EXHIBIT 10.6
AGREEMENT
This Agreement (this "AGREEMENT") dated as of December 14, 2001 is
entered into by and between TRC Companies, Inc., a corporation organized under
the laws of Delaware (together with its successors, "TRC"), and ▇▇▇▇▇▇▇▇
International, Ltd., a company organized under the laws of Bermuda (together
with its successors, "▇▇▇▇▇▇▇▇").
The parties hereto agree as follows:
1. Purchase and Sale. In consideration of and upon the basis of the
representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:
(A) ▇▇▇▇▇▇▇▇ agrees to purchase from TRC, and TRC agrees to
sell to ▇▇▇▇▇▇▇▇ on the Initial Closing Date (as defined below), in
accordance with Section 2 below, fifteen thousand (15,000) shares (the
"INITIAL PREFERRED SHARES") of TRC's Series A-1 Cumulative Convertible
Preferred Stock (the "SERIES A-1 PREFERRED STOCK"), having the terms
and conditions set forth in the Certificate of Rights and Preferences
attached hereto as Annex A (the "CERTIFICATE OF RIGHTS AND
PREFERENCES"), at a price of one thousand dollars ($1,000) per share
for an aggregate purchase price of fifteen million dollars
($15,000,000). ▇▇▇▇▇▇▇▇ shall have the right to convert the outstanding
Initial Preferred Shares into shares of Common Stock of TRC, par value
ten cents ($0.10) per share ("COMMON STOCK"), in the manner, and
subject to the terms, specified in this Agreement and in the
Certificate of Rights and Preferences.
(B) The closing (the "INITIAL CLOSING") of the sale of the
Initial Preferred Shares shall occur on the third (3rd) Business Day,
after and excluding the date hereof, or at such other date and time as
▇▇▇▇▇▇▇▇ and TRC shall mutually agree (such date, the "INITIAL CLOSING
DATE").
(C) TRC grants ▇▇▇▇▇▇▇▇ rights (the "▇▇▇▇▇▇▇▇ RIGHTS") to
require TRC, at any time between and including December 15, 2002 and
December 14, 2003, to issue to it from time to time, provided that such
rights shall be exercisable by ▇▇▇▇▇▇▇▇ no more than three (3) times
and for a minimum each time of at least one thousand (1,000) shares, in
whole or in part, up to an aggregate of ten thousand (10,000) shares of
additional series of TRC preferred stock (e.g., Series A-2 Cumulative
Convertible Preferred Stock, Series A-3 Cumulative Convertible
Preferred Stock, etc.), having, except as set forth below, identical
terms, conditions, rights, preferences and privileges as the Series A-1
Preferred Stock (such shares shall collectively be referred to as the
"ADDITIONAL PREFERRED SHARES" and together with the Initial Preferred
Shares, the "SERIES A PREFERRED SHARES") at a price of one thousand
dollars ($1,000) per share for an aggregate purchase price for all
▇▇▇▇▇▇▇▇ Rights of ten million dollars ($10,000,000). ▇▇▇▇▇▇▇▇ shall
have the right to convert the outstanding Additional Preferred Shares
into shares of Common Stock in the manner, and subject to the terms,
specified in this Agreement and in a certificate of rights and
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preferences for each such series of Additional Preferred Shares (each,
a " SUBSEQUENT CERTIFICATE OF RIGHTS AND PREFERENCES" and collectively,
the "SUBSEQUENT CERTIFICATES OF RIGHTS AND PREFERENCES"). Each
Subsequent Certificate of Rights and Preferences shall have the same
terms and conditions as the Certificate of Rights and Preferences,
except that (A) the Conversion Price (as defined therein) shall equal
one hundred twenty percent (120%) of the Average Market Price (as
defined therein) calculated as of the Business Day on which the
corresponding ▇▇▇▇▇▇▇▇ Notice (as defined below) is delivered but not
less than the greater of (1) the volume-weighted average price of the
Common Stock on the NYSE on the Business Day before and excluding the
corresponding Subsequent Closing Date and (2) the lesser of (i)
twenty-four dollars and fourteen cents ($24.14) and, (ii) fifty percent
(50%) of the Average Market Price calculated on the date ninety (90)
calendar days after and excluding the Restatement Date (as defined in
the Certificate of Rights and Preferences); (B) the number of
Additional Preferred Shares issued pursuant to each Subsequent
Certificate of Rights and Preferences may differ from the number of
shares of Series A-1 Preferred Stock; and (C) the number denoting which
Series of Series A Shares (e.g., the "2" in A-2, the "3" in A-3) is
being issued shall be inserted where the number "1" is located in the
term "Series A-1" in each place where such term is located in the
Certificate of Rights and Preferences. To exercise any ▇▇▇▇▇▇▇▇ Rights,
▇▇▇▇▇▇▇▇ shall deliver one or more written notices substantially in the
form attached hereto as Annex B (each, a "▇▇▇▇▇▇▇▇ NOTICE") to TRC from
time to time commencing at any time between and including December 15,
2002 and December 14, 2003 (the "▇▇▇▇▇▇▇▇ Rights Expiration Date" ). .
The ▇▇▇▇▇▇▇▇ Rights Expiration Date shall be extended by one calendar
day for each Registration Statement Unavailability Day (as defined
below). Upon satisfaction or, if applicable, waiver of the relevant
conditions set forth in Sections 13 and 14 hereof, the closing of each
exercise of ▇▇▇▇▇▇▇▇ Rights (each, a "SUBSEQUENT CLOSING") shall take
place on the date that is two (2) Business Days following and excluding
delivery of the ▇▇▇▇▇▇▇▇ Notice, or at such other date and time as
▇▇▇▇▇▇▇▇ and TRC shall mutually agree (each such date and time being
referred to herein as a "SUBSEQUENT CLOSING DATE" and, together with
the Initial Closing Date, a "CLOSING DATE").
(D) TRC shall redeem all of the Series A Preferred Shares
(including any accrued and unpaid dividends) pursuant to the terms and
conditions set forth in the Certificate of Rights and Preferences or
Subsequent Certificate of Rights and Preferences of each such series.
As set forth in the Certificate of Rights and Preferences or Subsequent
Certificate of Rights and Preferences of each such series, TRC may
satisfy its redemption obligations under Section 6(B)(ii)and (iii) of
the Certificate of Rights and Preferences and the Subsequent
Certificates of Rights and Preferences by delivering shares of
Registered Common Stock (the amount of which shall be determined
pursuant to the terms and conditions set forth in the Certificate of
Rights and Preferences and Subsequent Certificates of Rights and
Preferences, as the case may be, of each such series) (collectively,
the "REDEMPTION COMMON STOCK").
(E) As used herein, the term "COMMON SHARES" means the
Redemption Common Stock and shares issuable upon conversion of or as
dividends under the Series A Preferred Shares (including Series A
Preferred Shares not yet issued), and all other Common Stock issuable
under the Certificate of Rights and Preferences, Subsequent
Certificates of Rights and Preferences or this Agreement; the term
"INVESTMENT
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SECURITIES" means the Series A Preferred Shares issued or issuable
hereunder, the ▇▇▇▇▇▇▇▇ Rights and all Common Shares; the term
"BUSINESS DAY" means any day on which the Common Stock may be traded on
the NYSE or, if not admitted for trading on the NYSE, on any day other
than a Saturday, Sunday or holiday on which banks in New York City are
required or permitted to be closed; the term "NEW YORK STOCK EXCHANGE"
means the New York Stock Exchange; and the term "NYSE" means the New
York Stock Exchange, but if the New York Stock Exchange is not then the
principal U.S. trading market for the Common Stock, or such other
applicable common stock, then "NYSE" shall be deemed to mean the
principal U.S. national securities exchange (as defined in the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) on
which the Common Stock, or such other applicable common stock, is then
traded, or if such Common Stock, or such other applicable common stock,
is not then listed or admitted to trading on any national securities
exchange but is designated as a national market system security or a
Nasdaq SmallCap Market Security by the National Association of
Securities Dealers, Inc. ("NASD"), then such market system, or if
such Common Stock, or such other applicable common stock, is not listed
or quoted on any of the foregoing, then the OTC Bulletin Board.
2. Initial Closing. The Initial Closing shall take place initially via
facsimile on the Initial Closing Date in the manner set forth below; provided
that original certificates representing shares of Series A-1 Preferred Stock
shall be delivered via Federal Express or another reputable overnight carrier
to:
Ms. Ele Stathatos
C/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇.
At the Initial Closing, the following deliveries shall be made:
(A) SERIES A-1 PREFERRED STOCK. TRC shall deliver to ▇▇▇▇▇▇▇▇ three (3)
stock certificates, each representing five thousand (5,000) shares of
Series A-1 Preferred Stock, duly executed by TRC in definitive form, and
shall register such shares in the stockholder register of TRC.
(B) PURCHASE PRICE. ▇▇▇▇▇▇▇▇ shall cause to be wire transferred to TRC,
in accordance with the instructions set forth in Section 19, the aggregate
purchase price of fifteen million dollars ($15,000,000) in immediately
available United States funds.
(C) CLOSING DOCUMENTS. The closing documents required by Sections 13
and 14 shall be delivered to ▇▇▇▇▇▇▇▇ and TRC, respectively.
(D) DELIVERY NOTICE. An executed copy of the delivery notice in the
form attached hereto as Annex C shall be delivered to ▇▇▇▇▇▇▇▇.
The deliveries specified in this Section 2 shall be deemed to occur
simultaneously as part of a
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single transaction, and no delivery shall be deemed to have been made until all
such deliveries have been made.
