Exhibit (d)(2)
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is entered into as of
July 24, 2001 by and among EA Engineering, Science, and Technology, Inc., a
Delaware corporation (the "Company"), Xxxxx X. Xxxxxx ("Xxxxxx"), the Xxxxxxx
Xxx Xxxxxx Irrevocable Trust, the Xxxxxxx Xxx Xxxxxx Irrevocable Trust and the
Xxxxx Xxxxx Xxxxxx Irrevocable Trust (collectively, the "Xxxxxx Family Trusts"),
Ecolair LLLP, a Maryland limited liability limited partnership ("Ecolair" and,
collectively, with Xxxxxx and the Xxxxxx Family Trusts, the "Xxxxxx Interests"),
and The Xxxxx Xxxxxx Group, Inc., a New Jersey corporation ("Xxxxxx"). The
Xxxxxx Interests and Xxxxxx, together with other stockholders of the Company,
who may become parties hereto, are referred to herein collectively as the
"Stockholders" and individually as a "Stockholder."
WHEREAS, each of the Stockholders owns the issued and outstanding
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock"), set forth opposite the Stockholder's name on Appendix I hereto;
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WHEREAS, Ecolair and Xxxxxx have formed EA Engineering Holdings, LLC
(the "Parent"), a Delaware limited liability company formed for the special
purpose of acquiring the outstanding Common Stock of the Company;
WHEREAS, the Parent has formed a wholly owned corporate subsidiary
under the laws of the State of the Delaware (the "Acquisition Subsidiary") to
effect the purchase of the shares of the outstanding Common Stock of the
Company;
WHEREAS, the Company, Parent and the Acquisition Subsidiary have
entered into a merger agreement (the "Merger Agreement") that provides for the
acquisition of the outstanding Common Stock of the Company, subject to the terms
and conditions contained therein;
WHEREAS, the Stockholders desire to enter into this Agreement in order
to provide, among other things, for certain mutual restrictions relating to the
transfer of the Equity Securities (as hereinafter defined) and other rights and
responsibilities as set forth herein; and
NOW, THEREFORE, for and in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto agree
as follows:
1. DEFINITIONS
For all purposes of this Agreement, certain capitalized terms
specified in Exhibit A shall have the meanings set forth in Exhibit A, except as
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otherwise expressly provided.
2. DIRECTORS OF THE COMPANY
2.1. Board of Directors
Each Stockholder (for so long as the Stockholder owns any Equity
Securities of the Company) shall take or cause to be taken all action within its
respective power and authority (including without limitation the voting of
shares of Equity Securities held by it or the taking of action by consent with
respect to the shares owned by it) as may be required:
(1) to establish and maintain the authorized size of the Board
of Directors of the Company at five (5) directors; to maintain the quorum
requirements for actions of the Board of Directors at a majority of the entire
number of directors (which must include at least one (1) director designated by
Xxxxxx); and to maintain the voting requirements for actions of the Board of
Directors at a majority of directors present at a meeting at which there is a
quorum, except in respect of the matters as this Agreement, the Articles or the
Bylaws of the Company may impose a greater voting requirement;
(2) to cause to be elected to the Board of Directors of the
Company (A) three (3) directors designated by the Xxxxxx Interests, and (B) two
(2) directors designated by Xxxxxx;
(3) to remove forthwith from the Board of Directors any director
when removal is requested for any reason by the Stockholder group designating
the election of the director pursuant to Section 2.1(2) above (each a
"Designating Group"), with or without cause;
(4) in the case of death, resignation or other removal as herein
provided of the director, to elect another person designated by the respective
Designating Group to fill the vacancy created thereby; and
(5) to use its best efforts to prevent any action from being
taken by the Board of Directors of the Company during the pendency of any
vacancy due to death, resignation or removal of a director, unless the
Designating Group shall have failed for a period of ten days after written
notice of the vacancy to designate a replacement.
2.2. Board Meetings
Each Stockholder agrees to take, or cause the Board of Directors to
take, all actions necessary to hold meetings of the Board of Directors at least
once each calendar quarter in accordance with the Bylaws of the Company.
2.3. Board Committees
Each Stockholder further agrees to take, or to cause the Board of
Directors to take, all actions necessary to cause any action establishing the
duties or membership of any committee of the Board of Directors to be approved
by at least three (3) directors (which must include at least one (1) director
designated by Xxxxxx) and to cause each committee of the Board of Directors to
consist of at least two (2) directors (which must include at least one (1)
director designated by Xxxxxx).
