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EXHIBIT 7.2
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇ TRANSPORTATION SERVICES, INC.,
SPECIALTY TRANSPORTATION SERVICES, INC., ▇▇▇▇▇ TRANSFER, INC.,
AG CARRIERS, INC.,
AND
▇▇▇▇▇▇▇▇▇ ENVIRONMENTAL & INDUSTRIAL EQUITY PARTNERS, L.P.
DATED AS OF AUGUST 17, 1999
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TABLE OF CONTENTS
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Section 1. Definitions and Principles of Construction.................. 1
1.01. Defined Terms............................................... 1
1.02. Principles of Construction.................................. 4
Section 2. Sale and Purchase of Stock.................................. 4
2.01. Sale and Purchase of Stock.................................. 4
2.02. Purchase Price; Number of Shares to be Purchased............ 4
2.03. Closing..................................................... 5
Section 3. Representations and Warranties of the Company and the
Subsidiaries................................................ 5
3.01. Organization and Good Standing.............................. 5
3.02. Authorization; No Conflict.................................. 5
3.03. Enforceability.............................................. 6
3.04. Approvals................................................... 6
3.05. Capitalization.............................................. 6
3.06. Subsidiaries................................................ 6
3.07. Compliance with Laws and Orders............................. 6
3.08. SEC Reports and Financial Statements........................ 7
3.09. Absence of Certain Changes or Events........................ 7
3.10. Absence of Undisclosed Liabilities.......................... 7
3.11. Legal Proceedings........................................... 7
3.12. Taxes....................................................... 8
3.13. Employee Benefit Plans...................................... 8
3.14. Environmental............................................... 8
3.15. Affiliate Transactions...................................... 9
3.16. Brokers..................................................... 9
3.17. Exemption from Registration; Restrictions on Offer and Sale
of Same or Similar Securities............................... 9
3.18 Specialty Transportation Services, Inc...................... 9
3.19. Disclosure.................................................. 10
Section 4. Representations and Warranties of Purchaser................. 10
4.01. Organization................................................ 10
4.02. Investment Intent........................................... 10
4.03. No Registration of Securities............................... 10
4.04. Investor Status............................................. 10
4.05. Authority to Execute and Perform Agreement; No Conflict..... 10
4.06. Brokers..................................................... 10
4.07. Approvals................................................... 10
Section 5. Covenants of the Company, the Subsidiaries and Purchaser.... 11
5.01. Company..................................................... 11
5.02. Purchaser................................................... 14
Section 6. Conditions Precedent to Obligations of Purchaser............ 14
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Section 7. Conditions Precedent to Obligations of the Company and the
Subsidiaries................................................ 16
Section 8. Notices..................................................... 17
Section 9. Survival of Representations, Warranties, Covenants and
Agreements.................................................. 18
Section 10. Indemnification............................................. 18
10.01. Indemnity by the Company and the Subsidiaries............... 18
10.02. Purchaser's Indemnity....................................... 19
10.03. Procedure................................................... 19
10.04. Indemnification not Affected by Knowledge................... 20
Section 11. Termination................................................. 20
11.01. Termination................................................. 20
11.02. Effect of Termination....................................... 21
11.03. No Liability................................................ 21
Section 12. Miscellaneous............................................... 21
12.01. Amendment or Waiver......................................... 21
12.02. Consent to Jurisdiction..................................... 21
12.03. Further Assurances.......................................... 21
12.04. Attorney's Fees and Costs................................... 21
12.05. Assignment.................................................. 22
12.06. Entire Agreement............................................ 22
12.07. Expenses.................................................... 22
12.08. Public Announcements........................................ 22
Exhibit A -- Form of Registration Rights Agreement
Exhibit B -- Form of Advisory Services Agreement
Exhibit C-1 -- Form of Voting Agreement
Exhibit C-2 -- Form of ▇▇▇▇▇▇▇ Voting Agreement
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EXHIBIT 7.2
This STOCK PURCHASE AGREEMENT, dated as of August 17, 1999, is by and
between ▇▇▇▇▇ Transportation Services, Inc., a Delaware corporation (the
"Company"), ▇▇▇▇▇▇▇▇▇ Environmental & Industrial Equity Partners, L.P., a
limited partnership organized under the laws of the State of Delaware
("Purchaser"), and Specialty Transportation Services, Inc., ▇▇▇▇▇ Transfer,
Inc., and AG Carriers, Inc., (each a "Subsidiary" and collectively, the
"Subsidiaries").
WHEREAS, the Company, through its Subsidiaries, is a diversified
transportation services company;
WHEREAS, in order to repay certain of the Company's indebtedness, and in
order to finance the Company's continued growth, the Company desires to issue
and sell to Purchaser, and Purchaser desires to purchase from the Company,
shares of common stock of the Company, par value $.0001 per share (the "Common
Stock");
WHEREAS, in order to induce the Purchaser to enter into this Agreement, and
concurrently herewith, Purchaser has entered into voting agreements
(collectively, the "Voting Agreements") substantially in the form attached
hereto as Exhibit C-1 with each of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and substantially in the form
attached hereto as Exhibit C-2 with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, pursuant to which each of
such persons has agreed, among other things, to vote the shares of the Company's
Common Stock owned by them in favor of: (i) the Charter Amendment (as
hereinafter defined), (ii) the Investment Proposal (as hereinafter defined),
(iii) the Charter and By-Law Amendments (as hereinafter defined) and (iv) the
continued appointment of the Purchaser Designees to the Company's Board of
Directors.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
Section 1. Definitions and Principles of Construction.
1.01. Defined Terms. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Additional Shares" has the meaning set forth in Section 2.02(c).
"Adjustment Period" means the period beginning on September 1, 2000, and
ending on November 1, 2000.
"Adjustment Price" has the meaning set forth in Section 2.02(c).
"Advisor" has the meaning set forth in the Advisory Services Agreement.
"Advisory Services Agreement" means an agreement in the form attached
hereto as Exhibit B.
"Affiliate" means any Person that, directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means (i) being the executive officer or director of the Company; and (ii)
having the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise. In any
event, and without limitation of the previous sentence, any Person owning more
than ten percent (10%) of the voting securities of a second Person shall be
deemed to control that second Person, provided, however, that in no event shall
the Purchaser or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ be deemed an Affiliate of the Company.
"Agreement" means this Agreement, as the same may be amended, supplemented
or modified in accordance with the terms hereof.
"Benefit Plan" has the meaning set forth in Section 3.13.
"Board of Directors" means the Board of Directors of the Company, as
constituted from time to time.
"Business Day" means any day other than a Saturday or a Sunday or a day
when commercial banks are permitted or required by law to be closed in New York
City.
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"Charter and By-Law Amendments" means amendments to the Company's Charter
and By-Laws for the purpose of increasing the maximum number of directors to
fifteen (15) persons in accordance with Section 5.01(b) of this Agreement.
"Charter Amendment" means an amendment to the Company's Certificate of
Incorporation for the purpose of increasing the maximum number of shares of
Common Stock that the Company is authorized to issue to a total of Twenty-Five
Million (25,000,000) shares of Common Stock, to permit the sale by the Company,
and the purchase by the Purchaser, of the Initial Shares and Additional Shares.
"Claim Notice" has the meaning set forth in Section 10.03(a).
"Closing" has the meaning set forth in Section 2.03(a).
"Closing Date" shall mean the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Common Stock of the Company, $.0001 par value per
share.
"Company" means ▇▇▇▇▇ Transportation Services, Inc.
"Company Disclosure Schedule" means the disclosure letter dated the date of
this Agreement from the Company to Purchaser.
"Company Financial Statements" has the meaning set forth in Section 3.08.
"Company Permits" has the meaning set forth in Section 3.07.
"Company SEC Reports" has the meaning set forth in Section 3.08.
"Competing Transactions" has the meaning set forth in Section 5.01(c).
"Damages" has the meaning set forth in Section 10.01.
"Diligence Out Date" has the meaning set forth in Section 11.01(c).
"ERISA" has the meaning set forth in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Extraordinary Transaction" has the meaning set forth in Section 2.02(c).
"Governmental or Regulatory Authorities" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign jurisdiction, the European Community or any
political subdivision or agency of any of the foregoing.
"HSR Act" means Section 7A of the ▇▇▇▇▇▇▇ Act (Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"Indemnified Party" and "Indemnifying Party" have the meanings set forth in
Section 10.03.
"Individual Transferee" has the meaning set forth in Section 5.02(b).
"Initial Price Per Share" means a price of (a) Five Dollars ($5.00) per
share of Common Stock, if the average closing price of the Company's Common
Stock on the NASDAQ for the ten (10) Trading Days immediately preceding the
Closing Date is equal to, or greater than, Five Dollars ($5.00) per share, or
(b) Four Dollars and Fifty Cents ($4.50) per share of Common Stock, if the
average closing price of the Company's Common Stock on the NASDAQ for the ten
(10) Trading Days immediately preceding the Closing Date is less than Five
Dollars ($5.00) per share.
"Initial Shares" has the meaning set forth in Section 2.02(b).
"Investment Proposal" has the meaning set forth in Section 5.01(a)(vii).
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"Knowledge" means, as to any specified facts or information, that those
facts or information are within the actual knowledge of any executive officer or
director of the Company.
"Law" means any law, statute, rule, regulation, ordinance or other
pronouncement having the effect of law in the United States, any foreign
jurisdiction, the European Union or any political subdivision of the foregoing.
"Lien" means any lien, pledge, hypothecation, mortgage, security interest,
claim, lease, charge, option, right of first refusal, easement, encroachment,
transfer restriction, or other encumbrance of any kind.
"Lock-Up Period" has the meaning set forth in Section 5.02(b).
"Material Adverse Effect" means a material adverse effect or impact upon
the business, assets, condition (financial or otherwise), or results of
operations of the Company and its Subsidiaries, taken as a whole, or on the
ability of the Company or any of the Subsidiaries to perform its respective
obligations hereunder.
"Most Recent Balance Sheet" means the unaudited balance sheet of the
Company as of June 30, 1999.
"NASDAQ" means the Nasdaq National Market.
"Notice Period" has the meaning set forth in Section 10.03(a).
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority.
"Person" means an individual, partnership, corporation, association, trust,
joint venture, unincorporated organization, and any government, governmental
department or agency or political subdivision thereof.
"Proxy Statement" means the proxy statement of the Company on Schedule 14A
to be filed with the SEC in connection with the Stockholder Meeting, as amended
or supplemented (including all exhibits and schedules thereto and documents
incorporated by reference therein).
"Purchase Price" has the meaning set forth in Section 2.02.
"Purchaser" means ▇▇▇▇▇▇▇▇▇ Environmental & Industrial Equity Partners,
L.P.
"Purchaser Designees" has the meaning set forth in Section 5.01(b).
"Registration Rights Agreement" means an agreement in the form attached as
Exhibit A.
"Related Agreements" means the Registration Rights Agreement, the Advisory
Services Agreement and the Voting Agreements.
"Revised Initial Shares" means, at any time, a number of shares of Common
Stock equal to the number of shares of Common Stock authorized by the Company's
Certificate of Incorporation minus (a) shares of Common Stock issued and
outstanding and (b) shares of Common Stock reserved for issuance pursuant to
stock options and warrants provided, however, the number of Revised Initial
Shares shall in no event exceed the maximum number of shares of Common Stock
which can be issued by the Company to Purchaser without stockholder approval in
accordance with Section 4310(c)(25)(H)(i)d of the NASDAQ Stock Market rules.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SEC" means the Securities and Exchange Commission.
"Shares" has the meaning set forth in Section 2.01.
"Stockholder Meeting" has the meaning set forth in Section 5.01(a)(vii).
"Subsidiaries" has the meaning set forth in the recitals to this Agreement.
"Taxes" means any federal, state, county, local or foreign taxes, charges,
fees, levies, or other assessments, including all net income, gross income,
sales and use, ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipt, capital stock, production, business and
occupation,
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disability, employment, payroll, license, estimated, stamp, custom duties,
severance or withholding taxes or charges imposed by any governmental entity,
including any interest and penalties (civil or criminal) on or additions to any
such taxes and any expenses incurred in connection with the determination,
settlement or litigation of any Tax liability.
"Tax Return" means a report, return or other information required to be
supplied to a governmental entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that include the Company or any Subsidiary.
"Termination Fee" has the meaning set forth in Section 11.02.
"Trading Day" means a day on which the NASDAQ is open for trading and on
which one thousand (1000) shares or more of the Company's Common Stock are
traded.
"Transactions" means the Investment Proposal, Charter Amendment, the
Charter and By-Law Amendments.
"Underwritten Registration or Underwritten Offering" has the meaning set
forth in the Registration Rights Agreement.
"Voting Agreements" has the meaning set forth in the recitals to this
Agreement.
1.02. Principles of Construction. (a) All references to sections, schedules
and exhibits are to sections, schedules and exhibits in or to this Agreement
unless otherwise specified. The words "hereof," "herein," and "hereunder" and
words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provisions of this Agreement.
(b) All accounting terms used in this Agreement shall be construed in
accordance with generally accepted accounting principles in the United States.
Section 2. Sale and Purchase of Stock.
2.01. Sale and Purchase of Stock. The Company agrees to issue and sell to
Purchaser, and, subject to the terms and conditions hereof and in reliance on
the representations, warranties and covenants set forth or referred to herein,
Purchaser agrees to purchase from the Company, the number of shares of Common
Stock determined in accordance with Section 2.02 (the "Shares").
2.02. Purchase Price; Number of Shares to be Purchased. (a) The aggregate
purchase price for the Shares (the "Purchase Price") shall be $12,000,000.
(b) The number of Shares (the "Initial Shares") to be issued and sold by
the Company at the Closing in consideration of the Purchase Price shall be equal
to the Purchase Price divided by the Initial Price Per Share.
(c) Not later than five (5) days after the end of the Adjustment Period,
the Company shall issue and deliver to Purchaser additional Shares, if any, (the
"Additional Shares") as follows: (i) (A) if the highest average closing price on
the NASDAQ of the Company's Common Stock for any ten (10) consecutive Trading
Days during the Adjustment Period (the "Adjustment Price") is less than Six
Dollars and Fifty Cents ($6.50) per share, and (B) the Initial Price Per Share
is Four Dollars and Fifty Cents ($4.50), the Company shall issue and deliver to
Purchaser a number of Additional Shares equal to the quotient of (x) (1) Six
Dollars and Fifty Cents ($6.50) multiplied by the number of Initial Shares,
minus (2) the greater of the Adjustment Price or Three Dollars ($3.00) per share
multiplied by the number of Initial Shares, divided by (y) the greater of the
Adjustment Price or Three Dollars ($3.00) per share, and (ii) (A) if the
Adjustment Price is less than Seven Dollars ($7.00) per share, and (B) the
Initial Price Per Share is Five Dollars ($5.00), the Company shall issue and
deliver to Purchaser a number of Additional Shares equal to the quotient of (x)
(1) Seven Dollars ($7.00) multiplied by the number of Initial Shares, minus (2)
the greater of the Adjustment Price or Three Dollars ($3.00) per share
multiplied by the number of Initial Shares, divided by (y) the greater of the
Adjustment Price or Three Dollars ($3.00) per share. If, prior to the end of the
Adjustment Period, the Company should subdivide or combine the outstanding
shares of the Company's Common Stock, then the reference amounts set forth in
this Section 2.02(c) shall be proportionately adjusted
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to place the Company and Purchaser in the same position as if such subdivision
or combination had not occurred. If, prior to the end of the Adjustment Period,
the Company merges or consolidates with or into another corporation, with the
result that the Company is not the continuing corporation, or if, prior to the
end of the Adjustment Period the Company's outstanding Common Stock shall be
changed, including, but not limited to, by virtue of any merger, consolidation
or recapitalization (other than a subdivision or combination described above)
(each an "Extraordinary Transaction"), the Adjustment Period shall be, at the
election of Purchaser in its sole discretion, deemed to be the sixty (60) day
period ending on the Business Day prior to the consummation of the Extraordinary
Transaction. In the alternative, if Purchaser does not so elect, the provisions
set forth in the first sentence of this Section 2.02(c) shall apply to the
securities into which the Common Stock is converted or changed pursuant to the
Extraordinary Transaction and all references to the Company and Common Stock in
such sentence shall be deemed to refer to such securities and the issuer
thereof, respectively, and the term NASDAQ (including for the purposes of the
definition of Trading Day) will be deemed to refer to the exchange/trading
system on which such securities are traded and it shall be a condition to the
consummation of any Extraordinary Transaction by the Company that such issuer
shall agree in writing (to be delivered to Purchaser) to be bound by the
provisions of this Section 2.02(c).
2.03. Closing. (a) Subject to the other provisions of this Agreement, the
closing of the purchase and sale of the Initial Shares (the "Closing") shall be
held at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
at 10:00 a.m. local time, on September 24, 1999, or, at the option of the
Purchaser, within thirty (30) days after the satisfaction or waiver of the
conditions contained in Sections 6 and 7.
(b) On the Closing Date, Purchaser shall pay the Purchase Price in
immediately available funds, by wire transfer to an account designated by the
Company not less than two (2) Business Days prior to the Closing Date or, if the
Company fails to so designate an account within the required time, by delivery
of a certified or official bank check payable to the order of the Company.
(c) Simultaneously with Purchaser's payment of the Purchase Price, the
Company shall deliver to Purchaser a certificate representing the Initial
Shares.
Section 3. Representations and Warranties of the Company and the
Subsidiaries. The Company and the Subsidiaries jointly and severally represent
and warrant to and for the benefit of Purchaser as follows:
3.01. Organization and Good Standing. Each of the Company and each
Subsidiary (a) is duly organized and existing in good standing in its
jurisdiction of formation, (b) is duly qualified and authorized to do business
in all other jurisdictions in which the nature of its business or property makes
such qualification necessary, and (c) has the power to own its properties and to
carry on its business as now conducted and as proposed to be conducted.