3. Subsequent Closing. Each Subsequent Closing shall take place
initially via facsimile on the Subsequent Closing Date in the manner set forth
below; provided that original certificates representing Additional Preferred
Shares shall be delivered via Federal Express or another reputable overnight
carrier to ▇▇▇▇▇▇▇▇ as ▇▇▇▇▇▇▇▇ instructs in writing. At each Subsequent
Closing, the following deliveries shall be made:
(A) ADDITIONAL PREFERRED SHARES. TRC shall issue and deliver
to ▇▇▇▇▇▇▇▇ stock certificates, each representing five thousand (5,000)
Additional Preferred Shares (except that to the extent the number of
Additional Preferred Shares to be delivered is not evenly divisible by
five thousand (5,000), one (1) stock certificate shall represent the
remaining shares), duly executed by TRC, and shall register such shares
in the stockholder register of TRC.
(B) PURCHASE PRICE. ▇▇▇▇▇▇▇▇ shall cause to be wire
transferred to TRC, in accordance with the instructions set forth in
Section 19, one thousand dollars ($1,000) per Additional Preferred
Share, in the aggregate the "Additional Issuance Price" as specified in
the applicable ▇▇▇▇▇▇▇▇ Notice (the "ADDITIONAL ISSUANCE PRICE")
payable on such Subsequent Closing Date, in immediately available
United States dollars.
(C) CLOSING DOCUMENTS. The closing documents required by
Sections 13 and 14 shall be delivered to ▇▇▇▇▇▇▇▇ and TRC,
respectively.
(D) DELIVERY NOTICE. An executed copy of the delivery notice
in the form attached hereto as Annex C shall be delivered to ▇▇▇▇▇▇▇▇.
The deliveries specified in this Section 3 shall be deemed to occur
simultaneously as part of a single transaction, and no delivery shall be deemed
to have been made until all such deliveries have been made.
4. Representations and Warranties of TRC. TRC hereby represents and
warrants to ▇▇▇▇▇▇▇▇ on each Closing Date, except as set forth on any Schedule
hereto, as follows:
(A) TRC has been duly incorporated and is validly existing in
good standing under the laws of Delaware or, after the Initial Closing
Date, if another entity has succeeded TRC in accordance with the terms
hereof, under the laws of one of the states of the United States.
(B) The execution, delivery and performance of this Agreement,
the Certificate of Rights and Preferences and Subsequent Certificates
of Rights and Preferences (including the authorization, sale, issuance
and delivery of the Investment Securities) have been duly authorized by
all requisite corporate action and no further consent or authorization
of TRC, its Board of Directors or its stockholders is required, except
as otherwise contemplated by this Agreement.
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(C) This Agreement has been duly executed and delivered by TRC
and, when this Agreement is duly authorized, executed and delivered by
▇▇▇▇▇▇▇▇, will be a valid and binding agreement enforceable against TRC
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principles of equity. The issuance of the Investment Securities is not
and will not be subject to any preemptive right or rights of first
refusal that have not been properly waived or complied with.
(D) TRC has full corporate power and authority necessary to
(i) own and operate its properties and assets and execute and deliver
this Agreement, (ii) perform its obligations hereunder and under the
Certificate of Rights and Preferences or Subsequent Certificates of
Rights and Preferences (including, but not limited to, the issuance of
the Investment Securities) and (iii) carry on its business as presently
conducted and as presently proposed to be conducted. TRC and its
subsidiaries are duly qualified and are authorized to do business and
are in good standing as foreign corporations in all jurisdictions in
which the nature of their activities and of their properties (both
owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not, individually or in
the aggregate, be reasonably expected to have a material adverse effect
on (i) the business affairs, assets, results of operations or prospects
of TRC or any of its subsidiaries, or (ii) the transactions
contemplated by, or TRC's ability to perform under, this Agreement, the
Certificate of Rights and Preferences or any Subsequent Certificate of
Rights and Preferences.
(E) No consent, approval, authorization or order of any court,
governmental agency or other body is required for execution and
delivery by TRC of this Agreement or the performance by TRC of any of
its obligations hereunder and under the Certificate of Rights and
Preferences or Subsequent Certificates of Rights and Preferences.
(F) Neither the execution and delivery by TRC of this
Agreement nor the performance by TRC of any of its obligations
hereunder or under the Certificate of Rights and Preferences or any
Subsequent Certificate of Rights and Preferences:
(i) violates, conflicts with, results in a breach of,
or constitutes a default (or an event which with the giving of
notice or the lapse of time or both would be reasonably likely
to constitute a default) or creates any rights in respect of
any person under (A) the certificates of incorporation or
by-laws of TRC or any of its subsidiaries, (B) any decree,
judgment, order, law, treaty, rule, regulation or
determination of which TRC has knowledge (or would have
knowledge after due inquiry) of any court, governmental agency
or body, or arbitrator having jurisdiction over TRC or any of
its subsidiaries or any of their respective properties, or (C)
the terms of any bond, debenture, indenture, credit agreement,
note or any other evidence of indebtedness, or any agreement,
stock option or other similar plan, lease, mortgage, deed of
trust or other instrument to which TRC or any of its
subsidiaries is a party, by which TRC or any of its
subsidiaries is bound, or to which any of the properties or
assets of TRC or any of its subsidiaries is subject, (D) the
terms of any "lock-up" or similar provision of any
underwriting or similar
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agreement to which TRC or any of its subsidiaries is a party,
or (E) any rule or regulation of the NASD or the New York
Stock Exchange or any rule or regulation of the markets where
TRC's securities are publicly traded or quoted applicable to
TRC or the transactions contemplated hereby; or
(ii) results in the creation or imposition of any
lien, charge or encumbrance upon any Investment Securities or
upon any of the properties or assets of TRC or any of its
subsidiaries.
(G) TRC has validly reserved for issuance to ▇▇▇▇▇▇▇▇ the
Series A-1 Preferred Shares and any Additional Preferred Shares under
this Agreement and eight hundred thousand (800,000) shares of Common
Stock. When issued to ▇▇▇▇▇▇▇▇ against payment therefor, each
Investment Security:
(i) will have been duly and validly authorized, duly
and validly issued, fully paid and non-assessable;
(ii) will be free and clear of any security
interests, liens, claims or other encumbrances; and
(iii) will not have been issued or sold in violation
of any preemptive or other similar rights of the holders of
any securities of TRC or any other person.
(H) TRC satisfies all maintenance criteria of the New York
Stock Exchange or has a valid exemption from such criteria of which it
has previously notified ▇▇▇▇▇▇▇▇ in writing. No present set of facts or
circumstances of which TRC has knowledge (or would have knowledge after
due inquiry) will (with the passage of time or the giving of notice or
both or neither) cause any of the Common Stock to be delisted from the
New York Stock Exchange. All of the Common Shares will, when issued, be
duly listed and admitted for trading on all of the markets where shares
of Common Stock are traded, including the New York Stock Exchange.
(I) There is no pending or, to the best knowledge of TRC,
threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over TRC
or any of its affiliates that would materially affect the execution by
TRC of, or the performance by TRC of its obligations under, this
Agreement, the Certificate of Rights and Preferences or Subsequent
Certificates of Rights and Preferences.
(J) (i) Since September 30, 1998, none of TRC's filings with
the United States Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the "SECURITIES ACT") or under
Section 13(a) or 15(d) of the Exchange Act (each an "SEC FILING")
contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements, in the light
of the circumstances under which they were made, not misleading (except
as set forth in amendments or supplements to such SEC Filings made
before and excluding the date hereof). (ii) Since June 30, 1998, there
has not been any pending or, to the best knowledge of TRC, threatened
action, suit, proceeding or investigation before any court,
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governmental agency or body, or arbitrator having jurisdiction over TRC
or any of its subsidiaries or any of its affiliates that could cause a
material adverse change in the condition, financial or otherwise, or in
the business affairs, assets, results of operations or prospects of TRC
and its subsidiaries, whether or not arising in the ordinary course of
business, except as disclosed in TRC's SEC Filings on or before the
date immediately before and excluding the date hereof. (iii) Since the
date of TRC's most recent SEC Filing, there has not been, and TRC is
not aware of, any development or condition that is reasonably likely to
result in, any material change in the condition, financial or
otherwise, or in the business affairs, assets, results of operations or
prospects of TRC and its subsidiaries, whether or not arising in the
ordinary course of business. (iv) TRC's SEC Filings made from and after
September 30, 1998, fully disclose all material information concerning
TRC and its subsidiaries (other than the existence and terms of this
Agreement).
(K) The offer and sale of the Investment Securities to
▇▇▇▇▇▇▇▇ pursuant to this Agreement will, subject to compliance by
▇▇▇▇▇▇▇▇ with the applicable representations and warranties contained
in Section 7 hereof and with the applicable covenants and agreements
contained in Section 11 hereof, be made in accordance with an exemption
from the registration requirements of the Securities Act and any
applicable state law. Neither TRC nor any agent on its behalf has
solicited or will solicit any offers to sell or has offered to sell or
will offer to sell all or any part of the Series A Preferred Shares to
any person or persons so as to bring the sale of such Series A
Preferred Shares by TRC within the registration provisions of the
Securities Act.
(L) Immediately before the Initial Closing Date and
immediately after the filing of the Certificate of Rights and
Preferences, the authorized capital stock of TRC consists of thirty
million (30,000,000) shares of Common Stock, par value ten cents
($0.10) per share, and five hundred thousand (500,000) shares of
preferred stock, par value ten cents ($0.10) per share ("PREFERRED
STOCK") of which fifteen thousand (15,000) are designated Series A-1
Preferred Stock. Immediately before the Initial Closing Date, (A) eight
million one hundred ninety-six thousand nine hundred and three
(8,196,903) shares of Common Stock and no shares of Preferred Stock
were issued and outstanding, (B) one million nine hundred twelve
thousand nine hundred and one (1.912,901) shares of Common Stock and no
shares of Preferred Stock are currently reserved and subject to
issuance upon the exercise of outstanding stock options, warrants or
other convertible rights, (C) 628,653 shares of Common Stock are held
in the treasury of TRC, and (D) up to two hundred and fifty-five
thousand and seventy four (255,074) additional shares of Common Stock
may be issued under the TRC Companies, Inc. Restated Stock Option Plan.