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2.4. Amendment to Certificate of Incorporation and Bylaws
Each Stockholder further agrees to take, or to cause the Board of
Directors to take, all of the actions necessary to cause the Certificate of
Incorporation and Bylaws of the Company to be amended to the extent necessary to
conform to, and to be consistent with this Agreement, including any amendments
hereto.
3. TRANSFER OF EQUITY SECURITIES; PREEMPTIVE RIGHTS
Until the termination of this Agreement, the following restrictions
shall apply to the Transfer of Equity Securities:
3.1. Restrictions on Transfer of Shares by the Stockholders
No Stockholder shall (during his lifetime, in the case of an
individual) make any Transfer (as defined herein) of any Equity Securities now
or hereafter held or acquired by it except in accordance with this Section 3
without first obtaining the prior written consent of each of the other
Stockholders. No Transfer of Equity Securities in violation of this Agreement
shall be made or recorded on the books of the Company, and any such Transfer
shall be void and of no effect.
3.2. Xxxxxx Ownership and Control
Xxxxxx will not, and will cause its affiliates not to, acquire
additional Equity Securities if doing so would have the effect of increasing
Xxxxxx'x aggregate percentage ownership of the Company above forty-nine percent
(49.0%) without first obtaining the written consent of the Xxxxxx Interests.
Xxxxxx hereby covenants that it will not seek to exercise control over the
management and operations of the Company other than through its ability to
designate two members of the Company's Board of Directors. Notwithstanding the
foregoing, Xxxxxx may acquire additional Equity Securities and thereby increase
its percentage ownership of the Company without obtaining the written consent of
the Xxxxxx Interests if the acquisition occurs as a result of the exercise of
the rights provided for in this Section 3.
3.3. Rights of First Refusal and Tag-Along Rights
3.3.1. First Offer Rights
In the event that a Stockholder (a "Transferor"), desires to Transfer
for value Equity Securities (a "Sale of Shares") now or hereafter held or
acquired by it, before the Transferor may effect a Sale of Shares, the
Transferor first must make the offer(s) required by this Section 3.3 and the
offer(s) must not have been accepted as provided in this Section 3.3.
Notwithstanding the foregoing, this Section 3.3 shall not apply to (i) Transfers
pursuant to Section 3.5 hereof, (ii) Transfers between Xxxxxx and the Xxxxxx
Interests, or (iii) Transfers among the Xxxxxx Interests.
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3.3.2. Offer
Prior to effecting a Sale of Shares, the Transferor shall first
deliver a written notice (the "Transfer Notice") to the Company and to each
other Stockholder specifying (i) the name and address of the individual or
entity to whom the Transferor wishes to Transfer any Equity Securities, (ii) the
number and class or series of Equity Securities which the Transferor wishes to
Transfer (the "Offered Shares"), (iii) the cash or other purchase price offered
for the Equity Securities (the "Offer Price"), and (iv) any other terms and
conditions of the Transfer. The Transfer Notice shall constitute an irrevocable
offer by the Transferor to sell to each other Stockholder the Offered Shares at
the price under the same terms and conditions contained in the Transfer Notice
and pursuant to the terms of this Section 3.3.
3.3.3. Stockholder Rights
The Stockholders shall have the right to purchase the Offered Shares.
Within ten (10) Business Days following its receipt of the Transfer Notice, each
other Stockholder shall notify the Company and the Transferor as to the number
of the Offered Shares, if any, that it is electing to purchase (each notice
being a "Stockholder Acceptance"). If the number of Offered Shares is less than
the total number included in all Stockholder Acceptances, then the number of
Offered Shares shall be allocated as nearly as practicable among the
Stockholders pro-rata in proportion to the number of shares of Equity Securities
(determined on an as-if converted basis with respect to all then-outstanding
securities convertible into Common Stock) held by each such Stockholder. Each of
the Stockholders shall have the right of over-subscription such that if any of
the Stockholders fails to exercise the right to purchase its pro rata portion of
the Offered Shares, the Transferor shall promptly notify each of the other
Stockholders and each of the other Stockholders may purchase the non-purchasing
Stockholder's portion, within ten (10) Business Days of the date of this
subsequent notice from the Transferor, allocated as nearly as practicable among
the Stockholders pro-rata in proportion to the number of shares of Equity
Securities (determined on an as-if converted basis with respect to all then-
outstanding securities convertible into Common Stock) held by each Stockholder.
