EXHIBIT 1
--------------------------------------------------------------------------------
UNITED ROAD SERVICES, INC.
Shares of Series A
Participating Convertible Preferred Stock
STOCK PURCHASE AGREEMENT
Dated as of July 20, 2000
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
AGREEMENT made as of this 20th day of July, 2000 (the "Agreement"), by
and among United Road Services, Inc., a Delaware corporation (the "Company") and
CFE, Inc., a Delaware corporation (the "Investor").
W I T N E S S E T H:
WHEREAS, the Company previously entered into a Stock Purchase
Agreement (as amended, the "KPS Agreement"), dated as of April 14, 2000, by and
among the Company and Blue Truck Acquisition, LLC ("Blue Truck"), an affiliate
of KPS Special Situations Fund, L.P. ("KPS"), pursuant to which the Company
agreed to issue and sell to Blue Truck, and Blue Truck agreed to purchase from
the Company, $25,000,000 worth of the authorized but unissued shares of the
Company's Series A Participating Convertible Preferred Stock, par value $.001
per share (the "Series A Preferred Stock"), upon the terms and subject to the
conditions set forth therein;
WHEREAS, the Company wishes to sell to the Investor, and the Investor
wishes to purchase from the Company, $2,000,000 worth of the Series A Preferred
Stock, upon the terms and subject to the conditions set forth herein;
WHEREAS, in connection with this Agreement and the transactions
contemplated hereby, the parties hereto, together with Blue Truck and certain
other Persons, shall enter into other agreements ancillary hereto, including,
without limitation, a Registration Rights Agreement (the "Registration Rights
Agreement" and together with the other documents and agreements ancillary hereto
relating to the Investor's Series A Preferred Stock, the "Ancillary
Agreements"); and
WHEREAS, simultaneously with the execution of the KPS Agreement the
Company and Charter URS LLC ("Charterhouse") entered into an amended and
restated purchase agreement, dated April 14, 2000 (as amended, the "Amended
Charterhouse Purchase Agreement") pursuant to which such parties agreed, among
other things, to amend the terms of the Company's 8% Convertible Subordinated
Debentures due 2008 (the "Charterhouse Debentures").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the Investor and the Company
hereby agree as follows:
SECTION 1
TERMS OF PURCHASE AND ISSUANCE
1.1 Description of Series A Participating Convertible Preferred
-----------------------------------------------------------
Stock. The Company has authorized the issuance and sale to the Investor of its
-----
Series A Preferred Stock for a per share purchase price (the "Per Share Purchase
Price") in the amount per share equal to the lesser of (A) $20.00 and (B) an
amount equal to the Thirty Day Average Share Price on the Closing Date;
provided, that if the Thirty Day Average
Share Price is (A) greater than or equal to $8.40 per share but less than or
equal to $10.00 per share then the Per Share Purchase Price shall be $10.00
times ten, or (B) less than $8.40 per share then the Per Share Purchase Price
shall be 120% of the product of ten times the Thirty Day Average Share Price.
1.2 Sale and Purchase. At the Closing (as defined in Section 1.3
-----------------
hereof) and subject to the terms and conditions herein set forth, the Company
shall issue and sell to the Investor, and the Investor shall purchase from the
Company, the amount of shares of Series A Preferred Stock obtained by dividing
$2,000,000 (the "Aggregate Purchase Price") by the Per Share Purchase Price.
1.3 Closing. The closing (the "Closing") of the sale and purchase
-------
of the Series A Preferred Stock shall take place simultaneously with, and at the
location of, the closing of the transactions described in the KPS Agreement (the
date upon which the Closing occurs, the "Closing Date"). At the Closing, the
Company will deliver the Series A Preferred Stock in the form of a stock
certificate issued in the Investor's name, against payment of the full Purchase
Price therefor in immediately available funds by wire transfer by or on behalf
of the Investor to the Company.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that as of the
date hereof and as of the Closing Date:
2.1 Organization and Qualification. The Company is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to carry on its
business as it is now being conducted. The Company is duly qualified to do
business and is in good standing in each jurisdiction in which the properties
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the failure to be so qualified
and in good standing could not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
2.2 Capitalization. As of the date hereof immediately preceding the
--------------
Closing, the authorized capital stock of the Company consists of 35,000,000
shares of common stock, par value $0.01 per share (the "Company Common Stock"),
and 5,000,000 shares of preferred stock, par value $0.001 per share ("Company
Preferred Stock"). As of the date hereof, (i) 1,909,375 shares of Company Common
Stock are issued and outstanding, all of which are validly issued and are fully
paid, nonassessable and free of preemptive rights, (ii) no shares of Company
Common Stock and no shares of Company Preferred Stock are held in the treasury
of the Company, (iii) 239,040 shares of Company Common Stock are reserved for
issuance pursuant to the exercise of outstanding options and warrants to
purchase Company Common Stock and (iv) 563,452 shares of Company Common Stock
are reserved for issuance pursuant to the conversion of outstanding convertible
debentures. There are no shares of Company Preferred Stock
-2-
issued and outstanding. Assuming the exercise of all outstanding options and
warrants to purchase Company Common Stock, the conversion of all outstanding
convertible debentures as of the date hereof immediately preceding the Closing,
and the conversion of all of the Series A Preferred Stock (assuming a conversion
price for the Series A Preferred Stock of $4.0778 per share) there would be
9,333,058 shares of Company Common Stock issued and outstanding as of the date
hereof.
As of the date hereof, other than as provided for in the KPS
Agreement, as disclosed above or as listed on Schedule 2.2 of the Company
Disclosure Schedule, there are no outstanding options, warrants, subscriptions,
calls, convertible securities or other rights, agreements, arrangements or
commitments (contingent or otherwise) (including any right of conversion or
exchange under any outstanding security, instrument or other agreement)
obligating the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, any shares of the capital stock of the Company or obligating
the Company to grant, extend or enter into any such agreement or commitment.
Except as disclosed on Schedule 2.2 of the Company Disclosure Schedule, there
are no outstanding contractual obligations of the Company to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company or make any
investment (in the form of a loan, capital contribution or otherwise) in any
other Person other than a subsidiary of the Company. Upon consummation of the
Closing as contemplated hereby, including receipt by the Company of the Purchase
Price, the Series A Preferred Stock owned by the Investor will be validly
issued, fully paid and nonassessable, and any shares of capital stock issued
upon the conversion of the Series A Preferred Stock in accordance with the terms
thereof shall be validly issued, fully paid and nonassessable.
2.3 Subsidiaries. Schedule 2.3 of the Company Disclosure Schedule
------------
sets forth a complete list of the Company's direct and indirect subsidiaries,
including their respective jurisdictions of incorporation or organization. Each
direct and indirect subsidiary of the Company is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite power and authority to carry on its business
as it is now being conducted and each such subsidiary is qualified to do
business, and is in good standing, in each jurisdiction in which the properties
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except as set forth on Schedule 2.3 of the
Company Disclosure Schedule and except where the failure to be so qualified and
in such good standing could not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. All of the outstanding
shares of capital stock of each corporate subsidiary of the Company are validly
issued, fully, paid, nonassessable and free of preemptive rights, and are owned,
directly or indirectly, by the Company, free and clear of any Liens, except that
such shares are pledged to secure the Company's credit facilities. There are no
subscriptions or rights relating to the issuance of any shares of capital stock
of any such subsidiary of the Company, including any right of conversion or
exchange under any outstanding security, instrument or agreement.
-3-
2.4 Power and Authority; Non-contravention; Government Approvals.
------------------------------------------------------------
(a) Power and Authority. The Company has all requisite corporate
-------------------
power and authority to enter into this Agreement and, subject to the Company
Required Statutory Approvals (as defined in Section 2.4(c) hereof) and the
--------------
approval of the Company's stockholders (the "Company Stockholder Approval"), to
consummate the transactions contemplated hereby. This Agreement, the Ancillary
Agreements and the transactions contemplated hereby and thereby have been
approved by the Board of Directors of the Company. Except as set forth on
Schedule 2.4(a) of the Company Disclosure Schedule, no other corporate
proceedings on the part of the Company are necessary to authorize the execution
and delivery of this Agreement and the Ancillary Agreements or, except for the
Company Required Statutory Approvals and the Company Stockholder Approval, the
consummation by the Company of the transactions contemplated hereby and thereby.
This Agreement and the Ancillary Agreements have been duly executed and
delivered by the Company, and assuming the due authorization, execution and
delivery by the other parties thereto, this Agreement and the Ancillary
Agreements constitute and, as of the Closing Date, will constitute valid and
legally binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforcement may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to enforcement of creditors' rights
generally and (ii) general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity. Neither the
Company nor any of its subsidiaries is in violation of any of the provisions of
their respective articles of incorporation, by-laws or equivalent organizational
documents in any material respect.