All of the outstanding shares of Common Stock are, and all shares of
capital stock which may be issued pursuant to stock options, warrants
or other convertible rights will be, when issued and paid for in
accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and non-assessable, free of any preemptive rights in
respect thereof and issued in material compliance with all applicable
state and federal laws concerning issuance of securities. As of the
date hereof, except as set forth above and except as may be provided
for in the agreements set forth on Schedule 4(l) attached hereto, and
except for shares of Common Stock or other securities issued upon
conversion, exchange, exercise or purchase associated with the
securities, options,
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warrants, rights and other instruments referenced above, no shares of
capital stock or other voting securities of TRC were outstanding, no
equity equivalents, interests in the ownership or earnings of TRC or
other similar rights were outstanding, and there were no existing
options, warrants, calls, subscriptions or other rights or agreements
or commitments relating to the capital stock of TRC or any of its
subsidiaries or obligating TRC or any of its subsidiaries to issue,
transfer, sell or redeem any shares of capital stock, or other equity
interest in, TRC or any of its subsidiaries or obligating TRC or any of
its subsidiaries to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement or commitment.
Attached hereto as Schedule 4(l) is a true and correct list as of the
date of this Agreement of all outstanding options, warrants, calls,
subscriptions and other rights or agreements or commitments relating to
the issuance of additional shares of capital stock of TRC and with
respect to each a description of the number and class of securities and
the exercise price thereof.
(M) SOLVENCY. The sum of the assets of TRC, both at a fair
valuation and at present fair salable value, exceeds its liabilities,
including contingent liabilities. TRC has sufficient capital with which
to conduct its business as presently conducted and, following the
Initial Closing, as proposed to be conducted. TRC has not incurred
debt, and does not intend to incur debt, beyond its ability to pay such
debt as it matures. For purposes of this paragraph, "DEBT" means any
liability on a claim, and "CLAIM" means (x) a right to payment, whether
or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured, or unsecured, or (y) a right to an equitable remedy
for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such contingent liabilities,
such liabilities are computed at the amount which, in light of all the
facts and circumstances existing at the time, represents the amount
which can reasonably be expected to become an actual or matured
liability.
(N) AUDITED FINANCIALS. Attached hereto as Annex D is a true,
correct and complete copy of (i) the report of PricewaterhouseCoopers
LLP dated October 9, 2001, together with the accompanying consolidated
financial statements and schedules of TRC at June 30, 2001 and the
results of TRC's operations and cash flows for each of the three (3)
years in the period ended June 30, 2001, as such report appears in the
Annual Report on Form 10-K for the fiscal year ended June 30, 2001
filed by TRC with the SEC (the "AUDITOR REPORT") and (ii) the written
consent of PricewaterhouseCoopers LLP to the inclusion of its report
described in clause (i) herein.
(O) EQUIVALENT VALUE. As of the Initial Closing Date, the
consideration that TRC is receiving from ▇▇▇▇▇▇▇▇ is equivalent in
value to the consideration ▇▇▇▇▇▇▇▇ is receiving from TRC pursuant to
this Agreement. As of the Initial Closing Date, under the terms of this
Agreement, TRC is receiving fair consideration from ▇▇▇▇▇▇▇▇ for the
agreements, covenants, representations and warranties made by TRC to
▇▇▇▇▇▇▇▇.
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(P) NO NON-PUBLIC INFORMATION. ▇▇▇▇▇▇▇▇ has not requested from
TRC, and TRC has not furnished to ▇▇▇▇▇▇▇▇, any material non-public
information concerning TRC or its subsidiaries.
(Q) RESTATEMENT NOTICES. As of each Subsequent Closing Date,
TRC has provided ▇▇▇▇▇▇▇▇ with all Restatement Notices (as defined in
the Certificate of Rights and Preferences or Subsequent Certificates of
Rights and Preferences) required to be delivered following a
Restatement (as defined in the Certificate of Rights and Preferences or
Subsequent Certificates of Rights and Preferences).
5. Registration Provisions.
(A) TRC shall, as soon as practicable and at its own expense,
file a Registration Statement (as defined below) under the Securities
Act covering the resale of the Registrable Number (as defined below) of
shares of Common Stock and shall use its best efforts to cause such
Registration Statement to be declared effective on or before April 14,
2002 (the "REQUIRED REGISTRATION DATE"). The obligations to have the
Registration Statement declared effective and to maintain such
effectiveness as provided in this Section 5 are referred to herein as
the "REGISTRATION REQUIREMENT." Pursuant to the preceding sentence, TRC
shall register pursuant to such Registration Statement a number of
shares of Common Stock equal to one hundred and sixty-six point
sixty-six percent (166.66%) of the number of Common Shares issuable
upon conversion of the Initial Preferred Shares based upon the
Conversion Price (as defined in the Certificate of Rights and
Preferences) in effect on the effective date of the Registration
Statement (the "REGISTRABLE NUMBER"). Prior to the exercise by ▇▇▇▇▇▇▇▇
of any of the ▇▇▇▇▇▇▇▇ Rights, TRC shall promptly amend such
Registration Statement (or, if necessary, file a new Registration
Statement) at any time and from time to time after the number of Common
Shares issued and issuable upon conversion or redemption of the Initial
Preferred Shares (including shares issuable as dividends under the
Initial Preferred Shares, assuming all such dividends are paid in
shares of Registered Common Stock) exceeds ninety percent (90%) of the
number of shares then registered (such greater number, thereafter, the
"Registrable Number") so that the Registrable Number of Common Shares
shall at all times be registered and freely tradable. In addition, from
and after the exercise by ▇▇▇▇▇▇▇▇ of any of the ▇▇▇▇▇▇▇▇ Rights, TRC
shall promptly amend such Registration Statement (or, if necessary,
file a new Registration Statement) at any time, and from time to time,
when the total number of Common Shares issued or issuable under the
Series A Preferred Shares, whether upon conversion or redemption,
(including shares issuable as dividends under the Series A Preferred
Shares, assuming all such dividends are paid in shares of Registered
Common Stock) exceeds eighty percent (80%) of the number of shares then
registered (such greater number, thereafter, the "Registrable Number"),
so that the Registrable Number of Common Shares shall at all times be
registered and freely tradable.
(B) The registration statement filed or required to be filed
under the Securities Act in accordance with Section 5(a) hereof, along
with any amendments and additional registration statements, is referred
to as the "REGISTRATION STATEMENT." TRC shall provide
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prompt written notice to ▇▇▇▇▇▇▇▇ when the Registration Statement has
been declared effective by the SEC.
(C) TRC will: (A) keep the Registration Statement effective
until the earlier of (x) the later of (i) the second anniversary of the
issuance of the last Common Share that may be issued, or (ii) such time
as all of the Common Shares issued or issuable hereunder can be sold by
▇▇▇▇▇▇▇▇ or any of its affiliates immediately without compliance with
the registration requirements of the Securities Act pursuant to
paragraph (k) of Rule 144 under the Securities Act ("RULE 144") or (y)
the date all of the Common Shares issued or issuable shall have been
sold by ▇▇▇▇▇▇▇▇ and its affiliates (such later period, the
"REGISTRATION PERIOD"); (B) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement (as so
amended and supplemented from time to time, the "PROSPECTUS") as may be
necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Common Shares by ▇▇▇▇▇▇▇▇ or any of
its affiliates; (C) furnish such number of Prospectuses and other
documents incident thereto, including any amendment of or supplement to
the Prospectus, as ▇▇▇▇▇▇▇▇ from time to time may reasonably request;
(D) cause all Common Shares to be listed on each securities exchange
and quoted on each quotation service on which similar securities issued
by TRC are then listed or quoted; (E) provide a transfer agent and
registrar for all Common Shares and a CUSIP number for all Common
Shares; (F) otherwise comply with all applicable rules and regulations
of the SEC, the New York Stock Exchange and any other exchange or
quotation service on which the Common Shares are obligated to be listed
or quoted under this Agreement; and (G) file the documents required of
TRC and otherwise obtain and maintain requisite blue sky clearance in
(x) New York and all other jurisdictions in which any of the shares of
Common Stock were originally sold and (y) all other states specified in
writing by ▇▇▇▇▇▇▇▇, provided, however, that as to this clause (y), TRC
shall not be required to qualify to do business or consent to service
of process in any state in which it is not now so qualified or has not
so consented. ▇▇▇▇▇▇▇▇ shall have the right to approve the description
of the selling stockholder, plan of distribution and all other
references to ▇▇▇▇▇▇▇▇ and its affiliates contained in each
Registration Statement and Prospectus.
(D) TRC shall furnish to ▇▇▇▇▇▇▇▇ upon request a reasonable
number of copies of a supplement to or an amendment of any Prospectus
as may be necessary in order to facilitate the public sale or other
disposition of all or any of the Common Shares by ▇▇▇▇▇▇▇▇ or any of
its affiliates pursuant to the Registration Statement.
(E) With a view to making available to ▇▇▇▇▇▇▇▇ and its
affiliates the benefits of Rule 144 and Form S-3 under the Securities
Act, TRC covenants and agrees to: (A) make and keep available adequate
current public information (within the meaning of Rule 144(c))
concerning TRC, until the earlier of (x) the second (2nd) anniversary
of the issuance of the last Common Share to be issued or (y) such date
as all of the Common Shares shall have been resold by ▇▇▇▇▇▇▇▇ or any
of its affiliates; and (B) furnish to ▇▇▇▇▇▇▇▇ upon request, as long as
▇▇▇▇▇▇▇▇ owns any Common Shares, (x) a written statement by TRC that it
has complied with the reporting requirements of the Securities Act and
the Exchange Act, (y) a copy of the most recent annual or quarterly
report of
10
TRC, and (z) such other information as may be reasonably requested in
order to avail ▇▇▇▇▇▇▇▇ and its affiliates of Rule 144 or Form S-3 with
respect to such Common Shares.