Each Stockholder Acceptance shall be deemed to be an irrevocable commitment to
purchase from the Transferor that number of the Offered Shares which the
Stockholders have elected to purchase pursuant to their Stockholder Acceptances.
3.3.4. Sale by Transferor
If the Stockholders do not deliver to the Transferor the Stockholder
Acceptances to purchase all of the Offered Shares or exercise Tag-Along Rights
within the time frames set forth in Section 3.3.3 above, the Transferor (a)
shall be under no obligation to sell any of the Offered Shares to the
Stockholders, unless the Transferor so elects, and (b) may, within a period of
90 days from the date of the Transfer Notice, sell all, but not less than all,
of the Offered Shares to one or more Third Parties (each a "Third Party
Transferee"), for cash or other consideration substantially on the terms
specified in the Transfer Notice; provided that if there is more than one Third
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Party Transferee, the Transferor in good faith must obtain binding and
definitive commitments to purchase all the Offered Shares within the 90-day
period before any sale to a Third Party Transferee of the Offered Shares may
take place. Upon any such sale, the Third Party Transferee of the Offered
Shares shall execute an agreement in form and substance satisfactory to the
Stockholders pursuant to which the Third Party Transferee agrees that the Equity
Securities it acquired from the Transferor are subject to the provisions of this
Section 3
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and otherwise agrees to become a party to this Agreement as a Stockholder. Any
Third Party Transferee to whom Offered Shares are Transferred pursuant to and in
compliance with this Section 3.3 shall, upon consummation of such Transfer, be
deemed a Stockholder. If the Transferor does not complete the sale of the
Offered Shares within the 90-day period, the provisions of this Section 3 shall
again apply, and no Transfer of Shares held by the Transferor shall be made
otherwise than in accordance with the terms of this Agreement.
3.3.5. Closing
The closing of purchases of Offered Shares by the Stockholders (or
their designees) pursuant to this Section 3.3. shall take place within 90 days
after the date of the Transfer Notice at 11:00 A.M. local time at the principal
offices of the Company, or at such other date, time or place as the parties to
the sale may agree. At least five (5) Business Days prior to the closing, the
Stockholders shall notify the Transferor in writing of the name and number of
purchasers and the portion of the Offered Shares to be purchased by the
Stockholders. At the closing, the Transferor shall sell, transfer and deliver
to each of the Stockholders participating in the purchase, full right, title and
interest in and to the Offered Shares so purchased, free and clear of all liens,
security interests or adverse claims of any kind and nature (except as otherwise
set forth in the Certificate of Incorporation and this Agreement and applicable
securities laws) and shall deliver to all participating Stockholders a
certificate or certificates representing the Offered Shares sold, in each case
duly endorsed for transfer or accompanied by appropriate stock transfer powers
duly endorsed with signatures guaranteed by a commercial bank, trust company or
registered broker dealer. Simultaneously with delivery of the certificates,
each of the participating Stockholders shall deliver to the Transferor, in full
payment of the purchase price of the Offered Shares purchased, (a) any cash
consideration for the shares by wire transfer of immediately available funds to
the bank and the account designated by the Transferor and/or (b) any non-cash
consideration for the shares in person to the Transferor at Closing.
3.3.6. Assignment of Right of First Refusal
A Stockholder may assign its right to purchase the Offered Shares
pursuant to Section 3.3.3 hereof to either the Company or any other Stockholder,
but to no other person or entity.
3.3.7. Tag-Along Rights
To the extent any rights of first refusal are not exercised under this
Section 3.3 as to all the Offered Shares or the consideration in any proposed
sale is other than cash or promissory notes, the Transferor proposing to effect
a Sale of Shares shall afford the Stockholders the opportunity to participate in
the sale with the Transferor (the "Tag-Along Right") with each such Stockholder
(including the Transferor) participating in the sale pro-rata in proportion to
the ownership of the Equity Securities by each of the Stockholders (determined
on an as-if converted basis with respect to all then-outstanding securities
convertible into Common Stock), and for the same consideration and otherwise on
the same terms as specified in the Transfer Notice. In the event that any
Stockholder shall propose a Sale of Shares, the Transferor shall provide written
notice to the Company and the Stockholders in accordance with Section 3.3, and
if the Stockholders intend to participate in the proposed sale, they shall state
their intention to participate in the Stockholder Acceptance, as the case may
be, delivered to the Transferor in accordance with Section 3.3.