3.02. Authorization; No Conflict. Except as set forth in Section 3.02 of
the Company Disclosure Schedule, the execution, delivery and performance by the
Company and each Subsidiary of this Agreement and the Related Agreements to
which it is a party, and the issuance and sale by the Company of the Shares, (a)
are within the Company's and each Subsidiary's corporate power and authority,
(b) have been duly authorized by all necessary corporate proceedings, (c) do not
and will not conflict with or result in any breach or violation of any provision
of the Certificate of Incorporation or Bylaws of the Company or any Subsidiary,
(d) do not and will not conflict with or result in any breach or violation of
any provision of any law, regulation, order, judgment, writ, injunction, license
or permit, applicable to the Company or any Subsidiary, except where such
conflict, breach or violation would not have a Material Adverse Effect, and (e)
do not and will not conflict with or result in any breach or violation of any of
the terms or conditions of, or constitute (or with notice or lapse of time or
both constitute) a default under, or give rise to the creation of any lien upon
any of the property or assets of the Company or any Subsidiary, under any
material contract, agreement, lease or other instrument to which the Company or
any Subsidiary is a party or by which any of their respective assets or
properties is bound, except where such conflict, breach or violation would not
have a Material Adverse Effect.
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3.03. Enforceability. Each of this Agreement and the Related Agreements to
which the Company and each Subsidiary is a party has been (or, in the case of
the Related Agreements, will be) duly executed and delivered by the Company and
each Subsidiary and constitutes (or, in the case of Related Agreements, will
constitute) the valid and legally binding obligation of the Company and each
Subsidiary enforceable against it in accordance with its respective terms,
except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally and by principles of equity regarding the
availability of remedies.
3.04. Approvals. Except (i) for the approval of the Transactions at the
Stockholder Meeting by the Company's stockholders; (ii) any required filing
under the HSR Act, and the expiration or early termination of the waiting period
thereunder if the Company issues Additional Shares to Purchaser and (iii) as set
forth in Section 3.04 of the Company Disclosure Schedule, the execution,
delivery and performance by the Company and each Subsidiary of this Agreement
and the Related Agreements, and the purchase and sale of the Shares, do not and
will not require the approval or consent of, or any filing with or notice to,
any Governmental or Regulatory Authority or any other Person.
3.05. Capitalization. (a) The authorized capital stock of the Company
consists solely of Ten Million (10,000,000) shares of Common Stock at the date
hereof, and after the filing of the Charter Amendment at the Closing will
consist solely of Twenty-Five Million (25,000,000) shares of Common Stock. All
of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable. Upon issuance and sale to
Purchaser in accordance with the terms of this Agreement the Shares will be duly
authorized, validly issued, fully paid and nonassessable and free and clear of
all Liens.
(b) Except as otherwise set forth in Section 3.05(b) of the Company
Disclosure Schedule, neither the Company nor any Subsidiary has outstanding any
rights (either pre-emptive or other) or options to subscribe for or purchase
from the Company or such Subsidiary or any warrants or other agreements
providing for or requiring the issuance or purchase or other acquisition by or
on behalf of the Company or such Subsidiary of, any capital stock or other
equity interests or any securities convertible into or exchangeable for the
Company's or such Subsidiary's capital stock or other equity interests. Except
as set forth in Section 3.05(b) of the Company Disclosure Schedule, there are no
voting trusts or other agreements or understandings with respect to the voting
of the capital stock or other equity interests of the Company or such Subsidiary
nor any restrictions on the transferability or sale of such shares or other
equity interests except as provided under the Securities Act, state "blue sky"
or securities laws, this Agreement and the Related Agreements. Neither the
Company nor any Subsidiary is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire, redeem or retire any shares of
capital stock or other equity interests of the Company or such Subsidiary or any
securities convertible into or exchangeable for any such capital stock or other
equity interests.
3.06. Subsidiaries. Section 3.06 of the Company Disclosure Schedule sets
forth the name, jurisdiction of organization, and amount of the Company's and
each other record owner's equity interest in each corporation or other entity in
which the Company, directly or indirectly, owns or has the power to vote shares
of any capital stock or other ownership interests having ordinary voting power
to elect a majority of the directors of such corporation, or other persons
performing similar functions for such entity, as the case may be, and each
partnership and limited liability company in which such corporation or entity is
a general partner or manager or member, as the case may be. Except for ownership
by the Company of the Subsidiaries as set forth in Section 3.06 of the Company
Disclosure Schedule or as otherwise set forth in Section 3.06 of the Company
Disclosure Schedule, neither the Company nor any Subsidiary directly or
indirectly owns any capital stock of, or other equity interest in, any person or
participates in any joint venture or similar arrangement with any person. Except
as set forth in Section 3.06 of the Company Disclosure Schedule, all of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully paid and non-assessable, and are owned,
beneficially and of record, directly or indirectly, by the Company free and
clear of all Liens.
3.07. Compliance with Laws and Orders. The Company and its Subsidiaries
hold all material permits, licenses, variances, exemptions, orders and approvals
of all Governmental and Regulatory Authorities
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necessary for the lawful conduct of their respective businesses (the "Company
Permits"). The Company and its Subsidiaries are in compliance with the terms of
the Company Permits where the failure to comply would have a Material Adverse
Effect. Except as disclosed in the Company SEC Reports (as defined in Section
3.08) filed prior to the date of this Agreement, the Company and its
Subsidiaries are not in material violation of or material default under any Law
or Order of any Governmental or Regulatory Authority.
3.08. SEC Reports and Financial Statements. The Company has delivered or
otherwise made available to Purchaser prior to the execution of this Agreement a
true and complete copy of each form, report, schedule, registration statement
and other document (together with all amendments thereof and supplements
thereto) filed by the Company or any of its Subsidiaries with the SEC since
January 1, 1996, (as such documents have since the time of their filing been
amended or supplemented, the "Company SEC Reports"), which, except as disclosed
in Section 3.08 of the Company Disclosure Schedule, are all the documents (other
than preliminary material) that the Company and its Subsidiaries were required
to file with the SEC since such date. Except as disclosed in Section 3.08 of the
Company Disclosure Schedule, and in the cases where the Company SEC Reports have
been amended, as of their respective dates, the Company SEC Reports (i) complied
as to form in all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except as
disclosed in Section 3.08(b) of the Company Disclosure Schedule, the audited
consolidated financial statements and unaudited interim consolidated financial
statements (including, in each case, the notes, if any, thereto) included in the
Company SEC Reports (the "Company Financial Statements") complied as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles in the United States applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes thereto and except
with respect to unaudited statements as permitted by Form 10-Q of the SEC) and
fairly present in all material respects (subject, in the case of the unaudited
interim financial statements, to normal, recurring year-end audit adjustments
which are not expected to be, individually or in the aggregate, material to the
consolidated financial position of the Company and its consolidated Subsidiaries
taken as a whole) the consolidated financial position of the Company and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended. Except as set forth in Section 3.08(b) of the Company
Disclosure Schedule, each Subsidiary of the Company is treated as a consolidated
subsidiary of the Company in the Company Financial Statements for all periods
covered thereby.
3.09. Absence of Certain Changes or Events. Except as disclosed in Section
3.09 of the Company Disclosure Schedule, (a) since December 31, 1998, there has
not been any change, event or development having, or that could be reasonably
expected to have, individually or in the aggregate with other changes, events or
developments a Material Adverse Effect, and (b) since December 31, 1998, the
Company and its Subsidiaries have conducted their respective businesses only in
the ordinary course of business consistent with past practice.
3.10. Absence of Undisclosed Liabilities. Except for matters reflected or
reserved against in the balance sheet for the year ended December 31, 1998,
included in the Company Financial Statements, as reflected on the Most Recent
Balance Sheet or as disclosed in Section 3.10 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries had at such date, or
has incurred since that date, any liabilities or obligations (whether absolute,
accrued, contingent, fixed or otherwise, or whether due or to become due) of any
nature that would be required by generally accepted accounting principles in the
United States, applied on a basis consistent with prior practice, to be
reflected on a consolidated balance sheet of the Company and its consolidated
subsidiaries (including the notes thereto), except liabilities or obligations
(i) which were incurred since such date in the ordinary course of business
consistent with past practice; and (ii) which are not, and could not reasonably
be expected to be, individually or in the aggregate, material to the business,
assets, condition (financial or otherwise) or operations of the Company, and its
Subsidiaries, taken as a whole.
3.11. Legal Proceedings. Except as disclosed in Section 3.11 of the Company
Disclosure Schedule, (i) there are no material claims, actions, suits,
arbitrations or proceedings pending or, to the Knowledge of the
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Company, threatened against, relating to or affecting, nor to the Knowledge of
the Company are there any Governmental or Regulatory Authority investigations or
audits pending or threatened against, relating to or affecting, the Company or
any of its Subsidiaries or any of their respective assets and properties and
(ii) neither the Company nor any of its Subsidiaries is subject to any material
Order of any Governmental or Regulatory Authority.
3.12. Taxes. Each of the Company and each Subsidiary has filed all Tax
Returns required to be filed. All Tax Returns were in all material respects
true, complete and correct and have been filed on a timely basis. Each of the
Company and each Subsidiary have paid, in the time and manner prescribed by law,
all Taxes that are due and payable. There are no Tax liens on any property of
the Company or any Subsidiary. Each of the Company and each Subsidiary has
complied in all material respects with the provisions of the Code and have, in
the time and manner prescribed by law, withheld from employee wages and have
paid to the proper governmental authorities all amounts required. Each of the
Company and each Subsidiary has established on their books and records reserves
adequate to pay all Taxes not yet due and payable. There are no agreements,
waivers or other arrangements providing for an extension of time with respect to
the filing of any returns or the assessment of any Tax or deficiency against the
Company or any of the Subsidiaries nor, except as disclosed in Section 3.12 of
the Company Disclosure Schedule, to the Knowledge of the Company are there any
actions, suits, proceedings, investigations or claims pending against the
Company or any of the Subsidiaries in respect of any Tax, assessment or
governmental charge, or any other matters under discussion between the Company
or any of the Subsidiaries and any federal, state or local authority relating to
any Tax assessments, or governmental charges or, to the Knowledge of the Company
any claims against the Company or any of the Subsidiaries for additional Taxes,
assessments, or any governmental charges asserted by any such authority.
3.13. Employee Benefit Plans. All employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), and all plans, programs, policies, practices arrangements or
contracts (whether group or individual) providing for payments, benefits or
reimbursements to employees of the Company or any Subsidiary, former employees,
their beneficiaries and dependents, or under which such employees, former
employees, their beneficiaries and dependents, are covered through an employment
relationship with the Company or any entity required to be aggregated in a
controlled group or affiliated service group with the Company for purposes of
ERISA or the Code (including without limitation, under Section 414(b), (c), (m)
or (o) of the Code or Section 4001 of ERISA), at any relevant time ("Benefit
Plans") have been maintained and operated in material compliance with their
benefit terms and with the applicable provisions of ERISA, the Code and all
other applicable Laws, (and each such Benefit Plan intended to qualify under
Section 401(a) of the Code is the subject of a favorable unrevoked determination
letter issued by the Internal Revenue Service as to its tax-qualified status
under the Code). There is no material suit, action, dispute, claim, arbitration
or legal, administrative or other proceeding or governmental investigation
pending, or to the Knowledge of the Company threatened, alleging any breach of
the terms of any such Benefit Plan or of any fiduciary duties thereunder or
violation of any applicable Law with respect to any Benefit Plan. Neither
Purchaser nor any plan maintained by Purchaser or any of its Affiliates shall be
subject to any tax, fine, penalty or other liability of any kind whatsoever,
that would not have been incurred by Purchaser or any of its Affiliates but for
the transactions contemplated hereby. The execution of, and performance of the
transactions contemplated by this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under any
Benefit Plan, or any trust or loan that will or may result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any employee of the Company or any of the Subsidiaries.
3.14. Environmental. Except as described in Section 3.14 of the Company
Disclosure Schedule: (i) the Company and each Subsidiary has conducted its
business in compliance with, and without giving rise to any liability under, all
applicable environmental laws, including, without limitation, by having all
material permits required under any environmental laws for the operation of its
business; (ii) none of the owned real property or, to the Company's Knowledge,
leased real property contains any hazardous substance in amounts exceeding the
levels permitted by applicable environmental laws; (iii) neither the Company nor
any Subsidiary has received any written notices, demand letters or requests for
information from any Governmental or Regulatory
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Authority or other person indicating that the Company may be in violation
of, or liable under, any environmental law; (iv) no written reports have been
filed, or are required to be filed, by the Company or any Subsidiary concerning
the release of any hazardous substance or the threatened or actual violation of
any environmental law; (v) no hazardous substance has been disposed of, released
or transported in violation of any applicable environmental law to or from the
owned real property or, to the Company's Knowledge, the leased real property, or
as a result of any activity of the Company or any Subsidiary, that would give
rise to liability under any environmental law; (vi) there are no underground
storage tanks on, in or under any of the owned real property or the leased real
property, and no underground storage tanks have been closed or removed from any
of the owned real property or the leased real property in a manner that would
give rise to liability under any environmental law; and (vii) there is no
asbestos present in any of the owned real property or to the Company's
Knowledge, the leased real property the condition or existence of which
currently requires remediation under applicable environmental law. There have
been no environmental investigations, studies, audits, tests, reviews or other
analyses regarding compliance or noncompliance with any environmental law
conducted by or on behalf of the Company or any Subsidiary, or which are in the
possession of the Company or any Subsidiary, relating to the activities of the
Company or any Subsidiary or any of the owned real property or the leased real
property that have not been delivered or otherwise made available to Purchaser
by the Company at its offices prior to the date hereof.
3.15. Affiliate Transactions. As of the date of this Agreement, except as
disclosed in Section 3.15 of the Company Disclosure Schedule and except for bona
fide intercompany obligations among the Company and its Subsidiaries, (i) there
are no outstanding amounts of indebtedness owed by the Company or any Subsidiary
to any of their respective Affiliates, or owed by any Affiliate of the Company
or any Subsidiary to the Company or any Subsidiary in excess of $200,000, and
(ii) there are no contracts or agreements, between the Company and the
Subsidiaries, or the Company and any officer, director or Affiliate of the
Company.
3.16. Brokers. Except for a fee payable by the Company to Madison Group
Securities Inc., in the amount of Seven Hundred Thousand Dollars ($700,000), and
the grant to Madison Group Securities Inc., of five year warrants to purchase
100,000 shares of Common Stock of the Company, all negotiations relative to this
Agreement or the Related Agreements and the transactions contemplated hereby
have been carried out by the Company directly with Purchaser without the
intervention of any Person on behalf of the Company in such manner as to give
rise to any valid claim by any Person against the Company or the Purchaser or
any of their respective Affiliates for a finder's fee, brokerage commission or
similar payment.
3.17. Exemption from Registration; Restrictions on Offer and Sale of Same
or Similar Securities. Assuming the representations and warranties of the
Purchaser set forth in Section 4.02 and Section 4.03 hereof are true and correct
in all material respects, the offer and sale of the Shares made pursuant to this
Agreement will be exempt from the registration requirements of the Securities
Act. Neither the Company nor any Person acting on its behalf has, in connection
with the offering of the Shares, engaged in (i) any form of general solicitation
or general advertising (as those terms are used within the meaning of Rule
502(c) under the Securities Act), (ii) any action involving a public offering
within the meaning of Section 4(2) of the Securities Act, or (iii) any action
that would require the registration under the Securities Act of the offering and
sale of the Shares pursuant to this Agreement or that would violate applicable
state securities or blue sky laws. The Company has not made and will not prior
to the Closing make, directly or indirectly, any offer or sale of Shares or of
securities of the same or a similar class as the Shares if as a result the offer
and sale of the Shares contemplated hereby could fail to be entitled to
exemption from the registration requirements of the Securities Act. As used
herein, the terms "offer" and "sale" have the meanings specified in Section 2(3)
of the Securities Act.
3.18. Specialty Transportation Services, Inc. After giving effect to the
transactions contemplated by Section 5.01(a)(vi), (i) the Company will own one
hundred percent (100%) of the outstanding capital stock of Specialty
Transportation Services, Inc., (ii) all outstanding indebtedness owed to
American Capital Strategies, Ltd. shall have been paid in full, (iii) there will
be no warrants or options outstanding with respect to the capital stock of
Specialty Transportation Services, Inc., and (iv) each of the Stockholders
Agreement dated as of January 30, 1998, among the Company, Specialty
Transportation Services, Inc. and American Capital Strategies, Inc., the Pledge
and Security Agreement dated as of January 30, 1998, between the
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Company and PNC Bank as Trustee in favor of American Capital Strategies,
Inc., and the Voting Trust Agreement dated as of January 30, 1998, between the
Company and PNC Bank as Trustee, will be terminated and will be of no further
force and effect.
3.19. Disclosure. No representation, warranty or statement made by the
Company or any Subsidiary in this Agreement or the Related Agreements, or in any
agreement, certificate, statement or document required to be delivered pursuant
hereto, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in this
Agreement or the Related Agreements or in such other agreement, certificate,
statement or document not misleading in light of the circumstances in which they
were made.
Section 4. Representations and Warranties of Purchaser. Purchaser
represents and warrants to and for the benefit of the Company as follows:
4.01. Organization. Purchaser is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware.
4.02. Investment Intent. Purchaser is acquiring the Shares for investment,
and not with a view to resell or otherwise distribute the Shares.
4.03. No Registration of Securities. Purchaser is aware that the Shares
have not been registered under the Securities Act or under state securities or
blue sky laws in reliance upon certain exemptions from such registration, and
may not be transferred except pursuant to an effective registration under the
Securities Act and under state securities or blue sky laws or in a transaction
exempt from such registration.
4.04. Investor Status. Purchaser is able to bear the economic risk of the
investment of Purchaser in the Shares and has such knowledge and experience in
financial and business matters, so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares. Purchaser is aware that no
Federal or state agency has (i) made any finding or determination as to the
fairness of any aspect of the investment in the Shares or (ii) passed on or
endorsed the merits of the offering of the Shares. Purchaser is an "accredited
investor," as that term is defined in Rule 501(a) of Regulation D promulgated
under the Securities Act.
4.05. Authority to Execute and Perform Agreement; No Conflict. Purchaser
has the legal right and power and all authority required to enter into, execute
and deliver this Agreement and each Related Agreement. Each of this Agreement
and the Related Agreements has been duly executed and delivered and is the valid
and binding obligation of such Purchaser enforceable in accordance with its
terms, except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally and by principles of equity regarding the
availability of remedies. The execution, delivery and performance by Purchaser
of this Agreement and the Related Agreements, and the purchase by Purchaser of
the Shares hereunder, (a) are within Purchaser's power and authority, (b) have
been duly authorized by all necessary proceedings of Purchaser, (c) do not
conflict with or result in any breach or violation of any provision of the
limited partnership agreement of Purchaser, (d) do not conflict with or result
in any breach or violation of any provision of any material law, regulation,
order, judgment, writ, injunction, license or permit, applicable to Purchaser,
or (e) conflict with or result in any breach or violation of any of the terms or
conditions of, or constitute (or with notice or lapse of time or both
constitute) a default under, or give rise to the creation of any lien upon any
of the property or assets of Purchaser, under any material contract, agreement,
lease or other instrument to which Purchaser is a party or by which any of its
respective assets or properties is bound.