(F) Notwithstanding anything else in this Section 5, if, at
any time during which a Prospectus is required to be delivered in
connection with the sale of any Common Shares, TRC determines in good
faith and upon the advice of its outside legal counsel that a
development has occurred or a condition exists as a result of which the
Registration Statement or the Prospectus contains a material
misstatement or omission, or that a material transaction in which TRC
is engaged or proposes to engage would require an immediate amendment
to the Registration Statement, a supplement to the Prospectus, or a
filing under the Exchange Act or other public disclosure of material
information and the disclosure of such transaction would be premature
or injurious to the consummation of the transaction, TRC will
immediately notify ▇▇▇▇▇▇▇▇ thereof by telephone and in writing. Upon
receipt of such notification, ▇▇▇▇▇▇▇▇ and its affiliates will
immediately suspend all offers and sales of Common Shares pursuant to
the Registration Statement. In such event, TRC will amend or supplement
the Registration Statement and the Prospectus or make such filings or
public disclosures as promptly as practicable and will take such other
steps as may be required to permit sales of the Common Shares
thereunder by ▇▇▇▇▇▇▇▇ and its affiliates in accordance with applicable
federal and state securities laws. TRC will promptly notify ▇▇▇▇▇▇▇▇
after it has determined in good faith that such sales have become
permissible in such manner and will promptly deliver copies of the
Registration Statement and the Prospectus (as so amended or
supplemented, if applicable) to ▇▇▇▇▇▇▇▇ in accordance with paragraphs
(c) and (d) of this Section 5. Notwithstanding the foregoing, (A) under
no circumstances shall TRC be entitled to exercise its right to suspend
sales of any Common Shares as provided in this Section 5(f) and
pursuant to the Registration Statement more than twice in any twelve
(12)-month period, (B) the period during which such sales may be
suspended (each a "BLACKOUT PERIOD") at any time shall not exceed
thirty (30) calendar days, and (C) no Blackout Period may commence less
than thirty (30) calendar days after the end of the preceding Blackout
Period.
(G) Upon the commencement of a Blackout Period pursuant to
this Section 5, ▇▇▇▇▇▇▇▇ will notify TRC of any contract to sell,
assign, deliver or otherwise transfer any Common Shares (each a "SALES
CONTRACT") that ▇▇▇▇▇▇▇▇ or any of its affiliates has entered into
before the commencement of such Blackout Period and that would require
delivery of such Common Shares during such Blackout Period, which
notice will contain the aggregate sale price and quantity of Common
Shares pursuant to such Sales Contract. If ▇▇▇▇▇▇▇▇ or any of its
affiliates are unable to consummate the sale of Common Shares pursuant
to the Sales Contract, TRC will promptly indemnify each ▇▇▇▇▇▇▇▇
Indemnified Party against any Proceeding that each ▇▇▇▇▇▇▇▇ Indemnified
Party may incur arising out of or in connection with ▇▇▇▇▇▇▇▇'▇ breach
or alleged breach of any such Sales Contract, and TRC shall reimburse
each ▇▇▇▇▇▇▇▇ Indemnified Party for any reasonable costs or expenses
(including reasonable legal fees) incurred by such party in
investigating or defending any such Proceeding.
(H) In addition to any other remedies available to ▇▇▇▇▇▇▇▇
under this Agreement or at law or equity, if the Registration Statement
has not been declared
11
effective by the Required Registration Date or such Registration
Statement is not available with respect to the Registrable Number at
any time on or after the Required Registration Date (except during a
Blackout Period permitted under Section 5(f))(each calendar day in
which the Registration Statement is unavailable under any of the
foregoing circumstances, a " REGISTRATION STATEMENT UNAVAILABILITY
DAY"), then each of the Conversion Prices (as defined in the
Certificate of Rights and Preferences and Subsequent Certificates of
Rights and Preferences) shall be permanently decreased by two and
one-half percent (2-1/2%) for each month or partial month, compounded
monthly, that such Registration Statement is not available with respect
to the Registrable Number.
(I) If the Registration Requirement is not satisfied at any
time during the Registration Period then the ▇▇▇▇▇▇▇▇ Rights Period
shall be extended by one (1) day for each day (or portion thereof) that
the Registration Requirement shall have not been satisfied.
6. Conversion and Redemption of Preferred Shares.
(A) Initial Preferred Shares and Additional Preferred Shares
are convertible and redeemable into Common Shares in accordance with
the terms and conditions set forth in Section 6 of the Certificate of
Rights and Preferences and Subsequent Certificates of Rights and
Preferences. The form of the "PREFERRED STOCK CONVERSION NOTICE" to be
executed and delivered by ▇▇▇▇▇▇▇▇ to TRC as specified therein is
attached hereto as Annex E, the form of the "PREFERRED STOCK CONVERSION
DELIVERY NOTICE" to be executed and delivered by TRC to ▇▇▇▇▇▇▇▇ as
specified therein is attached hereto as Annex F, the form of the "CALL
REDEMPTION NOTICE" to be executed and delivered by TRC to ▇▇▇▇▇▇▇▇ as
specified therein is attached hereto as Annex G, the form of the
"INITIAL REDEMPTION NOTICE" to be executed and delivered by ▇▇▇▇▇▇▇▇ to
TRC as specified therein is attached hereto as Annex H and the form of
the "FINAL REDEMPTION NOTICE" to be executed and delivered by TRC to
▇▇▇▇▇▇▇▇ as specified therein is attached hereto as Annex I.
(B) If the number of Common Shares issued and issuable under
this Agreement (including, but not limited to, all Common Shares issued
or issuable upon conversion or redemption of or as dividends upon
Series A Preferred Shares issued or that may become issuable under this
Agreement) on the date of any Preferred Stock Conversion Notice or on
any date on which ▇▇▇▇▇▇▇▇ is entitled to deliver a Holder Redemption
Notice (each a "▇▇▇▇▇▇▇▇ NOTICE DATE") would result in ▇▇▇▇▇▇▇▇
receiving more than seventeen and one-half percent (17.5%) of the
shares of Common Stock outstanding as of the date of this Agreement
(the "ORIGINAL NUMBER") and ▇▇▇▇▇▇▇▇'▇ receipt of twenty percent (20%)
or more of the Original Number would require the approval (the
"REQUIRED CONSENT") of the holders of Common Stock pursuant to the
listing requirements or rules of the NYSE, TRC (A) shall not issue
Common Shares (the "ISSUANCE BLOCKAGE") to the extent that the total
number of shares of Common Stock issued hereunder would exceed nineteen
and ninety-nine one-hundredths percent (19.99%) of the Original Number,
(B) shall notify TRC's stockholders of a stockholder meeting for the
purpose of voting on the Required Consent within twenty (20) Business
Days from and including the ▇▇▇▇▇▇▇▇ Notice Date, which meeting shall
be held on or before the seventieth (70th) calendar day after and
including the ▇▇▇▇▇▇▇▇ Notice Date, and
12
(C) shall otherwise use its best efforts to obtain, on or before the
seventieth (70th) calendar day after and including the ▇▇▇▇▇▇▇▇ Notice
Date, the Required Consent for the issuance of all Common Shares issued
or issuable under this Agreement (including, but not limited to, all
Common Shares issued or issuable upon conversion or redemption of
Series A Preferred Shares issued or issuable under this Agreement)
including, but not limited to, recommending to TRC's stockholders that
such stockholders give the Required Consent and not withdrawing such
recommendation.
(C) The aggregate number of Common Shares issuable upon
conversion or redemption of, or as dividends upon, the Series A
Preferred Shares, when combined with all shares of Common Stock then
beneficially owned (as determined pursuant to Exchange Act Rule 13d-3)
by ▇▇▇▇▇▇▇▇, shall not exceed the Maximum Number of shares of Common
Stock. The "MAXIMUM NUMBER" equals the sum of eight hundred thousand
(800,000) plus the Exercisable Number. The "EXERCISABLE NUMBER" is
initially zero (0) and thereafter may be increased upon expiration of a
sixty-five (65) day period (the "NOTICE PERIOD") after ▇▇▇▇▇▇▇▇
delivers a notice (a "65 DAY NOTICE") to TRC designating an aggregate
number of Common Shares in excess of the Maximum Number which shall be
issuable upon conversion or redemption of the Series A Preferred
Shares. A 65 Day Notice may be given at any time. From time to time
following the Notice Period, Common Stock may be issued to ▇▇▇▇▇▇▇▇ on
any Business Day for any quantity of Common Stock, such that the
aggregate number of shares of Common Stock issued hereunder is less
than or equal to the Maximum Number.
7. Representations and Warranties of ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ hereby
represents and warrants to TRC on each Closing Date:
(A) ▇▇▇▇▇▇▇▇ has been duly incorporated and is validly
existing under the laws of Bermuda.
(B) The execution, delivery and performance of this Agreement
by ▇▇▇▇▇▇▇▇ have been duly authorized by all requisite corporate action
and no further consent or authorization of ▇▇▇▇▇▇▇▇, its Board of
Directors or its stockholders is required. This Agreement has been duly
executed and delivered by ▇▇▇▇▇▇▇▇ and, when duly authorized, executed
and delivered by TRC, will be a valid and binding agreement enforceable
against ▇▇▇▇▇▇▇▇ in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and
to general principles of equity.
(C) ▇▇▇▇▇▇▇▇ understands that no United States federal or
state agency has passed on, reviewed or made any recommendation or
endorsement of the Investment Securities.