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3.4. Obligation to Sell
(1) In the event that the Company has received a proposal for any
consolidation, merger, sale of all or substantially all of the Company's assets,
recapitalization, sale of Equity Securities or other form of business
combination in a bona fide arms length transaction with a Third Party (other
than a public offering under the Act) (an "Acquisition Offer") and the
Stockholders have approved the Acquisition Offer by the affirmative vote of at
least two-thirds (2/3) of the outstanding voting Equity Securities (voting on an
as-if converted basis with respect to all then-outstanding securities
convertible into Common Stock), the Stockholders shall be obligated to, and
shall, (a) Transfer to such Third Party all Equity Securities owned by such
Stockholder, (b) if stockholder approval of the transaction is required, vote
its Equity Securities in favor thereof and (c) take all other actions required
in order to effectuate fully the transactions contemplated by such Acquisition
Offer. The requirements of this Section 3.4 shall apply only in the event that
(a) the per share consideration to be received in the transaction contemplated
by the Acquisition Offer is in excess of the applicable Threshold Price and (b)
the consideration offered in the transaction contemplated by the Acquisition
Offer consists of (i) cash, (ii) securities listed on an established national
securities exchange or automated quotation system and registered under the Act
or (iii) a combination thereof.
(2) The obligations of the Stockholders pursuant to this Section 3.4
are subject to the satisfaction of the following conditions:
(a) if any Stockholders of a class or series are given an option as
to the form and amount of consideration to be received, all holders of such
class or series will be given the same option; and
(b) no Stockholder shall be obligated to make any out-of-pocket
expenditure prior to the consummation of the transaction contemplated by the
Acquisition Offer and no Stockholder shall be obligated to pay more than its pro
rata share (based upon the amount of consideration received) of reasonable
expenses incurred in connection with the consummation of such transaction to the
extent such costs are incurred for the benefit of all Stockholders and are not
otherwise paid by the Company or the acquiring party (costs incurred by or on
behalf of a Stockholder for its sole benefit will not be considered costs of the
transaction hereunder), provided that a Stockholder's liability for such
expenses shall be capped at the total purchase price received by such
Stockholder for its Equity Securities of the Company.
3.5. Put Rights of the Xxxxxx Interests
At any time following the closing of the Tender Offer pursuant to
which Acquisition Subsidiary has accepted for payment and purchased shares of
Common Stock of the Company (the "Tender Offer Closing"), each of the Xxxxxx
Interests shall have the right to sell, and Xxxxxx shall have the obligation to
purchase, all or any portion of the Equity Securities of the Company held by any
of the Xxxxxx Interests. Each of the Xxxxxx Interests may exercise this right
with regard to all or a part of the Equity Securities of the Company held by it
by sending written notice to Xxxxxx requesting that Xxxxxx purchase its Equity
Securities. The purchase price per share of Common Stock shall be the Put Price
Per Share (as defined herein), subject to adjustment as indicated in the
definition thereof. The closing of the transaction contemplated by this Section
3.5 shall occur at the Company's principal executive offices on a date agreed to
by Xxxxxx and the Xxxxxx Interest exercising such right, but the closing shall
occur no later than
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thirty (30) days after Xxxxxx'x receipt of the notice from the Xxxxxx Interest
pursuant to this Section 3.5. At the closing, the Xxxxxx Interest exercising the
put right pursuant to this Section 3.5 shall sell, transfer and deliver to
Xxxxxx full right, title and interest in and to the Equity Securities to be
purchased by Xxxxxx, free and clear of all liens, security interests or adverse
claims of any kind and nature (except as otherwise set forth in the Certificate
of Incorporation and this Agreement and applicable securities laws) and shall
deliver to Xxxxxx a certificate or certificates representing the Equity
Securities sold, in each case duly endorsed for transfer or accompanied by
appropriate stock transfer powers duly endorsed with signatures guaranteed by a
commercial bank, trust company or registered broker dealer. Simultaneously with
delivery of the certificates, Xxxxxx shall deliver to the Xxxxxx Interest
exercising the put right pursuant to this Section 3.5, in full payment of the
purchase price of the Equity Securities purchased, cash in an amount equal to
the aggregate purchase therefor by wire transfer of immediately available funds
to the bank and the account designated by the Xxxxxx Interest. Xxxxxx shall
deliver to the Xxxxxx Interest exercising the put right pursuant to this Section
3.5, any adjustment to the Put Price Per Share, as determined in accordance with
the definition thereof, cash in an amount equal to such adjustment by wire
transfer of immediately available funds to the bank and account designated by
the applicable Xxxxxx Interest within five (5) calendar days of when the
determination of such adjustment can first be made.
