EXHIBIT 1
---------
INVESTORS' AGREEMENT
This INVESTORS' AGREEMENT (this "AGREEMENT") is made as of June 17,
2003, between United Road Services, Inc., a Delaware corporation (the
"COMPANY"), Blue Truck Acquisition, LLC, a Delaware limited liability company (
"BLUE TRUCK"), CFE, Inc., a Delaware corporation ("CFE"), Charter URS LLC, a
Delaware limited liability company ("CHARTER") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇",
and together with Blue Truck, CFE and Charter, the "INVESTORS").
WHEREAS, the Company and Blue Truck have entered into that certain
Exchange Agreement, dated as of even date herewith (the "BLUE TRUCK EXCHANGE
AGREEMENT"), pursuant to which, among other things, the Company is issuing
shares of its Series B Participating Convertible Preferred Stock ("SERIES B
PREFERRED") to Blue Truck;
WHEREAS, the Company and CFE have entered into that certain Exchange
Agreement, dated as of even date herewith (the "CFE EXCHANGE AGREEMENT"),
pursuant to which, among other things, the Company is issuing shares of Series B
Preferred to CFE;
WHEREAS, the Company and Charter have entered into that certain
Exchange Agreement, dated as of even date herewith (the "CHARTER EXCHANGE
AGREEMENT", and together with the Blue Truck Exchange Agreement and the CFE
Exchange Agreement, the "EXCHANGE AGREEMENTS"), pursuant to which, among other
things, the Company is issuing shares of its Series C Participating Convertible
Preferred Stock ("SERIES C PREFERRED") to Charter;
WHEREAS, the Company has issued options (the "OPTIONS") to purchase
shares of Series C Preferred to ▇▇▇▇▇▇▇ and Charter pursuant to a Credit
Enhancement Agreement, dated as of even date herewith, by and among the Company,
▇▇▇▇▇▇▇ and Charter (the "CREDIT ENHANCEMENT AGREEMENT"); and
WHEREAS, the execution and delivery of this Agreement is a condition to
the closing of the Exchange Agreements and the issuance of the Options pursuant
to the Credit Enhancement Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
meanings set forth below:
1.1 "AFFILIATE" of a Person means any other Person who is
controlled by, controls or is under common control with such Person.
1.2 "ANCILLARY AGREEMENTS" means the Exchange Agreements,
the Credit Enhancement Agreement and other documents executed and delivered in
connection herewith and therewith.
1.3 "CLOSING" means the closing of the transactions
contemplated by the Exchange Agreements.
1.4 "CLOSING DATE" means the date on which the Closing
occurs.
1.5 "COMMON STOCK" means the common stock of the Company.
1.6 "COMPANY BOARD" means the Board of Directors of the
Company.
1.7 "CONVERSION TRIGGER DATE" shall have the meaning
given to such term in Section 5(a) of the certificates of designations relating
to the Preferred Stock.
1.8 "CONVERTED SHARES" means the shares of Common Stock
actually received by the Original Holders upon conversion of some or all of the
shares of Series B Preferred or Series C Preferred.
1.9 "CURRENT COMPANY DIRECTORS" means the members of the
Board of Directors of the Company as constituted immediately prior to the
Closing.
1.10 "INVESTOR NOMINEE" has the meaning set forth in
Section 2.1.2
1.11 "MAJORITY HOLDERS" shall mean the holders of a
majority of the outstanding shares of Series C Preferred.
1.12 "ORIGINAL HOLDERS" shall mean the Investors and any
Permitted Transferees who execute an agreement to be bound by the terms and the
conditions of this Agreement.
1.13 "PERMITTED TRANSFEREE" means any Affiliate, partner,
member or stockholder of an Investor.
1.14 "PERSON" means an individual, corporation, limited
liability company, partnership, association, trust or any other entity or
organization.
1.15 "PREFERRED STOCK" means the Series B Preferred and
Series C Preferred.
1.16 "QUALIFIED PUBLIC OFFERING" shall means a firm
commitment underwritten public offering of Common Stock by the Company after the
date hereof, that is first issued with a nationally recognized investment
banking firm at a price per share offered to the public of at least $0.02 (as
adjusted for any stock splits, stock dividends, combinations, recapitalizations,
reclassifications or other similar events), in a total offering including gross
proceeds of at least $30,000,000 before deduction of underwriting commissions
and expenses of the offering.
