall be paid by the party requesting
such new appraisal. The value of a share of Stock shall be determined by the
appraiser without any discount applied for the minority ownership position of
the Minority Shareholders and without premium applied to the majority
ownership position of GTSD or GTSD Sub. The parties hereto covenant and
agree that they will disclose to the appraiser so selected and each other
party hereto and their representatives, any and all
34-
information or documents in their possession that might reasonably be
expected to bear upon the valuation of the Company including, but not limited
to, any future plans or prospects with respect to the Company, the Company
Business, the Company Assets or the Stock of the Company, and any agreements
(written or oral) or plans for public offerings or potential sales of all or
any part of the business, assets or Stock of the Company following or in
connection with the transaction for which the appraisal is prepared.
SECTION 8.4 PAYMENT OF THE PURCHASE PRICE.
Unless other terms and conditions are agreed upon by the parties at the
time of the purchase and sale, the purchase price for the Shares shall be
payable according to the terms of a promissory note, mutually agreeable to
the parties of such purchase and sale, and which shall contain the following
terms and conditions:
(a) If the purchase and sale transaction occurs pursuant to
Sections 8.1(a), (d), (e) or 8.2, the purchase price for the Shares would be
payable in five (5) equal annual installments beginning six (6) months from
the date of the purchase and sale. Subsequent payments shall be made by the
purchaser of the shares on each one (1) year anniversary of the first payment
and shall include principal (equal to the amount of the initial installment
payment) plus simple accrued interest at the then current one-year London
Interbank Offered Rate as quoted in the WALL STREET JOURNAL ("LIBOR") on the
outstanding balance, provided that the installment payments shall be no less
than $150,000 per twelve (12) month period (per Minority Shareholder entitled
to such payment) until the obligation is paid in full.
(b) If the purchase and sale transaction occurs pursuant to
Sections 8.1(b) or (c), the purchase price for the Shares would be payable in
three (3) equal annual installments beginning six (6) months from the date of
the purchase and sale. Subsequent payments shall be made by the purchaser of
the shares on each one (1) year anniversary thereafter and shall include
principal (equal to the amount of the initial installment payment) plus
simple interest at the then current one-year LIBOR rate plus four percent
(4.0%) on the outstanding balance, provided that the installment payments
shall be no less than $250,000 per twelve (12) month period (per Minority
Shareholder entitled to such payment) until the obligation is paid in full.
(c) The promissory notes issued by the Company or GTSD Sub
evidencing the payment obligations referred to in Sections 8.4(a) and (b)
shall be guaranteed by GTSD.
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ARTICLE IX: OTHER RESTRICTIONS
SECTION 9.1 LEGEND ON CERTIFICATES.
The parties hereto shall cause the Company to note the following legend
conspicuously upon all certificates representing the Stock of the Company now
or hereafter owned by each of the stockholders:
"Transfer of any interest in the securities represented by
this certificate is subject to a Stockholders' Agreement dated November
29, 1995 by and among Bird Environmental Gulf Coast, Inc., GTS Duratek,
Inc., GTSD Sub II, Inc. and the persons referred to therein as the
Minority Shareholders, as the same may be from time to time amended,
modified or supplemented, and no such transfer may be made without
compliance with that Agreement. A copy of that Agreement and all
amendments, modifications and supplements thereto is available for
inspection at the office of the corporation upon appropriate request."
An executed copy of this Agreement and amendments, modifications and
supplements hereto shall at all times be kept on file at the office of the
Company and shall be open for inspection by each stockholder of the Company
or any person claiming any right or interest through a stockholder in any
Stock.
SECTION 9.2 ACTIONS REQUIRING VOTE OR CONSENT OF THE MINORITY
SHAREHOLDERS.
The following actions shall require the approval, or the consent, of a
majority of the shares of Stock owned by the Minority Shareholders and their
transferees, notwithstanding whether such affirmative vote or consent would
otherwise be required under the Company's Organizational Documents or
applicable law:
(a) the merger or consolidation of the Company with or into another
entity, except as contemplated by Section 4.6 to reincorporate the Company as
a Maryland corporation;
(b) the sale by the Company, other than in the ordinary course of
business, of all or substantially all of its property and assets;
(c) an amendment (whether in connection with a merger or
otherwise) of the Organizational Documents of the Company, except as
contemplated by Section 4.6;
(d) the issuance and sale of any equity or debt securities of the
Company, except for the Preferred Stock in an amount contemplated by SCHEDULE
4.7 or any additional amount reasonably needed by the Company to the extent
that SCHEDULE 4.7 is underestimated;
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(e) authorization for loans or borrowings in excess of $250,000
during the Measurement Period (as such term is defined in the Employment
Agreements and in the agreement between the Company and ▇. ▇▇▇▇▇);
(f) any loans to a stockholder or an Affiliate of a stockholder
and/or the pledge of any assets of the Company for a loan for the benefit of
a stockholder or an Affiliate of a stockholder; and
(g) the pledge of all or substantially all of the assets of the
Company.
SECTION 9.3 COMPOSITION OF BOARD OF DIRECTORS.