(b) Non-contravention. The execution and delivery of this
-----------------
Agreement and the Ancillary Agreements by the Company does not violate, conflict
with or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, could reasonably be expected
to constitute a default) under, or result in the termination, suspension,
revocation or cancellation of, or accelerate the performance required by, or
result in a right of termination, suspension, revocation or cancellation or
acceleration under, or result in the creation of any Lien, upon any of the
terms, conditions or provisions of (i) the respective charters or by-laws of the
Company or any of its subsidiaries, (ii) any statute, law, ordinance, rule,
regulation, judgment, decree, order, injunction, writ, permit or license of any
court, governmental authority or arbitration panel applicable to the Company or
any of its subsidiaries or any of their respective properties or assets, (iii)
except as provided for in the KPS Agreement or as set forth on Schedule
2.4(b)(iii) of the Company Disclosure Schedule, any note, bond, mortgage,
indenture, deed of trust, license, franchise, permit, concession, contract,
lease or sublease or other instrument, obligation or agreement of any kind to
which the Company or any of its subsidiaries is now a party or by which the
Company or any of its subsidiaries or any of their respective properties or
assets may be bound or affected. The consummation by the Company of the
transactions contemplated hereby will not result in any violation, conflict,
breach, termination, suspensions, revocations, cancellations, acceleration or
creation of Liens under any of the terms, conditions or provisions described in
clauses (i) through (iii) of the preceding sentence, subject (x) in the case of
-4-
the terms, conditions or provisions described in clause (ii) above, to obtaining
(prior to the Closing) the Company Required Statutory Approvals and the Company
Stockholder's Approval and (y) in the case of the terms, conditions or
provisions described in clause (iii) above, to obtaining (prior to the Closing)
the amendment of the Charterhouse agreements (described in Section 3.13 hereof)
and the consents required from Blue Truck and from the commercial lenders,
lessors or other third parties specified in Section 2.4(b) of the Company
Disclosure Schedule. Excluded from the foregoing sentences of this paragraph (b)
insofar as they apply to the terms, conditions or provisions described in
clauses (ii) and (iii) of the first sentence of this paragraph (b) (and whether
resulting from such execution and delivery or consummation), are such
violations, conflicts, breaches, defaults, terminations, suspensions,
revocations, cancellations, accelerations or creations of Liens that could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(c) Government Approvals. Except for (i) compliance with any
--------------------
filings or approvals listed on Schedule 2.4(c) of the Company Disclosure
Schedule; (ii) compliance with any applicable requirements of the Securities Act
and the Exchange Act and (iii) such filings as may be required under any
applicable state securities or blue sky laws (the filings and approvals referred
to in clauses (i) through (iii) being herein referred to collectively as the
"Company Required Statutory Approvals"), and except as otherwise set forth on
Schedule 2.4(c) of the Company Disclosure Schedule, no declaration, filing or
registration with, or notice to, or authorization, consent, approval, order or
permit of, any governmental or regulatory body or authority is necessary for the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, other than such
declarations, filings, registrations, notices, authorizations, consents or
approvals which, if not made or obtained, as the case may be, could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
2.5 SEC Reports; Financial Statements.
---------------------------------
(a) Since February 26, 1998, the Company has filed with the SEC
all forms, statements, reports and documents (including all exhibits, post-
effective amendments and supplements thereto) required to be filed by it under
each of the Securities Act and the Exchange Act (collectively, the "Company SEC
Reports"), all of which, as amended (if applicable) complied when filed in all
material respects with all applicable requirements of the appropriate act and
the rules and regulations thereunder. As of their respective dates, the Company
SEC Reports did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representation in the preceding two sentences shall
not apply to any misstatement or omission in any Company SEC Report filed prior
to the date of this Agreement which was superseded by an amended or subsequent
Company SEC Report filed prior to the date of this Agreement.
(b) Each of the consolidated financial statements included in
the Company SEC Reports, together with the related notes and schedules
(collectively,
-5-
the "Company Financial Statements"), has been prepared in accordance with GAAP
applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and fairly presents the consolidated financial position of the
Company and its subsidiaries as of the respective dates thereof and the results
of their operations and cash flow for the periods then ended, except as
otherwise noted therein and subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments and any other adjustments
described therein.
2.6 Absence of Undisclosed Liabilities. Except as provided for in
----------------------------------
the KPS Agreement or as set forth on Schedule 2.6 of the Company Disclosure
Schedule, the Company did not have at September 30, 1999, and has not incurred
since that date, any liabilities or obligations (whether absolute, accrued,
contingent or otherwise) of any nature, except (a) liabilities, obligations or
contingencies (i) which are accrued or reserved against in the Company Financial
Statements contained in the SEC Reports filed prior to the date hereof or
reflected in the notes thereto or (ii) which were incurred after September 30,
1999, and were incurred in the ordinary course of business and consistent with
past practices, (b) liabilities, obligations or contingencies which (i) are
incurred in the ordinary course of business or (ii) would not be disclosed on
the Company Financial Statements and (c) liabilities, obligations or
contingencies which are of a nature not required to be reflected in the Company
Financial Statements.
2.7 Absence of Certain Changes or Events. Since the date of the
------------------------------------
most recent Company SEC Report filed prior to the date hereof that contains
consolidated financial statements of the Company and except as provided for in
the KPS Agreement or as set forth on Schedule 2.7 of the Company Disclosure
Schedule, (a) there have been no events, changes, or occurrences which have had,
or are reasonably likely to have, a Company Material Adverse Effect, (b) the
Company and its subsidiaries have (i) conducted their respective businesses in
the ordinary and usual course, (ii) not changed, in any material respect, the
accounting methods or practices followed by the Company, including, without
limitation, any material change in any assumption underlying, or method of
calculating any bad debt, contingency or other reserve or any material
revaluation by the Company of any asset (including, without limitation, any
writing-down of the value of inventory or writing-off of notes or accounts
receivable), other than in the ordinary course of business consistent with past
practices, and (c) there has not been any (i) (A) declaration, setting aside or
payment of any dividend or distribution in respect of any capital stock of the
Company or any redemption, purchase or other acquisition of any of its
securities, (B) any split, combination, reclassification, exchange or
substitution of the capital stock or other security of the Company or (C) any
issuance of the Company's common stock at a price which is below the average of
the last reported sales price per share on the Nasdaq National Market for the
thirty consecutive trading days immediately preceding such issuance, (ii)
amendment of any term of any outstanding security of the Company or any of its
subsidiaries that would materially increase the obligations of the Company or
such subsidiary under such security, (iii) damage, destruction or other casualty
loss with respect to any asset or property owned, leased or otherwise used by
the Company or any of its subsidiaries, except for such damage, destruction or
loss that, individually or in the aggregate, could not reasonably be expected to
have a Company Material Adverse Effect, (iv) incurrence, assumption or
-6-
guarantee by the Company or any of its subsidiaries of any indebtedness for
borrowed money other than in the ordinary course of business and consistent with
past practices, except as incurred under facilities existing as of the date of
the most recent Company Financial Statement, (v) making of any loan, advance or
capital contribution to or investment in any Person by the Company or any of its
subsidiaries other than (A) loans, advances or capital contributions to or
investments in any wholly-owned subsidiary, (B) loans or advances to the Company
by any of its subsidiaries or (C) loans or advances to employees of the Company
or any of its subsidiaries made in the ordinary course of business consistent
with past practices, (vi) (A) transactions, commitments, contracts or agreements
entered into by the Company or any of its subsidiaries relating to any material
acquisition or disposition of any assets or business or (B) modification,
amendment, assignment, termination or relinquishment by the Company or any of
its subsidiaries of any contract, license or other right that could be
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect, other than, in either case, transactions, commitments, contracts
or agreements modified, amended, assigned, terminated, relinquished or expired
in the ordinary course of business consistent with past practices and those
contemplated by this Agreement, or (vii) other than in the ordinary course of
business consistent with past practice, any material increase in or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit-sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any executive officers or key employees of the Company or any
of its subsidiaries.
2.8 Litigation. Schedule 2.8 of the Company Disclosure Schedule
----------
sets forth a complete listing of all claims, actions, suits, proceedings and
investigations pending or, to the knowledge of the Company, threatened in
writing, by or against any of (i) the Company and its subsidiaries, (ii) its or
their respective properties, assets, rights or businesses, or (iii) to the
knowledge of the Company, any of its or their officers or directors in
connection with their businesses or affairs, in each case which is (x) in the
ordinary course of the Company and its subsidiaries and could reasonably be
expected, individually, to result in a liability to the Company or any of its
subsidiaries in excess of $50,000 or (y) outside the ordinary course of business
of the Company and its subsidiaries. There are no claims, suits, actions or
proceedings pending or, to the knowledge of the Company, threatened against,
relating to or affecting the Company, before any court, governmental department,
commission, agency, instrumentality or authority, or any arbitrator that seek to
restrain the consummation of this transaction or which could reasonably be
expected, either alone or in the aggregate with all such claims, suits, actions
or proceedings, to have a Company Material Adverse Effect. Neither the Company
nor any of its properties or assets is subject to any judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or authority or arbitrator which prohibits or restricts
the consummation of the transactions contemplated hereby or could reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
-7-
2.9 No Violation of Law; Licenses; Permits and Registration. Except
-------------------------------------------------------
as set forth on Schedule 2.9 of the Company Disclosure Schedule, neither the
Company nor any of its subsidiaries is in violation of, or has been given notice
or been charged with any violation of, any law, statute, order, rule,
regulation, ordinance or judgment (including, without limitation, any applicable
environmental law, ordinance or regulation) of any governmental or regulatory
body or authority or arbitration panel, except for violations which could not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Except as set forth on Schedule 2.9 of the Company
Disclosure Schedule, as of the date of this Agreement, no investigation or
review by any governmental or regulatory body or authority is pending or, to the
knowledge of the Company, threatened involving the Company or its subsidiaries,
nor has any governmental or regulatory body or authority indicated an intention
to conduct the same. Each of the Company and its subsidiaries has all material
permits, licenses, approvals, authorizations of and registrations under all
federal, state, local and foreign laws applicable to it, and from all applicable
governmental authorities as are required by the Company and its subsidiaries to
carry on their respective businesses as currently conducted.