1.17 "STOCK" means the capital stock of the Company.
2
1.18 "STOCKHOLDERS" means all of the holders of capital
stock of the Company and "Stockholder" shall mean any such Person.
1.19 "TRANSFER" means to sell, assign, transfer
(voluntarily or involuntarily), exchange (by merger or otherwise) or otherwise
dispose of.
2. CORPORATE GOVERNANCE.
2.1 ELECTION OF DIRECTORS.
2.1.1 RESIGNATION OF DIRECTORS AND FILLING OF
VACANCIES. Effective as of the Closing, the Current Company Directors that are
listed on SCHEDULE A to this Agreement, shall resign as directors, such
resignations to be evidenced by letters of resignation delivered to the Company
on or prior to the Closing Date, and the remaining Current Company Directors
shall fill the vacancies caused by such resignations with the persons listed on
SCHEDULE B to this Agreement, such that immediately after the Closing, the
Company Board shall consist of seven (7) members, I.E., four (4) members
designated by Charter, one member designated by Blue Truck, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇").
2.1.2 RIGHT TO APPOINT DIRECTORS. From and after
the Closing:
(a) The Majority Holders may, from time
to time, cause the number of directors that compose the Company Board to
increase or decrease.
(b) Blue Truck (or one of its designated
Affiliates) shall have the right to designate one member to the Company Board
(the "BLUE TRUCK NOMINEE"), on the terms and conditions provided in the
certificate of designations relating to the Series B Preferred.
(c) Charter (or one of its designated
Affiliates) shall have the right to designate members to the Company Board
("SERIES C NOMINEES", and together with the Blue Truck Nominee, the "INVESTOR
NOMINEES"), on the terms and conditions provided in the certificate of
designations relating to the Series C Preferred.
(d) ▇▇▇▇▇▇▇ shall be entitled to serve
as a member of the Company Board for so long as he remains continuously employed
by the Company. ▇▇▇▇▇▇▇▇ shall not have such right.
(e) If at any time Charter elects to
designate less members to the Company Board than it is otherwise entitled under
the certificate of designations relating to the Series C Preferred, the
Investors and the Company shall take all necessary corporate action to vest the
appropriate number of Company Board votes (I.E., the number of Series C Nominees
Charter is entitled to designate) in the existing Series C Designees, including,
but in no way limited to, the designation of the Series C Designees as directors
with more than one vote.
2.2 REMOVAL AND REPLACEMENT OF DIRECTORS.
2.2.1 REMOVAL OF INVESTOR NOMINEES.
3
(a) If at any time Charter (or one of
its designated Affiliates) notifies the Company Board of its wish to remove any
Series C Nominee from the Company Board, or Blue Truck (or one of its designated
Affiliates) notifies the Company Board of its wish to remove the Blue Truck
Nominee from the Company Board, the Investors shall use their best efforts to
cause the Company Board to vote to remove the applicable Investor Nominee
provided that such Investor Nominee can be removed in accordance with the
Company's Bylaws and the Delaware General Corporation Law. If the Company Board
fails to remove such Investor Nominee, the Investors shall vote all their shares
of Stock to so remove the applicable Investor Nominee provided that he or she
may be removed in accordance with the Company's Bylaws and the Delaware General
Corporation Law.
(b) Removal of an Investor Nominee by
the Company Board or the Investors requires the prior written consent of Charter
(or one of its designated Affiliates), if he or she is a Series C Nominee and
Charter continues to have the right to appoint a successor to such Series C
Nominee under the certificate of designations relating to the Series C
Preferred, or Blue Truck (or one of its designated Affiliates), if he or she is
a Blue Truck Nominee and Blue Truck continues to have the right to appoint a
director under the certificate of designations relating to the Series B
Preferred, unless such removal is based upon the gross negligence or willful
misconduct of the applicable Investor Nominee.