4. ADDITIONAL COVENANTS OF THE STOCKHOLDERS AND THE COMPANY
4.1. Books and Records
The Company shall keep and maintain adequate and proper books and
records of account, in which complete entries are made in accordance with
generally accepted accounting principles consistently applied and in accordance
with all applicable laws, rules and regulations, reflecting all financial and
other transactions of the Company normally or customarily included in books and
records of account of companies engaged in the same or similar businesses and
activities as the Company.
4.2. Access and Examination Rights
The Company shall permit each Stockholder and any agents or
representatives thereof to visit and inspect the properties of the Company, to
examine and make abstracts from any of the Company's books and records
(including agreements, licenses, and similar documents) at any reasonable time
and as often as such Stockholder or such agents or representatives may
reasonably request, and to discuss the business, operations, prospects, assets,
properties, and condition (financial or otherwise) of the Company with any of
the officers, directors, employees, agents, or representatives of the Company;
provided, however, that such rights of access and examination shall be subject
to such security or safety rules and regulations as the Company may have in
effect from time to time that are applicable to all visitors to its facilities
and to applicable laws and regulations, including those applying to classified
material and facilities.
4.3. Financial and Business Information
The Company shall furnish to the Stockholders:
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(1) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a copy of the audited balance sheet of
the Company as of the end of such fiscal year and the related audited statements
of income and cash flows for the fiscal year, all prepared in reasonable detail,
and certified by independent certified public accountants as presenting fairly
the financial position of the Company and approved by the Board of Directors of
the Company, including footnotes and setting forth in comparative form the
corresponding figures for the corresponding period of the preceding fiscal year.
The Company shall also provide the figures for such period set forth in the
operating plan and budget delivered by the Company pursuant to subsection (3)
hereof;
(2) as soon as available and in any event within 45 days after the
end of each fiscal quarter of the Company (other than the last quarter of each
fiscal year) in the case of quarterly statements and within 30 days after the
close of each month of each fiscal year in the case of monthly statements, a
copy of the unaudited balance sheet of the Company as of the end of the quarter
or month and the related unaudited statements of income and cash flows of the
Company for the periods commencing at the end of the previous quarter or month
and ending at the end of the quarter or month and commencing at the beginning of
the fiscal year and ending at the end of the quarter or month, in each case (a)
setting forth in comparative form the corresponding figures for the
corresponding period of the preceding fiscal year and the figures for the period
set forth in the operating plan and budget delivered by the Company pursuant to
subsection (3) hereof and (b) in the case of quarterly financial statements,
accompanied by a report from the Company's Chief Financial Officer (or other
member of management acting in such capacity) summarizing the Company's
financial condition and results of operations during such period and in
comparison to the periods set forth in (a) immediately preceding; and
4.4. Defaults; Litigation
The Company shall furnish to the Stockholders notifications of any
material defaults under any of its contracts or agreements and copies of any
litigation brought against the Company, including in each case, a detailed
description thereof.
4.5. Additional Information
The Company shall furnish to the Stockholders such additional
information as the Stockholders may reasonably request.
4.6. Special Meetings
The Stockholders agree that, upon a request by a Stockholder that a
special meeting of the Company's stockholders be called, the other Stockholders
will request the Company to call such a special meeting.
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4.7. Stock Ownership
Each of the Stockholders hereby represents that as of the date of this
Agreement, it owns (free and clear of any liens) the number of issued and
outstanding Equity Securities set forth opposite such Stockholder's name on
Appendix I hereto.