2.10 Taxes. All material Tax Returns required to be filed prior to
-----
the date hereof with respect to the Company and its subsidiaries or their
income, properties, franchises or operations have been timely filed. Each such
Tax Return has been prepared in material compliance with all applicable laws and
regulations, and all such Tax Returns are true and correct in all material
respects. The Company and its subsidiaries have duly paid in full or made
adequate provisions on the books of the Company and its subsidiaries in
accordance with GAAP for the payment of all Taxes for all past and current
periods. The liabilities and reserves for Taxes reflected in the Company balance
sheet included in the latest Company SEC Report filed prior to the date hereof
to cover all Taxes for all periods ending at or prior to the date of such
balance sheet have been determined in accordance with GAAP and there is no
material liability for Taxes for the Company and each subsidiary for any period
beginning after such date other than Taxes arising in the ordinary course of
business. The Company and its subsidiaries have withheld and paid all Taxes to
the appropriate governmental authorities required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party. Except as set forth on
Schedule 2.10 of the Company Disclosure Schedule, with respect to each taxable
period of the Company and its subsidiaries: (a) no material deficiency or
proposed adjustment which has not been settled or otherwise resolved for any
amount of Taxes has been asserted or assessed by any taxing authority against
the Company or any of its subsidiaries, other than a deficiency or an adjustment
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been established on the books of the Company, (b)
the Company and its subsidiaries have not consented to extend the time in which
any Taxes may be assessed or collected by any taxing authority, (c) the Company
and its subsidiaries have not requested or been granted an extension of the time
for filing any Tax Return, (d) there is no action, suit, taxing authority
proceeding, or audit now in progress, or pending or, to the knowledge of the
Company, threatened against or with respect to the Company or any of its
subsidiaries
-8-
regarding Taxes, and (e) there are no Liens for Taxes (other than for current
Taxes not yet due and payable) upon the assets of the Company or any of its
subsidiaries.
2.11 Labor and Employment Matters. Neither the Company nor any of
----------------------------
its subsidiaries is a party to or bound by any collective bargaining agreement
or any other agreement with a labor union, and, except as set forth on Schedule
2.11 of the Company Disclosure Schedule to the Company's knowledge, there has
been no effort by any labor union during the 24-month period prior to the date
hereof to organize any employees of the Company or any of its subsidiaries into
one or more collective bargaining units. There is no pending or, to the
knowledge of the Company, threatened material labor dispute, strike or work
stoppage at the Company or any of its subsidiaries. All persons classified by
the Company or any of its subsidiaries as independent contractors and/or leased
employees satisfy the requirements of applicable law to be so classified and
neither the Company, nor any of its subsidiaries has any obligation to provide
benefits to any such person, whether or not under any Company Plan (as such term
is defined in Section 2.12 hereof).
2.12 Employee Benefit Plans; ERISA. Except as set forth on Schedule
-----------------------------
2.12(a) of the Company Disclosure Schedule, the Company and its subsidiaries do
not maintain or contribute to or have any obligation or liability, actual or
contingent, to or with respect to, directly or indirectly, any employee benefit
plans, programs, arrangements or practices, including employee benefit plans
within the meaning set forth in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or other similar arrangements for
the provision of benefits to employees (such plans, programs, arrangements or
practices of Company and its subsidiaries being referred to as the "Company
Plans").
With respect to each Company Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary course) are pending or,
to the knowledge of the Company, threatened, (ii) to the knowledge of the
Company, no facts or circumstances exist that could give rise to any such
actions, suits or claims, and (iii) no events have occurred and no conditions
exist that would subject the Company or any of its subsidiaries, either directly
or indirectly, to any tax, fine, lien, penalty or other liability imposed by
ERISA, the Code or other applicable laws, rules and regulations. Neither
Company nor any of its subsidiaries has any obligation to create or contribute
to any additional such plan, program, arrangement or practice or to amend any
such plan, program, arrangement or practice so as to increase benefits or
contributions thereunder, except as required under the terms of the Company
Plans, or to comply with applicable law.
Neither the Company nor any of its subsidiaries contributes to,
maintains, or has an actual or contingent liability with respect to, or sponsors
any defined benefit pension plan and/or arrangement (whether or not subject to
Title IV of ERISA). All Company Plans are in compliance in all material
respects with the requirements prescribed by any and all statutes (including
ERISA and the Code) and all other applicable laws, rules and regulations.
Except as set forth on Schedule 2.12(b) of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries has any
-9-
actual or contingent liability in respect of the provision of post-employment or
post-retirement benefits, including, but not limited to, health and life
insurance benefits to any person (other than post-employment benefits provided
in accordance with the health care continuation provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, or comparable state law).
Other than as set forth on Schedule 2.12(c) of the Company Disclosure
Schedule, no Company Plan or other agreement or arrangement exists that, as a
result of the transaction contemplated by this Agreement, could result in the
payment to any present or former employee of the Company or its subsidiaries of
any money or other property or accelerate the time of, or increase the amount of
payment to which such person may otherwise be entitled, or provide any other
rights or benefits to any present or former employee of the Company or its
subsidiaries or any other person, whether or not such payment would constitute a
parachute payment within the meaning of Section 280G of the Code. Except as set
forth on Schedule 2.12(c) of the Company Disclosure Schedule, no employee or
former employee of the Company or any of its subsidiaries will become entitled
to any bonus, retirement, severance, job security or similar benefit or
enhancement of such benefit (including acceleration of vesting or exercise of an
incentive award) as a result of the transactions contemplated hereby.
2.13 Title to and Condition of Assets. Except as set forth on
--------------------------------
Schedule 2.13 of the Company Disclosure Schedule, each of the Company and its
subsidiaries has good and marketable fee title to, or, in the case of leased
properties and assets, has good and valid leasehold interests in, all of its
tangible properties and assets, real, personal and mixed, used or held for use
in, or which are necessary to conduct, the business of the Company and its
subsidiaries as currently conducted, free and clear of all Liens, other than (a)
any Liens for current taxes, payments of which are not yet delinquent, (b) such
imperfections in title and easements and encumbrances, if any, as are not
substantial in character, amount or extent and do not materially detract from
the value, or interfere with the present use of the property subject thereto or
affected thereby, or otherwise materially impair the Company's business
operations (in the manner presently carried on by the Company), or (c) Liens
arising under the Company's credit facilities or any refinancing or replacement
thereof.
2.14 Brokers and Finders. Except with respect to KPS Management LLC
-------------------
(as contemplated by Sections 5.1 and 5.7 of the KPS Agreement), Charter URS LLC,
and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Securities Corporation ("DLJ"), each of whose
fees will be paid by the Company, (a) the Company is not a party to or bound by
any contract, arrangement or understanding with any person or firm which may
result in the obligation of the Company to pay any finder's fees, brokerage or
agent commissions or other like payments in connection with the transactions
contemplated hereby and (b) there is no claim for payment by the Company of any
investment banking fees, finder's fees, brokerage or agent commissions or other
like payments in connection with the negotiations leading to this Agreement or
the consummation of the transactions contemplated hereby.
-10-
2.15 Intellectual Property.
---------------------
(a) Except as could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, the Company
and each of its subsidiaries own or have a valid license to use each trademark,
patent or copyright (including any registrations or applications for
registration of any of the foregoing) necessary to carry on the business of the
Company and its subsidiaries, taken as a whole, as currently conducted
(collectively the "Company Intellectual Property"). To the knowledge of the
Company, neither the Company nor any of its subsidiaries has received any
complaint, assertion, threat or allegation or otherwise has notice of any claim,
lawsuit, demand, proceeding or investigation involving any such matters or
otherwise knows that any of the Company Intellectual Property is invalid or
conflicts with the rights of any third party.
(b) Except as set forth on Schedule 2.15(b) of the Company
Disclosure Schedule, the Company and each of its subsidiaries owns free and
clear of all Liens or has a valid license to use all computer software that is
material to the operation of its business as presently conducted.