4.06. Brokers. Other than fees payable by the Company to ▇▇▇▇▇▇▇▇▇ Capital,
Inc., pursuant to the Advisory Services Agreement, all negotiations relative to
this Agreement and the transactions contemplated hereby, have been carried out
by Purchaser directly with the Company without the intervention of any Person on
behalf of Purchaser in such manner as to give rise to any valid claim by any
Person against the Company or any Subsidiary for a finder's fee, brokerage
commission or similar payment.
4.07. Approvals. Except for any required filing under the HSR Act, and the
expiration or early termination of the waiting period thereunder if the Company
issues Additional Shares to Purchaser, the
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execution, delivery and performance by Purchaser of this Agreement and the
Related Agreements, and the purchase and sale of the Shares, do not require the
approval or consent of, or any filing with, any Governmental or Regulatory
Authority or any other Person.
Section 5. Covenants of the Company, the Subsidiaries and Purchaser.
5.01. Company. (a) The Company and each Subsidiary jointly and severally
covenant and agree that, except with the written consent of Purchaser it shall:
(i) Conduct of Business. From the date hereof until the later of the
date on which Purchaser receives the Additional Shares or the Revised
Initial Shares, as the case may be, the Company and each Subsidiary shall
operate its business in a manner consistent with the manner in which it is
being operated at the date of this Agreement and:
(1) Shall conduct its operations according to its usual, regular
and ordinary course in substantially the same manner as heretofore
conducted;
(2) Shall use its reasonable efforts to preserve intact its
business organizations and goodwill, keep available the services of its
respective officers and employees and maintain satisfactory
relationships with those persons having business relationships with
them;
(3) Shall not amend its Certificate of Incorporation or Bylaws or
comparable governing instruments (other than the Charter Amendment and
the Charter and By-Law Amendments, as contemplated by this Agreement);
(4) Shall promptly notify the Purchaser of any breach of any
representation or warranty by it contained herein;
(5) Shall promptly deliver to the Purchaser true and correct copies
of any report, statement or schedule filed with the SEC subsequent to
the date of this Agreement;
(6) Shall not (x) except pursuant to the exercise of options,
warrants, conversion rights and other contractual rights of the Company
with respect to the Company's Common Stock which are existing on the
date hereof and disclosed pursuant to this Agreement or pursuant to a
management incentive plan of the Company currently being developed with
respect to the Company's Common Stock, issue any shares of its capital
stock, effect any stock split or otherwise change its capitalization as
it existed on the date hereof, provided, however, the maximum number of
shares of Common Stock and the option prices therefor which may be
issued pursuant to such management incentive plan shall be disclosed in
writing to Purchaser prior to the Diligence Out Date, (y) grant, confer
or award any option, warrant, conversion right or other right not
existing on the date hereof to acquire any shares of its capital stock
or grant, confer or award any bonuses or other forms of cash incentives
to any officer, director or key employee except consistent with past
practice or pursuant to such management incentive plan, or (z) increase
any compensation under any employment agreement with any of its present
or future officers, directors or employees, except for normal increases
consistent with past practice and except in connection with the renewal
or extension of an employment agreement between any executive officer
and the Company or any Subsidiary, provided, however, that such increase
in compensation occurs prior to the Diligence Out Date and notice
thereof is provided in writing to the Purchaser at the time of such
increase, grant any severance or termination pay to, or enter into any
employment or severance agreement with any officer or director except in
connection with the employment of a new hire or amend any such agreement
in any material respect other than severance arrangements which are
consistent with past practice with respect to employees terminated by
the Company, or adopt any new employee benefit plan (including any stock
option, stock benefit or stock purchase plan) or amend any existing
employee benefit plan in any material respect other than to increase the
number of shares reserved for option grants subject to approval of the
Stockholders;
(7) Shall not (i) declare, set aside or pay any dividend or make
any other distribution or payment with respect to any shares of its
capital stock or other ownership interests or (ii) directly or
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indirectly redeem, purchase or otherwise acquire any shares of its
capital stock other than to repurchase from American Capital Strategies,
Ltd., its ownership interest in Specialty Transportation Services, Inc.,
or make any commitment for, or publicly announce its intention to take,
any such action;
(8) Shall not sell, lease or otherwise dispose of any of its assets
except in the ordinary course of business;
(9) Shall not make any change to its accounting (including tax
accounting) methods, principles or practices, except as may be required
by generally accepted accounting principles in the United States;
(10) Shall not enter into any transaction with any of its
Affiliates or their immediate family members (other than employment
arrangements made in the ordinary course of business, consistent with
past practice, and other than the repayment of the Company's
indebtedness to its Affiliates in an amount not to exceed Three Million
Two Hundred Thousand Dollars ($3,200,000) existing as of the date of
this Agreement utilizing the proceeds from the sale of Shares to
Purchaser), or any Affiliate of any of the foregoing;
(11) Shall not enter into any transaction with any of its
shareholders, officers, directors or employees or their respective
Affiliates that are not on terms any less favorable than could be
obtained from an independent third party on an arm's length basis; and
(12) Shall not enter into any transaction with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or
any Affiliate thereof.
(ii) Antitrust, Competition Law Requirements. In the event of the
issuance and delivery to Purchaser of Additional Shares, and in any event
within five (5) days after the end of the Adjustment Period, take promptly
all actions necessary to make the filings required of the Company or its
Affiliates with any Governmental or Regulatory Authorities in connection
with Purchaser's acquisition of Additional Shares, including without
limitation those required under the HSR Act, and comply at the earliest
practicable date with any request for additional information received by
the Company or its Affiliates from any Governmental or Regulatory Authority
in respect of such filing and cooperate with Purchaser in connection with
any similar or comparable filing required to be made by Purchaser and in
connection with resolving any investigation or other inquiry concerning the
transactions contemplated by this Agreement commenced by any Governmental
or Regulatory Authority.
(iii) Investigation by Purchaser. Upon reasonable notice, the Company
and its Subsidiaries will permit Purchaser and its representatives to have
reasonable access to the Company's and each Subsidiary's employees, agents,
assets and properties and all relevant books, records and documents of or
relating to the business and assets of the Company and its Subsidiaries
during normal business hours and will furnish to Purchaser such
information, financial records and other documents relating to the Company
or its Subsidiaries and their operations and business as Purchaser may
reasonably request. The Company and its Subsidiaries will permit Purchaser
and its representatives reasonable access to the Company's and each
Subsidiary's accountants, auditors and, upon the advance request of
Purchaser, suppliers and customers for reasonable consultation or
verification of any information obtained by Purchaser and will use
commercially reasonable efforts to cause such Persons to cooperate with
Purchaser and its representatives in such consultations and in verifying
such information.
(iv) Notice of Events. Promptly give Purchaser notice of (A) any
event, condition or circumstance occurring from the date hereof through the
Closing Date that would constitute a violation or breach of this Agreement
or (B) any event, occurrence, transaction or other item which would have
been required to have been disclosed on any Schedule or statement delivered
hereunder, had such event, occurrence, transaction or item existed on the
date hereof other than items arising in the ordinary course of business
which would not render any representation or warranty of such parties
materially misleading.
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(v) Equality of Rights. Grant to Purchaser (in addition to rights
already held by Purchaser) rights substantially equivalent to those
obtained by any other equity holder who acquires from the Company or any
Affiliate thereof an equal or smaller percentage of voting interest in the
Company than Purchaser.
(vi) Use of Proceeds. The Company will use the proceeds received by
the Company from the sale of the Common Stock contemplated by this
Agreement solely to (A) repay its subordinated debt and in accordance with
the respective terms of such debt and warrants, repurchase outstanding
warrants held by American Capital Strategies Ltd. ("ACS") in Specialty
Transportation Services, Inc., (B) repay other senior and subordinated debt
of the Company in accordance with its terms including, but not limited to
indebtedness owing to any Affiliate of the Company in an amount not
exceeding Three Million Two Hundred Thousand Dollars ($3,200,000), (C)
purchase the ten percent (10%) ownership position held by ACS in Specialty
Transportation Services, Inc. for an aggregate purchase price determined in
accordance with the agreements between the Company and ACS, (D) finance
acquisitions, (E) pay fees and expenses relating to the transactions
contemplated by this Agreement, and (F) for general corporate purposes.
(vii) Stockholder Meeting; Proxy Material; Charter Amendment. The
Company shall cause a meeting of its stockholders to be duly called and
held on or prior to September 17, 1999, or such later date as the Company
deems necessary so as to obtain the number of votes required to approve the
Transactions, but in no event later than October 15, 1999, for the purpose
of voting on (A) the approval of the purchase of the Shares by the
Purchaser pursuant to the terms of this Agreement (the "Investment
Proposal"), (B) the approval of the Charter Amendment and the Charter
By-Law Amendments and (C) transacting such other business as may properly
come before the meeting or any adjournment thereof (the "Stockholder
Meeting"). The Board of Directors shall recommend approval and adoption of
the Transactions. In connection with the Stockholder Meeting, the Company:
(A) shall promptly prepare and file with the SEC, in accordance with the
Exchange Act, the Proxy Statement, shall use its best efforts to have the
Proxy Statement and/or any amendment or supplement thereto cleared by the
SEC and shall thereafter mail to its shareholders as promptly as
practicable the Proxy Statement; (B) shall use all best efforts to obtain
the necessary approvals by its shareholders of the Transactions; and (C)
shall otherwise comply with all legal requirements applicable to such
meeting. The Company shall make available to the Purchaser prior to the
filing thereof with the SEC copies of the preliminary Proxy Statement and
any amendments or supplements thereto, shall make any changes therein
reasonably requested by the Purchaser insofar as such changes relate to any
matters relating to the Purchaser or the description of the transactions
contemplated by this Agreement, the Transactions and the Related Agreements
and shall not file any such Proxy Statement or amendments or supplements
thereto as to which the Purchaser shall reasonably object.
(b) Board of Directors. Prior to the Closing, the Company shall take all
actions necessary to increase the size of the Company's Board of Directors from
nine (9) members to fifteen (15) members and to elect four (4) new members who
shall take office effective upon the Closing and be designated by the Purchaser
(the "Purchaser Designees"). From and after the Closing and for so long as
Purchaser and its successors and assigns beneficially own in the aggregate more
than fifty percent (50%) of the number of Initial Shares and Additional Shares
originally issued to Purchaser, the Company shall take all actions necessary to
cause to be nominated, and shall use its best efforts to cause to be elected, a
number of members of the Company's Board of Directors (rounded up to the next
whole number) (such members to be designated by the holders of a majority of the
shares of Common Stock beneficially owned by Purchaser and its successors and
assigns) which bears the same proportion to the total number of members of the
Company's Board of Directors as the number of shares of Common Stock then
beneficially owned in the aggregate by Purchaser and its successors and assigns
bears to the total number of shares of Common Stock then issued and outstanding.
The Company shall upon the initial election or appointment of the Purchaser
Designees to the Company's Board of Directors, and at the conclusion of each
annual meeting of the Board thereafter, automatically grant to each of the
Purchaser Designees Formula Options (as defined in the ▇▇▇▇▇ Transportation
Services, Inc. Stock Option Plan (the "Stock Option Plan")) to purchase five
thousand (5,000) shares of Common Stock. Further the Company shall, so long as
the Purchaser Designees serve on the Company's Board of Directors, cause to
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be maintained in effect policies of directors' and officers' liability
insurance reasonably acceptable to Purchaser.
(c) Exclusivity. Until the earlier to occur of the Closing or the
termination of this Agreement, the Company and its Subsidiaries, and each
officer, director, agent and representative of the Company and its Subsidiaries
will not, directly or indirectly, (a) submit, solicit, initiate, encourage or
discuss any proposal or offer from any person relating to any (i)
reorganization, dissolution or recapitalization involving the Company or any of
its Subsidiaries, (ii) merger or consolidation involving the Company or any of
its Subsidiaries, (iii) sale of any assets of the Company or any of its
Subsidiaries outside the ordinary course of business or sale of capital stock or
other equity interests in the Company or any of its Subsidiaries, or (iv)
similar transaction or business combination involving the Company or any of its
Subsidiaries or its respective assets, capital stock or equity interests (the
transactions described in clauses (i) through (iv) above are hereinafter
referred to as "Competing Transactions"); or (b) furnish any information with
respect to, assist or participate in or facilitate in any other manner any
effort or attempt by any person to do or seek the foregoing. The Company and its
Subsidiaries will terminate all discussions with any third party regarding the
foregoing and will notify Purchaser immediately if any person engages in such
discussions or makes any proposal or offer with respect to the foregoing.
(d) Revised Initial Shares. If the Purchaser shall have waived the
conditions contained in Section 6(n) and elected not to terminate this
Agreement, the Company shall issue and deliver to Purchaser the Revised Initial
Shares at the Closing.
(e) Best Efforts. The Company and each Subsidiary jointly and severally
covenants and agrees that, except with the written consent of the Purchaser,
each shall use its respective best efforts to cause all of the conditions set
forth in Section 6 to be fulfilled as promptly as practicable after the date of
this Agreement.
5.02. Purchaser. (a) Purchaser covenants and agrees that, except with the
written consent of the Company, it shall use its best efforts to cause all of
the conditions set forth in Section 7 to be fulfilled as promptly as practicable
after the date of this Agreement.
(b) Lock-Up Period and Registration Rights. The Purchaser shall not, for a
period commencing on the Closing Date and terminating on the date two (2) years
after the Closing Date (the "Lock-Up Period"), effect any sale or other transfer
of the Shares acquired pursuant to this Agreement, provided, however, that
notwithstanding the above during the Lock-Up Period (i) Purchaser or any of its
permitted transferees set forth in this sentence may sell Shares pursuant to an
Underwritten Registration or Underwritten Offering, and (ii) Purchaser may
transfer Shares to any partner in the Purchaser and, in the case of any partner
in the Purchaser which is a corporation, partnership or limited liability
company, such partner may transfer to any stockholder, partner or member
thereof, respectively, or (iii) in the case where the permitted transferee set
forth in this sentence is an individual (an "Individual Transferee") such
Individual Transferee may transfer Shares to such Individual Transferee's spouse
or descendants (including adopted children and stepchildren, if any), or a
trust, the sole income beneficiary of which, or a corporation, partnership or
limited liability company, the sole stockholders, limited and/or general
partners or members, as the case may be, of which, include the Individual
Transferee, such Individual Transferee's spouse and/or such Individual
Transferee's descendants (including adopted children and stepchildren, if any);
provided that in the case of each transfer pursuant to clauses (ii) or (iii)
above the transferee agrees in writing (to be delivered to the Company) to be
bound by the provisions of this Section 5.02(b).
(c) Standstill. The Purchaser and ▇▇▇▇▇▇▇▇▇ Capital, Inc., shall not from
the date hereof until the end of the Adjustment Period, buy, sell, or otherwise
dispose of shares of Common Stock, other than as contemplated by this Agreement
and the Related Agreements.
Section 6. Conditions Precedent to Obligations of Purchaser. Purchaser's
obligation to purchase the Initial Shares or the Revised Initial Shares, as the
case may be, at the Closing pursuant to this Agreement is subject to compliance
by the Company and each Subsidiary with its agreements herein contained and to
the
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satisfaction, on or prior to the Closing Date with respect to Purchaser's
obligation to consummate the Closing, of the following conditions:
(a) Charter Documents; Good Standing Certificate. Purchaser shall have
received from the Company and each Subsidiary (i) a certificate from a duly
authorized officer thereof dated as of the Closing Date certifying as to (A) the
absence of any amendment to its Certificate or Articles of Incorporation since
the date of the Secretary of State's certificate referred to in clause (ii)
below, and (B) the completeness and accuracy of its By-Laws as in effect on the
Closing Date, (ii) a long-form certificate, dated not more than ten (10) days
prior to the Closing Date, of the Secretary of state of incorporation listing
its Certificate or Articles of Incorporation and each amendment thereto on file
in his office and certifying that (A) the attached copy of its Certificate or
Articles of Incorporation and each amendment thereto is a true and correct copy
thereof, (B) such amendments are the only amendments on file in its office, (C)
that all franchise taxes have been paid to the date of such certificate and (D)
that such entity is duly incorporated and in good standing under the laws of the
state of incorporation.
(b) Proof of Corporate Action. Purchaser shall have received from the
Company and each Subsidiary copies, certified by a duly authorized officer
thereof to be true and complete as of the Closing Date, of the resolutions of
the Board of Directors of each Subsidiary and the Board of Directors and (to the
extent required under applicable Law or the requirements of NASDAQ) the
stockholders of the Company authorizing the Transactions and the execution,
delivery and performance of this Agreement and the Registration Rights
Agreement.
(c) Incumbency Certificate. Purchaser shall have received from the Company
and each Subsidiary an incumbency certificate, dated the Closing Date, signed by
a duly authorized officer thereof, and giving the name and bearing a specimen
signature of each individual who shall be authorized to sign, in the name and on
behalf of the Company and each Subsidiary, this Agreement.
(d) Legal Opinion. Purchaser shall have received from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Ltd., special counsel to the Company, their opinion, dated the Closing Date, in
a form reasonably satisfactory to Purchaser.
(e) Representations and Warranties; Officers' Certificates. The
representations and warranties of the Company and each Subsidiary contained
herein shall be true and correct in all material respects on and as of the
Closing Date with the same force and effect as though such representations and
warranties were made on and as of such date (except for representations and
warranties which by their terms are made expressly as of an earlier date, which
shall be true and correct as of such earlier date) and the Company and each
Subsidiary shall have performed and complied with all conditions, covenants and
agreements required to be performed or complied with by prior to the Closing
Date; and Purchaser shall have received on the Closing Date a certificate to
this effect signed by an authorized officer of the Company and each Subsidiary.
(f) Legality; Authorization; Consents. The purchase of the Shares shall not
be prohibited by any Law or Order. The applicable waiting period under the HSR
Act shall have expired.
