CONFIDENTIAL
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is entered
into as of the 20th day of February, 1998, by and between DOMINION
BRIDGE CORPORATION, a Delaware corporation (the "Company"), and
American Eco Corporation, an Ontario, Canada corporation (the
"Purchaser"). The Company and Purchaser are hereinafter collectively
referred to as the "Parties".
BACKGROUND
The Company wishes to obtain additional financing for general
working capital purposes and Purchaser desires to provide such
financing to the Company through the purchase of Units (the "Units"),
each Unit consisting of one share of the Company's Common Stock, par
value $.001 per share (the "Common Stock"), and one-tenth of a Common
Stock Purchase Warrant (the "Warrants"), on the terms provided herein.
The Units are being privately offered by the Company to Purchaser
pursuant to this Agreement.
AGREEMENT
In consideration of the premises hereof and the agreements set
forth below, the Parties hereto, intending to be legally bound, hereby
agree as follows:
1. SALE AND PURCHASE OF UNITS
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(a) Purchase of Units: Subject to the terms and conditions
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herein, the Company agrees to issue and sell Purchaser, and
Purchaser agrees to purchase, 1,923,077 Units at the
Closing.
(b) Purchase Price: The purchase price for the Units shall be
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$2.60 per Unit (the "Purchase Price"). Unless otherwise
indicated, all references to "$" or to "dollar" shall be to
lawful currency of the United States of America.
2. CLOSING:
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(a) A closing of the purchase and sale of the Units offered
hereunder (the "Closing") shall occur at 5:00pm (Montreal
time) on February 20 1998. . At the Closing, Purchaser shall
pay the Purchase Price of the Units by release of the
Purchase Price from escrow against delivery of (i) one or
more certificates for 1,923,077 shares of Common Stock; and
(ii) a Warrant in the form attached as Exhibit "A" for the
purchase of 192,308 additional shares of Common Stock, in
each case registered in the name of Purchaser. The date of
the Closing is referred to herein as the "Closing Date."
3. CONDITIONS PRECEDENT TO CLOSING: The following shall be
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conditions precedent to the Closing:
(a) Executed copy of the Securities Purchase Agreement;
(b) Executed Warrant to purchase 192,308 shares of Common Stock;
(c) Executed copy of the Registration Rights Agreement in the
form attached as Exhibit "B" (the "Registration Rights
Agreement");
(d) Delivery by the Company of certified resolutions of its
Board of Directors authorizing the:
(i) Securities Purchase Agreement;
(ii) Issuance of the Warrants; and
(iii) Registration Rights Agreement;
(e) Delivery by the Purchaser of certified resolutions of its
Board of Directors authorizing the:
(i) Securities Purchase Agreement; and
(ii) Registration Rights Agreement;
(f) Opinion from the Company's counsel in the form attached as
Exhibit "C";
(g) Opinion from the Purchaser's counsel in the form attached as
Exhibit "D"; and
(h) Delivery of the Purchase Price by Purchaser to the Company.
4. DESCRIPTION OF SECURITIES:
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The Securities consist of Common Stock and Common Stock Purchase
Warrants, each of which is described below.
4.1 Common Stock. Holders of Common Stock of the Company have
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equal rights to receive dividends when, as, and if declared
by the Board of Directors out of funds legally available
therefor. Holders of Common Stock of the Company have one
vote for each share held of record and do not have
cumulative voting rights. Holders of Common Stock of the
Company are entitled upon liquidation of the Company to
share ratably in the net assets available for distribution,
subject to the rights, if any of holders of any preferred
stock of the Company then outstanding. Shares of Common
Stock of the Company are not redeemable and have no
pre-emptive or similar rights. All outstanding shares of
Common Stock of the Company are fully paid and
non-assessable.
4.2 Warrants. The terms and conditions of the Warrants are set
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forth in the form of Warrants attached hereto and made a
part hereof as Exhibit "B". Each Warrant entitles Purchaser
to purchase one (1) share of Common Stock of the Company at
an exercise price of $3.00 per share for a period of three
(3) years commencing from the date of issuance. Prior to the
exercise of the Warrants, Purchaser shall not be entitled to
voting rights or other rights provided by law to security
holders of the Company.
4.3 Restricted Securities. The Common Stock, Warrants, and
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shares of Common Stock underlying the Warrants (the
"Exercise Shares") (collectively, the "Securities")
constitute "restricted securities", as that term is defined
in Rule 144 under the Securities Act of 1933, as amended
(the "Act"). Accordingly, the Securities may not be offered
for sale or sold, or otherwise transferred in any
transaction which would constitute a sale thereof within the
meaning of the Act, unless (i) such security has been
registered for sale under the Act and registered or
qualified under applicable state securities laws relating to
the offer and sale of securities, or (ii) exemptions from
the registration requirements of the Act and the
registration or qualification requirements of all such state
securities laws are available and the Company shall have
received an opinion of counsel satisfactory to the Company
that the proposed sale or other disposition of such
securities may be effected without registration under the
Act and would not result in any violation of any applicable
state securities laws relating to the registration or
qualification of securities for sale, such counsel and such
opinion to be satisfactory to counsel to the Company.