(D) ▇▇▇▇▇▇▇▇ is an "accredited investor" as such term is
defined in Regulation D promulgated under the Securities Act.
(E) ▇▇▇▇▇▇▇▇ is purchasing the Investment Securities for its
own account for investment only and not with a view to, or for resale
in connection with, the public sale or
13
distribution thereof in the United States, except pursuant to sales
registered under the Securities Act or exempt from such registration.
(F) ▇▇▇▇▇▇▇▇ understands that the Investment Securities are
being or will be offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal
securities laws and that TRC is relying on the truth and accuracy of,
and ▇▇▇▇▇▇▇▇'▇ compliance with, the representations, warranties,
agreements, acknowledgments and understandings of ▇▇▇▇▇▇▇▇ set forth
herein in order to determine the availability of such exemptions and
the eligibility of ▇▇▇▇▇▇▇▇ to acquire the Investment Securities.
(G) ▇▇▇▇▇▇▇▇ is able to bear the economic risk of an
investment in the Investment Securities and, at the present time, is
able to afford a complete loss of such investment.
8. Right of First Offer. Subject to the terms and conditions specified
in this Section 8, TRC hereby grants to (i) ▇▇▇▇▇▇▇▇, (ii) any affiliate or
wholly-owned subsidiary of ▇▇▇▇▇▇▇▇, or (iii) any of ▇▇▇▇▇▇▇▇'▇ designees which,
other than in the case of an assignment of Investment Securities or this
Agreement in accordance with Section 20(b) hereof, have been approved by TRC
(collectively, the "FIRST OFFER STOCKHOLDERS"), a right of first offer with
respect to future sales by TRC of its Offered Shares (as hereinafter defined).
The term "OFFERED SHARES" means any shares of, or securities convertible into,
exercisable or exchangeable for, or whose value is derived in whole or in part
from, any shares of any class of its capital stock. At any time within the
thirty (30) Business Days after and excluding any Closing Date that TRC has a
bona fide intention to offer to sell to a third party any Offered Shares, TRC
shall first negotiate with the First Offer Stockholders (and, for the sake of
clarity, in the case of a ▇▇▇▇▇▇▇▇ Notice delivered at such time as TRC shall be
in the process of offering, negotiating to sell or seeking indications of
interest to purchase Offered Shares, TRC shall then immediately cease such
activities and shall negotiate with the First Offer Stockholders) to sell such
Offered Shares in accordance with the following provisions:
(A) TRC shall deliver a notice in accordance with Section 19
of this Agreement (an "OFFER NOTICE") to ▇▇▇▇▇▇▇▇ stating (i) its bona
fide intention to offer such Offered Shares, (ii) the number of such
Offered Shares proposed to be offered, (iii) the price and terms upon
which it proposes to offer such Offered Shares, and (iv) to the extent
available, the identity of the proposed purchasers of such Offered
Shares and such purchasers' affiliates and associates.
(B) For ten (10) Business Days after delivery of the Offer
Notice, TRC shall negotiate exclusively and in good faith with the
First Offer Stockholders with respect to the proposed sale of Offered
Shares and TRC shall not enter into or continue negotiations with,
respond to, furnish information to, or consummate any transaction with
any person or entity concerning any transaction regarding the proposed
sale of Offered Shares.
(C) Within ten (10) Business Days after delivery of the Offer
Notice, the First Offer Stockholders may elect by delivering a written
notice to TRC, to purchase or obtain, at the price and on the terms
specified in the Offer Notice (or on terms that are
14
substantially similar to, or more favorable to TRC than, the terms
contained in the Offer Notice)(the "Specified Terms"), any or all of
the Offered Shares. If the Offer Notice specifies consideration other
than cash is to be paid for the Offered Shares, the First Offer
Stockholders may, at their sole option, (if they choose to purchase
such Offered Shares) deliver either of (i) such consideration or (ii)
cash equal to the fair market value of such consideration on the date
and at the time such offer is accepted. The closing of any such
transaction shall occur not later than twenty (20) Business Days after
TRC receives written notice of such election. If (i) the First Offer
Stockholders do not so elect within ten (10) Business Days after
delivery of the Offer Notice or, (ii) having elected to so purchase or
obtain any or all of the Offered Shares at the Specified Terms,
nonetheless do not, in the reasonable good faith judgment of TRC,
present to TRC the same benefit, from a non-financial point of view, as
that presented by an alternative investor identified in the Offer
Notice to whom TRC proposes to sell and to whom TRC in fact sells the
Offered Shares at the Specified Terms (viz., in terms of the benefit to
TRC of being associated with such investor either as a result of such
investor's identity or such investor's possible strategic value to
TRC), then, in the case of clause (i), TRC may sell the Offered Shares
to any person at the price and on terms that are no less favorable to
TRC than the Specified Terms and, in the case of clause (ii) above, TRC
may sell the Offered Shares only to the investor identified in the
Offer Notice at the price and on terms that are no less favorable to
TRC than the Specified Terms, in each case within sixty (60) calendar
days after the date of the Offer Notice.
(D) The right of first offer in this Section 8 shall not
apply, (for the sake of clarity, subject to the terms of the
Certificate of Rights and Preferences and any Subsequent Certificates
of Rights and Preferences), to any issuance or sale of the following
securities:
(i) Such Offered Shares as are issued (x) as
consideration for the acquisition of at least fifty percent
(50%) of the voting capital stock or assets of a bona fide
operating company in a similar or complementary line of
business to that of TRC, as determined reasonably and in good
faith by TRC's Board of Directors whether through purchase,
merger, consolidation, tender offer or otherwise, provided
that the purpose of TRC entering into any such transaction
shall not be to raise capital, directly or indirectly, or
otherwise to avoid the requirements of this Section 8 or (y)
in connection with any bona fide lease financing, in
connection with any joint venture where none of the parties to
such joint venture is a financial investor, or in
consideration of license rights or similar rights to
proprietary technology;
(ii) Common Stock issued pursuant to any stock split,
dividend or distribution payable in additional shares of
Common Stock or other securities or rights convertible into,
or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock without payment
of any consideration by such holder;
(iii) Common Stock issuable or issued to employees,
consultants or directors of TRC directly or pursuant to a
stock option plan, employee stock
15
purchase plan or restricted stock plan, or other similar
arrangements related to compensation for services in effect on
the date of this Agreement or approved by TRC's stockholders,
in each case in the ordinary course of business consistent
with TRC's past practice;
(iv) Common Stock issued upon conversion of warrants
and options in existence on the date hereof; or
(v) Common Stock issued as dividends on, or upon
conversion or redemption of Series A Preferred Shares.
(vi) Common Stock issued in a bona fide firm
commitment underwritten offering to the public with net
proceeds of at least twenty-five million dollars ($25,000,000)
to TRC, after underwriter's discounts or commissions and other
fees or expenses.
9. Covenants of TRC. TRC covenants and agrees with ▇▇▇▇▇▇▇▇ as follows:
(A) For so long as ▇▇▇▇▇▇▇▇ owns or has the right to purchase
any Investment Securities, and for a period of one (1) year thereafter,
TRC will (i) maintain the eligibility of the Common Stock for listing
on the New York Stock Exchange and (ii) regain the eligibility of the
Common Stock for listing or quotation on all markets and exchanges
including the New York Stock Exchange, in the event that the Common
Stock is delisted by the New York Stock Exchange or any other
applicable market or exchange; and (iii) cause the representations and
warranties contained in Section 4 to be and remain true and correct,
except those representations and warranties that speak as of a
particular date, which shall be true and correct as of such date.
(B) TRC will provide ▇▇▇▇▇▇▇▇ with a reasonable opportunity,
which shall not be less than two (2) full Business Days, to review and
comment on any public disclosure by TRC of information regarding this
Agreement and the transactions contemplated hereby, before such public
disclosure. Beginning on the date hereof and for so long as ▇▇▇▇▇▇▇▇
owns or has the right to purchase any Investment Securities and for a
period of ninety (90) calendar days thereafter, TRC will promptly
notify ▇▇▇▇▇▇▇▇ immediately following any press release or other
information disseminated to any stockholder, analyst, or member of the
media.
(C) As soon as such information is available (but in no event
later than two (2) weeks after the Closing Date), TRC shall deliver to
▇▇▇▇▇▇▇▇ a written notice stating the Original Number.
(D) TRC will make all filings required by law with respect to
the transactions contemplated hereby.
(E) TRC will comply with the terms and conditions of the
Series A Preferred Shares as set forth in the Certificate of Rights and
Preferences and Subsequent Certificates of Rights and Preferences, and
will not amend the Certificate of Rights and
16
Preferences or Subsequent Certificates of Rights and Preferences
without the required consent of the holders of Series A Preferred
Shares.
(F) For so long as ▇▇▇▇▇▇▇▇ holds any Investment Securities,
on or promptly following the date of filing of each of its quarterly
reports on Form 10-Q with the SEC, TRC shall deliver to ▇▇▇▇▇▇▇▇ a copy
of the review report delivered to TRC relating to the final
consolidated unaudited financial statements contained therein, prepared
by PricewaterhouseCoopers LLP, or another nationally recognized
accounting firm, in accordance with Statements of Auditing Standard No.
71; from and after such time as ▇▇▇▇▇▇▇▇ shall have converted 7,500 or
more shares of Series A Preferred Shares, ▇▇▇▇▇▇▇▇ shall pay 50% of
TRC's cost of obtaining such reports, up to a maximum of $5,000 per
year.
(G) TRC shall use commercially reasonable efforts to cause the
Common Shares to be eligible for book-entry transfer through The
Depository Trust Company (or any successor thereto) as soon as
practicable after the date of this Agreement and thereafter to use
commercially reasonable efforts to maintain such eligibility.
(H) TRC shall at all times reserve for issuance such number of
its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all Series A Preferred Shares and to satisfy
its delivery obligation upon such conversion and to effect the
redemption of the Series A Preferred Shares.