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4.8. Status as a Small Business
Until such time as the put rights of the Xxxxxx Interests pursuant to
Section 3.5 shall be exercised in full, the Stockholders will take all action
reasonably necessary to cause the Company to maintain its status as a "Small
Business," as defined in the Small Business Investment Act of 1958, as amended,
and the regulations thereunder.
4.9. [Intentionally Omitted]
4.10. Protective Provisions
Except upon the affirmative vote of at least two-thirds (2/3) of the
outstanding voting Equity Securities (voting on an as-if converted basis with
respect to all then-outstanding securities convertible into Common Stock) in the
aggregate and given in writing or by vote at a meeting, the Company shall not
take any of the following actions:
(a) amend, repeal or change, directly or indirectly, any of the
provisions of the Company's Certificate of Incorporation or Bylaws;
(b) consolidate or merge with or into any other corporation or
entity, or acquire or purchase all or substantially all of the assets of any
other entity, including shares of stock or other evidences of beneficial
ownership of other entities;
(c) sell, lease, license, assign, pledge, transfer or otherwise
dispose of all or substantially of its properties or assets;
(d) voluntarily or involuntarily dissolve, liquidate or wind-up its
affairs; and
(e) enter into any business substantially different from the business
currently engaged in by the Company.
4.11. Publicity
Each Stockholder hereby covenants and agrees that such Stockholder
shall not, directly or indirectly, make any press release or public notice,
announcement, or filing available to the public concerning the Company, its
Stockholders, or its intended business without prior notice to and reasonable
consultation with the other Stockholders, unless such notice and consultation is
impracticable under applicable laws or governmental regulations. It is
specifically recognized that Stockholders that are subject to the disclosure
requirements of the Securities Exchange Act of 1934 or that are making offerings
or distributions subject to the Securities Act of 1933 or other applicable laws
governing disclosure may, from time to time, be
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required to make such releases, notices, announcements or filings without the
opportunity for prior notice to or reasonable consultation with the other
Stockholders.
4.12. Confidentiality
Each Stockholder (in its capacity as a Stockholder) hereby covenants
and agrees that, unless each other Stockholder otherwise consent in advance in
writing, and except as otherwise required by any applicable law or governmental
regulation, such Stockholder shall not, directly or indirectly, disclose to
anyone other than the Stockholders or the officers or directors of the Company
any non-public information regarding this Agreement or the transactions
contemplated hereby or the Stockholders or the business of the Company.
4.13. Good Faith Operation of the Company
In the event that the Put Price Per Share is calculated using the
EBITDA for the twelve (12) full calendar months immediately preceding the
Calculation Months, as required by the second sentence of the definition
thereof, during the twelve (12) full calendar months immediately following the
Calculation Months, Xxxxxx shall (i) operate the Company, as nearly as
reasonably practicable, in the ordinary course of business and consistent with
past practice and (ii) operate the business in good faith and without oppression
so as to not deprive the Stockholders who exercised the put right pursuant to
Section 3.5 hereof of the reasonable benefits contemplated by the adjustment
mechanism in the definition of Put Price Per Share.
4.14. Company Stock Incentive Plan
The Stockholders agree that, following the consummation of the
transactions contemplated by the Merger Agreement, Xxxxxx shall set aside up to
five percent (5%) of its stock of the Company for purchase by employees of the
Company as a form of incentive compensation arrangement. The total number of
shares set aside, the terms and conditions of the purchase transactions and the
employees eligible to participate shall be decided by the Stockholders after the
consummation of the Merger.
5. REPRESENTATIONS AND WARRANTIES
5.1. Representatives and Warranties of Non-Individual Stockholders
Each Stockholder that is a corporation, partnership, limited
liability company or trust hereby represents and warrants to each other
Stockholder as follows:
5.1.1. Organization and Standing
Such Stockholder is duly organized, validly existing, and in good
standing under the laws of the jurisdiction in which it is organized. Such
Stockholder has the corporate, partnership, limited liability company or trust
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
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5.1.2. Authorization
Such Stockholder has taken all corporate, partnership, limited
liability company or trust action necessary for it to enter into this Agreement
and to consummate the transactions contemplated hereby.