2.2.2 REPLACEMENT OF DIRECTORS. If at any time
after the Closing Date, a vacancy is created on the Company Board by reason of
the incapacity, death, removal or resignation of, or the expiration of the term
of, any Investor Nominee, then: (i) if such Investor Nominee was a Series C
Nominee and Charter (or one of its designated Affiliates) continues to have the
right to appoint a successor to such Series C Nominee, Charter (or one of its
designated Affiliates) shall be entitled to designate an individual to fill such
vacancy and (ii) if such Investor Nominee was a Blue Truck Nominee, Blue Truck
(or one of its designated Affiliates), as long as Blue Truck continues to have
the right to designate a director under the certificate of designations relating
to the Series B Preferred, shall be entitled to designate an individual to fill
such vacancy. If at any time after the Closing Date, a vacancy is created on the
Company Board by reason of the incapacity, death, removal or resignation of, or
the expiration of the term of, any member of the Company Board that is not an
Investor Nominee, such vacancy shall be filled in accordance with governing
documents of the Company and applicable law.
2.2.3 STOCKHOLDER MEETINGS. At each meeting of
Stockholders of the Company at which directors are elected, the nominees for
directors proposed by the Company Board shall include those nominees as are
necessary to comply with Section 2.1.2, including ▇▇▇▇▇▇▇ in accordance with
Section 2.1.2(d). Each of the Original Holders shall vote its shares of Stock
and each Original Holder shall take all other actions necessary, to designate
directors in accordance with this Section 2 and ensure that the Company's
Certificate of Incorporation and Bylaws facilitate and do not at any time
conflict with any provision of this Agreement.
2.3 BOARD MEMBERS. All Investor Nominees and ▇▇▇▇▇▇▇ (in
his capacity as a director) shall be entitled to the same indemnification rights
as are accorded the other members of the Company Board. The Company shall at all
times maintain a directors' and officers' insurance policy covering all the
members of the Company Board.
4
3. PREEMPTIVE RIGHTS.
3.1 The Company shall not issue any Common Stock or other
Stock or any securities convertible into or exchangeable into Common Stock or
other Stock or an option or right to acquire Common Stock or other Stock (the
"OFFERED SHARES") for cash (or any other form of consideration in the case of an
issuance to Charter or any of its Affiliates) without first complying with this
Section 3, unless such issuance is (i) pursuant to any stock option plan, stock
purchase plan or other benefit plan, in each case for directors, officers and/or
employees and approved by the Company Board, (ii) pursuant to a registration
statement of the Company that is declared effective by the Securities and
Exchange Commission, or (iii) with respect to the exercise or conversion of
securities convertible into or exchangeable into Common Stock or other Stock or
options or rights to acquire Common Stock or other Stock.
3.2 In the event that the Company proposes to make an
issuance requiring compliance with this Section 3, it shall first offer in
writing (the "PREEMPTIVE OFFER") to each Original Holder the right to purchase,
at the same price, subject to Section 3.4, and on the same terms as the proposed
issuance giving rise to the Preemptive Offer, a number of Offered Shares equal
to the product of (a) the total number of Offered Shares and (b) a fraction, the
numerator of which is the number of Converted Shares owned by such Original
Holder and/or shares of Common Stock into which all shares of Series B Preferred
and/or Series C Preferred owned by such Original Holder is then convertible (or
would be convertible following the Conversion Trigger Date) and the denominator
of which is the total number of outstanding shares of Common Stock (on a fully
diluted basis after giving effect to the conversion or exchange, as applicable,
of all in-the-money securities convertible into or exchangeable into, or options
or rights to acquire, Common Stock). The Preemptive Offer shall be sent to the
Original Holders not less than 30 days prior to the proposed consummation of
such issuance. The Original Holders shall have the right to accept the
Preemptive Offer for all, but not less than all, of the Offered Shares offered
to it under the Preemptive Offer by written notice to the Company within 15 days
of receipt by it of the Preemptive Offer. Any such acceptance shall be
irrevocable.
3.3 In the event that an Original Holder shall accept a
Preemptive Offer, the closing of the sale and purchase of the applicable Offered
Shares shall occur, subject to Section 3.4, within 15 days after acceptance may
be made or simultaneously with the sale of Offered Shares giving rise to the
obligation of the Company to make the Preemptive Offer, whichever is later,
except that the Company Board may determine to cancel the sale of shares of
capital stock giving rise to the obligation of the Company to make the
Preemptive Offer under this Section 3, in which case no such sale and purchase
is required to occur. In the event that such closing does not occur within the
time period prescribed by this Section 3.3, any subsequent issuance of
securities must be made in accordance with the terms of this Section 3, if
applicable.