4.4 Registration Rights. Purchaser shall have certain
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registration rights with regard to the Common Stock and the
Exercise Shares as set forth in the Registration Rights
Agreement by and between the Parties attached hereto and
made a part hereof as Exhibit "C".
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
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Purchaser represents and warrants to the Company as follows:
5.1 Organization and Standing. Purchaser is a corporation duly
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organized, validly existing and in good standing under the
laws of the Province of Ontario, Canada.
5.2 Authority; Enforceability; No Conflict. Purchaser has all
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required power and authority to enter into this Agreement
and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement by Purchaser has
been duly and validly authorized by all requisite corporate
action on the part of Purchaser including approval by the
Board of Directors of the Purchaser. This Agreement is a
valid and binding obligation of Purchaser, enforceable
against it in accordance with its terms. The Purchaser has
applied for a waiver under the Credit and Guaranty Agreement
dated as of August 22, 1997 between Purchaser and Union Bank
of California, NA, as agent (the "Credit Agreement") with
respect to the transactions contemplated by this Agreement,
a copy of which has been delivered to the Company. The
execution and delivery of this Agreement by Purchaser do
not, and consummation by Purchaser of the transactions
contemplated hereunder will not, result in or constitute (i)
a default, breach or violation of or under the
organizational documents of Purchaser; or (ii) a default,
breach or violation of or under any mortgage, deed of trust,
indenture, note, bond, license, lease agreement or other
instrument or obligation to which Purchaser is a party or by
which any of its properties or assets are bound; or (iii) a
violation of any statute, rule, regulation, order, judgment
or decree of any court, public body or authority; provided,
however, that the Purchaser has not obtained the required
waiver under the Credit Agreement as of the date of this
Securities Purchase Agreement.
5.3 Deliveries at Closing. Purchaser shall deliver to the
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Company at or prior to Closing copies of its articles of
incorporation or other organizational documents, and
resolution of its Board of Directors authorizing the
transactions contemplated by this Agreement.
5.4 Access to Information. Purchaser has had access to all
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material and relevant information concerning the Company,
its management, financial conditions, capitalization, market
information, properties and prospects necessary to enable
Purchaser to make an informed investment decision with
respect to its investment in the Units. Purchaser
acknowledges that it has had the opportunity to ask
questions of and receive answers from, and to obtain
additional information from, representatives of the Company
concerning the terms and conditions of the acquisition of
the Units and the present and proposed business and
financial condition of the Company and has had all such
questions answered to its satisfaction and has been supplied
all information requested.
5.5 Review of Securities and Exchange Commission Filings.
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Purchaser acknowledges that it has been provided with and
has reviewed a copy of the Company's Annual Report for the
year ended September 30, 1997 as filed with the Securities
and Exchange Commission ("SEC") on Form 10-K (the Form
10-K"). Purchaser acknowledges and understands that the Form
10-K reflects information as of the date thereof and that
there may have occurred changes thereafter, which changes
may be material.
5.6 Accredited Investor: Purchaser has such knowledge and
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experience in business and financial matters, such that it
is capable of evaluating the merits and risk of purchasing
the Securities and is an "Accredited Investor" as that term
is defined in the Act and the rules and regulations
thereunder.
5.7 Investment Intent: (i) Purchaser is acquiring the Units for
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its own account and not on behalf of any other person; (ii)
Purchaser is acquiring the Units for investment and not with
a view to the distribution thereof or with the intent to
divide its participation with others by reselling or
otherwise distributing the Units; and (iii) Purchaser will
hold the Units and will not sell, offer to sell, or
otherwise transfer or sell in any transaction which would
constitute a sale thereof under the meaning of the Act
unless the Company receives an opinion of counsel reasonably
acceptable to it (as to both counsel and the opinion) to the
effect that such registration is not necessary.
5.8 Understanding of Investment Risks. Purchaser acknowledges
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and understands that the Units offered hereby have not been
approved or disapproved by the SEC, or any state securities
commission, nor has the SEC or any state securities
commission passed upon the adequacy or accuracy of this
Agreement or any exhibit hereto.
5.9 Understanding of Nature of Units: Purchaser acknowledges and
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understands that:
(a) The Units have not been registered under the Act or any
state securities laws and are being issued and sold in
reliance upon certain of the exemptions contained in
the Act.