5.1.3. Absence of Violation
Neither the execution and delivery of this Agreement, or of any
document or instrument to be executed and delivered by such Stockholder pursuant
hereto, nor the consummation of the transactions contemplated hereby and thereby
will constitute a violation of, or default under, or conflict with, or require
any consent under (other than a violation or default that has been waived or a
consent that has been obtained), any term or provision of the certificate or
articles of incorporation or bylaws, partnership agreement, certificate or
articles of formation or limited liability company agreement or trust agreement
of such Stockholder or any contract, commitment, indenture, lease, or other
agreement to which such Stockholder is a party or by which such Stockholder or
any of its assets is bound.
5.1.4. Binding Obligation
This Agreement constitutes a valid and binding obligation of such
Stockholder, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar laws
affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to be
executed by such Stockholder pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding obligation
of such Stockholder, enforceable in accordance with its terms (with the
aforesaid exceptions).
5.2. Representations and Warranties of Individual Stockholders
Each Stockholder who is an individual hereby represents and warrants
to the Company and each other Stockholder as follows:
5.2.1. Power and Authority
The Stockholder has the legal capacity and all other necessary power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
5.2.2. Absence of Violation
Neither the execution and delivery of this Agreement, or of any
document or instrument to be executed and delivered by such Stockholder pursuant
hereto, nor the consummation of the transactions contemplated hereby and thereby
will constitute a violation of, or default under, or conflict with, or require
any consent under (other than a violation or default that has been waived or a
consent that has been obtained), any term or provision of any contract,
commitment, indenture, lease, or other agreement to which such Stockholder is a
party or by which such Stockholder or any of his assets is bound.
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5.2.3. Binding Obligation
This Agreement constitutes a valid and binding obligation of such
Stockholder, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar laws
affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to be
executed by such Stockholder pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding obligation
of such Stockholder, enforceable in accordance with its terms (with the
aforesaid exceptions).
5.3. Representatives and Warranties of the Company
The Company hereby represents and warrants to each Stockholder as
follows:
5.3.1. Organization and Standing
The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware. The Company has the
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
5.3.2. Authorization
The Company has taken all corporate action necessary for it to enter
into this Agreement and to consummate the transactions contemplated hereby.
5.3.3. Absence of Violation
Neither the execution and delivery of this Agreement, or of any
document or instrument to be executed and delivered by the Company pursuant
hereto, nor the consummation of the transactions contemplated hereby and thereby
will constitute a violation of, or default under, or conflict with, or require
any consent under (other than a violation or default that has been waived or a
consent that has been obtained), any term or provision of the Certificate of
Incorporation or bylaws of the Company or any contract, commitment, indenture,
lease, or other agreement to which the Company is a party or by which the
Company or any of its assets is bound.
5.3.4. Binding Obligation
This Agreement constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar laws
affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to be
executed by the Company pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding obligation
of the Company, enforceable in accordance with its terms (with the aforesaid
exceptions).
-12-
6. MISCELLANEOUS
6.1. Legend
The Stockholders shall cause the certificates or other evidence
representing the Equity Securities held by the Stockholders to bear a legend
(the "Legend") in substantially the following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") or
state securities laws and cannot be offered, sold or
otherwise transferred in the absence of registration or the
availability of an exemption from registration under the Act
and regulations promulgated thereunder and applicable state
securities laws. The voting rights with respect to, and sale
or other disposition of, the securities represented by this
certificate are restricted by and subject to the provisions
of a Stockholders' Agreement dated as of July 24, 2001, a
copy of which is available for inspection at the offices of
the Company.
6.2. Specific Performance
With respect to the terms of this Agreement, in addition to any other
remedies which the Stockholders may have at law or in equity, each Stockholder
hereby acknowledges the harm which might result to the other Stockholders from
breaches by it of its obligations to take all necessary actions with respect to
the rights and obligations set forth in this Agreement cannot be adequately
compensated by damages. Accordingly, each Stockholder agrees that the parties
to this Agreement shall have the right to have all obligations and undertakings
set forth in this Agreement specifically performed by each other party to this
Agreement and that any Stockholder shall have the right to obtain an order or
decree of such specific performance in any of the courts of the United States of
America or of any state or other political subdivision thereof.