3.4 In the event of an issuance of shares other than for
cash, an Original Holder that has, and elects to exercise, rights under this
Section 3 shall purchase the shares offered to it under the Preemptive Offer for
cash at a price per share equal to the value per share received by the Company
for the Offered Shares. Such price per share shall be determined by the Board of
Directors in good faith and with due care. If the majority of the Original
Holders that have elected to purchase shares pursuant to this Section 3 object
to such valuation (the "OBJECTING HOLDERS"), in writing, within 10 days after
being notified of such valuation (the
5
"OBJECTION NOTICE"), the valuation shall be determined by an arbitrator mutually
selected by a majority of the Objecting Holders and the Board of Directors, or
in the event a single arbitrator cannot be agreed upon within 3 days after the
Objection Notice, the valuation shall be determined by an arbitration in which
(i) the Objecting Holders shall have named in the Objection Notice an
arbitrator, (ii) the Board of Directors shall name a second arbitrator within 5
days from the receipt of the Objection Notice, (iii) the arbitrators selected by
the Objecting Holders and the Board of Directors shall together select a third
arbitrator within 5 days thereafter, and (iv) the three arbitrators thus
selected shall determine the valuation within 5 days thereafter. The costs of
such arbitration shall be borne equally by the Company and by the Objecting
Holders, and as among the Objecting Holders, pro rata based on the number of
shares held on an as-converted basis. Such determination of value and the
sharing of costs by the Objecting Holders shall be binding on all Objecting
Holders and any Original Holders that accept such Preemptive Offer.
Notwithstanding anything herein to the contrary, this Section 3.4 shall not be
construed to prevent or otherwise delay the closing of the offer and sale of the
Offered Shares giving rise to the applicable Preemptive Offer and the procedures
and determinations set forth in this Section 3.4 may occur after such closing
and, the closing of the Preemptive Offers that have been accepted shall occur as
soon as reasonably practicable (but no more than 15 days) after completion of
such procedures and determinations.
4. TAG-ALONG RIGHTS.
4.1 TAG-ALONG RIGHTS OF THE SERIES B PREFERRED.
4.1.1 If any Original Holder or Affiliated group
of Original Holders proposes, in a single, bona fide, arm's length transaction
or a series of related bona fide, arm's length transactions, to Transfer (such
Original Holders being collectively the "TAGGED HOLDER") 10% or more of the
total number of outstanding shares of Series C Preferred to transferees other
than its Permitted Transferees, the Tagged Holder shall, at least 20 days prior
to the closing that would trigger the obligations under this Section 4.1, give
notice thereof to all other Original Holders (the "TAG-ALONG NOTICE"). The
Tag-Along Notice shall identify the proposed purchaser, the consideration per
share to be paid by such purchaser and the other material terms and conditions
of the proposed Transfer and, in the case of a Transfer in which the
consideration payable consists in part or in whole of consideration other than
cash, such information relating to such consideration as any such other Original
Holder may reasonably request as being necessary to evaluate such non-cash
consideration (it being understood that such request shall not obligate a Tagged
Holder to deliver any information to the other Original Holders not reasonably
available to such Tagged Holder).
4.1.2 Each Original Holder receiving a Tag-Along
Notice shall have the right, exercisable as set forth below, to Transfer to the
proposed transferee on the same terms as are set forth in the Tag-Along Notice,
except as otherwise provided in this Section 4, up to the number of shares of
Series B Preferred owned by such Original Holder at the time of the proposed
Transfer, multiplied by a fraction (i) the numerator of which is the number of
shares of Common Stock into which the Series C Preferred to be acquired by the
transferee is then convertible (or would be convertible following the Conversion
Trigger Date), and (ii) the denominator of which is the total number of shares
of Common Stock into which all shares of Series B Preferred and Series C
Preferred owned (beneficially and of record) by the Tagged
6
Holder and all other Original Holders is then convertible (or would be
convertible following the Conversion Trigger Date). The number of shares of
Series C Preferred to be Transferred by the Tagged Holder shall be reduced by
the aggregate amount of shares Transferred by the Tagging Holders.
4.1.3 Each Original Holder's rights under this
Section 4.1 may be exercised by giving written notice (which shall be
irrevocable) to the Tagged Holder during the period (the "TAG-ALONG OFFER
PERIOD") which is 10 days after the delivery to it of the Tag-Along Notice. The
failure by any Original Holder to so notify the Tagged Holder within such
Tag-Along Offer Period shall be deemed an election by such Original Holder not
to exercise its rights under this Section 4.1.