(g) Litigation, Etc. There shall not be in effect on the Closing Date any
Order or Law restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement or
which could reasonably be expected to otherwise result in a material diminution
of the benefits of the transactions contemplated by this Agreement to Purchaser,
and there shall not be pending or threatened on the Closing Date any Action or
Proceeding or any other action in, before or by any Governmental or Regulatory
Authority which could reasonably be expected to result in the issuance of any
such Order or the enactment, promulgation or the deemed applicability of any
such Law to Purchaser, the Company, any Subsidiary or the transactions
contemplated by this Agreement.
(h) Registration Rights Agreement. The Company shall have executed and
delivered to the Purchaser the Registration Rights Agreement, substantially in
the form attached hereto as Exhibit A.
(i) NASDAQ Requirements. The shares of Common Stock issuable to Purchaser
shall have been approved for quotation on the NASDAQ, subject to notice of
issuance, by the Nasdaq Stock Market, Inc.
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(j) Board of Directors. If the Purchaser purchases the Initial Shares, the
Purchaser Designees shall have been elected to the Company's Board of Directors.
(k) Advisory Services Agreement. If the Purchaser purchases the Initial
Shares, the Company shall have executed and delivered the Advisory Services
Agreement, substantially in the form attached hereto as Exhibit B.
(l) Voting Agreements. The Voting Agreements and ▇▇▇▇▇▇▇ Voting Agreement
shall be in full force and effect.
(m) Transaction Costs. ▇▇▇▇▇▇▇▇▇ Capital, Inc., shall have received by wire
transfer of immediately available funds from the Company (i) an investment
banking fee equal to three percent (3%) of the Purchase Price, or in the event
Purchaser purchases the Revised Initial Shares, an amount equal to three percent
(3%) of (A) the number of Revised Initial Shares multiplied by (B) the Initial
Price Per Share; (ii) an administrative and processing fee of Five Thousand
Dollars ($5,000); (iii) if Purchaser purchases Initial Shares, a fee of Ten
Thousand Dollars ($10,000) representing payment of the monthly management fee
for the initial month of the term of the Advisor's engagement pursuant to the
Advisory Services Agreement; and (iv) all reasonable out-of-pocket expenses that
the Purchaser and ▇▇▇▇▇▇▇▇▇ Capital, Inc. have incurred in connection with the
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby (including legal, accounting, and environmental and other
professional fees).
(n) Stockholder Approval. The Transactions shall have been duly approved by
the holders of the Common Stock of the Company entitled to vote thereon at the
Stockholder Meeting; provided, however, that Purchaser, in its sole discretion,
in lieu of terminating this Agreement in accordance with clause (B) of Section
11.01(c), may waive the foregoing condition, in which event the Company shall
proceed with the Closing on the terms and conditions set forth herein except
that, in lieu of the Initial Shares and the Additional Shares to be issued
hereunder, at the Closing the Company shall issue and deliver the Revised
Initial Shares to the Purchaser at a price per share equal to the Initial Price
Per Share.
(o) D&O Insurance. If the Purchaser purchases the Initial Shares, the
Company shall have obtained the insurance policies required pursuant to Section
5.01(b).
(p) Warrants. The Company shall have delivered to the Purchaser true and
complete copies of the warrants issued to Madison Group Securities Inc.
(q) American Capital Strategies, Ltd. The Company shall have delivered to
the Purchaser true and complete copies of documents governing all subordinated
debt and outstanding warrants held by American Capital Strategies, Ltd.
(r) Default Waivers. The Company shall have delivered to the Purchaser true
and complete copies of waivers of default and non-compliance granted to the
Company by American Capital Strategies, Ltd., and by each of the Company's and
its Affiliates' senior secured and unsecured lenders in relation to all loans,
warrants and other similar debt instruments pursuant to which the Company and
its Affiliates is considered in default, or in respect of which the Company or
its Affiliates has not complied with loan covenants contained therein.
(s) Consents. The Company shall have obtained the consent of each of
American National Bank and Trust Company of Chicago and Mellon Bank, N.A. to the
Transactions and furnished copies of such consents to Purchaser.
(t) General. All instruments and legal, governmental, administrative and
corporate proceedings in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance to Purchaser,
and Purchaser shall have received copies of all documents, including, without
limitation, records of corporate or other proceedings, opinions of counsel,
consents, licenses, approvals, permits and orders which Purchaser may have
reasonably requested in connection therewith.
Section 7. Conditions Precedent to Obligations of the Company and the
Subsidiaries. The Company's obligation to issue and sell the Initial Shares or
the Revised Initial Shares as the case may be pursuant to this Agreement is
subject to compliance by Purchaser with the agreements herein contained, and to
the
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satisfaction, on or prior to the Closing Date with respect to its obligation
to consummate the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties of
Purchaser contained herein shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as though such
representations and warranties were made on and as of such date (except for
representations and warranties which by their terms are made expressly as of an
earlier date, which shall be true and correct as of such earlier date) and
Purchaser shall have performed and complied with all conditions, covenants and
agreements required to be performed or complied with by it prior to the Closing
Date; and the Company shall have received on the Closing Date a certificate to
this effect signed by an authorized officer of Purchaser with respect to the
certificate to be issued on the Closing Date.
(b) Legality; Authorization; Consents. The issuance and sale of the Shares
shall not be prohibited by any Law or Order. The applicable waiting period under
the HSR Act shall have expired.
(c) Legal Opinion. The Company shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP,
special counsel for Purchaser, and ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., Senior Vice President and
Legal Counsel for Purchaser, their legal opinions, dated the Closing Date, each
in a form reasonably satisfactory to the Company.
(d) Incumbency Certificate. The Company shall have received from Purchaser
an incumbency certificate, dated the Closing Date, signed by a duly authorized
officer thereof, and giving the name and bearing a specimen signature of each
individual who shall be authorized to sign, in the name and on behalf of
Purchaser, this Agreement.
(e) Litigation, Etc. There shall not be in effect on the Closing Date any
Order or Law restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement or
which could reasonably be expected to otherwise result in a material diminution
of the benefits of the transactions contemplated by this Agreement to Purchaser,
and there shall not be pending or threatened on the Closing Date any Action or
Proceeding or any other action in, before or by any Governmental or Regulatory
Authority which could reasonably be expected to result in the issuance of any
such Order or the enactment, promulgation or deemed applicability to Purchaser,
the Company, any Subsidiary or the transactions contemplated by this Agreement
of any such Law.
(f) Stockholder Approval. If the Purchaser purchases the Initial Shares,
the Transactions shall have been duly approved by the holders of the Common
Stock of the Company entitled to vote thereon at the Stockholder Meeting.
(g) Consents. The Company shall have obtained the consent of each of
American National Bank and Trust Company of Chicago and Mellon Bank, N.A. to the
Transactions and furnished copies of such consents to Purchaser.
Section 8. Notices. Any notice or other communication in connection with
this Agreement shall be deemed to be delivered if in writing (or in the form of
a telecopy) addressed as provided below and if either (a) actually delivered or
telecopied to said address or (b) in the case of a letter, three (3) Business
Days shall have elapsed after the same shall have been deposited in the United
States mail, postage prepaid and registered or certified:
If to the Company or any Subsidiary:
c/o -- ▇▇▇▇▇ Transportation Services, Inc.
▇▇▇▇▇ ▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
▇▇▇▇▇▇▇▇▇ Capital, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇▇ Capital, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and
Legal Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice):
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9. Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements of the
Company, the Subsidiaries and Purchaser contained in this Agreement and or in
any other document or papers delivered pursuant to this Agreement, will survive
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (i) with respect to representations and
warranties or any covenant to be performed in whole or in part on or before the
Closing Date, until the date which is thirty-six (36) months after the Closing
Date; provided that the representations and warranties set forth in Sections
3.01, 3.02, 3.03, 3.05, 3.06, 3.12, 3.13, and 3.14 will survive until the
expiration of all applicable statutes of limitation with respect to the matters
covered thereby; and (ii) with respect to all other covenants and agreements,
until 90 days following the last date on which each such covenant or agreement
is to be performed, or if no such date is specified, indefinitely; provided,
however, that any representation, warranty, covenant or agreement that would
otherwise terminate in accordance with clause (i) or (ii) above will continue to
survive, if a Claim Notice shall have been given under Section 10.03 on or prior
to such termination date, until the related claim for indemnification has been
satisfied or otherwise resolved as provided in Section 10.03.
Section 10. Indemnification.
10.01. Indemnity by the Company and the Subsidiaries. (a) Subject to the
provisions of this Section 10, the Company and each Subsidiary jointly and
severally indemnify and hold Purchaser and its respective officers, directors,
stockholders, managers, agents, employees, representatives, affiliates,
successors and assigns, harmless from and against any and all damage, loss
(including loss of value), cost, obligation, claims, demands, assessments,
settlements, judgments or liability (whether based on contract, tort, product
liability, strict liability or otherwise), including Taxes, and all expenses
(including interest, penalties and attorneys' and
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accountants' fees and disbursements) (collectively referred to herein as
"Damages") incurred in litigation or otherwise, and any investigation relating
thereto, by any of the above-named persons, directly or indirectly, arising from
or in connection with: (i) the inaccuracy, untruth or incompleteness, as of the
date made or deemed made, of any representation or warranty by the Company or
any Subsidiary in this Agreement or in any other agreement, certificate
(including, without limitation, the certificates delivered by the Company and
each Subsidiary pursuant to Section 6), schedule, exhibit or writing required to
be delivered to Purchaser pursuant to this Agreement; (ii) any breach of or
failure to perform any covenant or agreement made by the Company or its
Subsidiaries in this Agreement; and (iii) any untrue or alleged untrue statement
of a material fact contained in the Proxy Statement or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statement therein not misleading, except for the section in the Proxy
Statement titled "The Purchaser."
10.02. Purchaser's Indemnity. Subject to the provisions of this Section 10,
Purchaser, from and after the Closing Date, shall indemnify and hold the Company
and the Subsidiaries, and their respective officers, directors, stockholders,
agents, employees, representatives, affiliates, successors and assigns, harmless
from and against any Damages incurred in litigation or otherwise, and any
investigation related thereto, by the Company or any Subsidiary, directly or
indirectly, arising from or in connection with: (a) the inaccuracy, untruth or
incompleteness, as of the date made or deemed made, of any representation or
warranty by Purchaser in this Agreement or in any other agreement, certificate
(including without limitation the certificates delivered by Purchaser pursuant
to Section 7), schedule, exhibit or writing delivered to the Company or any
Subsidiary pursuant to this Agreement; and (b) any breach of or failure to
perform any covenant or agreement made by Purchaser in this Agreement.
10.03. Procedure. No claim for indemnification shall be valid unless made
prior to the expiration (pursuant to Section 9) of the applicable
representation, warranty or covenant on which it is based. All claims for
indemnification by a party under this Section 10 (the party claiming
indemnification and the party against whom such claims are asserted being
hereinafter called the "Indemnified Party" and the "Indemnifying Party,"
respectively) shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an Indemnifying Party
would be liable to an Indemnified Party hereunder is asserted against or sought
to be collected from such Indemnified Party by a third party, such Indemnified
Party shall with reasonable promptness give notice (the "Claim Notice") to the
Indemnifying Party of such claim or demand, specifying the nature of and
specific basis for such claim or demand and the amount or the estimated amount
thereof to the extent then feasible (which estimate shall not be conclusive of
the final amount of such claim and demand); provided, however, that no failure
to give, or delay in giving, any such Claim Notice shall excuse or diminish the
Indemnifying Party's obligations to the Indemnified Party under this Section 10,
unless such failure or delay is prejudicial to Indemnifying Party. The
Indemnifying Party shall have ten (10) days from the date the Claim Notice is
given in accordance with Section 8 of this Agreement (the "Notice Period") to
notify the Indemnified Party (i) whether or not it disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such claim
or demand, and (ii) whether or not it desires, at the cost and expense of the
Indemnifying Party, to defend the Indemnified Party against such claim or
demand; provided, however, that any Indemnified Party is hereby authorized, but
is not obligated, prior to and during the Notice Period, to file any motion,
answer or other pleading that it shall deem necessary or appropriate to protect
its interests or those of the Indemnifying Party. If the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such claim or demand, the Indemnifying
Party shall, subject to the last sentence of this paragraph, have the right to
control the defense against the claim by all appropriate proceedings and any
settlement negotiations. If the Indemnifying Party assumes the defense of a
proceeding, (i) no compromise or settlement of such claims may be effected by
the Indemnifying Party without the Indemnified Party's consent (such consent not
to be unreasonably withheld or delayed) unless the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party; and (ii) the
Indemnified Party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If the Indemnified Party
desires to participate in, but not control, any such defense, it may do so at
its sole cost and expense. If the Indemnifying Party fails to respond to the
Indemnified Party within the Notice Period or otherwise elects not
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to defend the Indemnified Party, or after electing to defend fails to
commence or diligently pursue such defense, then the Indemnified Party shall
have the right, but not the obligation, to undertake or continue such defense
and to compromise or settle the claim or other matter, all on behalf, for the
account and at the risk of the Indemnifying Party.
(b) If requested by the Indemnifying Party, the Indemnified Party agrees,
at the Indemnifying Party's expense and upon presentation of adequate security
for the payment of such expenses, to cooperate with the Indemnifying Party and
its counsel in contesting any claim or demand which the Indemnifying Party
elects to contest, or, if appropriate and related to the claim in question, in
making any counterclaim against any person asserting the third-party claim or
demand, or any cross-complaint against any person.
(c) If any Indemnified Party should have a claim against the Indemnifying
Party hereunder which does not involve a claim or demand being asserted against
or sought to be collected from it by a third party, the Indemnified Party shall
send a Claim Notice with respect to such claim to the Indemnifying Party. If the
Indemnifying Party disputes such claim, such dispute shall be resolved by
litigation in an appropriate court of competent jurisdiction described in
Section 12.02. If the Indemnifying Party does not dispute such claim, then the
Indemnifying Party shall pay to the Indemnified Party the amount of such claim
within thirty (30) days after receipt of such Claim Notice.
(d) In connection with the matters for which indemnification is sought
hereunder (i) the Company agrees to give Purchaser and its representatives
reasonable access during regular business hours and upon five (5) days' prior
written notice to the Company, to the books, records and employees of the
Company to the extent such reasonably relate to the matters to which the Claim
Notice relates and (ii) Purchaser agrees to give the Company and its
representatives reasonable access, during regular business hours and upon five
(5) days' prior written notice to Purchaser, to the books, records and employees
of Purchaser to the extent they reasonably relate to the matters to which the
Claim Notice relates.
10.04. Indemnification not Affected by Knowledge. The right to
indemnification, payment for Damages or any other remedy based on any inaccuracy
in or breach of any representation, warranty, covenant or agreement contained in
this Agreement or in any document, certificate or other papers delivered
pursuant to this Agreement, will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement or
the Closing Date, with respect to, the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant or obligation.
Section 11. Termination.
11.01. Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) By mutual agreement of the Company and Purchaser;
(b) By either Purchaser or the Company if the Closing has not taken place
on or before December 31, 1999 or such other date specified by the Purchaser in
accordance with Section 2.03(a), and the failure to consummate the Closing is
not caused by a breach of this Agreement by the party seeking to terminate this
Agreement.
(c) By the Purchaser if:
(A) On or before September 13, 1999 (the "Diligence Out Date") the
Purchaser shall not have completed its due diligence in relation to the
transactions contemplated by this Agreement in a manner satisfactory to the
Purchaser in its sole discretion; provided, however, that if the Company or
any Subsidiary fails to reasonably comply with Section 5.01(a)(iii), the
Diligence Out Date shall be the Closing Date; or
(B) The Stockholders fail to duly approve any of the Transactions at a
meeting duly convened therefor or at any adjournment thereof, and the
Purchaser has not elected to waive such approval in accordance with Section
6(n).
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11.02. Effect of Termination. In the event of termination pursuant to
Section 11.01(b) or clause (B) of Section 11.01(c), the Company shall pay to
▇▇▇▇▇▇▇▇▇ Capital, Inc. by wire transfer of immediately available funds to an
account designated by ▇▇▇▇▇▇▇▇▇ Capital, Inc. an amount in cash equal to
Purchaser's and ▇▇▇▇▇▇▇▇▇ Capital Inc.'s reasonable out-of-pocket expenses
(including legal, accounting, environmental and other professional fees) that
were incurred through the date of termination in connection with the
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby. Notwithstanding the foregoing, if at or prior to the time
of termination pursuant to Section 11.01(b) or clause (B) of Section 11.01(c)
any Person other than Purchaser shall have made an offer or a proposal for a
Competing Transaction and the transactions contemplated by such a Competing
Transaction with such third party are consummated with such third party or a
definitive agreement is entered into with respect to such transaction within
eighteen months after such termination, then the Company shall pay at the
request of Purchaser to ▇▇▇▇▇▇▇▇▇ Capital, Inc. as its sole remedy for the
breach hereof, (A) a fee in an amount in cash equal to Seven Hundred Fifty
Thousand Dollars ($750,000) (the "Termination Fee") and (B) an amount in cash
equal to Purchaser's and ▇▇▇▇▇▇▇▇▇ Capital Inc.'s reasonable out-of-pocket
expenses (including legal, accounting, environmental and other professional
fees) that were incurred through the date of termination in connection with the
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby. The Termination Fee and payment for out-of-pocket expenses
pursuant to the preceding sentence shall be paid by wire transfer of immediately
available funds to an account designated by ▇▇▇▇▇▇▇▇▇ Capital, Inc., and shall
be paid within three Business Days after the earlier of consummation of the
Competing Transaction or entering into of such definitive agreement. The Company
acknowledges that the agreements contained in this Section 11.02 are an integral
part of the transactions contemplated in this Agreement and that, without these
agreements, Purchaser would not enter into this Agreement; accordingly, if the
Company fails to promptly pay the amount due pursuant to this Section 11.02,
and, in order to obtain such payment, Purchaser or ▇▇▇▇▇▇▇▇▇ Capital, Inc.,
commences a suit which results in a judgment against the Company for the fee set
forth in this Section 11.02, the Company shall pay to Purchaser its costs and
expenses (including attorneys' fees) in connection with such suit, together with
interest on the amount of the fee at the rate of 12% per annum.