(I) TRC shall deliver a notice (an "INCREASE NOTICE") stating
the increase, if any, in the aggregate number of shares of Common Stock
outstanding as of the last day of the preceding month over the number
outstanding as of the last day of the second preceding month, or in the
case of the last day of the month immediately following the Initial
Closing Date, the number of shares outstanding specified in Section
4(l), provided that in any month in which there is an increase of less
than 10,000 shares (as such number may be adjusted to reflect any
stock-splits, etc) TRC need not deliver any such notice and shall
instead carry-over the amount of such increase into succeeding months
until such amount is reflected in a notice delivered hereunder. Unless
expressly waived by ▇▇▇▇▇▇▇▇, TRC shall deliver an Increase Notice to
▇▇▇▇▇▇▇▇ on or before the tenth (10th) day of every calendar month from
and including the Initial Closing Date.
(J) TRC shall, within one (1) Business Day after and excluding
each Closing Date publicly distribute a press release disclosing the
material terms of such Initial Closing or Subsequent Closing and shall,
within three (3) Business Days after and excluding each Closing Date
file a report with the SEC on Form 8-K with respect to the same.
10. Consolidation, Merger, Etc. In case TRC shall be a party to any
transaction which results in a Change in Control (as defined in the Certificate
of Rights and Preferences or Subsequent Certificates of Rights and Preferences),
▇▇▇▇▇▇▇▇ and its assigns shall have the rights set forth in the Certificate of
Rights and Preferences and Subsequent Certificates of Rights and Preferences
regarding Changes in Control in addition to the rights contained in this
Agreement. "ACQUIRER" means, in connection with any Change in Control, the
continuing or surviving
17
corporation of a consolidation or merger with TRC (if other than TRC), the
transferee of all or substantially all of the properties or assets of the
Company, the corporation consolidating with or merging into TRC in a
consolidation or merger in connection with which the Common Stock is changed
into or exchanged for stock or other securities of any other person or cash or
any other property, the entity or group acting in concert acquiring or
possessing the power to cast the majority of the eligible votes at a meeting of
the Company's stockholders at which directors are elected or, in the case of a
capital reorganization or reclassification, TRC. TRC agrees that it will not
enter into an agreement with an Acquirer resulting in a Change in Control unless
such agreement expressly obligates the Acquirer to assume all of TRC's
obligations under this Agreement, the Certificate of Rights and Preferences and
the Subsequent Certificates of Rights and Preferences including, but not limited
to, the dividend, liquidation, conversion, exercise, redemption, voting and
other provisions regarding the Series A Preferred Shares and the ▇▇▇▇▇▇▇▇ Rights
contained herein and therein. Without limiting the foregoing, all unexercised
and unexpired ▇▇▇▇▇▇▇▇ Rights shall automatically be converted into equivalent
rights with respect to the Acquirer including, but not limited to, the right to
receive the equivalent of the Additional Preferred Shares issuable upon the
exercise of such rights and to receive the consideration for such Additional
Preferred Shares set forth in Section 6(F) of the Subsequent Certificate of
Rights and Preferences governing such series of Additional Preferred Shares. On
or before the date an agreement is entered into with an Acquirer resulting in a
Change in Control, the Company shall deliver to ▇▇▇▇▇▇▇▇ written notice that the
Acquirer has assumed such obligations. TRC shall provide ▇▇▇▇▇▇▇▇ with written
notice of any proposed transaction resulting in a Change in Control as soon as
the existence of such proposed transaction is made public by any person. TRC
shall notify ▇▇▇▇▇▇▇▇ promptly of any material developments with respect to such
transaction, including advance notice at least ten (10) Business Days before the
date such transaction is expected to become effective (provided, however, in the
case of such information which TRC reasonably believes, after consultation with
outside counsel, would be required to be publicly disseminated if disclosed to
▇▇▇▇▇▇▇▇ absent a confidentiality agreement, that TRC shall so notify ▇▇▇▇▇▇▇▇
only after ▇▇▇▇▇▇▇▇'▇ delivery of a notice indicating its agreement to keep such
information confidential).
11. Covenants of ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ hereby covenants and agrees with
TRC that:
(A) Neither ▇▇▇▇▇▇▇▇, nor any of its affiliates, will at any
time offer or sell any Investment Securities other than pursuant to
registration under the Securities Act or pursuant to an available
exemption therefrom.
(B) Neither ▇▇▇▇▇▇▇▇, nor any of its affiliates, shall engage
in short sales of TRC's securities.
12. Legend. Subject to Section 5, ▇▇▇▇▇▇▇▇ understands that the
certificates or other instruments representing the Investment
Securities shall bear a restrictive legend composed of exactly the
following words (and a stop transfer order may be placed against
transfer of such certificates or other instruments):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THE
18
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED UNLESS (1) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, OR (2)
THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR ANOTHER APPLICABLE
EXEMPTION UNDER THE SECURITIES ACT.
The legend set forth above shall be removed and TRC shall issue a
certificate without such legend to any holder of Investment Securities if,
unless otherwise required by state securities laws, such shares are sold
pursuant to an effective Registration Statement under the Securities Act, Rule
144 or another applicable exemption from registration.
13. Conditions Precedent to ▇▇▇▇▇▇▇▇'▇ Obligations. The obligations of
▇▇▇▇▇▇▇▇ hereunder are subject to the performance by TRC of its obligations
hereunder and to the satisfaction of the following additional conditions
precedent, unless expressly waived in writing by ▇▇▇▇▇▇▇▇:
(A) On each Closing Date, (i) the representations and
warranties made by TRC in this Agreement shall be true and correct;
(ii) TRC shall have complied fully with all of the covenants and
agreements (other than those referred to in clause (iii) of this
subsection (a)) in this Agreement, (iii) TRC shall have complied fully
in all material respects with all of the covenants and agreements in
Sections 9(b), 9(f), 9(g) and 9(i) of this Agreement; and (iv) ▇▇▇▇▇▇▇▇
shall have received a certificate of the Chief Executive Officer and
the Chief Financial Officer of TRC dated such date and to such effect.
(B) On each Closing Date, TRC shall have delivered to ▇▇▇▇▇▇▇▇
opinions of (1) Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP (or other counsel
reasonably satisfactory to ▇▇▇▇▇▇▇▇), dated the date of delivery,
confirming in substance the matters covered in paragraphs (a), (b),
(c), (d)(i) and (ii), (e), (f)(but not, other than as agreed to by the
parties, (f)(i)(C)), (g) and (k) of Section 4 hereof and to the effect
that the offer and sale of the Investment Securities to ▇▇▇▇▇▇▇▇
hereunder do not require registration under the Securities Act and (2)
the Company's general counsel, dated the date of delivery, confirming
in substance the matters covered in paragraphs (d)(iii), and (f)(i)(C)
and (l) of Section 4 hereof.
(C) On the Initial Closing Date, ▇▇▇▇▇▇▇▇ shall have received
a copy of a letter from PricewaterhouseCoopers LLP to TRC to the effect
that, as of such date, it consents to the inclusion in this Agreement
of the Auditor Report. On each Subsequent Closing Date, ▇▇▇▇▇▇▇▇ shall
receive a copy of a report of PricewaterhouseCoopers LLP, together with
the accompanying consolidated financial statement and schedules of TRC
and results of TRC's operations and cash flows, as such report appears
in the most recent Form 10-K filed by TRC with the SEC and a letter
from PricewaterhouseCoopers LLP to TRC to the effect that, as of such
date, it consents to the inclusion in this Agreement of such report.
(D) On the Initial Closing Date, TRC shall have submitted to
the New York Stock Exchange a complete listing application in respect
of the Registrable Number and
19
within 60 days thereafter the Registrable Number shall be duly listed
and admitted for trading on the New York Stock Exchange.
(E) On each Subsequent Closing Date all of the Common Shares
shall be registered and freely tradable.
(F) On or before each Subsequent Closing Date, TRC shall have
filed with the Delaware Secretary of State a Subsequent Certificate of
Rights and Preferences, with terms and conditions of the applicable
series of Additional Preferred Shares as required by this Agreement.
14. Conditions Precedent to TRC's Obligations. The obligations of TRC
hereunder are subject to the performance by ▇▇▇▇▇▇▇▇ of its obligations
hereunder and to the satisfaction (unless expressly waived in writing by TRC) of
the additional conditions precedent that, on each Closing Date: (i) the
representations and warranties made by ▇▇▇▇▇▇▇▇ in this Agreement shall be true
and correct; (ii) ▇▇▇▇▇▇▇▇ shall have complied fully with all the covenants and
agreements in this Agreement; (iii) in respect of the foregoing clauses (i) and
(ii) only, TRC shall have received on each such date a certificate of an
appropriate officer of ▇▇▇▇▇▇▇▇ dated such date and to such effect, (iv) no (x)
statute, rule, regulation or executive order or (y) decree, ruling or injunction
which by its terms expressly binds TRC shall have been promulgated by any court
or governmental authority of competent jurisdiction that prohibits the
consummation of the transactions contemplated by this Agreement, and (v) solely
in respect of the obligations under any particular Certificate of Rights and
Preferences or Subsequent Certificates of Rights and Preferences, no decree,
ruling or injunction which by its terms expressly binds TRC shall have been
promulgated by any court or governmental authority of competent jurisdiction
that prohibits the consummation of the transactions contemplated by such
Certificate of Rights and Preferences or Subsequent Certificates of Rights and
Preferences.
15. Fees and Expenses. Each of ▇▇▇▇▇▇▇▇ and TRC agrees to pay its own
expenses incident to the performance of its obligations hereunder, including,
but not limited to the fees, expenses and disbursements of such party's counsel,
except as is otherwise expressly provided in this Agreement.