4.1.4 The Tagged Holder shall have 120 days from
the termination of the Tag-Along Offer Period to consummate the Transfer
contemplated by the Tag-Along Notice to the proposed transferees at the price
and on terms no more favorable to the proposed transferee(s) than those
contained in the Tag-Along Notice. If the Tagged Holder has not completed the
Transfer contemplated by the Tag-Along Notice within such 120-day period, then
the rights of the Tagged Holder and the Original Holders pursuant to this
Section 4.1 shall terminate as to such proposed Transfer and the Tagged Holder
shall again comply with the procedures set forth in this Section 4.1 with
respect to that Transfer and any subsequent proposed Transfer that is subject to
this Section 4.1.
4.1.5 Promptly (but no more than 5 business days)
after the consummation of the Transfer of the Series B Preferred and Series C
Preferred as to which one or more Original Holders have elected to participate
pursuant to this Section 4.1 (each participating Original Holder being a
"TAGGING HOLDER") or, the determination of the value of the consideration
pursuant to Section 4(b) of the certificates of designations relating to the
Preferred Stock, if other than cash or cash equivalents, whichever is earlier,
the Tagged Holder shall notify the Tagging Holders thereof, shall remit to each
of them its share of the total consideration (to be determined as set forth
below), and shall furnish such other evidence of such Transfer and the terms
thereof as may be reasonably requested by the Tagging Holders. Notwithstanding
the foregoing, the Tagging Holders shall be required (i) to bear their share of
any escrows, holdbacks or adjustments in purchase price established pursuant to
the agreement evidencing such Transfer proportionate to the Tagging Holder's
share of the total consideration and (ii) to make such representations,
warranties and covenants and enter into such agreements customarily made by
selling minority stockholders in similar transactions regarding (x) ownership of
the shares to be transferred (including the absence of any liens), (y) due
authority, and (z) other customary matters. For purposes of this Section 4, the
Tagged Holder's and each Tagging Holder's share of the total consideration paid
by the purchaser of shares shall be determined and allocated as though such
total consideration were being distributed to such Original Holders (on a per
share basis) pursuant to a Liquidation Event (as such term is defined in Section
4(a) of the certificates of designations relating to the Preferred Stock) in
accordance with Section 4 of the certificates of designations relating to the
Preferred Stock, solely as it relates to those shares being sold in the Transfer
pursuant to this Section 4, and as though the shares sold in the Transfer
pursuant to this Section 4 were the only outstanding shares of the Company at
the time of such Liquidation Event.
7
4.1.6 Notwithstanding anything contained in this
Section 4.1, there shall be no liability on the part of the Tagged Holder to
other Original Holders if the Transfer pursuant to this Section 4.1 is not
consummated for whatever reason. The determination of whether to effect a
Transfer of Stock pursuant to this Section 4.1 by the Tagged Holder is in the
sole and absolute discretion of the Tagged Holder.
4.2 CLOSING. In the event that the rights of an Original
Holder under Section 4.1 shall be exercised, each Tagging Holder shall cause the
stock certificate or certificates representing the shares covered by such
Transfer to be delivered to a representative of the Tagged Holder, duly endorsed
for transfer with all applicable stock transfer tax stamps attached, paid or
otherwise provided for by such Tagging Holder together with such other documents
and instruments as such representative may reasonably request in connection with
such Transfer.
5. DRAG-ALONG RIGHTS.
5.1 DRAG-ALONG RIGHTS OF THE SERIES C PREFERRED.
5.1.1 If any Original Holder or Affiliated group
of Original Holders owning Series C Preferred (other than ▇▇▇▇▇▇▇) proposes in a
single, bona fide, arm's length transaction or a series of related, bona fide,
arm's length transactions (such Original Holder(s) being collectively, the
"DRAGGING HOLDER") to either (a) Transfer 10% or more of the total number of
outstanding shares of Series C Preferred other than sales in the open market or
(b) cause the Company to sell all or substantially all of its assets, in each
case to an unaffiliated third party, then, upon written notice to all other
Original Holders (each a "DRAGGED HOLDER") and the Company (a "DRAG-ALONG
NOTICE"), the Dragging Holder shall have the right to cause each, but not less
than all, of the Dragged Holders to participate in such Transfer (a "DRAG-ALONG
TRANSACTION") as set forth below. Notwithstanding anything in this Agreement to
the contrary, in the event the Dragging Holder proposes to Transfer less than a
majority of the total number of outstanding shares of Converted Shares and/or
Series C Preferred owned by it, such Dragging Holder shall not have the right to
cause the other Original Holders to participate in the Transfer, and such
Original Holders shall not have any obligation, under this Section 5 unless the
consideration received by each such Dragged Holder in connection with such
Transfer is equal to or greater than the Series B Preferred Base Liquidation
Amount (as defined in the certificate of designations relating to the Series B
Preferred) per share of Series B Preferred being Transferred.