11.03. No Liability. In the event of a termination of this Agreement
pursuant to Section 11.01, there shall be no liability on the parties hereto or
any of their respective directors, officers, shareholders, members, managers, or
affiliates after such termination, provided, however, that such termination
shall not affect any liability which any party may have hereunder as a
consequence of any breach by any other party of this Agreement prior to such
termination or for the Termination Fee and reimbursement of out-of-pocket
expenses pursuant to Section 11.02.
(a) Notice. Any party hereto may exercise its right of termination of this
Agreement only by delivering written notice to that effect to the other parties
hereto, provided that such notice is received by the latter party prior to the
Closing.
Section 12. Miscellaneous.
12.01. Amendment or Waiver. Neither this Agreement nor any terms hereof may
be changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by the Company, the Subsidiaries
and Purchaser.
12.02. Consent to Jurisdiction. Each of the Company, the Subsidiaries and
Purchaser hereby agrees to submit to the exclusive jurisdiction of the U.S.
Federal courts in the Southern District of the State of New York.
12.03. Further Assurances. Each party agrees to execute any and all
documents and to perform such other acts as may be necessary or expedient to
further the purposes of this Agreement, the Related Agreements and the
transactions contemplated hereby and thereby.
12.04. Attorney's Fees and Costs. If attorney's fees or other costs are
incurred to secure performance of any obligations hereunder, or to establish
damages for the breach thereof or to obtain any other appropriate relief,
whether by way of prosecution or defense, the prevailing party will be entitled
to recover reasonable attorneys' fees and expenses incurred in connection
therewith (which in the case of Purchaser, shall include
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the reasonable allocation of the costs of its in-house legal services, but
without duplication of the outside legal counsel fees) and interest on any
amount of money determined by any court to be due, at the legal rate in the
State of New York, from the date or dates the court determines that payment
should have been made.
12.05. Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned or delegated by the Company, any
Subsidiary or Purchaser without the prior written consent of the other party and
any purported assignment or delegation in violation hereof shall be null and
void, provided, however, that Purchaser may assign all or any part of its
rights, interests and obligations hereunder to (a) any third party in the event
of a sale by Purchaser of all or a portion of the Shares to such third party or
(b) any Affiliate of Purchaser; provided, that no such assignment before the
Closing Date by Purchaser shall relieve Purchaser of its obligations hereunder.
This Agreement is not intended to confer any rights or benefits on any Person
other than the parties hereto.
12.06. Entire Agreement. This Agreement (including the Exhibits and
Schedules) sets forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby and supersede any prior written
or oral understandings with respect thereto, including, without limitation, any
letters of intent. The invalidity or unenforceability of any terms or provisions
hereof shall not affect the validity or enforceability of any other term or
provision hereof. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument and shall be governed by and construed in accordance
with laws of the State of New York without giving regard to the principles of
conflicts of law, and shall bind and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
12.07. Expenses. Except as otherwise expressly provided in this Agreement,
the Company agrees to pay, without right of reimbursement from Purchaser, the
costs incurred, incident to the preparation and execution of this Agreement and
the Related Agreements and performance of its obligations hereunder, whether or
not the transactions contemplated by this Agreement and the Related Agreements
shall be consummated, including, without limitation, reasonable fees and
disbursements of legal counsel, accountants and consultants employed by the
respective parties in connection with the transactions contemplated by this
Agreement and the Related Agreements.
12.08. Public Announcements. At all times at or before the Closing, except
as required by law or on the advice of counsel, neither the Company and the
Subsidiaries, on the one hand, and Purchaser on the other hand will issue or
make any release to the press or NASDAQ, or other public disclosure with respect
to this Agreement or the transactions contemplated hereby without the consent of
the other. Except as required by law or NASDAQ, the Company and the
Subsidiaries, on the one hand, and Purchaser on the other hand, will also obtain
the other's prior approval of any press release to be issued immediately
following the Closing announcing the consummation of the transactions
contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
▇▇▇▇▇ TRANSPORTATION SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇▇▇ TRANSFER, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President/Finance
AG CARRIERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President/Finance
SPECIALTY TRANSPORTATION SERVICES,
INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇ ENVIRONMENTAL &
INDUSTRIAL EQUITY PARTNERS, L.P.,
a Delaware limited partnership
By ▇▇▇▇▇▇▇▇▇ Capital Environmental,
L.L.C., a Delaware limited liability
company
Its General Partner
By ▇▇▇▇▇▇▇▇▇ Capital, Inc.
Its Managing Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
23
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of September , 1999, between
▇▇▇▇▇ TRANSPORTATION SERVICES, INC., a Delaware corporation (the "Company"), and
▇▇▇▇▇▇▇▇▇ ENVIRONMENTAL & INDUSTRIAL EQUITY PARTNERS, L.P., a limited
partnership organized under the laws of the State of Delaware (together with its
permitted assigns under this Agreement, the "Holder").
WHEREAS, the Company and the Holder have entered into a Stock Purchase
Agreement, dated as of August , 1999 (the "Stock Purchase Agreement"), by and
between the Company and the Holder, pursuant to which the Company has issued and
sold to the Holder shares of Common Stock of the Company (the "Shares");
WHEREAS, as a condition to the consummation of the transactions under the
Stock Purchase Agreement, the Company agreed to grant to the Holder the
registration rights set forth in this Agreement;
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 hereto, intending to
be legally bound hereby, agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Advice" shall have the meaning set forth in Section 6.
"Affiliate" means any Person that, directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person, whether by contract, through the
ownership of voting securities, or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing; provided, however, that
in no event shall the Holder be deemed an Affiliate of the Company.
"Business Day" means any day that is not a Saturday, a Sunday or a legal
holiday on which banking institutions in the State of New York are not required
to be open.
"Capital Stock" means, with respect to the Company, any and all shares,
interests, participations or other equivalents (however designated) of capital
stock issued by the Company, including each class of common stock and preferred
stock of the Company.
"Closing Date" has the meaning set forth in the Stock Purchase Agreement.
"Common Stock" means the Common Stock, par value $.0001 per share, of the
Company or any other shares of capital stock or other securities of the Company
into which such shares of Common Stock shall be reclassified or changed,
including by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or if
the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock, or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be such number of shares of stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such change, reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.
"Company" has the meaning set forth in the introductory clauses.
"Demand Notice" has the meaning set forth in Section 2(a).
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"Demand Registration" has the meaning set forth in Section 2(b).
"Effectiveness Period" has the meaning set forth in Section 2(d).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Holdback Period" has the meaning set forth in Section 4.
"Holder" has the meaning set forth in the introductory clauses and includes
any assignee thereof in accordance with Section 11 of this Agreement.
"Indemnified Party" has the meaning set forth in Section 9(c).
"Indemnifying Party" has the meaning set forth in Section 9(c).
"Inspectors" has the meaning set forth in Section 6(j).
"Interruption Period" has the meaning set forth in Section 6.
"Losses" has the meaning set forth in Section 9(a).
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Piggyback Registration" has the meaning set forth in Section 3(a).
"Prospectus" means the prospectus included in any Registration Statement
(including a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable Shares
covered by such Registration Statement and all other amendments and supplements
to such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
prospectus.
"Records" has the meaning set forth in Section 6(j).
"Registrable Shares" means shares of Common Stock owned by a Holder at any
time, unless (i) they have been effectively registered under Section 5 of the
Securities Act and disposed of pursuant to an effective Registration Statement,
(ii) such securities can be freely sold and transferred without restriction
under Rule 144 or any other restrictions under the Securities Act or (iii) such
securities have been transferred pursuant to Rule 144 under the Securities Act
or any successor rule such that, after any such transfer referred to in this
clause (iv), such securities may be freely transferred without restriction under
the Securities Act.
"Registration" means registration under the Securities Act of an offering
of Registrable Shares pursuant to a Demand Registration or a Piggyback
Registration.
"Registration Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Shares pursuant
to the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such registration statement, including
pre-effective amendments and post-effective amendments, all exhibits thereto and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Shelf Registration" has the meaning set forth in Section 2(b).
"Stock Purchase Agreement" has the meaning set forth in the introductory
clauses.
"Underwritten Registration or Underwritten Offering" means a registration
under the Securities Act in which securities of the Company are sold to an
underwriter for reoffering to the public.
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SECTION 2. Demand Registration.
(a) The Holder shall have the right at any time by written notice (the
"Demand Notice") given to the Company, to request the Company to register under
and in accordance with the provisions of the Securities Act all or any portion
of the Registrable Shares designated by such Holder; provided, however, that the
aggregate number of Registrable Shares requested to be registered pursuant to
any Demand Notice and pursuant to any related Demand Notices received pursuant
to the following sentence shall be at least 100,000 (subject to adjustment) and
provided, further, however, that such registration shall, at the option of the
Company, be on Form S-3 (or its successor form) if such form is then available
for use by the Company. Upon receipt of any such Demand Notice, the Company
shall promptly notify any other Holders of the receipt of such Demand Notice and
allow them the opportunity to include Registrable Shares held by them in the
proposed registration by submitting their own Demand Notice. In connection with
any Demand Registration in which more than one Holder participates, in the event
that such Demand Registration involves an Underwritten Offering and the managing
underwriter or underwriters participating in such offering advise in writing the
Holders of Registrable Shares to be included in such offering that the total
number of Registrable Shares to be included in such offering exceeds the amount
that can be sold in (or during the time of) such offering without delaying or
jeopardizing the success of such offering (including the price per share of the
Registrable Shares to be sold), then the amount of Registrable Shares to be
offered for the account of such Holders shall be reduced pro rata on the basis
of the number of Registrable Shares to be registered by each such Holder. The
Holders as a group shall be entitled to three Demand Registrations pursuant to
this Section 2 unless any Demand Registration does not become effective, is not
maintained for a period (whether or not continuous) of at least the applicable
period specified in Section 2(c), or where the amount of Registrable Shares to
be offered for the account of such Holders is reduced pro rata as described in
the preceding sentence by more than ten percent (10%), in which case the Holders
will be entitled to an additional Demand Registration pursuant hereto.
(b) The Company, within thirty (30) days of the date on which the Company
receives a Demand Notice given by Holders in accordance with Section 2(a)
hereof, shall file with the SEC, and the Company thereafter shall use its best
efforts to cause to be declared effective, a Registration Statement on the
appropriate form (subject to the last proviso of the first sentence of Section
2(a)) for the registration and sale, in accordance with the intended method or
methods of distribution, of the total number of Registrable Shares specified by
the Holders in such Demand Notice, which may at the option of the Company
include a "shelf" registration (a "Shelf Registration") pursuant to Rule 415
under the Securities Act (a "Demand Registration").
(c) The Company shall use commercially reasonable efforts to keep each
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of the Registrable Shares covered thereby (i) in the
case of a Registration that is not a Shelf Registration, for a period of one
hundred twenty (120) days from the date on which the SEC declares such
Registration Statement effective and (ii) in the case of a Shelf Registration,
continuously from the date on which the SEC declares such Registration Statement
effective, in either case (x) until all the Registrable Shares covered by such
Registration Statement have been sold pursuant to such Registration Statement),
and (y) as such period may be extended pursuant to this Section 2.
(d) The time period for which the Company is required to maintain the
effectiveness of any Registration Statement shall be extended by the aggregate
number of days of all Holdback Periods (as defined in Section 4) and all
Interruption Periods (as defined in Section 6(k)) occurring during such
Registration and such period and any extension thereof is hereinafter referred
to as the "Effectiveness Period."
(e) Except to the extent required by agreements with other security holders
of the Company entered into prior to the date of the Stock Purchase Agreement,
the Company shall not include any securities that are not Registrable Shares in
any Registration Statement filed pursuant to this Section 2 without the prior
written consent of the Holders of a majority in number of the Registrable Shares
covered by such Registration Statement, which consent shall not be unreasonably
withheld.
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(f) Holders of a majority in number of the Registrable Shares to be
included in a Registration Statement pursuant to this Section 2 may, at any time
prior to the effective date of the Registration Statement relating to such
Registration, revoke such request by providing a written notice to the Company
revoking such request. Notwithstanding such revocation, such request shall be
deemed to be a Demand Registration pursuant to Section 2(a) unless the Holders
of Registrable Shares who revoke such request shall reimburse the Company for
all its out-of-pocket expenses incurred in the preparation, filing and
processing of the Registration Statement; provided, however, that, if such
revocation was based on the Company's failure to comply in any material respect
with its obligations hereunder, such reimbursement shall not be required.
SECTION 3. Piggyback Registration.
(a) Right to Piggyback. If at any time after the date hereof the Company
proposes to file a registration statement under the Securities Act with respect
to a public offering of securities of the same type as the Registrable Shares
pursuant to a firm commitment underwritten offering solely for cash for its own
account (other than a registration statement (i) on Form S-4 or Form S-8 or any
successor forms thereto, or (ii) filed solely in connection with a dividend
reinvestment plan or employee benefit plan covering officers or directors of the
Company or its Affiliates) or for the account of any holder of securities of the
same type as the Registrable Shares or the securities into which the Registrable
Securities then are convertible (to the extent that the Company has the right to
include Registrable Shares in any registration statement to be filed by the
Company on behalf of such holder), then the Company shall give written notice of
such proposed filing to the Holders at least fifteen (15) days before the
anticipated filing date. Such notice shall offer the Holders the opportunity to
register such amount of Registrable Shares as they may request (a "Piggyback
Registration"). Subject to Section 3(b), the Company shall include in each such
Piggyback Registration all Registrable Shares with respect to which the Company
has received written requests for inclusion therein within ten (10) days after
notice has been given to the Holders. Each Holder shall be permitted to withdraw
all or any portion of the Registrable Shares of such Holder from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration.
(b) Priority on Piggyback Registrations. The Company shall permit the
Holders to include all such Registrable Shares on the same terms and conditions
as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters
participating in such offering advise the Holders in writing that the total
amount of securities requested to be included in such Piggyback Registration
exceeds the amount which can be sold in (or during the time of) such offering
without delaying or jeopardizing the success of the offering (including the
price per share of the securities to be sold), then the amount of securities to
be offered for the account of the Holders and other holders of securities who
have piggyback registration rights with respect thereto shall be reduced (to
zero if necessary) (i) first, by reducing pro-rata the securities included
therein held by each of the holders participating in such offering, and (ii)
second, by reducing the securities included therein held by the Holders
participating in such offering.
(c) Right To Abandon. Nothing in this Section 3 shall create any liability
on the part of the Company to the Holders if the Company in its sole discretion
should decide not to file a registration statement proposed to be filed pursuant
to Section 3(a) or to withdraw such registration statement subsequent to its
filing, regardless of any action whatsoever that a Holder may have taken,
whether as a result of the issuance by the Company of any notice hereunder or
otherwise.
SECTION 4. Holdback Agreement. If (i) during the Effectiveness Period, the
Company shall file a registration statement (other than in connection with the
registration of securities issuable pursuant to an employee stock option, stock
purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act) with
respect to the Common Stock or similar securities or securities convertible
into, or exchangeable or exercisable for, such securities and (ii) with
reasonable prior notice, the Company (in the case of a non-underwritten public
offering by the Company pursuant to such registration statement) advises the
Holders in writing that a public sale or distribution of such Registrable Shares
would materially adversely affect such offering or the managing underwriter or
underwriters (in the case of an underwritten public offering by the Company
pursuant to such registration statement) advises the Company in writing (in
which case the Company shall notify the Holders) that a
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public sale or distribution of Registrable Shares would materially adversely
impact such offering, then each Holder shall, to the extent not inconsistent
with applicable law, refrain from, and agree in a writing to the Company and the
underwriter or underwriters to refrain from, effecting any public sale or
distribution of Registrable Shares during the ten (10) days prior to the
effective date of such registration statement and until the earliest of (A) the
abandonment of such offering, (B) ninety (90) days from the effective date of
such registration statement and (C) if such offering is an underwritten
offering, the termination in whole or in part of any "hold back" period obtained
by the underwriter or underwriters in such offering from the Company in
connection therewith (each such period, a "Holdback Period").
SECTION 5. Eligibility for Form S-3. The Company represents and warrants
that it meets the requirements for the use of Form S-3 for registration of the
resale by Holder of the Registrable Shares. The Company covenants and agrees
that for so long as Registrable Shares remain outstanding, the Company shall
continue to be eligible to use Form S-3 for registration of such resale and the
Company shall file all reports required to be filed by the Company with the SEC
in a timely manner so as to maintain such eligibility for the use of Form S-3.