(b) The Units are "Restricted Securities" as that term is
defined in Rule 144 promulgated under the Act.
(c) The Units cannot be sold or transferred without
registration under the Act and applicable state
securities laws, or unless the Company receives an
opinion of counsel reasonably acceptable to it (as to
both counsel and the opinion) that such registration is
not necessary.
(d) The Securities and any certificates issued in
replacement therefor shall bear the following legend,
in addition to any other legend required by law or
otherwise:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE ON CERTAIN EXEMPTIONS FROM REGISTRATION
THEREUNDER THE SALE, PLEDGE, HYPOTHECATION OR OTHER
TRANSFER OF SUCH SECURITIES IS SUBJECT TO COMPLIANCE
WITH APPLICABLE SECURITIES LAWS AND REGULATIONS."
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
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represents and warrants to Purchaser as follows:
6.1 Organization and Standing of the Company. The Company is a
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duly organized and validly existing corporation in good
standing under the laws of the state of Delaware with the
power and authority to conduct the business in which it is
now engaged, and is in good standing in and qualified to do
business in such other states or jurisdictions as is
necessary to enable it to carry on its business, except
where failure to so qualify would not have a material
adverse effect on the business or the assets of the Company.
6.2 Capitalization. The authorized capital stock of the Company
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is as set forth in the Form 10-K. Except as set forth in
Schedule 6.2 delivered by the Company to Purchaser
concurrently with the execution and delivery of this
Agreement, there are no outstanding pre-emptive, conversion
or other rights, options, warrants or agreements granted or
issued by or binding upon the Company for the purchase or
acquisition of any shares of capital stock of the Company or
any other securities convertible into, exchangeable for or
evidencing the right to subscribe for any shares of such
capital stock. Except as set forth on Schedule 6.2, the
Company is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any
shares of the capital stock of the Company or any
convertible securities, rights, or options.
6.3 Due Authorization; Corporate Power and Authority. The
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Company has all required power and authority to enter into
this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the
transactions contemplated hereby have been duly authorized
by the Board of Directors of the Company. No other corporate
act or proceeding on the part of the Company is necessary to
authorize this Agreement or the consummation of the
transactions contemplated hereby. When duly executed and
delivered by the Parties hereto, this Agreement will
constitute a valid and legally binding obligation of the
Company enforceable against it in accordance with its terms.
The Company has applied for approval of the transactions
contemplated by this Securities Purchase Agreement by the
Vancouver Stock Exchange ("VSE") The execution and delivery
of this Agreement by the Company do not, and consummation by
the Company of the transactions contemplated hereunder will
not, result in or constitute (i) a default, breach or
violation of or under the organizational documents of the
Company; or (ii) a default, breach or violation of or under
any mortgage, deed of trust, indenture, note, bond, license,
lease agreement or other instrument or obligation to which
the Company is a party or by which any of its properties or
assets are bound; or (iii) a violation of any statute, rule,
regulation, order, judgment or decree of any court, public
body or authority; provided, however, that the application
to the VSE is pending and that the VSE has not approved the
transactions contemplated by this Securities Purchase
Agreementas of the date hereof.
6.4 Securities. All of the Securities have been duly authorized
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and, upon issuance and sale pursuant to the terms of this
Agreement or upon the exercise of the Warrants in accordance
with the terms of the Warrants, will have been validly
issued, fully paid and non-assessable and will be free and
clear of all liens, claims and encumbrances.
6.5 Deliveries at Closing. The Company has delivered copies of
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the Company's Certificate of Incorporation, By-Laws, certain
resolutions of the Board of Directors and the Form 10-K.
6.6 Financial Statements. The Company has delivered to Purchaser
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true and complete copies of the Company's audited income
statement and balance sheet for the two years ended
September 30, 1997 (included in the Form 10-K). The
Financial Statements fairly and accurately present in
accordance with generally accepted accounting principles
("GAAP"), the consolidated financial position of the Company
as of their respective dates and the results of operations
for the periods covered thereby. There has been no material
adverse change in the business, financial condition or the
results of operations since September 30, 1997.
6.7 Reservation of Common Stock. The Company has reserved from
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issuance 192,308 shares of Common Stock of the Company to
cover the exercise of the Warrants granted to Purchaser
hereunder.