16. Non-Performance.
(A) If TRC, at any time, shall fail to deliver the Investment
Securities to ▇▇▇▇▇▇▇▇ required to be delivered pursuant to this
Agreement, in accordance with the terms and conditions of this
Agreement, for any reason other than the failure of any condition
precedent to TRC's obligations hereunder or the failure by ▇▇▇▇▇▇▇▇ to
comply with its obligations hereunder, then TRC shall (without
limitation to ▇▇▇▇▇▇▇▇'▇ other remedies at law or in equity):
(i) indemnify and hold ▇▇▇▇▇▇▇▇ harmless against any
loss, claim or damage to which it is entitled under law or in
equity arising from or as a result of such failure by TRC; and
(ii) reimburse ▇▇▇▇▇▇▇▇ for all of its reasonable
out-of-pocket expenses, including fees and disbursements of
its counsel, incurred by ▇▇▇▇▇▇▇▇ in
20
connection with this Agreement and the transactions contemplated herein
and therein.
17. Indemnification.
(A) INDEMNIFICATION OF ▇▇▇▇▇▇▇▇. TRC hereby agrees to
indemnify ▇▇▇▇▇▇▇▇ and each of its officers, directors, employees,
consultants, agents, attorneys, accountants, and affiliates and each
person that controls (within the meaning of Section 20 of the Exchange
Act) any of the foregoing persons (each a "▇▇▇▇▇▇▇▇ INDEMNIFIED PARTY")
against any claim, demand, action, liability, damages, loss, cost or
expense (including, without limitation, reasonable legal fees and
expenses incurred by such ▇▇▇▇▇▇▇▇ Indemnified Party in investigating
or defending any such Proceeding) (a "PROCEEDING"), that it may incur
in connection with any of the transactions contemplated hereby arising
out of or based upon:
(i) any untrue or alleged untrue statement of a
material fact in a SEC Filing from and after September 30,
1998, by TRC or any of its affiliates or any person acting on
its or their behalf or omission or alleged omission to state
therein any material fact necessary in order to make the
statements, in the light of the circumstances under which they
were made, not misleading by TRC or any of its affiliates or
any person acting on its or their behalf; provided that with
respect to the items disclosed in any Schedule to Section 4
(other than Schedule 4(l)), the items disclosed therein shall
not, to the extent that the consequences thereof have been so
disclosed, constitute untrue or alleged untrue statements of a
material fact;
(ii) any of the representations or warranties made by
TRC herein being untrue or incorrect at the time such
representation or warranty was made; and
(iii) any breach or non-performance by TRC of any of
its covenants, agreements or obligations under this Agreement,
the Certificate of Rights and Preferences and Subsequent
Certificates of Rights and Preferences;
provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of, or is based upon, the gross
negligence or willful misconduct of ▇▇▇▇▇▇▇▇ in connection therewith.
(B) INDEMNIFICATION OF TRC. ▇▇▇▇▇▇▇▇ hereby agrees to
indemnify TRC and each of its officers, directors, employees,
consultants, agents, attorneys, accountants, and affiliates and each
person that controls (within the meaning of Section 20 of the Exchange
Act) any of the foregoing persons against any Proceeding, that it may
incur in connection with any of the transactions contemplated hereby
arising out of or based upon:
(i) any untrue or alleged untrue statement of a
material fact included in an SEC filing by TRC with the
express written consent of ▇▇▇▇▇▇▇▇
21
therefor by ▇▇▇▇▇▇▇▇ or any of its affiliates or any person
acting on its or their behalf or omission or alleged omission
to state any such material fact necessary in order to make the
statements, in the light of the circumstances under which they
were made, not misleading by ▇▇▇▇▇▇▇▇ or any of its affiliates
or any person acting on its or their behalf;
(ii) any of the representations or warranties made by
▇▇▇▇▇▇▇▇ herein being untrue or incorrect at the time such
representation or warranty was made; and
(iii) any breach or non-performance by ▇▇▇▇▇▇▇▇ of
any of its covenants, agreements or obligations under this
Agreement;
provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of, or is based upon, the gross
negligence or willful misconduct of TRC in connection therewith.
(C) CONDUCT OF CLAIMS.
(i) Whenever a claim for indemnification shall arise under
this Section 17, the party seeking indemnification (the "INDEMNIFIED
PARTY"), shall notify the party from whom such indemnification is
sought (the "INDEMNIFYING PARTY") in writing of the Proceeding and the
facts constituting the basis for such claim in reasonable detail;
(ii) Such Indemnifying Party shall have the right to retain
the counsel of its choice in connection with such Proceeding and to
participate at its own expense in the defense of any such Proceeding;
provided, however, that counsel to the Indemnifying Party shall not
(except with the consent of the relevant Indemnified Party) also be
counsel to such Indemnified Party. In no event shall the Indemnifying
Party be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances; and
(iii) No Indemnifying Party shall, without the prior written
consent of the Indemnified Parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever in respect of which indemnification could be
sought under this Section 17 unless such settlement, compromise or
consent (A) includes an unconditional release of each Indemnified Party
from all liability arising out of such litigation, investigation,
proceeding or claim and (B) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of
any Indemnified Party.
22
18. Survival of the Representations, Warranties, etc. The respective
representations, warranties, and agreements made herein by or on behalf of the
parties hereto shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or any
officer, director or employee of, or person controlling or under common control
with, such party and will survive delivery of and payment for any Investment
Securities issuable hereunder, until the seventh anniversary of the Initial
Closing Date.
19. Notices. All communications hereunder shall be in writing and
delivered as set forth below.
(A) If sent to ▇▇▇▇▇▇▇▇, all communications shall be deemed
delivered: if delivered by hand, on the day received by ▇▇▇▇▇▇▇▇; if
sent by reputable overnight courier, on the next Business Day; and if
transmitted by facsimile to ▇▇▇▇▇▇▇▇, on the date transmitted (provided
such facsimile is later confirmed), in each case to the following
address (unless otherwise notified in writing of a substitute address):
▇▇▇▇▇▇▇▇ International, Ltd.
c/o A. S. & K. Services Ltd.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇
Bermuda
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Corporate Administrator
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ Asset Management, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which copy shall not constitute notice) to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If sent to TRC, all communications shall be deemed
delivered: if delivered by hand, on the day received by ▇▇▇▇▇▇▇▇; if
sent by reputable overnight courier, on the next Business Day; and if
or transmitted by facsimile to TRC, on the date transmitted
23
(provided such facsimile is later confirmed), in each case to the
following address (unless otherwise notified in writing of a substitute
address):
TRC Companies, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel and Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which copy shall not constitute notice) to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To the extent that any funds shall be delivered to TRC by wire transfer, unless
otherwise instructed by TRC, such funds should be delivered in accordance with
the following wire instructions:
TRC Companies, Inc.
Account Number: 005313-2695
ABA Number: ▇▇▇▇▇▇▇▇▇
Bank: Fleet Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Account Name: TRC Companies, Inc. -- Concentration Account
20. Miscellaneous.
(A) The parties may execute and deliver this Agreement as a
single document or in any number of counterparts, manually, by
facsimile or by other electronic means, including contemporaneous
xerographic or electronic reproduction by each party's respective
attorneys. Each counterpart shall be an original, but a single document
or all counterparts together shall constitute one instrument that shall
be the agreement. This Agreement shall become effective when each party
executes and delivers this Agreement to the other party.
(B) This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors and
assigns and, with respect to Section 17 hereof, shall inure to the
benefit of their respective officers, directors, employees, agents,
affiliates and controlling persons, and no other person shall have any
right or obligation
24
hereunder. TRC may not assign this Agreement. Notwithstanding anything
to the contrary in this Agreement, ▇▇▇▇▇▇▇▇ may assign, pledge,
hypothecate or transfer any of the rights and associated obligations
contemplated by this Agreement (including, but not limited to, the
Series A Preferred Shares and the Common Shares), in whole or in part,
at its sole discretion (including, but not limited to, assignments,
pledges, hypothecations and transfers in connection with financing or
hedging transactions with respect to this Agreement, the Series A
Preferred Shares and the Common Shares), provided that any such
assignment, pledge, hypothecation or transfer must comply with
applicable federal and state securities laws and provided, further,
that ▇▇▇▇▇▇▇▇ may not knowingly make any assignment or transfer of this
Agreement, the Series A Preferred Shares or the Common Shares to any of
the entities set forth on Schedule 20(b) without the consent of TRC. No
person acquiring Common Stock from ▇▇▇▇▇▇▇▇ pursuant to a public market
purchase shall thereby obtain any of the rights contained in this
Agreement. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and
oral, between the parties hereto with respect to the subject matter of
this Agreement. Except as provided in this Section 20(b), this
Agreement is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
(C) This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, and each
of the parties hereto hereby submits to the non-exclusive jurisdiction
of any state or federal court in the Southern District of New York and
any court hearing any appeal therefrom, over any suit, action or
proceeding against it arising out of or based upon this Agreement (a
"RELATED PROCEEDING"). Each of the parties hereto hereby waives any
objection to any Related Proceeding in such courts whether on the
grounds of venue, residence or domicile or on the ground that the
Related Proceeding has been brought in an inconvenient forum.
(D) Each party represents and acknowledges that, in the
negotiation and drafting of this Agreement and the other instruments
and documents required or contemplated hereby, it has been represented
by and relied upon the advice of counsel of its choice. Each party
hereby affirms that its counsel has had a substantial role in the
drafting and negotiation of this Agreement and such other instruments
and documents. Therefore, each party agrees that no rule of
construction to the effect that any ambiguities are to be resolved
against the drafter shall be employed in the interpretation of this
Agreement and such other instruments and documents.