SECTION 6. Registration Procedures. In connection with the registration
obligations of the Company pursuant to and in accordance with Sections 2 and 3
(and subject to Sections 2 and 3), the Company shall use commercially reasonable
efforts to effect such registration to permit the sale of such Registrable
Shares in accordance with the intended method or methods of disposition thereof,
and pursuant thereto the Company shall as expeditiously as possible (but subject
to Sections 2 and 3):
(a) prepare and file with the SEC a Registration Statement for the sale of
the Registrable Shares on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate in accordance with such Holders'
intended method or methods of distribution thereof, subject to the last proviso
of the first sentence of Section 2(a), Section 2(b), and, subject to the
Company's right to terminate or abandon a registration pursuant to Section
3(c),use commercially reasonable efforts to cause such Registration Statement to
become effective and remain effective as provided herein; provided, however,
that the Company shall permit the Holders and their counsel to review the
Registration Statement within a reasonable period of time prior to filing the
Registration Statement with the SEC and not file the Registration Statement in a
form to which such counsel reasonably objects;
(b) prepare and file with the SEC such amendments (including post-effective
amendments) to such Registration Statement, and such supplements to the related
Prospectus, as may be required by the rules, regulations or instructions
applicable to the Securities Act during the applicable period in accordance with
the intended methods of disposition specified by the Holders of the Registrable
Shares covered by such Registration Statement, make generally available earnings
statements satisfying the provisions of Section 11(a) of the Securities Act
(provided that the Company shall be deemed to have complied with this clause if
it has complied with Rule 158 under the Securities Act), and cause the related
Prospectus as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; provided, however, that before filing any amendments or
supplements to the Registration Statement, the Company shall permit the Holders
of Registrable Shares covered by such Registration Statement and their counsel
to review such amendment or supplement within a reasonable period of time prior
to filing such amendment or supplement with the SEC and not file such amendment
or supplement in a form to which such counsel reasonably objects;
(c) notify the Holders of any Registrable Shares covered by such
Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective; provided,
however, that the Company will not request acceleration without prior notice to
the Holders' counsel, (ii) of any request by the SEC for amendments or
supplements to such Registration Statement or the related Prospectus or for
additional information regarding such Holders, (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of such Registration Statement or
the initiation of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding
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for such purpose, and (v) of the happening of any event that requires the making
of any changes in such Registration Statement, Prospectus or documents
incorporated or deemed to be incorporated therein by reference so that they will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading;
(d) use commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of such Registration Statement, or the
lifting of any suspension of the qualification or exemption from qualification
of any Registrable Shares for sale in any jurisdiction in the United States;
(e) furnish to the Holders of any Registrable Shares covered by such
Registration Statement, each counsel for such Holders and each managing
underwriter, if any, without charge, one conformed copy of such Registration
Statement, as declared effective by the SEC, and of each post-effective
amendment thereto, in each case including financial statements and schedules and
all exhibits and reports incorporated or deemed to be incorporated therein by
reference; and deliver, without charge, such number of copies of the preliminary
prospectus, any amended preliminary prospectus, each final Prospectus and any
post-effective amendment or supplement thereto, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Shares of such
Holder covered by such Registration Statement in conformity with the
requirements of the Securities Act;
(f) prior to any public offering of Registrable Shares covered by such
Registration Statement, use commercially reasonable efforts to register or
qualify such Registrable Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Holders of such Registrable Shares shall
reasonably request in writing; provided, however, that the Company shall in no
event be required to qualify generally to do business as a foreign corporation
or as a dealer in any jurisdiction where it is not at the time so qualified or
to execute or file a general consent to service of process in any such
jurisdiction where it has not theretofore done so or to take any action that
would subject it to general service of process or taxation in any such
jurisdiction where it is not then subject;
(g) upon the occurrence of any event contemplated by paragraph 6(c) (v),
prepare a supplement or post-effective amendment to such Registration Statement
or the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference and file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Shares being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(h) use commercially reasonable efforts to cause all Registrable Shares
covered by such Registration Statement to be listed on each securities exchange
or automated interdealer quotation system, if any, on which similar securities
issued by the Company are then listed or quoted;
(i) on or before the effective date of such Registration Statement, provide
the transfer agent of the Company for the Registrable Shares with printed
certificates for the Registrable Shares covered by such Registration Statement,
which are in a form eligible for deposit with The Depository Trust Company;
(j) if such offering is an underwritten offering, make available for
inspection by any Holder of Registrable Shares included in such Registration
Statement, any underwriter participating in any offering pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the "Inspectors"), all financial
and other records and other information, pertinent corporate documents and
properties of any of the Company and its subsidiaries and affiliates
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibilities; provided, however, that the
Records that the Company determines, in good faith, to be confidential and which
it notifies the Inspectors in writing are confidential shall not be disclosed to
any Inspector unless such Inspector signs a confidentiality agreement reasonably
satisfactory to the Company (which shall permit the disclosure of such Records
in such Registration Statement or the related Prospectus if necessary to avoid
or correct a material misstatement in or material omission from such
Registration Statement or Prospectus) or either (i) the disclosure of such
Records is necessary to avoid or correct a
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misstatement or omission in such Registration Statement or (ii) the release of
such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction; provided, further, however, that (A) any decision
regarding the disclosure of information pursuant to subclause (i) shall be made
only after consultation with counsel for the applicable Inspectors and the
Company and (B) with respect to any release of Records pursuant to subclause
(ii), each Holder of Registrable Shares agrees that it shall, promptly after
learning that disclosure of such Records is sought in a court having
jurisdiction, give notice to the Company so that the Company, at the Company's
expense, may undertake appropriate action to prevent disclosure of such Records;
and
(k) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other appropriate and
reasonable actions requested by the Holders of a majority of the Registrable
Shares being sold in connection therewith (including those reasonably requested
by the managing underwriters) in order to expedite or facilitate the disposition
of such Registrable Shares, and in such connection, (i) use commercially
reasonable efforts to obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters and counsel to the Holders
of the Registrable Shares being sold), addressed to each selling Holder of
Registrable Shares covered by such Registration Statement and each of the
underwriters as to the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by
such counsel and underwriters, (ii use commercially reasonable efforts to obtain
"cold comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each
selling holder of Registrable Shares covered by the Registration Statement
(unless such accountants shall be prohibited from so addressing such letters by
applicable standards of the accounting profession) and each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings, (iii) if requested and if an underwriting agreement is entered into,
provide indemnification provisions and procedures substantially to the effect
set forth in Section 9 hereof with respect to all parties to be indemnified
pursuant to such Section. The above shall be done at each closing under such
underwriting or similar agreement, or as and to the extent required thereunder.
The Company may require each Holder of Registrable Shares covered by a
Registration Statement to furnish such information regarding such Holder and
such Holder's intended method of disposition of such Registrable Shares as it
may from time to time reasonably request in writing. If any such information is
not furnished within a reasonable period of time after receipt of such request,
the Company may exclude such Holder's Registrable Shares from such Registration
Statement, provided, however, the Company shall hold in confidence and not make
any disclosure of information concerning the Holder provided to the Company
unless (a) disclosure of such information is necessary to comply with federal or
state securities laws, (b) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement, (c)
the release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction or is otherwise
required by applicable law or legal process, (d) such information has been made
generally available to the public other than by disclosure in violation of this
or any other agreement (to the knowledge of the Company), or (e) the Holder
consents to the form and content of any such disclosure. The Company agrees that
it shall, upon learning that disclosure of such information concerning the
Holder is sought in or by a court or governmental body of competent jurisdiction
or through other means, give prompt notice to the Holder prior to making such
disclosure, and allow the Holder, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information.
Each Holder of Registrable Shares covered by a Registration Statement
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 6(c)(ii), 6(c)(iii), 6(c)(iv) or 6(c)(v),
that such Holder shall forthwith discontinue disposition of any Registrable
Shares covered by such Registration Statement or the related Prospectus until
receipt of the copies of the
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34
supplemented or amended Prospectus contemplated by Section 6(g), or until such
Holder is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
(such period during which disposition is discontinued being an "Interruption
Period") and, if requested by the Company, the Holder shall deliver to the
Company (at the expense of the Company) all copies then in its possession, other
than permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Shares at the time of receipt of such request.
Each Holder of Registrable Shares covered by a Registration Statement
further agrees not to utilize any material other than the applicable current
preliminary prospectus or Prospectus in connection with the offering of such
Registrable Shares.
SECTION 7. Registration Expenses. Whether or not any Registration Statement
is filed or becomes effective, the Company shall pay all costs, fees and
expenses incident to the Company's performance of or compliance with this
Agreement, including (i) all registration and filing fees, including NASD filing
fees, (ii) all fees and expenses of compliance with securities or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection therewith,
(iii) printing expenses (including expenses of printing certificates for
Registrable Shares and of printing prospectuses if the printing of prospectuses
is requested by the Holders or the managing underwriter, if any), (iv)
messenger, telephone and delivery expenses, (v) fees and disbursements of
counsel for the Company, (vi) fees and disbursements of all independent
certified public accountants of the Company (including expenses of any "cold
comfort" letters required in connection with this Agreement) and all other
persons retained by the Company in connection with such Registration Statement,
(vii) fees and disbursements of one counsel, other than the Company's counsel,
selected by Holders of a majority of the Registrable Shares being registered, to
represent all such Holders, (viii) fees and disbursements of underwriters
customarily paid by the issuers or sellers of securities and (ix) all other
costs, fees and expenses incident to the Company's performance or compliance
with this Agreement. Notwithstanding the foregoing, the fees and expenses of any
persons retained by any Holder, other than one counsel for all such Holders, and
any discounts, commissions or brokers' fees or fees of similar securities
industry professionals and any transfer taxes relating to the disposition of the
Registrable Shares by a Holder, will be payable by such Holder and the Company
will have no obligation to pay any such amounts.
SECTION 8. Underwriting Requirements.
(a) Subject to Section 8(b), any Holder shall have the right, by written
notice, to request that any Demand Registration provide for an Underwritten
Offering.
(b) In the case of any Underwritten Offering pursuant to a Demand
Registration, the Holders of a majority of the Registrable Shares to be disposed
of in connection therewith shall select the institution or institutions that
shall manage or lead such offering, which institution or institutions shall be
reasonably satisfactory to the Company. In the case of any Underwritten Offering
pursuant to a Piggyback Registration, the Company shall select the institution
or institutions that shall manage or lead such offering. No Holder shall be
entitled to participate in an Underwritten Offering unless and until such Holder
has entered into an underwriting or other agreement (including a "holdback
agreement" to the effect set forth in Section 4) with such institution or
institutions for such offering in such form as the Company and such institution
or institutions shall determine.
SECTION 9. Indemnification.
(a) Indemnification by the Company. The Company shall, without limitation
as to time, indemnify and hold harmless, to the full extent permitted by law,
each Holder of Registrable Shares whose Registrable Shares are covered by a
Registration Statement or Prospectus, the officers, directors and agents and
employees of each of them, each Person who controls each such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
person, to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgment, costs (including, without limitation,
costs of preparation and reasonable attorneys' fees)
8
35
and expenses (collectively, "Losses"), as incurred, arising out of or based upon
(i) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, or any other law, including, without limitation, any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of securities, or (ii) any untrue or alleged untrue statement of a material
fact contained in a Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same are based upon information furnished in writing to the
Company by or on behalf of such Holder expressly for use therein; provided,
however, that the Company shall not be liable to any such Holder to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if (A) having previously been furnished by or on behalf of the
Company with copies of the Prospectus, such Holder failed to send or deliver a
copy of the Prospectus with or prior to the delivery of written confirmation of
the sale of Registrable Shares by such Holder to the person asserting the claim
from which such Losses arise and (B) the Prospectus would have corrected in all
material respects such untrue statement or alleged untrue statement or such
omission or alleged omission; and provided, further, however, that the Company
shall not be liable in any such case to the extent that any such Losses arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission in the Prospectus, if (x) such untrue statement or
alleged untrue statement, omission or alleged omission is corrected in all
material respects in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, prior to or concurrently
with the sale of Registrable Shares.
(b) Indemnification by Holder of Registrable Shares. In connection with any
Registration Statement in which a Holder is participating, such Holder shall
furnish to the Company in writing such information as the Company reasonably
requests for use in connection with such Registration Statement or the related
Prospectus and agrees to indemnify, to the full extent permitted by law, the
Company, its directors, officers, agents or employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act) and the directors, officers, agents or employees of such
controlling Persons, from and against all Losses arising out of or based upon
any untrue or alleged untrue statement of a material fact contained in such
Registration Statement or the related Prospectus or any amendment or supplement
thereto, or any preliminary prospectus, or arising out of or based upon any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but only
to the extent, that such untrue or alleged untrue statement or omission or
alleged omission is based upon any information so furnished in writing by or on
behalf of such Holder to the Company expressly for use in such Registration
Statement or Prospectus, provided, however, that the indemnification obligations
of the Holder pursuant to this Section 9(b) shall be limited to a maximum amount
equal to the cash proceeds actually received by the Holder pursuant to any
public offering of securities in connection with such Registration Statement.
(c) Conduct of Indemnification Proceedings. If any Person shall be entitled
to indemnity hereunder (an "Indemnified Party"), such Indemnified Party shall
give prompt notice to the party from which such indemnity is sought (the
"Indemnifying Party") of any claim or of the commencement of any proceeding with
respect to which such Indemnified Party seeks indemnification or contribution
pursuant hereto; provided, however, that the delay or failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any obligation
or liability except to the extent that the Indemnifying Party has been
prejudiced by such delay or failure. The Indemnifying Party shall have the
right, exercisable by giving written notice to an Indemnified Party promptly
after the receipt of written notice from such Indemnified Party of such claim or
proceeding, to assume, at the Indemnifying Party's expense, the defense of any
such claim or proceeding, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that (i) an Indemnified Party shall have
the right to employ separate counsel in any such claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless: (1) the Indemnifying
Party agrees to pay such fees and expenses; (2) the Indemnifying Party fails
promptly to assume the defense of such claim or proceeding or fails to employ
counsel reasonably satisfactory
9
36
to such Indemnified Party; or (3) the named parties to any proceeding (including
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that there
may be one or more legal defenses available to it that are inconsistent with
those available to the Indemnifying Party or that a conflict of interest is
likely to exist among such Indemnified Party and any other indemnified parties
(in which case the Indemnifying Party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party); and (ii) subject to
clause (3) above, the Indemnifying Party shall not, in connection with any one
such claim or proceeding or separate but substantially similar or related claims
or proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one firm of attorneys (together with appropriate local counsel) at any time for
all of the indemnified parties. Whether or not such defense is assumed by the
Indemnifying Party, such Indemnified Party shall not be subject to any liability
for any settlement made without its consent. The Indemnifying Party shall not
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release, in form and substance reasonably
satisfactory to the Indemnified Party, from all liability in respect of such
claim or litigation for which such Indemnified Party would be entitled to
indemnification hereunder.
(d) Contribution. If the indemnification provided for in this Section 9 is
unavailable to an Indemnified Party in respect of any Losses (other than in
accordance with its terms), then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party, on
the one hand, and such Indemnified Party, on the other hand, in connection with
the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party, on the one hand, and Indemnified Party, on the other hand, shall be
determined by reference to, among other things, whether any action in question,
including any untrue statement of a material fact or omission or alleged
omission to state a material fact, has been taken by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent any such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include any legal or other
fees or expenses incurred by such party in connection with any investigation or
proceeding. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 9(d), an Indemnifying Party that
is a Holder shall not be required to contribute any amount which is in excess of
the amount by which the total proceeds received by such Holder from the sale of
the Registrable Shares sold by such Holder (net of all underwriting discounts
and commissions) exceeds the amount of any damages that such Indemnifying Party
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
SECTION 10. Reports Under the Exchange Act. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the Securities Act or
any other similar rule or regulation of the SEC that may at any time permit the
Holders to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees, until termination of this Agreement pursuant
to Section 12(a), to:
(a) Make and keep "public information" available, as those terms are
understood and defined in Rule 144;
(b) File with the SEC in a timely manner and make and keep available all
reports and other documents required of the Company under the Securities Act and
the Exchange Act so long as the Company remains subject to such requirements and
the filing and availability of such reports and other documents is required for
the applicable provisions of Rule 144; and
10
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(c) Furnish to the Holders so long as the Holders hold Registrable Shares,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144, the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of the
company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Holders to
sell such securities pursuant to Rule 144 without registration.
SECTION 11. Transfer of Registration Rights. The rights to cause the
Company to register Registrable Shares pursuant to this Agreement may not be
assigned by a Holder to a transferee or assignee of such securities except to a
Person who has agreed to be bound by the terms of this Agreement as if such
Person were a Holder.
SECTION 12. Miscellaneous.
(a) Termination. This Agreement and the obligations of the Company and the
Holders hereunder (other than Section 9) shall terminate on the first date on
which no Registrable Shares remain outstanding.
(b) No Inconsistent Agreements. The Company shall not on or after the date
of this Agreement enter into any agreement with respect to its securities which
is inconsistent with or limits or impairs the rights granted to the Holder in
this Agreement or otherwise conflicts with the provisions hereof.
(c) Adjustments Affecting Registrable Shares. The Company shall not take
any action, or permit any change to occur, with respect to the Registrable
Shares which would adversely affect the ability of the Holders of Registrable
Shares to include such Registrable Shares in a registration undertaken pursuant
to this Agreement.
(d) Notices. All notices or communications hereunder shall be in writing
(including telecopy or similar writing), addressed as follows:
If to the Company:
▇▇▇▇▇ Transportation Services, Inc.
▇▇▇▇▇ ▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
▇▇▇▇▇▇▇▇▇ Capital, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
11
38
With a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇▇ Capital, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and
Legal Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice):
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or such other addresses as each of the parties hereto or any future Holder
may designate to the other parties.
Any such notice or communication shall be deemed given (i) when made, if
made by hand delivery, (ii) upon transmission, if sent by confirmed telecopier,
(iii) one business day after being deposited with a next-day courier, postage
prepaid, or (iv) three (3) business days after being sent certified or
registered mail, return receipt requested, postage prepaid, in each case
addressed as above (or to such other address or to such other telecopier number
as such party may designate in writing from time to time).
(e) Separability. If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforcibility shall not affect the remaining provisions hereof which shall
remain in full force and effect.
(f) Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, devisees, legatees,
legal representatives, successors and assigns.
(g) Entire Agreement. This Agreement represents the entire agreement of the
parties and shall supersede any and all previous contracts, arrangements or
understandings between the parties hereto with respect to the subject matter
hereof.
(h) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of at least a
majority in number of the Registrable Shares then outstanding.
(i) Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior
consent of the other parties, except to the extent that such party is advised by
counsel that such release or announcement is necessary or advisable under
applicable law or the rules or regulations of any securities exchange, in which
case the party required to make the release or announcement shall to the extent
practicable provide the other party with an opportunity to review and comment on
such release or announcement in advance of its issuance.
(j) Expenses. Whether or not the transactions contemplated hereby are
consummated, except as otherwise provided herein, all costs and expenses
incurred in connection with the execution of this Agreement shall be paid by the
party incurring such costs or expenses, except as otherwise set forth herein.
(k) Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12
39
(l) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be one and the same agreement, and shall become
effective when counterparts have been signed by each of the parties and
delivered to each other party.
(m) Governing Law. This Agreement shall be construed, interpreted, and
governed in accordance with the internal laws of the State of New York without
giving regard to the principles of conflicts of law.
(n) Calculation of Time Periods. Except as otherwise indicated, all periods
of time referred to herein shall include all Saturdays, Sundays and holidays;
provided, however, that if the date to perform the act or give any notice with
respect to this Agreement shall fall on a day other than a Business Day, such
act or notice may be timely performed or given if performed or given on the next
succeeding Business Day.
(o) Consent to Jurisdiction. Subject to the provisions of paragraph (n),
each of the Company and the Holder hereby agrees to submit to the exclusive
jurisdiction of the U.S. Federal courts in the Southern District of the State of
New York.
(p) Further Assurances. Each party agrees to execute any and all documents
and to perform such other acts as may be necessary or expedient to further the
purposes of this Agreement and the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first written above.
▇▇▇▇▇ TRANSPORTATION SERVICES, INC.