2.16 Environmental Matters.
---------------------
(a) (i) The Company and its subsidiaries have conducted their
respective businesses in material compliance with all applicable Environmental
Laws (defined in Section 2.16(b)), including, without limitation, having all
permits, licenses and other approvals and authorizations necessary for the
operation of their respective businesses as presently conducted, (ii) except as
set forth on Schedule 2.16(a)(ii) of the Company Disclosure Schedule, none of
the properties currently or formerly owned or operated by Company or any of its
subsidiaries contain any Hazardous Substance (defined in Section 2.16(c)) as a
result of any activity of Company or any of its subsidiaries in amounts
exceeding the levels permitted by applicable Environmental Laws and, to the
knowledge of the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, no such condition exists on any of
the properties as a result of any activity by any other Person, (iii) since May
6, 1998, neither Company nor any of its subsidiaries has received any notices,
demand letters or requests for information from any Federal, state, local or
foreign governmental entity indicating that Company or any of its subsidiaries
may be in material violation of, or materially liable under, any Environmental
Law in connection with the ownership or operation of their businesses, (iv)
there are no civil, criminal or administrative actions, suits, demands, claims,
hearings, investigations or proceedings pending or, to the knowledge of the
Employees and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, threatened, against the Company or any of its
subsidiaries under any Environmental Law arising out of, or related to, the
current or past operation of business of the Company and its subsidiaries, (v)
no Hazardous Substance has been disposed of, released or transported in
violation of any applicable Environmental Law from any properties owned by the
Company or any of its subsidiaries as a result of any activity of the Company or
any of its subsidiaries during the time such properties were owned, leased or
operated by the Company or any of its subsidiaries, and (vi) neither the
Company, its subsidiaries nor any of their respective properties are subject to
any liabilities or expenditures (fixed or contingent) relating to any suit,
-11-
settlement, court order, administrative order, regulatory requirement or
obligation, judgment or claim asserted or arising under any Environmental Law,
except violations of the foregoing clauses (ii), (iv) or (vi) that, individually
or in the aggregate, could not reasonably be expected to result in a liability
to the Company or any of its subsidiaries in excess of $100,000 in the
aggregate.
(b) As used herein, "Environmental Law" means any Federal,
state, local or foreign law, statute, ordinance, rule, regulation, code,
license, permit, authorization, approval, consent, legal doctrine, order,
judgment, decree, injunction, requirement or agreement with any governmental
entity relating to (x) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource) or to human health or safety or (y)
the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Hazardous Substances, in each case as amended and as in effect on the Closing
Date. The term "Environmental Law" includes, without limitation, (i) the Federal
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Amendments and Reauthorization Act, the
Federal Water Pollution Control Act of 1972, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal Act and the Federal Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, and the Federal Occupational
Safety and Health Act of 1970, each as amended and as in effect on the Closing
Date, and (ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of,
effects of or exposure to any Hazardous Substance.
(c) As used herein, "Hazardous Substance" means any
substance presently listed, defined, designated or classified as hazardous,
toxic, radioactive, or dangerous, or otherwise regulated, under any
Environmental Law. Hazardous Substance includes any substance to which exposure
is regulated by any government authority or any Environmental Law including,
without limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial substance
or petroleum or any derivative or by-product thereof, radon, radioactive
material, asbestos, or asbestos containing material, urea formaldehyde foam
insulation, lead or polychlorinated biphenyls.
2.17 Material Contracts. The Company's SEC Reports filed prior
------------------
to the date hereof contain a complete list of all contracts, agreements,
licenses, notes, bonds, mortgages, guarantees, security agreements and
commitments, including all amendments and modifications thereto, to which the
Company or any of its subsidiaries is a party that are required to be disclosed
pursuant to Item 601 of Regulation S-K under the Securities Act (the "Material
Contracts") except as disclosed on Schedule 2.17(a). Except as disclosed on
Schedule 2.17(b) of the Company Disclosure Schedule, each Material
-12-
Contract is valid and binding on the Company and is in full force and effect.
The Company and each of its subsidiaries are not in breach or violation of or in
default in the performance or observance of any terms or provisions of, and no
event has occurred which, with lapse of time or action by a third party, could
result in a default under any Material Contract. To the knowledge of the
Company, no other party to any Material Contract is in breach thereof or default
thereunder.
2.18 Insurance. Neither the Company nor any of its subsidiaries is
---------
in default with respect to any policies or binders of fire, liability, workmen's
compensation, vehicular or life insurance held by the Company and its
subsidiaries or other types of policies customary for motor vehicle and
equipment towing, recovery and transport services (the "Company Insurance
Policies"), and neither has failed to give any notice or present any claim under
such policy or binder in due and timely fashion, except as could not,
individually or in the aggregate, reasonably be expected to have Company
Material Adverse Effect. Schedule 2.18(a) of the Company Disclosure Schedule
sets forth a list of the Company Insurance Policies, and Schedule 2.18(b) of the
Company Disclosure Schedule sets forth the loss-runs for the past five years in
respect thereof or, in the case of the Company's subsidiaries, since the date of
the Company's acquisition of such subsidiary. The Company Insurance Policies are
sufficient for the operation of the Company's business and are in full force and
effect. Except as set forth on Schedule 2.18(c) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has received a notice
of cancellation or non-renewal of any such policy or binder. Except for claims
disclosed on Schedule 2.18(d) of the Company Disclosure Schedule, there are no
outstanding unpaid claims under any such policy or binder and, to the knowledge
of the Company, none of the material unpaid claims disclosed on Schedule 2.18(d)
of the Company Disclosure Schedule have been denied. The Company has not
received notice of any inaccuracy in any application for such policies or
binders, any failure to pay premiums when due or any similar state of facts
which might form the basis for termination of any such insurance, except as
could not, individually or in the aggregate, reasonably be expected to result in
a Company Material Adverse Effect.
2.19 Securities Law Compliance. Assuming the representations and
-------------------------
warranties of the Investor set forth in Section 7 hereof are true and correct in
all material respects, the issuance and sale of the Series A Preferred Stock
pursuant to this Agreement will be exempt from the registration requirements of
the Securities Act. Except as set forth on Schedule 2.19 of the Company
Disclosure Schedule, neither the Company nor any Person acting on its behalf
has, in connection with the sale of the Series A Preferred Stock, 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 Series A Preferred Stock pursuant
to this Agreement or that would violate applicable state securities or "blue
sky" laws.
-13-
2.20 Acquisition Obligations.
-----------------------
(a) Schedule 2.20(a) sets forth a true and correct list of the
Company's acquisitions since May 6, 1998.
Except as disclosed in the Company's SEC Reports filed prior to the
date hereof, there is no outstanding right, option or other agreement of any
kind which has or could reasonably be expected to have the effect of requiring
the Company to register any of the Company's common stock or preferred stock or
any other security of the Company, and there is no outstanding security of any
kind of the Company convertible into any such right. Except as provided for in
the KPS Agreement and the agreements related thereto or on Schedule 2.20(b) of
the Company Disclosure Schedule, there is no agreement of any kind which has or
could reasonably be expected to have the effect of requiring the Company to keep
effective a registration statement of the Company effective as of or following
the date hereof with respect to any of the Company's common stock or preferred
stock or any other security of the Company. Except as disclosed in the Company's
SEC Reports filed prior to the date hereof, no Person has any right arising out
of an acquisition by either the Company or any of its subsidiaries to
participate in, or receive any payment based on revenue, income, value, net
worth or other financial measure of the Company and/or any of its subsidiaries
or any component or portion thereof.
2.21 Fraud and Abuse; Absence of Certain Business Practices. None
------------------------------------------------------
of the Company or any of its subsidiaries nor any officer or director thereof
nor, to the knowledge of the Company, any other Person or entity acting on
behalf of any of the Company or any of its subsidiaries, acting alone or
together, has (A) received, directly or indirectly, any rebates, payments,
commissions, promotional allowances or any other economic benefits, regardless
of their nature or type, from or on behalf of any Person or entity with whom any
of the Company and its subsidiaries has done business directly or indirectly, or
(B) directly or indirectly, given or agreed to give any gift or similar benefit
to any Person or entity who is or may be in a position to help or hinder the
business of any of the Company and its subsidiaries which, in the case of either
clause (A) or clause (B) above, could reasonably be expected to subject any of
the Company and its subsidiaries to any damage or penalty in any civil, criminal
or governmental litigation or proceeding.
2.22 Disclosure.
----------
(a) No representation or warranty by the Company in this
Agreement and no statement contained in the schedules or exhibits or in any
certificate to be delivered pursuant to this Agreement, contains or will contain
any untrue statement of a material fact or omits or will omit to state any
material fact necessary, in light of the circumstances under which it was made,
in order to make the statements therein not misleading.
(b) The Investor has been furnished with, or given access to,
complete and correct copies of all agreements, instruments or documents,
together with
-14-
any amendments or supplements thereto, set forth on, or underlying the Company
Disclosure Schedule.
SECTION 3
CONDITIONS OF PURCHASE
The Investor's obligation to purchase and pay for the Series A
Preferred Stock shall be subject to the fulfillment to the Investor's
satisfaction on or before the Closing Date of the following conditions:
3.1 Satisfaction of Conditions. The representations and warranties
--------------------------
of the Company contained in this Agreement shall be, if specifically qualified
by materiality or Company Material Adverse Effect, true in all respects and, if
not so qualified, shall be true in all material respects, in each case on and as
of the Closing Date with the same effect as if made on and as of the Closing
Date, other than representations and warranties expressly stated to be made as
of the date of this Agreement or of another date other than the Closing Date,
which shall be true and correct as of such date, and the covenants and
agreements contained in this Agreement to be complied with by the Company on or
before the Closing shall have been complied with in all material respects. The
Company shall have delivered to the Investor a certificate dated the Closing
Date to the foregoing effect.