7. AFFIRMATIVE COVENANTS OF THE COMPANY. From and after the Closing
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Date and so long as Purchaser owns at least 1,923,077 shares of
Common Stock, the Company hereby covenants and agrees as follows:
7.1 SEC Reports. The Company shall provide Purchaser with copies
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of all reports or forms filed with the Securities and
Exchange Commission
7.2 Board of Directors. Upon completion of the Closing, the
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Purchaser shall be entitled to designate ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
to serve as a member of the Company's Board of Directors for
a term expiring 1999 and its Executive Committee. If
Purchaser does not obtain the waiver under the Credit
Agreement referred to in Section 5.2 hereof, the Company
shall appoint two (2) additional independent directors who
shall be representatives from internationally recognized
public accounting firms.
7.3 VSE. The Company shall take any action required to delist
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from the VSE if consent to the transactions contemplated by
this Securities Purchase Agreement is not obtained by March
3, 1998.
8. NOTICES. All notices, requests, consents or other communications
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required or permitted hereunder shall be in writing and shall be
hand delivered or mailed first class postage prepaid, registered
or certified mail, to the following addresses:
If to the Company:
Dominion Bridge Corporation.
▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Chairman of the Board & C.E.O.
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, P.C.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Purchaser:
American Eco Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman, President and CEO
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
▇▇▇▇ & Priest LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Such notices and other communications shall for all purposes of
this Agreement be treated as being effective upon being delivered
personally or, if sent by mail, five days after it has been
deposited in a regularly maintained receptacle for the deposit of
mail, addressed as set forth above, and postage prepaid.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Representations and
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warranties contained herein shall survive the execution and
delivery of this Agreement.
10. INDEMNIFICATION.
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(a) Indemnification of Company by Purchaser relating to the
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Credit Agreement. Purchaser shall indemnify, defend and hold
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the Company, any subsidiary ("Subsidiary") of the Company
and any director, executive officer or agent of the Company
or any Subsidiary (collectively the "Indemnified Persons"
each an "Indemnified Person") harmless from and against any
and all demands, claims suits, actions, proceedings, losses,
damages or liabilities of any kind or nature, together with
all reasonable costs and expenses related thereto, including
legal, accounting and other fees and expenses arising out of
or in any way related to Purchaser's failure to obtain the
waiver under the Credit Agreement referred to in Section 5.2
hereof.
(b) Indemnification Procedure. In the event that the Company
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receives notice of the commencement of any action involving
a claim referred to in Section 10(a) hereof, the Company
shall provide written notice to the Purchaser of such claim
as soon as reasonably practicable. Thereafter, the
Purchasher will be entitled to participate in and, if it so
elects, to assume the defense of any and all Indemnified
Persons; provided, however, that in the event that
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the Company shall have reasonably concluded that
there may be one or more legal defenses available to it or
any Indemnified Person which are different from or
additional to and are inconsistent with those available to
the Purchaser, then Purchaser shall not have the right to
assume the defense of the Company. In such event, the
Company shall have the right to retain a single counsel of
its choosing and Purchaser shall be obligated to pay the
reasonable fees and expenses of such counsel including, but
not limited to, any reasonable expenses incurred in
connection with retention of any expert witnesses reasonably
required in connection with the defense of the Indemnified
Person. If an offer is made to settle any such claim against
any Indemnifed Person and such Indemnified Person desires to
accept such offer, such Indemnified Person shall give
written notice to Purchaser, who shall have fifteen (15)
days from receipt thereof to accept or reject the offer,
which rejection must be on a reasonable basis.
11. PARTIES IN INTEREST. All the terms and provisions of this
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Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and permitted assigns
of the Parties hereto, provided that this Agreement and the
interests herein may not be assigned by either party without the
express written consent of the other party.
12. GOVERNING LAW. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Delaware, without
regard to that State's conflict of laws provisions.
13. SECTIONS AND OTHER HEADINGS. The section and other headings
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contained in this Agreement are for the convenience of reference
only, do not constitute part of this Agreement or otherwise
affect any of the provisions hereof.
14. COUNTERPART SIGNATURES. The Agreement may be signed in
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counterpart and all counterparts together shall become effective
only when the counterpart(s) have been executed and delivered by
and on behalf of the Company and the Purchaser.
15. NON-ASSIGNABILITY. This Agreement is not assignable by either of
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the Parties hereto.
16. TIME IS OF THE ESSENCE. This Agreement shall be null and void if
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the Closing has not occurred prior to 5:00 pm (Montreal time) on
February 20, 1998.
17. ENTIRE AGREEMENT. This Agreement represents, the entire agreement
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among the Parties with respect to the subject matter hereof and
supersedes all prior arrangements or understandings with respect
thereto.
IN WITNESS THEREOF THIS AGREEMENT HAS BEEN DULY EXECUTED AS OF THE
DATE FIRST ABOVE WRITTEN.
DOMINION BRIDGE CORPORATION AMERICAN ECO CORPORATION
Per: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Per: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Per: _______________________
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