By:
-----------------------------------
Name:
Title:
▇▇▇▇▇▇▇▇▇ ENVIRONMENTAL &
INDUSTRIAL EQUITY PARTNERS, L.P.,
a Delaware limited partnership
By ▇▇▇▇▇▇▇▇▇ Capital Environmental,
L.L.C., a Delaware limited liability
company
Its General Partner
By ▇▇▇▇▇▇▇▇▇ Capital, Inc.
Its Managing Agent
By:
-------------------------
Name:
Title:
13
40
EXHIBIT B
ADVISORY SERVICES AGREEMENT
THIS ADVISORY SERVICES AGREEMENT is entered into as of September [ ], 1999
(the "Agreement"), by and between ▇▇▇▇▇▇▇▇▇ Capital, Inc., a Minnesota
corporation (the "Advisor"), and ▇▇▇▇▇ Transportation Services, Inc., a Delaware
corporation (the "Company").
WITNESSETH:
WHEREAS, the Company has entered into a Stock Purchase Agreement (the
"Purchase Agreement") dated as of August , 1999, with an affiliate of Advisor,
▇▇▇▇▇▇▇▇▇ Environmental & Industrial Equity Partners, L.P. (the "Purchaser"), a
limited partnership organized under the laws of the State of Delaware;
WHEREAS, the Company and the Advisor have agreed that the Advisor make
available to the Company certain management and financial advisory services
commencing on the date hereof;
WHEREAS, the Advisor desires to provide such management and financial
advisory services to the Company commencing on the date hereof; and
WHEREAS, capitalized terms used but not defined herein have meanings as set
forth in the Purchase Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, it is agreed as follows:
1. Engagement and Duties
1.1 The Company hereby appoints the Advisor as an advisor to the Company,
whereby the Advisor shall, from time to time, provide those management and
financial advisory services to the Company and the Subsidiaries which are set
forth in Section 1.2 hereof. The Advisor hereby accepts such appointment and
agrees to provide each of the services required to be provided by it under this
Agreement and to make itself available from time-to-time, on a part-time basis,
to consult with the management and the Board of Directors of the Company (the
"Board") in connection with such services.
1.2 Upon the reasonable request of the Board, the Advisor hereby agrees to
provide the following services to the Company and its Subsidiaries, if any:
(a) review periodically the business, operations, financial condition
and prospects of the Company and its Subsidiaries, including, without
limitation: (i) reviewing the strategic direction and plans of the Company
and its Subsidiaries; (ii) reviewing and evaluating the annual business
plan and budget of the Company and its Subsidiaries; and (iii) reviewing
and evaluating the sales, profitability and working capital and other
financing requirements of the Company and its Subsidiaries;
(b) assist the Company and its Subsidiaries in seeking out and
negotiating with potential financing sources in connection with financing
transactions of the Company;
(c) provide to the Company and its Subsidiaries such other management
and financial advisory services as may be reasonably requested by the
Board; and
(d) assist the Company and its Subsidiaries regarding any claims for
indemnification on behalf of the Company or its Subsidiaries pursuant to
the Purchase Agreement.
2. Nature of Relationship. Notwithstanding the services provided by the
Advisor, the Advisor shall be deemed to be an independent contractor and, unless
otherwise expressly authorized by the Company's Board, shall not be authorized
to manage the affairs of, act in the name of or bind the Company. The Company
shall not be obligated to follow or accept any advice or recommendation made by
the Advisor, and the management, policies and operations of the Company shall be
the sole responsibility of the Board and the management of the Company. The
obligations of the Advisor to the Company are not exclusive, and the Advisor
may, in its sole discretion, render the same or similar services to any other
person or entity. Nothing
41
set forth in this Agreement shall be deemed to prohibit the Advisor from serving
any other person or entity in any capacity the Advisor may deem appropriate or
from conducting its business and affairs in any manner it may elect, whether or
not such activities might involve an actual or potential conflict of interest
with respect to the Company or any of its Subsidiaries. In the event Advisor
engages in activities which are competitive with the business of the Company,
the Advisor agrees not to disclose any Company proprietary information to such
competitive enterprise.
3. Term. Subject to the termination provisions of Section 7 hereof, the
term of the Advisor's engagement hereunder (the "Term") shall commence on the
date hereof and continue until the earlier of (i) the time when Purchaser and
its successors and assigns no longer beneficially own in the aggregate more then
fifty percent (50%) of the number of Initial Shares and Additional Shares
originally issued to Purchaser and (ii) the fifth anniversary hereof.
4. Compensation and Expenses.
4.1 In consideration of the services to be provided by the Advisor to the
Company, during the Term the Company shall pay the Advisor a monthly management
fee of $10,000 (the "Management Fee"), payable at the Closing (as defined in the
Purchase Agreement) and each monthly anniversary of the Closing thereafter.
4.2 On the date hereof, the Company shall pay to the Advisor an investment
banking fee of $360,000 by wire transfer of immediately available funds.
4.3 Upon execution of this Agreement, Company shall pay Advisor a one time
administrative fee of $5,000.00 by wire transfer of immediately available funds.
4.4 The Company shall also pay or reimburse the Advisor for all Expenses
incurred by the Advisor during the Term (as defined in Section 4.6).
4.5 Upon any termination of the Advisor's engagement hereunder, the
Management Fee payable with respect to the then current month shall be prorated
to reflect the actual number of days during which the Advisor was engaged by the
Company.
4.6 The term "Expenses" shall mean all fees, costs and expenses reasonably
incurred by the Advisor in connection with its provision of services hereunder,
including, without limitation: (i) all reasonable fees and expenses of legal
counsel, accountants and other consultants and experts retained by the Advisor
in connection with its provision of services hereunder, (ii) all travel and
other out-of-pocket costs and expenses incurred by the Advisor in connection
therewith, and (iii) all Losses (as defined below) that are the subject of
indemnification pursuant to this Agreement. The Company shall reimburse the
Advisor promptly for all Expenses upon the Advisor's presentation of invoices or
other documents reasonably evidencing such Expenses.
5. Indemnification.
5.1 The Company shall, to the fullest extent permitted by law, indemnify
the Advisor and its Affiliates and their respective directors, officers,
stockholders, employees and agents (collectively, the "Indemnitees") against,
and the Company will hold harmless and will release each Indemnitee from, any
and all Losses (as defined below), including any incurred in connection with any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or commission, whether pending or threatened, whether or
not any Indemnitee is or may be a party thereto, which arise out of, relate to
or are in connection with the provision of any services hereunder or otherwise
relate to this Agreement or the management or conduct of the business or affairs
of the Company or any of its Subsidiaries. The Company shall not be required to
indemnify any Indemnitee for Losses that are determined by a court of competent
jurisdiction pursuant to a final, nonappealable order to have resulted primarily
from the gross negligence or willful misconduct of the Indemnitee seeking
indemnification. The term "Losses" shall mean all losses, claims, damages or
liabilities of each Indemnitee, joint or several, and all judgments, fines,
penalties, interest and charges, and all costs and expenses incurred in
connection with the investigation, defense or settlement of any pending or
threatened claims (including, without limitation, attorneys' fees and expenses
related thereto).
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5.2 The termination of any proceeding by settlement shall not, of itself,
create a presumption that the Indemnitee acted in a manner which constituted
gross negligence or willful misconduct. The right of any Indemnitee to the
indemnification provided herein shall be cumulative of, and in addition to, any
and all rights to which such Indemnitee may otherwise be entitled by contract or
as matter of law or equity and shall extend to his heirs, successors, assigns
and legal representatives.
5.3 Promptly after receipt by an Indemnitee hereunder of written notice of
the commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 5, such Indemnitee will, if
a claim in respect thereof is to be made against the Company promptly give
written notice to the Company of the commencement of such action; provided that
the failure of any Indemnitee to give notice as provided herein shall not
relieve the Company of its obligations under this Section 5, except to the
extent that the Company is actually and materially prejudiced by such failure to
give notice. In case any such action is brought against an Indemnitee, Company
will be entitled to participate in and to assume the defense thereof, to the
extent that it may wish, with counsel reasonably satisfactory to such
Indemnitee, and after notice from the Company of its election to assume the
defense thereof, the Company will not be liable to such Indemnitee for any legal
or other expenses subsequently incurred by the Indemnitee in connection with the
defense thereof, unless in such Indemnitee's reasonable judgment a conflict of
interest between the Indemnitee and the Company arises in respect of such claim
after the assumption of the defense thereof (in which case, the Company shall
not assume the defense thereof, but shall be responsible for the fees and
expenses of one counsel in each jurisdiction for all parties indemnified by the
Company, subject to the same exception as is set forth in the last sentence of
this subsection 5.3), and the Company will not be subject to any liability for
any settlement made without its consent (which consent shall not be unreasonably
withheld). The Company will not consent to entry of any judgment or enter into
any settlement (a) which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnitee of a release from all
liability in respect to such claim or litigation, and (b) that imposes any
obligation on an Indemnitee (except any obligation to make payments which the
Company shall, and promptly does, pay). If the Company elects not to assume the
defense of a claim, it will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by the Company with respect to
such claim, unless in the reasonable judgment of any Indemnitee a conflict of
interest may exist between such Indemnitee and any other of such Indemnitees
with respect to such claim, in which event the Company shall be obligated to pay
the fees and expenses of such additional counsel or counsels.
5.4 Notwithstanding any termination of the Advisor's engagement hereunder
pursuant to Section 7, the expiration of the Term pursuant to Section 3 or
otherwise, the indemnification and contribution provided under this Agreement
shall remain in full force and effect thereafter.
5.5 No Indemnitee shall be liable to the Company or its Subsidiaries for
any error of judgment or mistake of law or for any loss incurred by the Company
or its Subsidiaries or any of their respective Affiliates in connection with the
matters to which this Agreement relates, except for any damages that are
determined by a court of competent jurisdiction pursuant to a final,
nonappealable order to have resulted primarily from the gross negligence or
willful misconduct of the Indemnitee seeking indemnification. In no event shall
the Advisor or any Indemnitee be liable for (i) any indirect, special or
consequential damages arising out of or in connection with this Agreement and
(ii) damages in excess of the total fees (and expressly excluding Expenses)
actually received by the Advisor pursuant to Section 4 of this Agreement. The
Advisor and the Indemnitees may consult with legal counsel, accountants and
other consultants and experts in respect of the affairs of the Company and its
Subsidiaries and shall be fully protected and justified in acting, or failing to
act, in a manner consistent with the advice or opinion of such legal counsel,
accountants and other consultants and experts.
6. Contribution. If the indemnification provided for in Section 5.1 is
judicially determined by a court of competent jurisdiction pursuant to a final,
nonappealable order to be unavailable (other than in accordance with the second
sentence of Section 5.1) to an Indemnitee in respect of any Losses, then, in
lieu of indemnifying such Indemnitee hereunder, the Company shall contribute to
the amount paid or payable by such Indemnitee as a result of such Losses (i) in
such proportion as is appropriate to reflect the relative benefits to the
Advisor and its Affiliates, on the one hand, and the Company, on the other hand,
in connection
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with the services heretofore provided to the Company by the Advisor or the
services provided by the Advisor under this Agreement, as the case may be, or
(ii) if the allocation provided by clause (i) above is not available, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in such clause (i) but also the relative fault of each of the Advisor and its
Affiliates and the Company, as well as any other relevant equitable
considerations; provided, however, that in no event shall the Indemnitee's
aggregate contribution to the amount paid or payable exceed the aggregate amount
of fees (and expressly excluding Expenses) actually received by the Advisor
under Section 4 of this Agreement.
7. Termination. Notwithstanding anything to the contrary contained in this
Agreement the Advisor's engagement hereunder may be terminated by the Advisor
upon at least forty-five (45) days prior written notice to the Company.
8. Notices. All notices and other communications under or in connection
with this Agreement shall be in writing and shall be deemed given (a) if
delivered personally, upon delivery, (b) if delivered by registered or certified
mail (return receipt requested), upon the earlier of actual delivery or three
days after being mailed, or (c) if given by telecopy, upon confirmation of
transmission by telecopy, in each case to the parties at the following
addresses:
(a) If to Advisor, addressed to:
▇▇▇▇▇▇▇▇▇ Capital, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
(b) If to Company, addressed to:
▇▇▇▇▇ Transportation Services, Inc.
▇▇▇▇▇ ▇. ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
9. Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof. It supersedes any prior
agreement or understanding among them, and it may not be modified or amended in
any manner other than by an instrument in writing signed by both parties hereto,
or their respective successors or assigns, or otherwise as provided herein.
10. Consent to Jurisdiction and Service of Process. Each of the Company and
the Advisor hereby agrees to submit to the exclusive jurisdiction of the U.S.
Federal courts in the Southern District of the State of New York.
11. Governing Law. This Agreement shall be construed, interpreted, and
governed in accordance with the internal laws of the State of New York without
giving regard to the principles of conflicts of law.
12. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, devisees,
legatees, legal representatives, successors and assigns. Nothing in this
Agreement, express or implied, is intended or shall be construed to give any
person other than the parties to this Agreement and their respective successors
or permitted assigns, any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein. Without the prior
written consent of the Advisor, the Company shall not be entitled to assign its
rights and obligations under this Agreement and any purported assignment in
violation hereof shall be null and void.
13. Force Majeure. If the performance by the Advisor of any of its services
hereunder is prevented, restricted or interfered with in whole or in part by
reason of any event or cause whatsoever beyond the reasonable control of the
Advisor, then in any such event, the Advisor shall be excused from such
performance
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to the extent of such prevention, restriction or interference, and the
compensation payable hereunder shall be reduced proportionately.
14. Headings. Captions contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit or extend the scope or intent
of this Agreement or any provision hereof.
15. Severability. If any provision of this Agreement, or the application of
such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
16. Waivers. No provision of this Agreement shall be deemed to have been
waived unless such waiver is contained in a written notice given to the party
claiming such waiver, and no such waiver shall be deemed to be a waiver of any
other or further obligation or liability of the party or parties in whose favor
the waiver was given.
17. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
18. Further Assurances. Each party agrees to execute any and all documents
and to perform such other acts as may be necessary or expedient to further the
purposes of this Agreement and the transactions contemplated hereby.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
▇▇▇▇▇▇▇▇▇ CAPITAL, INC.
By:
------------------------------------
Name:
Title:
▇▇▇▇▇ TRANSPORTATION SERVICES, INC.
By:
------------------------------------
Name:
Title:
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EXHIBIT C-1
VOTING AGREEMENT
This Voting Agreement (this "Agreement"), dated as of August , 1999 among
▇▇▇▇▇▇▇▇▇ Environmental & Industrial Equity Partners, L.P. a limited partnership
organized under the laws of the State of Delaware ("Purchaser"), and
[ ], a stockholder (the "Stockholder") of ▇▇▇▇▇ Transportation
Services, Inc., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, concurrently herewith, Purchaser and the Company are entering into
a Stock Purchase Agreement (as such agreement may hereafter be amended from time
to time, the "Stock Purchase Agreement"), pursuant to which the Purchaser will
purchase from the Company shares of Common Stock of the Company, par value
$.0001 per share (the "Common Stock"); and
WHEREAS, as an inducement and a condition to entering into the Stock
Purchase Agreement, Purchaser has required that the Stockholder agree, and the
Stockholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. Capitalized terms used and not defined herein have the
respective meanings ascribed to them in the Stock Purchase Agreement. For
purposes of this Agreement:
(a) "Company Stock" shall mean at any time, collectively, shares of Common
Stock.
(b) "Beneficially Own" or "Beneficial Ownership" with respect to any securities
shall mean having "Beneficial Ownership" of such securities (as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Notwithstanding the foregoing,
securities Beneficially Owned by a Person shall not include securities which are
actually owned by other Persons but which such Person may be deemed to
Beneficially Own under Rule 13d-3 under the Exchange Act solely because such
Person may be deemed to be part of a "group" with such other Persons as within
the meaning of Section 13(d)(3) of the Exchange Act.
(c) "Related Party" or "Related Parties" means Affiliates of the Stockholder and
the Company, principal stockholders of the Company, the spouse of the
Stockholder, family members of the Stockholder, and any family trust or similar
instrument (whether the Stockholder is a beneficiary or trustee thereof).
2. Provisions Concerning Company Stock.
(a) The Stockholder hereby agrees that during the period commencing on the date
hereof and continuing for so long as the Stockholder holds any shares of Common
Stock, at any meeting of the holders of Company Stock, however called, or in
connection with any written consent of the holders of Company Stock, the
Stockholder shall vote (or cause to be voted) all shares of Company Stock held
of record or Beneficially Owned by the Stockholder, whether heretofore owned or
hereafter acquired (collectively, the "Shares"): (i) in favor of the Charter
Amendment; (ii) in favor of the Investment Proposal and the execution and
delivery by the Company of the Stock Purchase Agreement and the Related
Agreements, the approval of the terms thereof and each of the other transactions
and actions contemplated thereby (and the matters related to the consummation
thereof); (iii) in favor of the appointment of the Purchaser Designees to the
Board of Directors of the Company, as contemplated by the Stock Purchase
Agreement; (iv) in favor of the Charter and By-Law Amendments; (v) against any
action or agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Stock Purchase Agreement or the Related Agreements or of the
Stockholder under this Agreement or that
47
would result in any of the conditions to the obligations of the Company under
the Stock Purchase Agreement not being fulfilled; and (vi) until the Investment
Proposal shall have been duly approved by the holders of Company Stock, and
except as otherwise agreed to in writing in advance by Purchaser, against each
of the following actions (other than the transactions contemplated by, or
required by, the Stock Purchase Agreement and the Related Agreements): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or its Subsidiaries; (B) a sale,
lease or transfer of a material amount of assets of the Company or its
Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation
of the Company or its Subsidiaries; (C) any change in a majority of the Persons
who constitute the board of directors of the Company; (D) any change in the
present capitalization of the Company or any amendment of the Company's
Certificate of Incorporation or Bylaws; (E) any other material change in the
Company's corporate structure or business; or (F) any other action involving the
Company or its Subsidiaries which is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone, or materially adversely affect the
transactions contemplated by the Stock Purchase Agreement, the Related
Agreements and this Agreement.
(b) In the event of a stock dividend or distribution, or any change in the
Company Stock by reason of any stock dividend, split-up, recapitalization,
combination, exchange of shares or the like, the term "Shares" shall be deemed
to refer to and include the Shares as well as all such stock dividends and
distributions and any shares into which or for which any or all of the Shares
may be changed or exchanged.