(E) Without prejudice to other rights or remedies hereunder
(including any specified interest rate), and except as otherwise
expressly set forth herein, interest shall be due on any amount that is
due pursuant to this Agreement and has not been paid when due,
calculated for the period from and including the due date to but
excluding the date on which such amount is paid at the prime rate of
U.S. money center banks as published in The Wall Street Journal (or if
The Wall Street Journal does not exist or publish such information,
then the average of the prime rates of three U.S. money center banks
agreed to by the parties) plus two percent (2%).
25
(F) ▇▇▇▇▇▇▇▇ and TRC stipulate that the remedies at law of the
parties hereto in the event of any default or threatened default by
either party in the performance of or compliance with any of the terms
of this Agreement, the Certificate of Rights and Preferences and the
Subsequent Certificates of Rights and Preferences are not and will not
be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
(G) Any and all remedies set forth in this Agreement, the
Certificate of Rights and Preferences and Subsequent Certificates of
Rights and Preferences: (i) shall be in addition to any and all other
remedies ▇▇▇▇▇▇▇▇ or TRC may have at law or in equity, (ii) shall be
cumulative, and (iii) may be pursued successively or concurrently as
each of ▇▇▇▇▇▇▇▇ and TRC may elect. The exercise of any remedy by
▇▇▇▇▇▇▇▇ or TRC shall not be deemed an election of remedies or preclude
▇▇▇▇▇▇▇▇ or TRC, respectively, from exercising any other remedies in
the future.
(H) TRC agrees that the parties have negotiated in good faith
and at arms' length concerning the transactions contemplated herein,
and that ▇▇▇▇▇▇▇▇ would not have agreed to the terms of this Agreement
without each and every of the terms, conditions, protections and
remedies provided herein and the Certificate of Rights and Preferences.
Except as specifically provided otherwise in this Agreement, the
Certificate of Rights and Preferences and the Subsequent Certificates
of Rights and Preferences, TRC's obligations to indemnify and hold
▇▇▇▇▇▇▇▇ harmless in accordance with Section 17 of this Agreement are
obligations of TRC that TRC promises to pay to ▇▇▇▇▇▇▇▇ when and if
they become due. TRC shall record any such obligations on its books and
records in accordance with U.S. generally accepted accounting
principles.
(I) This Agreement may be amended, modified or supplemented in
any and all respects, but only by a written instrument signed by
▇▇▇▇▇▇▇▇ and TRC expressly stating that such instrument is intended to
amend, modify or supplement this Agreement.
(J) Each of the parties will cooperate with the others and use
its best efforts to prepare all necessary documentation, to effect all
necessary filings, to obtain all necessary permits, consents, approvals
and authorizations of all governmental bodies and other third parties,
and to do all other things necessary to consummate the transactions
contemplated by this Agreement.
(K) For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires: (i) the
terms defined in this Agreement have the meanings assigned to them in
this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender
and neuter gender of such term; (ii) accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with
U.S. generally accepted accounting principles; (iii) references herein
to "Articles," "Sections," "Subsections," "Paragraphs" and other
subdivisions without reference to a document are to designated
Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement, unless the
26
context shall otherwise require; (iv) a reference to a Subsection
without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions; (v) the words "herein," "hereof," "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular provision; (vi) the term "include" or "including" shall
mean without limitation; (vii) the table of contents to this Agreement
and all section titles or captions contained in this Agreement or in
any Schedule or Exhibit annexed hereto or referred to herein are for
convenience only and shall not be deemed a part of this Agreement and
shall not affect the meaning or interpretation of this Agreement;
(viii) any agreement, instrument or statute defined or referred to
herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statues and references to all
attachments thereto and instruments incorporated therein; and (ix)
references to a person are also to its permitted successors and assigns
and, in the case of an individual, to his or her heirs and estate, as
applicable.
(L) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or
public policy all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. If the final
judgment of a court of competent jurisdiction or other authority
declares that any term or provision hereof is invalid, void or
unenforceable, the parties agree that the court making such
determination shall have the power to reduce the scope, duration, area
or applicability of the term or provision, to delete specific words or
phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or
unenforceable term or provision. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely
as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
(M) Time shall be of the essence in this Agreement.
(N) All dollar ($) amounts set forth herein, in the
Certificate of Rights and Preferences and in each Subsequent
Certificate of Rights and Preferences refer to United States dollars.
All payments hereunder and thereunder shall be made in lawful currency
of the United States of America.
(O) Notwithstanding anything herein to the contrary, all
measurements and references related to share prices and share numbers
herein shall be, in each instance, appropriately adjusted for stock
splits, recombinations, stock dividends and the like.
[SIGNATURE PAGE FOLLOWS]
27
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement, all as of the day and year first above written.
TRC COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ INTERNATIONAL, LTD., by its duly
authorized investment advisor,
▇▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Deputy Chief Executive Officer
By: /s/ ▇▇▇▇▇ Zayfort
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Name: ▇▇▇▇▇ Zayfort
Title: Executive Vice President
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TABLE OF CONTENTS
1. Purchase and Sale...........................................................................................1
2. Initial Closing.............................................................................................3
3. Subsequent Closing..........................................................................................4
4. Representations and Warranties of TRC.......................................................................4
5. Registration Provisions.....................................................................................9
6. Conversion and Redemption of Preferred Shares..............................................................12
7. Representations and Warranties of ▇▇▇▇▇▇▇▇.................................................................13
8. Right of First Offer.......................................................................................14
9. Covenants of TRC...........................................................................................16
10. Consolidation, Merger, Etc.................................................................................17
11. Covenants of ▇▇▇▇▇▇▇▇......................................................................................18
12. Legend.....................................................................................................18
13. Conditions Precedent to ▇▇▇▇▇▇▇▇'▇ Obligations.............................................................19
14. Conditions Precedent to TRC's Obligations..................................................................20
15. Fees and Expenses..........................................................................................20
16. Non-Performance............................................................................................20
17. Indemnification............................................................................................21
18. Survival of the Representations, Warranties, etc...........................................................23
19. Notices....................................................................................................23
20. Miscellaneous..............................................................................................24
ANNEXES
FORM OF CERTIFICATE OF RIGHTS AND
PREFERENCES OF CLASS B-1 CUMULATIVE CONVERTIBLE
PREFERRED STOCK OF TRC COMPANIES, INC...........................................................................A-1
FORM OF ▇▇▇▇▇▇▇▇ NOTICE.........................................................................................B-1
FORM OF DELIVERY NOTICE.........................................................................................C-1
AUDITOR REPORT..................................................................................................D-1
FORM OF PREFERRED STOCK CONVERSION NOTICE.......................................................................E-1
FORM OF PREFERRED STOCK CONVERSION DELIVERY NOTICE..............................................................F-1
FORM OF CALL REDEMPTION NOTICE..................................................................................G-1
FORM OF HOLDER REDEMPTION NOTICE................................................................................H-1
FORM OF FINAL REDEMPTION NOTICE.................................................................................I-1
AUDITOR REPORT............................................................................................EXHIBIT 1
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INDEX OF DEFINED TERMS
"hereunder"......................................................................................................27
65 Day Notice....................................................................................................13
accredited investor..............................................................................................13
Additional Issuance Price.........................................................................................4
Additional Preferred Shares.......................................................................................1
Agreement.........................................................................................................1
Auditor Report....................................................................................................8
Blackout Period..................................................................................................11
Business Day......................................................................................................3
Certificate of Rights and Preferences.............................................................................1
claim.............................................................................................................8
Common Shares.....................................................................................................2
Common Stock......................................................................................................1
debt..............................................................................................................8
Exchange Act......................................................................................................3
Exercisable Number...............................................................................................13
First Offer Stockholders.........................................................................................14
▇▇▇▇▇▇▇▇..........................................................................................................1
▇▇▇▇▇▇▇▇ Indemnified Party.......................................................................................21
▇▇▇▇▇▇▇▇ Notice...................................................................................................2
▇▇▇▇▇▇▇▇ Notice Date.............................................................................................12
▇▇▇▇▇▇▇▇ Rights...................................................................................................1
herein...........................................................................................................27
hereof...........................................................................................................27
hereunder........................................................................................................27
Increase Notice..................................................................................................17
Indemnified Party................................................................................................22
Indemnifying Party...............................................................................................22
Initial Closing...................................................................................................1
Initial Closing Date..............................................................................................1
Initial Preferred Shares..........................................................................................1
Investment Securities.............................................................................................2
Issuance Blockage................................................................................................12
lock-up...........................................................................................................5
Maximum Number...................................................................................................13
NASD..............................................................................................................3
Notice Period....................................................................................................13
NYSE..............................................................................................................3
Offer Notice.....................................................................................................14
Offered Shares...................................................................................................14
Original Number..................................................................................................12
Paragraphs.......................................................................................................26
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Preferred Stock...................................................................................................7
Preferred Stock Conversion Delivery Notice.......................................................................12
Preferred Stock Conversion Notice................................................................................12
Proceeding.......................................................................................................21
Prospectus.......................................................................................................10
Redemption Common Stock...........................................................................................2
Registrable Number................................................................................................9
Registration Period..............................................................................................10
Registration Requirement..........................................................................................9
Registration Statement............................................................................................9
Related Proceeding...............................................................................................25
Required Consent.................................................................................................12
Required Registration Date........................................................................................9
Rule 144.........................................................................................................10
Sales Contract...................................................................................................11
SEC...............................................................................................................6
Sec Filing........................................................................................................6
Sections.........................................................................................................26
SECURITIES ACT....................................................................................................6
SECURITIES ACT...................................................................................................18
Series A Preferred Shares.........................................................................................1
Series A-1 Preferred Stock........................................................................................1
Subsections......................................................................................................26
Subsequent Certificate of Rights and Preferences..................................................................1
Subsequent Certificates of Rights and Preferences.................................................................2
Subsequent Closing................................................................................................2
Subsequent Closing Date...........................................................................................2
TRC...............................................................................................................1
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