5.1.2 Any Drag-Along Notice shall contain (1) the
name and address of the proposed transferee(s), (2) the proposed purchase price,
terms of payment and other material terms and conditions of the proposed
Drag-Along Transaction, and (3) the number of shares of the Dragged Holder's
Series B Preferred and/or Converted Shares to be included in the Transfer (the
"DRAGGED SHARES"), which may be up to the number of shares of Series B Preferred
and Converted Shares owned by such Dragged Holder at the time of the proposed
Transfer, multiplied by a fraction (i) the numerator of which is the number of
shares of Converted Shares and/or Series C Preferred (on an as-converted basis)
to be sold by the Dragging Holder, and (ii) the denominator of which is the
total number of Converted Shares and/or shares of Series C Preferred (on an
as-converted basis) owned by the Dragging Holder immediately prior to such
Transfer.
8
5.1.3 Each Dragged Holder shall consent to and
raise no objection with respect to (and will not exercise statutory appraisal
rights in connection with) the transaction described in the Drag-Along Notice
and will, at the option of the Dragging Holder, agree to Transfer the Dragged
Shares to the proposed transferee as part of such transaction, on the same terms
as are set forth in the Drag-Along Notice, except as otherwise provided in this
Section 5. After delivery of a Drag-Along Notice, the Dragging Holder shall
provide any Dragged Holder with any written information regarding the proposed
Transfer as reasonably requested by such Dragged Holder. If such transaction is
structured as a sale of stock, within 10 days following the date of the
Drag-Along Notice, each of the Dragged Holders shall deliver to a representative
of the Dragging Investor designated in the Drag-Along Notice certificates
representing all of the shares of Series B Preferred and/or Converted Shares to
be transferred by such Dragged Holder, duly endorsed for Transfer with all
applicable stock transfer tax stamps attached, paid or otherwise provided for by
such Dragged Holder, together with such other documents and instruments as the
Dragging Investor or its representative may reasonably request to evidence such
Transfer.
5.1.4 Promptly (but no more than 5 business days)
after the completion of any transaction described in a Drag-Along Notice or, the
determination of the value of the consideration received in such transaction
pursuant to Section 4(b) of the certificates of designations relating to the
Preferred Stock, if other than cash or cash equivalents, whichever is earlier,
the Dragging Holder shall give notice thereof to the Dragged Holders, shall
remit to each of them the transaction proceeds to which it is entitled (to be
determined as set forth below) (other than any amounts that are required to be
withheld pursuant to applicable law or otherwise necessary to be withheld
pursuant to the agreement evidencing such Drag-Along Transaction) and shall
furnish such other evidence of the completion and time of completion of such
sale or other disposition and the terms and conditions thereof as any Dragged
Holder may reasonably request. For purposes of this Section 5, the Dragging
Holder's and each Dragged Holder's share of the total consideration paid by the
purchaser in respect of a Drag-Along Transaction, (x) if such transaction
involves a sale of shares of Stock, shall be determined and allocated as though
such total consideration were being distributed to such Original Holders (on a
per share basis) pursuant to a Liquidation Event (as such term is defined in
Section 4(a) of the certificates of designations relating to the Preferred
Stock) in accordance with Section 4 of the certificates of designations relating
to the Preferred Stock, and as though the shares sold in the Transfer pursuant
to this Section 5 were the only outstanding shares of the Company at the time of
such Liquidation Event or (y) if such transaction involves a sale of
substantially all of the assets of the Company, shall be determined and
allocated in accordance with the applicable provisions of the certificates of
designations relating to the Preferred Stock.