3.2 Company Material Adverse Effect. There shall not have been any
-------------------------------
event, occurrence or change that has had or could be reasonably expected,
individually or in the aggregate, to have a Company Material Adverse Effect
after the date of this Agreement and prior to the Closing Date.
3.3 Opinion of Counsel. The Investor shall have received an opinion
------------------
of counsel to the Company, dated the Closing Date, in substantially the form of
Appendix A attached hereto.
3.4 Authorization. The Board of Directors of the Company shall have
-------------
duly adopted resolutions in form reasonably satisfactory to the Investor
authorizing the Company to consummate the transactions contemplated hereby in
accordance with the terms hereof, and the Investor shall have received a duly
executed certificate of the Secretary of the Company setting forth a copy of
such resolutions, the Company's Certificate of Designations, Preferences and
Rights of Series A Preferred Stock (the "Certificate of Designations") and the
By-laws and such other matters as may be requested by the Investor.
3.5 Effectiveness of Preferred Stock Terms. The Board of Directors
--------------------------------------
of the Company shall have adopted a resolution establishing the terms of the
Series A Preferred Stock as set forth in Appendix B hereto and such action shall
have been made effective by the filing of a certificate of designations with the
Secretary of State for the State of Delaware.
-15-
3.6 Delivery Documents. The Company shall have executed and
------------------
delivered to the Investor (or shall have caused to be executed and delivered to
the Investor by the appropriate persons) the following:
(a) Newly issued stock certificates issued to the Investor and
evidencing the shares of the Series A Preferred Stock purchased by the Investor;
(b) A copy of the certificate of incorporation of the Company,
as amended, certified as of the Closing Date by the Secretary of State of the
State of Delaware;
(c) A copy of the By-laws of the Company, certified by the
Company's secretary; and
(d) Certificates issued by the Secretary of State of Delaware
certifying that the Company is in good standing.
3.7 Reserved
3.8 Consents. All consents set forth on Schedule 2.4(b) of the
--------
Company Disclosure Schedule and the consents, authorizations, orders and
approvals of (or filings or registrations with) any governmental commission,
board or other regulatory body required to consummate the transactions under
this Agreement shall have been obtained and be in effect at the Closing Date.
3.9 Compliance with Law. The issuance and sale of the Series A
-------------------
Preferred Stock to the Investor shall be made in conformity with all applicable
state and federal securities laws.
3.10 No Order.
--------
(a) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Closing or any of the other
transactions contemplated hereby shall be in effect.
(b) No stockholder of the Company shall have brought an action
in its own name or in the name of the Company which seeks a remedy (in law or
equity) as a result of or otherwise in connection with (i) this Agreement and
the transactions contemplated hereby or (ii) the Company's SEC Reports filed
prior to the Closing (each, a "Stockholder Suit.")
3.11 Ancillary Agreements. The Company shall have duly authorized,
--------------------
executed and delivered the Registration Rights Agreement.
3.12 Refinancing Company's Credit Facility. A refinancing or
-------------------------------------
replacement of the Company's existing credit facility shall be available from
the Investor at the Closing providing for at least $25 million available for
borrowing in addition to the
-16-
amount outstanding under the Company's existing credit facility at Closing, as
contemplated in the commitment letter, dated as of May 19, 2000, between General
Electric Capital Corporation and the Company (the "Commitment Letter").
3.13 Restructuring of Charterhouse Documents. The Company, Blue
---------------------------------------
Truck and Charterhouse shall have consummated an agreement for restructuring of
the Charterhouse Debentures in form and substance reasonably satisfactory to
such parties and General Electric Capital Corporation. In addition, the Company
and Charterhouse shall have amended the Amended Charterhouse Purchase Agreement,
and the documents related to such agreement, in form and substance reasonably
satisfactory to the Investor, as appropriate to permit the transactions
contemplated by this Agreement.
3.14 KPS Agreement. The transactions contemplated by the KPS
-------------
Agreement shall have been consummated.
3.15 Blue Truck Consent. Blue Truck shall have given its consent to
------------------
the transactions contemplated by this Agreement.
3.16 Stockholder Approval. At a special meeting of the stockholders
--------------------
of the Company entitled to vote (the "Special Meeting"), the stockholders of the
Company shall have approved the issuance to the Investor and Blue Truck pursuant
to this Agreement and the KPS Agreement, respectively, of the Series A Preferred
Stock (the "Series A Preferred Issuance").
SECTION 4
CONDITIONS OF SALE
The Company's obligation to issue the Series A Preferred Stock to the
Investor and perform its other obligations hereunder shall be subject to the
fulfillment to the Company's satisfaction on or before the Closing Date of the
following conditions:
4.1 Satisfaction of Conditions. The representations and warranties
--------------------------
of the Investor contained in this Agreement shall be true in all material
respects on and as of the Closing Date with the same effect as if made on and as
of the Closing Date, other than representations and warranties expressly stated
to be made as of the date of this Agreement or as of another date other than the
Closing Date, which shall be true and correct as of such date, and the covenants
and agreements contained in this Agreement to be compiled with by the Investor
on or before the Closing shall have been complied with in all material respects.
The Investor shall have delivered to the Company a certificate dated the Closing
Date to the foregoing effect.
4.2 Reserved
4.3 Consents. All consents, authorizations, orders and approvals of
--------
(or filings or registrations with) any governmental commission, board or other
regulatory body required to consummate the transactions under this Agreement
shall have been obtained and be in effect at the Closing Date.
-17-
4.4 Compliance with Law. The issuance and sale of the Series A
-------------------
Preferred Stock to the Investor shall be made in conformity with all applicable
state and federal securities laws.
4.5 Certificates for Related Parties. At the Closing, the Investor
--------------------------------
shall have delivered to the Company, in form and substance reasonably
satisfactory to the Company, certificates executed by each of the equity
interest holders in the Investor with respect to their investment intent and
qualification as accredited and sophisticated investors, and containing
representation and warranties for the benefit of the Company similar to those in
Section 7.1.
4.6 No Order.
--------
(a) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the Closing or any of the other
transactions contemplated hereby shall be in effect.
(b) No stockholder of the Company shall have brought an action
in its own name or in the name of the Company which seeks a remedy (in law or
equity) as a result of or otherwise in connection with this Agreement and the
transactions contemplated hereby.
4.7 Refinancing Company's Credit Facility. A refinancing or
-------------------------------------
replacement of the Company's existing credit facility shall be available from
the Investor at the Closing providing for at least $25 million available for
borrowing in addition to the amount outstanding under the Company's existing
credit facility at Closing, all as contemplated in the Commitment Letter.
4.8 Restructuring of Charterhouse Documents. The Company, Blue
---------------------------------------
Truck and Charterhouse shall have consummated an agreement for restructuring of
the Charterhouse Debentures in form and substance reasonably satisfactory to
such parties. In addition, the Company and Charterhouse shall have amended the
Amended Charterhouse Purchase Agreement, and the documents related to such
agreement, in form and substance reasonably satisfactory to the Company, as
appropriate to permit the transactions contemplated by this Agreement. In
addition, the Investor shall have delivered to the Company and Charterhouse an
executed copy of a side letter from Investor and Blue Truck to the Company and
Charterhouse in the form set forth in Appendix C hereto.
4.9 KPS Agreement. The transactions contemplated by the KPS
-------------
Agreement shall have been consummated.
4.10 Blue Truck Consent. Blue Truck shall have given its consent to
------------------
the transactions contemplated by this Agreement.
4.11 Stockholder Approval. At a special meeting of the stockholders
--------------------
of the Company entitled to vote, the stockholders of the Company shall have
approved the
-18-
issuance to the Investor and Blue Truck pursuant to this Agreement and the KPS
Agreement, respectively, of the Series A Preferred Stock.
SECTION 5
COVENANTS
5.1 Expenses. Each party will pay the fees and expenses incurred
--------
by such party in connection with the negotiation, execution, delivery and
performance of this Agreement and the agreements, documents and instruments
contemplated hereby or executed pursuant hereto.