3. Other Representations, Warranties and Covenants. The Stockholder hereby
represents, warrants and covenants to Purchaser as follows:
(a) Ownership of Shares. The Stockholder is, as of the date hereof, the record
holder of and Beneficially Owns the number of shares of Company Stock set forth
opposite the Stockholder's name on Schedule I hereto. As of the date hereof, the
Shares set forth opposite the Stockholder's name on Schedule I hereto constitute
all of the Shares owned of record or Beneficially Owned by the Stockholder. The
Stockholder has sole voting power or sole power to issue instructions with
respect to the matters covered hereby.
(b) Power; Binding Agreement. The Stockholder has the legal capacity, power and
authority to enter into and perform all of the Stockholder's obligations under
this Agreement. The execution, delivery and performance of this Agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party including, without limitation, any other voting agreement, stockholders
agreement, voting trust or similar agreement. This Agreement has been duly and
validly executed and delivered and authorized, to the extent required, by the
Stockholder and constitutes a valid and binding agreement of the Stockholder,
enforceable against the Stockholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which the Stockholder is a trustee whose consent is required for the
execution and delivery of this Agreement or the consummation by the Stockholder
of the transactions contemplated hereby.
(c) No Conflicts. (i) No filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is necessary for the
execution of this Agreement by the Stockholder and the consummation by the
Stockholder of the transactions contemplated hereby, and (ii) none of the
execution and delivery of this Agreement by the Stockholder, the consummation by
the Stockholder of the transactions contemplated hereby or compliance by the
Stockholder with any of the provisions hereof shall (A) result in a violation or
breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which the Stockholder is a party or by which the
Stockholder or any of the Stockholder's properties or assets may be bound, or
(B) violate any order, writ, injunction, decree, judgment, order, statute, rule
or regulation applicable to the Stockholder or any of the Stockholder's
properties or assets.
(d) Proxies and Non-Interference. Beginning on the date hereof and continuing
until this Agreement terminates pursuant to Section 4, the Stockholder shall
not, directly or indirectly, (i) except as contemplated by this Agreement, grant
any proxies or powers of attorney, deposit any Shares into a voting trust or
enter into
2
48
or amend a voting agreement with respect to any Shares, or (ii) take any action
that would have the effect of preventing or disabling the Stockholder from
performing the Stockholder's obligations under this Agreement.
(e) Standstill. During the ten (10) Trading Days immediately preceding the
Closing Date, and during the period commencing fifteen (15) Trading Days prior
to the Adjustment Period and continuing until the expiration of the Adjustment
Period, without the prior written consent of Purchaser, the Stockholder shall
not (i) (x) in any manner acquire, agree to acquire or make any proposal to
acquire or (y) in any manner Transfer (as hereinafter defined), directly or
indirectly shares of Common Stock of the Company, (ii) make or in any way
participate, directly or indirectly, in any "solicitation" of "proxies" (as such
rules are used in the proxy rules of the Securities & Exchange Commission) to
vote, or seek to advise or influence any person with respect to the voting of,
any shares of Common Stock of the Company or (iii) form, join or in any way
participate in a "group" (within the meaning of Section 13(d) of the Exchange
Act) with respect to any shares of Common Stock of the Company.
(f) Reliance by Purchaser. The Stockholder understands and acknowledges that
Purchaser is entering into the Stock Purchase Agreement in reliance upon the
Stockholder's execution and delivery of this Agreement.
(g) Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further lawful action as may be necessary
or desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
4. Termination. This Agreement shall terminate only upon, and
simultaneously with, the termination of the Stock Purchase Agreement in
accordance with its terms; provided, however, that no such termination shall
relieve any party of liability for a breach hereof prior to termination.
5. Stockholder Capacity. No Person executing this Agreement who is or
becomes during the term hereof a director of the Company makes any agreement or
understanding herein in his or her capacity as such director. The Stockholder
signs solely in his or her capacity as the record and/or Beneficial Owner of, or
the trustee of a trust whose beneficiaries are the Beneficial Owners of, the
Stockholder's Shares.
6. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersede all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
(b) Restriction on Transfers. Prior to the Stockholder Meeting, this
Agreement and the obligations hereunder shall attach to the Stockholder's Shares
and shall be binding upon any Person to which legal or Beneficial Ownership of
such Shares shall pass, whether by operation of law or otherwise, including,
without limitation, the Stockholder's heirs, guardians, administrators or
successors. Prior to the Stockholder Meeting the Stockholder shall not sell,
agree to sell, make any proposal to sell, transfer, pledge, assign or otherwise
dispose of (whether by operation of law or otherwise) (collectively,
"Transfer"), or enter into any contract, option or other arrangement with
respect to the Transfer of any of the Stockholder's Shares, unless as a
condition of such Transfer the transferee agrees in writing to be bound by the
terms and conditions of this Agreement. After the Stockholder Meeting and until
the earliest of (x) the date upon which this Agreement terminates pursuant to
Section 4, (y) the period ending on the fifth anniversary after the Closing
Date, and (z) the date Purchaser and its successors and assigns no longer
beneficially own in the aggregate more than fifty percent (50%) of the number of
Initial Shares and Additional Shares originally issued to Purchaser, the
Stockholder shall not Transfer any of the Stockholder's Shares, unless (i) such
Transfer is permitted by Section 3(e), and (ii) if such Transfer is made to a
Related Party, as a condition of such Transfer the transferee agrees in writing
to be bound by the terms and conditions of this Agreement.
(c) Legends. The Stockholder hereby acknowledges and agrees the Company
shall place a legend on the shares of Company Stock so as to indicate that all
holders thereof shall be subject to the terms and conditions of this Agreement.
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(d) Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned or delegated by the Stockholder or
Purchaser without the prior written consent of the other party and any purported
assignment or delegation in violation hereof shall be null and void, provided,
however, that Purchaser may assign all or any part of its rights, interests and
obligations hereunder to any Affiliate of Purchaser; provided, that no such
assignment before the Closing Date by Purchaser shall relieve Purchaser of its
obligations hereunder.
(e) Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated with respect to the
Stockholder, except upon the execution and delivery of a written agreement
executed by the parties hereto; provided that Schedule I hereto may be
supplemented by Purchaser by other relevant information concerning the
Stockholder of the Company without the agreement of the other party hereto.
(f) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to Purchaser:
▇▇▇▇▇▇▇▇▇ Capital, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(g) Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unforceability will not affect any other provision or
portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(h) Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenant or agreement contained in this
Agreement will cause the other party to sustain damages for which it would not
have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(i) Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
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(j) No Waiver. The failure of any party hereto to exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
(k) No Third Party Beneficiaries. This Agreement is not intended to be for
the benefit of, and shall not be enforceable by, any Person who or which is not
a party hereto.
(l) Governing Law. This Agreement shall be governed by and construed in
accordance with laws of the State of New York without giving regard to the
principles of conflicts of law.
(m) Jurisdiction. Each of the parties hereto hereby agrees to submit to the
exclusive jurisdiction of the U.S. Federal courts in the Southern District of
the State of New York.
(n) Descriptive Headings. The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
(o) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same Agreement.
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51
IN WITNESS WHEREOF, Purchaser and each Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
STOCKHOLDER:
By:
------------------------------------
Name:
Address:
▇▇▇▇▇▇▇▇▇ ENVIRONMENTAL &
INDUSTRIAL EQUITY PARTNERS, L.P.,
a Delaware limited partnership
By ▇▇▇▇▇▇▇▇▇ Capital Environmental,
L.L.C.,
a Delaware limited liability company
Its General Partner
By ▇▇▇▇▇▇▇▇▇ Capital, Inc.
Its Managing Agent
By:
-------------------------------
Name:
Title:
6
52
EXHIBIT C-2
▇▇▇▇▇▇▇ VOTING AGREEMENT
This Voting Agreement (this "Agreement"), dated as of August , 1999 among
▇▇▇▇▇▇▇▇▇ Environmental & Industrial Equity Partners, L.P. a limited partnership
organized under the laws of the State of Delaware ("Purchaser"), and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, a stockholder (the "Stockholder") of ▇▇▇▇▇ Transportation Services,
Inc., a Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, concurrently herewith, Purchaser and the Company are entering
into a Stock Purchase Agreement (as such agreement may hereafter be amended from
time to time, the "Stock Purchase Agreement"), pursuant to which the Purchaser
will purchase from the Company shares of Common Stock of the Company, par value
$.0001 per share (the "Common Stock"); and
WHEREAS, as an inducement and a condition to entering into the Stock
Purchase Agreement, Purchaser has required that the Stockholder agree, and the
Stockholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. Capitalized terms used and not defined herein have the
respective meanings ascribed to them in the Stock Purchase Agreement. For
purposes of this Agreement:
(a) "Company Stock" shall mean at any time, collectively, shares
of Common Stock.
(b) "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "Beneficial Ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Notwithstanding the foregoing,
securities Beneficially Owned by a Person shall not include securities which are
actually owned by other Persons but which such Person may be deemed to
Beneficially Own under Rule 13d-3 under the Exchange Act solely because such
Person may be deemed to be part of a "group" with such other Persons as within
the meaning of Section 13(d)(3) of the Exchange Act.
(c) "Related Party" or "Related Parties" means Affiliates of the
Stockholder and the Company, principal stockholders of the Company, the spouse
of the Stockholder, family members of the Stockholder, and any family trust or
similar instrument (whether the Stockholder is a beneficiary or trustee
thereof).
2. Provisions Concerning Company Stock.
(a) The Stockholder hereby agrees that during the period
commencing on the date hereof and continuing for so long as the Stockholder
holds any shares of Common Stock, at any meeting of the
53
holders of Company Stock, however called, or in connection with any written
consent of the holders of Company Stock, the Stockholder shall vote (or cause to
be voted) all shares of Company Stock held of record or Beneficially Owned by
the Stockholder, whether heretofore owned or hereafter acquired (collectively,
the "Shares"): (i) in favor of the Charter Amendment; (ii) in favor of the
Investment Proposal and the execution and delivery by the Company of the Stock
Purchase Agreement and the Related Agreements, the approval of the terms thereof
and each of the other transactions and actions contemplated thereby (and the
matters related to the consummation thereof); (iii) in favor of the Charter and
By-Law Amendments; (iv) against any action or agreement that would result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Stock Purchase Agreement or the
Related Agreements or of the Stockholder under this Agreement or that would
result in any of the conditions to the obligations of the Company under the
Stock Purchase Agreement not being fulfilled; and (v) until the Investment
Proposal shall have been duly approved by the holders of Company Stock, and
except as otherwise agreed to in writing in advance by Purchaser, against each
of the following actions (other than the transactions contemplated by, or
required by, the Stock Purchase Agreement and the Related Agreements): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or its Subsidiaries; (B) a sale,
lease or transfer of a material amount of assets of the Company or its
Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation
of the Company or its Subsidiaries; (C) any change in a majority of the Persons
who constitute the board of directors of the Company; (D) any change in the
present capitalization of the Company or any amendment of the Company's
Certificate of Incorporation or Bylaws; (E) any other material change in the
Company's corporate structure or business; or (F) any other action involving the
Company or its Subsidiaries which is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone, or materially adversely affect the
transactions contemplated by the Stock Purchase Agreement, the Related
Agreements and this Agreement.
(b) In the event of a stock dividend or distribution, or any
change in the Company Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term "Shares"
shall be deemed to refer to and include the Shares as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Shares may be changed or exchanged.
3. Other Representations, Warranties and Covenants. The Stockholder
hereby represents, warrants and covenants to Purchaser as follows:
(a) Ownership of Shares. The Stockholder is, as of the date
hereof, the record holder of and Beneficially Owns the number of shares of
Company Stock set forth opposite the Stockholder's name on Schedule I hereto. As
of the date hereof, the Shares set forth opposite the Stockholder's name on
Schedule I hereto constitute all of the Shares owned of record or Beneficially
Owned by the Stockholder. The Stockholder has sole voting power or sole power to
issue instructions with respect to the matters covered hereby.
(b) Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of the Stockholder's
obligations under this Agreement. The execution, delivery and performance of
this Agreement by the Stockholder will not violate any other agreement to which
the Stockholder is a party including, without limitation, any other voting
agreement, stockholders agreement, voting trust or similar agreement. This
Agreement has been duly and validly executed and delivered and authorized, to
the extent required, by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms. There is no beneficiary or holder of a voting trust certificate
or other interest of any trust of which
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54
the Stockholder is a trustee whose consent is required for the execution and
delivery of this Agreement or the consummation by the Stockholder of the
transactions contemplated hereby.
(c) No Conflicts. (i) No filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by the Stockholder
and the consummation by the Stockholder of the transactions contemplated hereby,
and (ii) none of the execution and delivery of this Agreement by the
Stockholder, the consummation by the Stockholder of the transactions
contemplated hereby or compliance by the Stockholder with any of the provisions
hereof shall (A) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which the Stockholder is a
party or by which the Stockholder or any of the Stockholder's properties or
assets may be bound, or (B) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to the Stockholder or
any of the Stockholder's properties or assets.
(d) Proxies and Non-Interference. Beginning on the date hereof
and continuing until this Agreement terminates pursuant to Section 4, the
Stockholder shall not, directly or indirectly, (i) except as contemplated by
this Agreement, grant any proxies or powers of attorney, deposit any Shares into
a voting trust or enter into or amend a voting agreement with respect to any
Shares, or (ii) take any action that would have the effect of preventing or
disabling the Stockholder from performing the Stockholder's obligations under
this Agreement.
(e) Standstill. During the ten (10) Trading Days immediately
preceding the Closing Date, and during the period commencing fifteen (15)
Trading Days prior to the Adjustment Period and continuing until the expiration
of the Adjustment Period, without the prior written consent of Purchaser, the
Stockholder shall not (i) (x) in any manner acquire, agree to acquire or make
any proposal to acquire, or (y) in any manner Transfer, directly or indirectly
shares of Common Stock of the Company, (ii) make or in any way participate,
directly or indirectly, in any "solicitation" of "proxies" (as such rules are
used in the proxy rules of the Securities & Exchange Commission) to vote, or
seek to advise or influence any person with respect to the voting of, any shares
of Common Stock of the Company, or (iii) form, join or in any way participate in
a "group" (within the meaning of Section 13(d) of the Exchange Act) with respect
to any shares of Common Stock of the Company.
(f) Reliance by Purchaser. The Stockholder understands and
acknowledges that Purchaser is entering into the Stock Purchase Agreement in
reliance upon the Stockholder's execution and delivery of this Agreement.
(g) Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
4. Termination. If the Closing shall not have occurred on or before
December 31, 1999, this Agreement shall terminate on January 1, 2000. If the
Closing shall have occurred on or before December 31, 1999, this Agreement shall
terminate at the end of the Adjustment Period.
5. Stockholder Capacity. No Person executing this Agreement who is or
becomes during the term hereof a director of the Company makes any agreement or
understanding herein in his or her capacity as such director. The Stockholder
signs solely in his or her capacity as the record and/or
3
55
Beneficial Owner of, or the trustee of a trust whose beneficiaries are the
Beneficial Owners of, the Stockholder's Shares.
6. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) Restriction on Transfers. Prior to the Stockholder Meeting,
this Agreement and the obligations hereunder shall attach to the Stockholder's
Shares and shall be binding upon any Person to which legal or Beneficial
Ownership of such Shares shall pass, whether by operation of law or otherwise,
including, without limitation, the Stockholder's heirs, guardians,
administrators or successors. Prior to the Stockholder Meeting, the Stockholder
shall not sell, agree to sell, make any proposal to sell, transfer, pledge,
assign or otherwise dispose of (whether by operation of law or otherwise)
(collectively, "Transfer"), or enter into any contract, option or other
arrangement with respect to the Transfer of any of the Stockholder's Shares,
unless as a condition of such Transfer the transferee agrees in writing to be
bound by the terms and conditions of this Agreement. After the Stockholder
Meeting, the Stockholder shall not Transfer any of the Stockholder's Shares,
unless (i) such Transfer is permitted by Section 3(e), and (ii) if such Transfer
is made to a Related Party, as a condition of such Transfer the transferee
agrees in writing to be bound by the terms and conditions of this Agreement.
(c) Legends. The Stockholder hereby acknowledges and agrees the
Company shall place a legend on the shares of Company Stock so as to indicate
that all holders thereof shall be subject to the terms and conditions of this
Agreement.
(d) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned or delegated by the
Stockholder or Purchaser without the prior written consent of the other party
and any purported assignment or delegation in violation hereof shall be null and
void, provided, however, that Purchaser may assign all or any part of its
rights, interests and obligations hereunder to any Affiliate of Purchaser;
provided, that no such assignment before the Closing Date by Purchaser shall
relieve Purchaser of its obligations hereunder.
(e) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated with respect
to the Stockholder, except upon the execution and delivery of a written
agreement executed by the parties hereto; provided that Schedule I hereto may be
supplemented by Purchaser by other relevant information concerning the
Stockholder of the Company without the agreement of the other party hereto.
(f) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to Purchaser: ▇▇▇▇▇▇▇▇▇ Capital, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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56
Copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Stockholder: J.A.J. Investments, Ltd.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Copy to: Baxter, Baker, ▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(g) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unforceability will not affect any other provision or
portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(h) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenant or agreement contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(i) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(j) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(k) No Third Party Beneficiaries. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any Person who or
which is not a party hereto.
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57
(l) Governing Law. This Agreement shall be governed by and
construed in accordance with laws of the State of New York without giving regard
to the principles of conflicts of law.
(m) Jurisdiction. Each of the parties hereto hereby agrees to
submit to the exclusive jurisdiction of the U.S. Federal courts in the Southern
District of the State of New York.
(n) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(o) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.
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58
IN WITNESS WHEREOF, Purchaser and each Stockholder have caused this Agreement to
be duly executed as of the day and year first above written.
STOCKHOLDER:
By:________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ENVIRONMENTAL & INDUSTRIAL EQUITY
PARTNERS, L.P., a Delaware limited partnership
By ▇▇▇▇▇▇▇▇▇ Capital Environmental, L.L.C., a
Delaware limited liability company
Its General Partner
By ▇▇▇▇▇▇▇▇▇ Capital, Inc.
Its Managing Agent
By:______________________________
Name:
Title:
59
SCHEDULE I
OWNERSHIP OF SHARES
____________________________ _________________________________
Name Number of shares of Common Stock