5.1.5 Each of the Dragging Holder and Dragged
Holders shall bear its pro-rata share (based upon the percentage of the total
consideration such holder is entitled in respect of the Drag-Along Transaction)
of the costs of any Transfer of shares pursuant to a transaction described in a
Drag-Along Notice to the extent such costs are incurred for the benefit of the
Dragging Holder and the Dragged Holders and are not otherwise paid by the
Company or the acquiring party, with the understanding that the Company shall
pay such costs unless prohibited from doing so by the terms of the transaction.
Costs incurred by the Dragging Holder and Dragged Holders on their own behalf
shall not be considered to be costs of the transaction hereunder.
9
6. LEGEND. Each of the Investors agrees that one or more of the
following legends may be placed on the certificates of any shares of Series B
Preferred and Series C Preferred (and Common Stock issuable upon conversion
thereof) owned by them:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
THE ACT OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENTS.
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
THE SHARES REPRESENTENTED BY THE CERTIFICATE ARE SUBJECT TO THE RIGHTS
AND RESTRICTIONS CONTAINED IN THE INVESTORS' AGREEMENT DATED AS OF JUNE
17, 2003, AS SUCH AGREEMENT MAY BE AMENDED, SUPPLEMENTED, RESTATED OR
OTHERWISE MODIFIED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE CORPORATION).
7. MISCELLANEOUS.
7.1 AGREEMENT TO BE BOUND. Notwithstanding anything to
the contrary contained in this Agreement, no shares of Common Stock, Preferred
Stock or Converted Shares held by any Investor may be Transferred unless the
transferee, prior to such Transfer, agrees in writing, in form and substance
reasonably satisfactory to the Company, to be bound by the terms of this
Agreement to the same extent and in the same manner as the transferor of such
shares, a copy of which writing shall be maintained on file with the Secretary
of the Company and shall include the address of such transferee to which notices
hereunder shall be sent. Any such transferee shall be entitled to exercise all
of the rights of an Investor as if an original party hereto.
7.2 TERM OF AGREEMENT.
7.2.1 This Agreement shall automatically terminate
on the occurrence of any of the following events: (i) the cessation of the
Company's business or the complete liquidation of the Company; (ii) whenever one
holder owns all of the shares of Stock; and (iii) upon a Qualified Public
Offering.
7.2.2 In addition, this Agreement shall terminate
and be of no further force or effect (i) with respect to any Investor when such
Investor ceases to own any Stock or (ii) by written consent in accordance with
SECTION 7.5 hereof.
10
7.3 RECAPITALIZATION, ETC. In the event that any Stock or
other securities of the Company are issued in respect of, in exchange for, or in
substitution of, any Common Stock or Preferred Stock by reason of any
reorganization, recapitalization, reclassification, merger, consolidation,
spin-off, partial or complete liquidation, stock dividend, split-up, sale of
assets, distribution to stockholders or combination of the Common Stock and
Preferred Stock or any other change in capital structure of the Company,
appropriate adjustments shall be made with respect to the relevant provisions of
this Agreement so as to fairly and equitably preserve, as far as practicable,
the original rights and obligations of the parties hereto under this Agreement.
7.4 NOTICES. All notices required to be given to any of
the parties to this Agreement shall be in writing and shall be deemed to have
been sufficiently given, subject to the further provisions of this Section, for
all purposes (and shall constitute valid legal service) when presented
personally to such party or sent by certified or registered mail, return receipt
requested, with proper postage prepaid, or any national overnight delivery
service, with proper charges prepaid, or by facsimile (together with an
electronically generated confirmation of receipt) to such party at its address
set forth below:
If to the Company:
United Road Services, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Blue Truck:
Blue Truck Acquisition, LLC
c/o KPS Special Situations Fund, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11
With a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to CFE:
c/o General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Winston & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Charter:
c/o Charterhouse Group International, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
12
Such notice shall be deemed to be received when delivered if delivered
personally, the next business day after the date sent if sent by a national
overnight delivery service, three (3) business days after the date mailed if
mailed by certified or registered mail, or when received if sent by facsimile.
Any party may change its address for purposes of this Agreement, and notice of
any change in such address shall also be given in the manner set forth above.
Whenever the giving of notice is required, the giving of such notice may be
waived in writing by the party entitled to receive such notice.
7.5 AMENDMENT AND WAIVER.
7.5.1 No failure or delay on the part of any party
hereto in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
parties hereto at law, in equity or otherwise.