5.2 Conduct of Business by the Company Pending the Closing. The
------------------------------------------------------
Company covenants and agrees that, prior to the Closing Date or earlier
termination of this Agreement as provided herein, unless the Investor shall
otherwise agree in writing and except as contemplated by this Agreement:
(a) the Company shall, and shall cause its subsidiaries to, act and
carry on their respective businesses in the ordinary course of business
substantially consistent with past practice and use its and their respective
reasonable best efforts to preserve substantially intact their current material
business organizations, keep available the services of their current officers
and employees (except for terminations of employees in the ordinary course of
business) and preserve their material relationships with others having
significant business dealings with them;
(b) the Company shall not (i) create any new class of shares having a
preference with respect to dividends and/or liquidation over or on parity with
the Series A Preferred Stock, (ii) increase the authorized number of shares of
Series A Preferred Stock, (iii) (A) declare, set aside, pay or effect any
dividend or other distribution or payment in cash, stock or property in respect
of any of its shares of capital stock, or (B) split, combine, reclassify,
exchange or substitute any of the capital stock or other security of the
Company, (iv) sell a majority of its assets in one or a series of related
transactions, or effect any merger, consolidation or combination of the Company
with another Person, or (v) effect any tender or exchange offer involving the
Company's equity securities or any security convertible into, exchangeable for,
or that otherwise gives the holder the right to obtain, equity securities of the
Company;
(c) neither the Company nor any of its subsidiaries shall (i)
except for shares issued upon the exercise of stock options outstanding as of
the date hereof, issue, grant, sell, pledge or transfer or agree or propose to
issue, grant, sell, pledge or transfer any shares of capital stock, stock
options, warrants, debt or equity securities or rights of any kind or rights to
acquire any such shares, securities or rights of the Company, any of its
subsidiaries or any successor thereto; provided, however, the Company may, in
the ordinary course of business consistent with past practice, adopt, establish,
enter into, terminate, withdraw from or amend any bonus, profit sharing, thrift
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment or other employee benefit plan, agreement, trust, fund
or other arrangement
-19-
for the benefit or welfare of any employee, director or former director or
employee, or increase the compensation or fringe benefits of or loan or advance
money or other property to any director, employee or former director or employee
or pay any benefit not required by any existing plan, arrangement or agreement;
(ii) acquire directly or indirectly by redemption or otherwise any shares of the
capital stock of the Company or its subsidiaries of any class or any options,
warrants or other rights to purchase any such shares except for employee stock
options, "holdback" shares which revert to the Company under the terms of the
agreements pursuant to which the Company made the acquisitions set forth on
Schedule 2.20(a) of the Company Disclosure Schedule, or as otherwise provided in
this Agreement, or (iii) enter into or modify any contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(d) neither the Company nor any of its subsidiaries shall make
any material change in its accounting principles or methods, except as may be
required by a change in GAAP or a change in any rule or regulation of the SEC;
and
(e) neither the Company nor any of its subsidiaries shall
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the stock or assets of, or by any other manner, any
Person.
5.3 Public Announcements. The initial press release relating to
--------------------
this Agreement shall be a joint press release the text of which has been
previously agreed to by each of the Investor and the Company. Thereafter, each
of the Investor and the Company shall consult with the other before issuing any
press release with respect to this Agreement or any of the transactions
contemplated hereby. Notwithstanding the foregoing, except as required by law,
the Company shall not, without the prior written consent of the Investor, use
the name of, or refer to, General Electric Capital Corporation, or any of its
affiliates (including without limitation, the Investor), in any correspondence,
discussions, press release or other disclosure.
5.4 All Reasonable Efforts; Agreement to Cooperate.
----------------------------------------------
(a) Subject to the terms and conditions herein provided, each of
the parties hereto shall use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.
(b) Without limiting the generality of the foregoing, and
notwithstanding anything in this Agreement to the contrary, the Company shall
use its reasonable best efforts to take or cause to be taken all reasonable
action and to do, or cause to be done, and to assist and cooperate with the
other parties hereto in doing, all things necessary, proper or advisable to
obtain all consents, amendments to or waivers from other parties under the terms
of all Material Contracts and other material leases, agreements, indentures,
instruments, permits, concessions, franchises or licenses applicable to the
Company or its subsidiaries required as a result of the transactions
contemplated by this Agreement and obtain all necessary consents, approvals and
-20-
authorizations as are required to be obtained under any federal or state law or
regulation.
5.5 Company Stockholders' Meeting. The Company shall use its best
-----------------------------
efforts to take all actions necessary or advisable and permitted by applicable
law to (i) hold a stockholders' meeting as promptly as practicable for the
purpose of voting upon the approval of the issuance of the Series A Preferred
Stock pursuant to the terms of the Certificate of Designations, (ii) recommend
that the stockholders of the Company vote to approve the Series A Preferred
Issuance, and (iii) secure the requisite vote or consent of stockholders for the
Series A Preferred Issuance.
SECTION 6
CONFIDENTIALITY; ACCESS
6.1 Confidentiality. The Investor agrees to use commercially reasonable
---------------
efforts (equivalent to the efforts the Investor applies to maintaining the
confidentiality of its own confidential information) to maintain as confidential
all confidential information provided to them by the Company or its
representatives or agents and designated as confidential for a period of two (2)
years following receipt thereof, except that the Investor may disclose such
information (a) to Persons employed or engaged by the Investor who have a need
to know such information in connection with the transactions contemplated hereby
and who receive such information having been made aware of the restrictions of
this Section 6.1; (b) to any bona fide assignee or potential assignee that has
agreed to comply with the covenants contained in this Section 6.1 (and any such
bona fide assignee or potential assignee may disclose such information to
Persons employed or engaged by them as described in clause (a) above); (c) as
required or requested by any Governmental Authority or reasonably believed by
the Investor to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of the Investor's
counsel, is required by law; (e) in connection with the exercise of any right or
remedy under this Agreement or in connection with any litigation, claim or suit
to which Investor is a party; or (f) that ceases to be confidential through no
fault of the Investor; provided, however, that with respect to clauses (c) and
(d), the Investor shall to the extent practicable use reasonable efforts to give
notice to the Company before releasing such information.
6.1 Access; Notification of Certain Matters.
---------------------------------------
(a) Upon reasonable notice, the Company shall afford the Investor and
its representatives and representatives of all prospective sources of financing
reasonable access during normal business hours to the offices, properties,
books, records and personnel of the Company and its subsidiaries and such
additional information concerning the business and properties of the Company and
its subsidiaries as the Investor and its representatives may reasonably request.
The Company shall instruct its and its subsidiaries' employees, counsel and
financial advisors to cooperate with the Investor in its investigation of the
business of the Company and its subsidiaries.
-21-
(b) The Company shall, promptly (and in any event within five (5)
business days) after obtaining knowledge of any of the following occurring
subsequent to the date of this Agreement and prior to the Closing Date, notify
the Investor of: (i) any material claims, actions, proceedings, tax audits or
investigations commenced or, to its knowledge, threatened in writing, involving
or affecting the Company or any of its subsidiaries or any of their properties
or assets, which if adversely resolved could reasonably be expected to have a
Company Material Adverse Effect, (ii) any notice of, or other written
communication relating to, a default or event which, with notice or lapse of
time or both, could reasonably be expected to become a default, received by the
Company or any of its subsidiaries, under any agreement, contract, lease,
indenture, permit, concession, franchise, license or other instrument to which
the Company or any of its subsidiaries is a party where such a default has had
or could reasonably be expected, individually or in the aggregate, to have a
Company Material Adverse Effect, (iii) any material event or emergency outside
the normal course of the business of the Company or any of its subsidiaries,
including, without limitation, any instances of wrongful injury or wrongful
death involving the Company or any of its subsidiaries, or otherwise of a nature
that would reasonably be expected to customarily be reported at a meeting of the
Board of Directors of the Company or of any of its committees, or (iv) any
governmental complaints, investigations, proceedings or hearings (or
communications indicating that the same may be contemplated) relating to either
the Company or any of its subsidiaries that are of a nature which would
customarily be reported at a meeting of the Board of Directors of the Company of
any of its committees.
SECTION 7
INVESTOR REPRESENTATIONS
7.1 Representations. It is the understanding of the Company, and
---------------
the Investor hereby represents and warrants to the Company with respect to the
Investor's purchase of Series A Preferred Stock hereunder that:
(a) The execution of this Agreement has been duly authorized by
all necessary action on the part of the Investor, has been duly executed and
delivered by the Investor, and constitutes a valid, binding agreement of the
Investor, enforceable in accordance with its terms.
(b) The Investor is acquiring the Series A Preferred Stock for
its own account, for investment, and not with a view to any "distribution"
thereof within the meaning of the Securities Act.
(c) The Investor understands that because the Series A Preferred
Stock has not been registered under the Securities Act, it cannot dispose of any
or all of the Series A Preferred Stock unless such securities are subsequently
registered under the Securities Act or exemptions from such registration are
available. The Investor understands that each certificate representing the
Series A Preferred Stock will bear the following legend or one substantially
similar thereto:
-22-
The securities represented by this certificate have not been
registered under the Securities Act. These securities have been
acquired for investment and not with a view to distribution or resale,
and may not be sold or otherwise transferred without an effective
registration statement for such securities under the Act or the
availability of an exemption from such registration requirements.
(d) The Investor is sufficiently knowledgeable and experienced
in the making of special situation investments so as to be able to evaluate the
risks and merits of its investment in the Company, and is able to bear the
economic risk of loss of its investment in the Company.
(e) The Investor has been advised that none of the Series A
Preferred Stock has been registered under the Securities Act or under the "blue
sky" laws of any jurisdiction and that the Company, in issuing the Series A
Preferred Stock is relying upon, among other things, the representations and
warranties of the Investor contained in this Section 7.
(f) No broker, finder, agent or similar intermediary has acted
on behalf of the Investor in connection with this Agreement or the transactions
contemplated hereby and there are no brokerage commissions, finder's fees or
similar fees or commissions payable by the Investor in connection therewith.
SECTION 8
INDEMNIFICATION AND TERMINATION
8.1 Indemnification, Fees and Expenses.
----------------------------------
(a) Each party shall indemnify, defend, and hold the
other party harmless against all liability, losses, claims, charges, actions,
suits, proceedings, penalties, fines, settlements, judgments or damages,
together with all reasonable costs and expenses related thereto (including
reasonable legal and accounting fees and expenses) (collectively, "Losses"),
arising from the breach of any of its representations, warranties, covenants or
agreements contained in this Agreement.