For so long as the Minority Shareholders in the aggregate own at least
ten percent (10%) of the outstanding shares of Stock of the Company, they
shall be entitled as a group to designate up to ten percent (10%) of the
number of directors on the Company's Board of Directors, but in any event not
less than one (1) director. GTSD Sub agrees that it shall vote all of its
shares of Stock for the election of that director or directors nominated by
the Minority Shareholders. If the Minority Shareholders and their
transferees pursuant to Permitted Transfers in the aggregate own ten percent
(10%) or less of the outstanding shares of Stock of the Company, then GTSD
Sub and the Minority Shareholders shall mutually agree as to the appropriate
level of representation, if any, of the Minority Shareholders on the
Company's Board of Directors.
SECTION 9.4 FORMATION OF MANAGEMENT COMMITTEE.
The Company shall form a management committee to oversee the operations
of the Company and make recommendations to the Board of Directors of the
Company as appropriate. ▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇ shall be members of this newly
formed management committee so long as they are shareholders and desire to
serve on such committee as well as any members that GTSD Sub appoints in its
sole discretion. The management committee would meet at least quarterly. ▇.
▇▇▇▇▇ would act as scientific advisor to the management committee and would
be invited to attend the management committee meetings.
ARTICLE X: TERMINATION
This Agreement shall terminate automatically upon (i) the dissolution,
liquidation or winding up of the Company, (ii) the occurrence of any event
which reduces the number of stockholders to one, or (iii) the merger of the
Company into another corporation (provided that the Company is not the
surviving corporation of such a merger and provided, further, that the
holders of a majority of the Stock owned by the Minority Shareholders and
their transferees pursuant to Permitted Transfers vote in favor of or consent
in writing to such merger). Notwithstanding the foregoing, the merger of the
Company into a newly formed Maryland corporation pursuant to Section 4.6
shall not cause the termination of this Agreement.
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ARTICLE XI: MISCELLANEOUS
SECTION 11.1 NO ASSIGNMENT.
Subject to Section 4.6(b), no assignment by any of the parties of their
respective rights nor delegation by any of the parties of their respective
duties shall be permitted hereunder without the prior written consent of all
other parties hereto, provided that GTSD Sub may assign its rights and
obligations hereunder to the transferee of its Shares of the Company provided
that it has satisfied the conditions of Section 7.4(c).
SECTION 11.2 COSTS.
Each party hereto shall pay all fees and expenses incurred by it in
connection with the negotiation, preparation, and performance of this
Agreement, including fees and disbursements of their respective counsel,
except that GTSD shall pay up to $60,000 of the legal fees reasonably
incurred by the Minority Shareholders in connection with this Agreement and
the transactions contemplated hereunder.
SECTION 11.3 PUBLICITY.
The parties hereto agree not to issue any statement or communication to
the public or the press regarding the transactions contemplated by this
Agreement without the prior written consent of the other parties; provided,
however, that each party shall be permitted, upon notice to the other, to
make such disclosures to the public or such governmental entities as its
counsel reasonably should deem necessary to maintain compliance with
applicable law.
SECTION 11.4 PARTIES IN INTEREST.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors, heirs, personal representatives,
and assigns permitted under the terms of this Agreement.
SECTION 11.5 ENTIRE AGREEMENT.
This Agreement, any Exhibits, Schedules, any other writings delivered
pursuant hereto which form a part hereof and all other documents delivered
contemporaneous with the execution hereof contain the entire understanding of
the parties with respect to its subject matter and supersede all prior oral
and written agreements and understandings between the parties with respect to
its subject matter. In this regard, although the Minority Shareholders'
Letter of Intent and the Bird Letter of Intent shall be merged into and
superseded by this Agreement, certain descriptive language contained therein
is expressly referred to herein and shall be interpreted as if expressly set
forth herein.
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SECTION 11.6 CONSTRUCTION.
The Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The masculine pronoun shall include the
feminine and neuter, and vice versa, where the context so requires.
SECTION 11.7 ADDITIONAL DOCUMENTS.
Each party hereto agrees to execute and deliver such documents and take
such further actions as may be reasonably necessary or desirable to effect
the purposes and objectives of this Agreement.
SECTION 11.8 NOTICES.
Except as otherwise expressly stated, all notices, claims, certificates,
requests, demands and other communications hereunder shall be in writing and
shall be deemed given upon the earlier of (i) when it is personally
delivered, (ii) three (3) business days after having been mailed by certified
mail, postage prepaid, return receipt requested or (iii) two (2) days after
having been sent by recognized overnight delivery service, addressed as
follows:
IF TO GTSD:
GTS Duratek, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chief
Executive Officer
WITH A COPY TO:
Piper & Marbury L.L.P.
▇▇▇▇▇▇▇ Center South
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
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IF TO GTSD SUB:
GTSD Sub II, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
WITH A COPY TO:
Piper & Marbury L.L.P.
▇▇▇▇▇▇▇ Center South
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
IF TO COMPANY:
Bird Environmental Gulf Coast, Inc.
c/o GTS Duratek, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
WITH A COPY TO:
Piper & Marbury L.L.P.