7.5.2 Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by any party from the terms of any
provision of this Agreement, shall be effective only if it is made or given in
writing and signed by (i) the affected party(ies), (ii) Charter, and (iii) Blue
Truck, for so long as Blue Truck continues to own at least 50% of the Adjusted
Number of Shares Purchased (as defined in the certificate of designations
relating to the Series B Preferred).
7.6 SPECIFIC PERFORMANCE. The parties hereto agree that
(a) irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached, and (b) each of the parties has the right to seek
damages or specific performance in the event that any other party hereto
willfully fails to perform such party's obligations hereunder. Therefore, if any
party shall institute any action or proceeding to enforce the provisions hereof,
any party against whom such action or proceeding is brought hereby waives any
claim or defense therein that the plaintiff party has an adequate remedy at law.
7.7 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
7.8 SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
7.9 ENTIRE AGREEMENT. This Agreement and the Ancillary
Agreements are intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreements and
understandings of the parties hereto in respect of the
13
subject matter contained herein and therein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and in the Ancillary Agreements. This Agreement and the Ancillary
Agreements supersede all prior agreements and understandings between the parties
with respect to such subject matter, including, but not limited to, the
Investors' Agreement, dated as of June 20, 2000, between the Company and Blue
Truck, the Amended and Restated Investors' Rights Agreement, dated as of April
14, 2000, between the Company and Charter, and the Tag-Along Side Letter, dated
as of June 20, 2000, between Blue Truck and CFE.
7.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO SUCH STATE'S PRINCIPLES REGARDING CONFLICTS OF LAW.
7.11 FURTHER ASSURANCES. Each of the parties shall, and
shall cause its respective Affiliates to, execute such instruments and take such
action as may be reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby.
7.12 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
permitted successors and assigns. This Agreement is not assignable by the
Company and may be assigned by any Investor to any Permitted Transferee.
7.13 NO THIRD PARTY BENEFICIARIES. Except for Section 2.3,
this Agreement is not intended to, and does not, create any rights or benefits
of any Person other than the parties hereto.
7.14 COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, and all of
which taken together shall constitute one and the same instrument.
7.15 JURISDICTION. Each party hereby irrevocably submits
to the exclusive jurisdiction of the courts of the State of New York and the
federal courts of the United States of America located in such state solely in
respect of any claim relating to the interpretation and enforcement of the
provisions of this Agreement, or otherwise in respect of the transactions
contemplated hereby and thereby, and hereby waives, and agrees not to assert, as
a defense in any action, suit or proceeding in which any such claim is made that
it is not subject thereto or that such action, suit or proceeding may not be
brought or is not maintainable in such courts or that the venue thereof may not
be appropriate or that this Agreement or any such document may not be enforced
in or by such courts, including with respect to notice of claim provided that
such notice is given pursuant of Section 7.4 hereof.
7.16 WAIVER OF JURY TRIAL. Each party acknowledges and
agrees that any controversy which may arise under this Agreement is likely to
involve complicated and difficult issues, and therefore each party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury. Each party certifies and acknowledges that (i) no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
14
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver, (ii) such party understands and has considered the
implications of this waiver, (iii) such party makes this waiver voluntarily, and
(iv) such party has been induced to enter into this Agreement by, among other
things, the mutual waivers, agreements and certifications in this section.
7.17 EFFECTIVENESS. Notwithstanding anything to the
contrary contained in this Agreement, this Agreement shall not become effective,
and the Original Holders shall have no rights hereunder, unless and until the
Closing has occurred.
[Signature Page Follows]
15
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first written above.
UNITED ROAD SERVICES, INC.
By: /s/
---------------------------------------
Name:
Title:
BLUE TRUCK ACQUISITION, LLC
By:
By: /s/
---------------------------------------
Name:
Title:
GE CAPITAL CFE, INC. (formerly, CFE, Inc.)
By: /s/
---------------------------------------
Name:
Title:
CHARTER URS LLC
By: /s/
---------------------------------------
Name:
Title:
/s/
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SCHEDULE A
----------
▇▇ ▇▇▇▇▇▇▇▇
A. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
17
SCHEDULE B
----------
Blue Truck designee: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Charter designee: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Charter designee: ▇▇▇▇ ▇▇▇▇▇▇
Charter designee: ▇▇▇▇▇ Silver
18