(b) All indemnification obligations under this Section 8
shall be net of any insurance proceeds received by the indemnified party in
respect of the event or circumstance giving rise to the claim for
indemnification.
8.2 Indemnification Procedure. Whenever a claim shall arise for
-------------------------
indemnification under Section 8.1, the party entitled to indemnification (the
"Indemnified Party") shall give notice to the other party (the "Indemnifying
Party") of any matter that the Indemnified Party has determined has given or
could give rise to a right of indemnification under this Agreement within 30
days after the Indemnified Party first learns of such claim, stating the amount
of the Loss, if known, and method of computation thereof, and containing a
reference to the provisions of this Agreement in
-23-
respect of which such right of indemnification is claimed or arises, provided,
--------
however, that the failure to provide such notice shall not release the
-------
Indemnifying Party from any of its obligations under Section 8.1 except to the
extent the Indemnifying Party is materially prejudiced by such failure and shall
not relieve the Indemnifying Party from any other obligation or liability that
it may have to any Indemnified Party otherwise than under Section 8.1. The
obligations and liabilities of the Indemnifying Party under Section 8.1 with
respect to Losses arising from claims of any third party which are subject to
the indemnification provided for in Section 8.1 ("Third Party Claims") shall be
governed by and contingent upon the following additional terms and conditions:
if an Indemnified Party shall receive notice of any Third Party Claim, the
Indemnified Party shall give the Indemnifying Party notice of such Third Party
Claim following receipt by the Indemnified Party of such notice in the time
frame provided above; provided, however, that the failure to provide such notice
-------- -------
shall not release the Indemnifying Party from any of its obligations under
Section 8.1 except to the extent the Indemnifying Party is materially prejudiced
by such failure and shall not relieve the Indemnifying Party from any other
obligation or liability that it may have to any Indemnified Party otherwise than
under Section 8.1. The Indemnifying Party shall be entitled to assume and
control the defense of such Third Party Claim at its expense and through counsel
of its choice if it gives notice of its intention to do so to the Indemnified
Party within ten days of the receipt of such notice from the Indemnified Party;
provided, however, that if there exists or is reasonably likely to exist a
conflict of interest that would prevent the same counsel from representing both
the Indemnified Party and the Indemnifying Party, then the Indemnified Party
shall be entitled to retain its own counsel, at the expense of the Indemnifying
Party provided that no more than one law firm (plus any local counsel required)
is so retained. In the event the Indemnifying Party exercises the right to
undertake any such defense against any such Third Party Claim as provided above,
the Indemnified Party shall cooperate with the Indemnifying Party in such
defense and make available to the Indemnifying Party, at the Indemnifying
Party's expense, all witnesses, pertinent records, materials and information in
the Indemnified Party's possession or under the Indemnified Party's control
relating thereto as is reasonably required by the Indemnifying Party. Similarly,
in the event the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make available to the
Indemnified Party, at the Indemnifying Party's expense, all witnesses, pertinent
records, materials and information in the Indemnifying Party's possession or
under the Indemnifying Party's control relating thereto as is reasonably
required by the Indemnified Party. No such Third Party Claim may be settled by
the Indemnifying Party without the prior written consent of the Indemnified
Party.
8.3 Indemnification Thresholds and Limitations.
------------------------------------------
(a) Except as set forth below, neither party shall have any
indemnification obligations hereunder in respect of a breach of any
representation or warranty set forth in this Agreement, unless the aggregate
Losses by the Indemnified Party exceed $20,000 (the "Basket Amount"), in which
case the Indemnifying Party shall indemnify the other party in respect of the
excess above that amount.
-24-
(b) Notwithstanding any provision herein to the contrary,
neither party shall have liability for any claim for indemnification asserted by
the other party to the extent the amount of such claim combined with any
previous claims for indemnification exceeds $2,000,000 (the "Cap").
(c) Notwithstanding anything to the contrary contained herein,
the Basket Amount and the Cap shall not apply with respect to any Losses for
amounts paid by the Investor or its directors, officers or affiliates as a
result of or otherwise in connection with a Stockholder Suit in which the
Investor or its directors, officers or affiliates are named as a defendant and
which was (x) instituted prior to the Closing and of which the Investor did not
have knowledge at the Closing or (y) instituted after the Closing.
(d) The Company and the Investor have agreed that separate
standards will apply to the use of terms such as "material," "materiality," and
nz"Material Adverse Effect" (together, the "Company Materiality Terms") for
purposes of determining the satisfaction of Section 3.1, on the one hand, and
the rights to indemnification under Section 8.3, on the other. For purposes of
determining the satisfaction of Section 3.1, the Company Materiality Terms shall
each be given their respective separate meanings in accordance with applicable
law. For purposes of indemnification, the representations and warranties in
Section 2 shall be construed as if they were not qualified by the Company
Materiality Terms.
8.4 Termination. This Agreement may be terminated and the other
-----------
contemplated by this Agreement may be abandoned at any time prior to the Closing
Date, notwithstanding any requisite approval and adoption of this Agreement and
the transactions contemplated by this Agreement, pursuant to a written notice of
such termination, as follows:
(a) by mutual written consent of each of the Investor and the
Company;
(b) by either the Investor or the Company if the Closing date
shall not have occurred on or before August 31, 2000; provided, however, that
-------- -------
the right to terminate this Agreement under this Section 8.4(b) shall not be
available to any party whose breach has caused the failure of the Closing to
occur on or before such date;
(c) by the Company or the Investor if there shall be any (x)
restraining order, injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the Closing or
any of the other transactions contemplated hereby which is final and
nonappealable or (y) action commenced by a stockholder of the Company which
seeks a remedy (in law or equity) as a result of or otherwise in connection with
this Agreement and the transactions contemplated hereby.
(d) by the Investor upon a breach of any representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement,
-25-
or if any representation or warranty shall have become untrue, such that the
conditions set forth in Section 3.1 would not be satisfied ("Terminating Company
Breach"); provided, however, that if such Terminating Breach is curable by the
-------- -------
Company through the exercise of its reasonable best efforts and for as long as
the Company continues to exercise such efforts, but not beyond the date
specified in paragraph (b) above, the Investor may not terminate this Agreement
under this Agreement 8.4(d);
(e) by the Company upon a breach of any representation,
warranty, covenant or agreement on the part of the Investor set forth in this
Agreement, or if any representation or warranty shall have become untrue, such
that the conditions set forth in Section 4.1 would not be satisfied
("Terminating Investor Breach"); provided, however, that if such Terminating
-------- -------
Investor Breach is curable by the Investor through the exercise of its
reasonable best efforts and for as long as the Investor continues to exercise
such efforts, but not beyond the date specified in paragraph (b) above, the
Company may not terminate this Agreement under this Section 8.2(e);
(f) by the Company if the Company receives a Superior Proposal,
resolves to accept such Superior Proposal; provided, however, that prior to such
-------- -------
termination the Company shall have given the Investor two days' prior written
notice of its intention to terminate pursuant to this provision;
(g) by the Company if (A) a tender or exchange offer is
commenced by a financially capable Person for all outstanding shares of Company
common stock, and (B) the Company's Board of Directors determines, in good faith
and after consultation with an independent financial advisor, that such offer
constitutes a Superior Proposal and resolves to accept such Superior Proposal or
recommends to the stockholders that they tender their shares in such tender or
exchange offer; provided, however, that prior to such termination the Company
-------- -------
shall have given the Investor two days' prior written notice of its intention to
terminate pursuant to this provision;
(h) by either the Company or the Investor if the stockholders of
the Company fail to approve the Series A Preferred Issuance at the Special
Meeting;
(i) by the Investor if (i) the Board of Directors of the Company
has withdrawn, modified or changed its approval or recommendation of this
Agreement, or approved or recommended a Superior Proposal, (ii) the Company
enters into any agreement with a Person with respect to a transaction the
proposal of which qualifies as a Superior Proposal, or (iii) (A) a third party
commences a tender offer or exchange offer for all of the outstanding shares of
the Company common stock and (B) the Board of Directors of the Company has
recommended that the shareholders of the Company tender their shares in such
tender or exchange offer, or (iv) the Board of Directors of the Company shall
have resolved to do any of the foregoing;
(j) by the Investor, if a Company Material Adverse Effect has
occurred;
-26-
(k) by either party upon any termination of the KPS Agreement;
or
(l) by the Investor if there shall be any Stockholder Suit.
8.5 Effect of Termination. In the event of termination of this
---------------------
Agreement pursuant to Section 8.5, this Agreement shall forthwith become void,
there shall be no liability under this Agreement on the part of the Investor or
the Company or any of their respective officers or directors, and all rights and
obligations of each party hereto shall cease; provided, however, that nothing
herein shall relieve any party from liability for any willful or intentional
breach of any covenant or agreement of such party contained in this Agreement.