▇▇▇▇▇▇▇ Center South
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
IF TO ▇. ▇▇▇▇▇:
▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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IF TO ▇. ▇▇▇▇▇:
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
IF TO ▇. ▇▇▇▇▇:
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
IF TO ▇▇▇▇▇:
▇▇▇ ▇. ▇▇▇▇▇ III
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ #▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
WITH A COPY TO FOR ANY OF THE MINORITY SHAREHOLDERS:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
SECTION 11.9 COUNTERPARTS.
This Agreement may be executed simultaneously in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
SECTION 11.10 GOVERNING LAW.
The validity of this Agreement and of any of the terms or provisions as
well as the rights and duties of the parties hereunder shall be governed by
the laws of the State of Maryland, without reference to any conflict of law
or choice of law principles in the State of Maryland that might apply the law
of another jurisdiction.
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SECTION 11.11 ARBITRATION.
(a) Any disputes between the parties relating to the terms of
this Agreement, or the breach thereof, shall be submitted to binding
arbitration in Baltimore, Maryland, in accordance with the rules of the
American Arbitration Association. In the event that either party desires to
arbitrate any such dispute, such party shall so notify the other party and
the parties shall endeavor, for a period of thirty (30) days, to resolve such
dispute without arbitration. In the event that the parties cannot resolve
the dispute within such thirty (30) day period, then within ten (10) days
thereafter, the parties shall jointly designate an arbitrator to hear the
dispute, or, if the parties are unable to jointly select an arbitrator, an
arbitrator shall be chosen in accordance with the rules of the American
Arbitration Association. The decision of the arbitrator shall be binding
upon the parties.
(b) The Company, GTSD or GTSD Sub shall pay all of their own
expenses in connection with such arbitration and shall advance payment for
the reasonable expenses incurred by the Minority Shareholders in connection
with such arbitration, including without limitation travel expenses and the
fees and expenses of counsel, provided that the Minority Shareholders shall
be obligated to repay such advance in the event that the arbitrator
determines that the Minority Shareholders did not act in good faith or did
not have a good faith basis to bring or defend the claim. In the event that
the Minority Shareholders are required to repay such advance, such amount
shall be offset against the amount to be paid to each or all of them pursuant
to Article VIII hereof or to be paid to each or all of them as a Bonus
Payment pursuant to the Employment Agreements or the ▇▇▇▇▇ Agreement, as
applicable. The offset described in the preceding sentence shall be the sole
remedy of the Company, GTSD or GTSD Sub to recover the advance.
SECTION 11.12 SPECIFIC PERFORMANCE.
The parties acknowledge and agree that the breach of the provisions of
this Agreement could not be adequately compensated with monetary damages, and
the parties hereto agree, accordingly, that injunctive relief and specific
performance shall be appropriate remedies to enforce provisions of this
Agreement and waive any claim or defense that there is an adequate remedy at
law for such breach; provided, however, that, except as expressly provided
herein, nothing herein shall limit the remedies herein, legal or equitable,
otherwise available and all remedies herein are in addition to any remedies
available at law or otherwise.
SECTION 11.13 SEVERABILITY.
If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable under any applicable law, then such contravention or
invalidity shall not invalidate the entire Agreement. Such provision shall
be deemed to be modified to the extent necessary to render it legal, valid
and enforceable, and if no such modification shall render it legal, valid and
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enforceable, then this Agreement shall be construed as if not containing the
provision held to be invalid, and the rights and obligations of the parties
shall be construed and enforced accordingly.
SECTION 11.14 NO DRAFTING PRESUMPTION.
Each of the parties hereto shall be deemed to have participated equally
in the drafting and preparation of this Agreement and, accordingly, no
presumption shall arise concerning the interpretation of any of the
provisions hereof with respect to the party or parties responsible for its
preparation.
SECTION 11.15 INCORPORATION BY REFERENCE; USE OF CERTAIN TERMS.
All Exhibits and Schedules attached to this Agreement shall be deemed
incorporated herein by reference as if fully set forth herein. When the
context requires, the gender of all words used herein shall include the
masculine, feminine and neuter and the number of all words shall include the
singular and plural.
SECTION 11.16 AMENDMENT AND WAIVER.
This Agreement may not be amended or modified except by a written
instrument signed by the parties hereto. The waiver by any party of such
party's rights under this Agreement in any particular instance or instances,
whether intentional or otherwise, shall not be considered as a continuing
waiver which would prevent subsequent enforcement of such rights or of any
other rights.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto on the date first above written.
WITNESS/ATTEST: BIRD ENVIRONMENTAL GULF COAST,
INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (SEAL)
---------------------------- -----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
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GTS DURATEK, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (SEAL)
---------------------------- -----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
GTSD SUB II, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (SEAL)
---------------------------- -----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
---------------------------- -----------------------------
▇▇▇ ▇. ▇▇▇▇▇
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
---------------------------- -----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇ (SEAL)
---------------------------- -----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/▇▇▇ ▇. ▇▇▇▇▇ III (SEAL)
---------------------------- -----------------------------
▇▇▇ ▇. ▇▇▇▇▇ III
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