SECTION 9
DEFINITIONS
9.1 As used herein, the following terms shall have the following
meanings:
"Affiliate" means, with respect to any Person, any other Person,
---------
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
-------
(including the correlative terms "controlling", "controlled by" and "under
----------- ------------- -----
common control with") means the possession, direct or indirect, of the power to
-------------------
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Company Disclosure Schedule" means the disclosure schedule of the
---------------------------
Company attached hereto and incorporated herein by this reference which
identifies exceptions to, and sets forth certain other information regarding,
the representations and warranties and covenants of the Company contained herein
by numbered Schedules corresponding to the Section numbers of such provisions.
"Company Material Adverse Effect" shall mean any material adverse
-------------------------------
effect on the business, operations, assets, condition (financial or other) or
results of operations of the Company and its subsidiaries, taken as a whole.
"Competing Transaction" means the occurrence of a transaction
---------------------
resulting in any of the following: (i) any Person, other than a trustee or
other fiduciary holding securities of the Company under a Company benefit plan
or any of the Company's subsidiaries or any stockholder (and such stockholder's
Affiliates) as of the date hereof and direct transferees thereof, becoming,
after the date hereof, the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company
representing, or convertible into, 20% or more of the outstanding Company
-27-
common stock; (ii) the merger or consolidation of the Company with any other
corporation; or (iii) the sale or transfer (in one transaction or a series of
related transactions) of all or any substantial part of the assets of the
Company and its subsidiaries, taken as a whole (including, without limitation, a
sale of stock of a subsidiary of the Company (whether by sale or direct
issuance), representing a substantial part of the assets of the Company and its
subsidiaries, taken as a whole) other than to a subsidiary of the Company.
"Employees" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
---------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles as in effect in
----
the United States of America from time to time, consistently applied.
"knowledge of the Company" or "Company's knowledge" shall mean the
------------------------ -------------------
knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
"Lien" means any mortgage, pledge, security interest, encumbrance,
----
lien, claim or charge of any kind (including, but not limited to, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code or comparable law or any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or charge).
"Person" means an individual, corporation, limited liability company,
------
partnership, association, trust or any other entity or organization.
"Registration Rights Agreement" means the registration rights
-----------------------------
agreement, to be executed at Closing, between the Company and the Investor.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Superior Proposal" means an offer made by a third party to consummate
-----------------
a Competing Transaction that the Board determines, in its reasonable judgment
(after consultation with a nationally recognized independent financial advisor),
to be more favorable to the Company's stockholders than the terms of the
transactions contemplated by this Agreement.
-28-
"Tax Returns" means any return, report or other document required to
-----------
be supplied to a taxing authority in connection with Taxes.
"Taxes" means all taxes, including, without limitation, income, gross
-----
receipts, excise, property, sales, withholding, social security, occupation,
use, service, license, payroll, franchise, transfer and recording taxes, fees
and charges, windfall profits, severance, customs, import, export, employment or
similar taxes, charges, fees, levies or other assessments imposed by the United
States, or any state, local or foreign government or subdivision or agency
thereof, together with all interest and all penalties, additions to tax or
additional amounts imposed by any of them.
"Thirty Day Average Share Price" means the average of the last
------------------------------
reported sale prices per share of the Company Common Stock on the Nasdaq
National Market (or on such other United States stock exchange or public trading
market on which the shares of Company Common Stock are listed or trade at the
time of the calculation).
9.2 As used herein, the following terms shall have the meanings
ascribed to them in the Section of this Agreement opposite each such term:
Term Section
---- -------
Aggregate Purchase Price 1.2
Agreement Preamble
Ancillary Agreements Preamble
Basket Amount 8.3(a)
Cap 8.3(b)
Certificate of Designations Preamble
Charterhouse Preamble
Closing 1.3
Closing Date 1.3
Commitment Letter 4.5
Company Preamble
Company Common Stock 2.2
Company Financial Statements 2.5(b)
Company Insurance Policies 2.18
Company Intellectual Property 2.15(a)
Company Materiality Terms 8.3(c)
Company Plans 2.12
Company Preferred Stock 2.2
Company Required Statutory Approvals 2.4(c)
Company SEC Reports 2.5(a)
Company Stockholder Approval 2.4(a)
Confidential Information 6.1(a)
"control" 9.1(a)
DLJ 2.14
Environmental Law 2.16(b)
Hazardous Substances 2.16(c)
-29-
Indemnified Party 8.2
Indemnifying Party 8.2
Investor Preamble
Losses 8.2(b)
Material Contracts 2.17
Per Share Purchase Price 1.1
Series A Preferred Issuance 3.16
Series A Preferred Stock Preamble
Special Meeting 3.16
Stockholder Suit 3.10(b)
Terminating Investor Breach 8.4(e)
Third Party Claims 8.2
SECTION 10
GENERAL
10.1 Amendments, Waivers and Consents. For the purposes of this
--------------------------------
Agreement and all agreements, documents and instruments executed pursuant
hereto, except as otherwise specifically set forth herein or therein, no course
of dealing between the Company and the Investor and no delay on the part of any
party hereto in exercising any rights hereunder or thereunder shall operate as a
waiver of the rights hereof and thereof. No covenant or other provision hereof
or thereof may be waived otherwise than by a written instrument signed by the
party so waiving such covenant or other provision, and no amendment to this
Agreement shall be effective otherwise than by a written instrument signed by
the Company and the Investor. The waiver or failure to insist upon strict
compliance with any condition or provision hereof shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other waiver or failure.
10.2 Survival of Representations, Warranties and Covenants,
------------------------------------------------------
Assignability of Rights. All representations and warranties made herein and in
-----------------------
the certificates, exhibits or schedules delivered or furnished by or on behalf
of a party to the other party in connection herewith or therewith shall be
deemed material and to have been relied upon by the receiving party, and, except
as otherwise provided in this Agreement, shall survive the delivery of the
Series A Preferred Stock regardless of any instruction until 60 days after the
Investor receives the audited financial statements of the Company for the year
ended December 31, 2000, and shall not merge in the performance of any
obligation and shall bind each party's successors, assigns and heirs, whether so
expressed or not, and, except as otherwise provided in this Agreement, all such
covenants, agreements, representations and warranties shall inure to the benefit
of the successors and assigns of the receiving party and to transferees of the
Series A Preferred Stock of the Investor, whether so expressed or not.
10.3 Governing Law. This Agreement shall be deemed to be a contract
-------------
made under, and shall be construed in accordance with, the laws of the State of
New
-30-
York (without giving effect to principles of conflicts of law the effect of
which would cause the application of domestic substantive laws of any other
jurisdiction).
10.4 Section Headings; Counterparts. The descriptive headings in this
------------------------------
Agreement have been inserted for convenience only and shall not be deemed to
limit or otherwise affect the construction of any provision thereof or hereof.
This Agreement may be executed simultaneously in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute but one and the same document.
10.5 Notices and Demands. All notices and other communications
-------------------
hereunder shall be in writing and shall be deemed given if delivered personally,
mailed by registered or certified mail (return receipt requested) or sent via
facsimile to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(i) If to Investor to:
CFE, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copies to:
Winston & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CFE, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Company, to:
United Road Services, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-31-
With a copy to:
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
10.6 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or the other provisions of this Agreement.
10.7 Integration. This Agreement, including the exhibits, documents
-----------
and instruments referred to herein (including the Ancillary Agreements),
constitute all of the agreements and supersede all other prior agreements and
understandings, both written and oral, among the parties with respect to the
preferred stock investment provided for herein.
10.8 No Assignment. Except as otherwise provided herein, this
-------------
Agreement may not be assigned, pledged, hypothecated or otherwise transferred
without the consent of the non-assigning party except by the Investor to an
Affiliate of the Investor.
10.9 Jurisdiction. Each party hereby irrevocably submits to the
------------
exclusive jurisdiction of the courts of the State of New York and the federal
courts of the United States of America located in such state solely in respect
of any claim relating to the interpretation and enforcement of the provisions of
this Agreement and of the documents referred to in this Agreement, or otherwise
in respect of the transactions contemplated hereby and thereby, and hereby
waives, and agrees not to assert, as a defense in any action, suit or proceeding
in which any such claim is made that it is not subject thereto or that such
action, suit or proceeding may not be brought or is not maintainable in such
courts or that the venue thereof may not be appropriate or that this Agreement
or any such document may not be enforced in or by such courts. The parties
hereby consent to and grant any such court jurisdiction over such parties and
over the subject matter of any such claim and agree that mailing of process or
other papers in connection with any such action, suit or proceeding in the
manner provided in Section 10.5, or in such other manner as may be permitted by
law, shall be valid and sufficient service thereof.
10.10 Waiver of Jury Trial. Each party acknowledges and agrees that
--------------------
any controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each party hereby irrevocably
and unconditionally waives any right such party may have to a trial by jury.
Each party certifies and
-32-
acknowledges that (i) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver, (ii) such party
understands and has considered the implications of this waiver, (iii) such party
makes this waiver voluntarily, and (iv) such party has been induced to enter
into this Agreement by, among other things, the mutual waivers, agreements and
certifications in this section.
10.11 Third-Party Beneficiary. Nothing expressed or implied in this
-----------------------
Agreement is intended or shall be construed to confer upon or give any Person
other than the parties hereto any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as a
sealed instrument as of the day and year first above written.
UNITED ROAD SERVICES, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
CFE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Title: Duly Authorized Signatory
-33-