6.3. Effectiveness and Termination
(a) This Agreement is effective for all purposes upon the acquisition
of shares of Common Stock of the Company pursuant to the Tender Offer
contemplated by the Merger Agreement and if the consummation of the acquisition
of the shares of Common Stock of the Company pursuant to the Tender Offer
contemplated by the Merger Agreement has not been consummated by December 1,
2001, this Agreement shall be void and of no force and effect. In addition,
this Agreement shall terminate, and all agreements, covenants and obligations of
the parties hereunder shall become wholly void and of no effect, upon the first
to occur of (i) the closing date of a Qualified Public Offering, (ii) the
closing date of a Change of Control Transaction, (iii) written agreement of all
of the Stockholders to terminate this Agreement and (iv) the occurrence of any
event which reduces the number of Stockholders to one.
(b) When effective, this Agreement shall apply with respect to all
Equity Securities of the Company owned by each of the Stockholders at the time
of the effectiveness of this Agreement and any other Equity Securities acquired
or received by such Stockholder as long as this Agreement is in effect.
-13-
6.4. Assignment
No Stockholder shall assign this Agreement or its rights or
obligations hereunder, in whole or in part, whether by operation of law or
otherwise, unless (a) such person shall have obtained the prior written consent
of all the other parties, (b) such assignment is in connection with a Transfer
of Equity Securities pursuant to Section 3 hereof, (c) such assignment is
pursuant to a transfer contemplated by provision (b) of the definition of
"Transfer," or (d) such assignment consists solely of the rights to purchase
Equity Securities from a Transferor pursuant to Section 3.3.3 hereof and the
assignee of such rights is the Company as contemplated by Section 3.3.6 hereof.
Any purported assignment of this Agreement contrary to the terms hereof shall be
null and void and of no force and effect.
6.5. Entire Agreement; Amendment
This Agreement, including the Exhibits hereto, constitutes the entire
agreement among the parties hereto with respect to the matters provided for
herein, and it supersedes all prior oral or written agreements, commitments or
understandings with respect to the matters provided for herein. No amendment,
modification or discharge of this Agreement shall be valid or binding unless set
forth in writing and duly executed by all of the Stockholders.
6.6. Waiver
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other instruments
given in connection with or pursuant to this Agreement shall impair any such
right, power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege,
or the exercise of any other right, power or privilege. No waiver shall be
valid against any party hereto unless made in writing and signed by the party
against whom enforcement of such waiver is sought and then only to the extent
expressly specified therein.
6.7. No Third Party Beneficiaries
It is the explicit intention of the parties hereto that no person or
entity other than the parties hereto is or shall be entitled to bring any action
to enforce any provision of this Agreement against any of the parties hereto,
and the covenants, undertakings and agreements set forth in this Agreement shall
be solely for the benefit of, and shall be enforceable only by, the parties
hereto or their respective successors, heirs, executors, administrators, legal
representatives and permitted assigns.
6.8. Binding Effect
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
-14-
6.9. Governing Law
This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed in
accordance with the laws of the State of Delaware (excluding the choice of law
rules thereof).
6.10. Notices
All notices, demands, requests, or other communications which may be
or are required to be given, served, or sent by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand-delivered or
mailed by first-class, registered or certified mail, return receipt requested,
postage prepaid, or transmitted by telecopy as follows:
(i) If to the Company:
EA Engineering, Science, and Technology, Inc.
00000 XxXxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
with a copy (which shall constitute notice) to:
-----
Semmes, Xxxxx & Xxxxxx
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxxx X. Xxxxxx
(ii) If to Xxxxxx:
Xxxxx X. Xxxxxx
c/o EA Engineering, Science, and Technology, Inc.
00000 XxXxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
---------
Xxxxx & Xxxxxxx L.L.P.
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Xx.
(iii) If to the Xxxxxx Family Trusts:
c/o Ecolair LLP
00000 XxXxxxxxx Xxxx, Xxxxx 000
-00-
Xxxx Xxxxxx, XX 00000
Attention: Trustee
Telecopy No.: (000) 000-0000
(iv) If to Ecolair:
Ecolair LLLP
00000 XxXxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
with a copy (which shall not constitute notice) to:
---------
Xxxxx & Xxxxxxx L.L.P.
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Xx.
-00-
(v) If to Xxxxxx:
The Xxxxx Xxxxxx Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
(vi) If to any other Stockholder:
To the name and address set forth on the books and records of
the Company.
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication which shall be hand-delivered,
mailed, transmitted or telecopied in the manner described above, shall be deemed
sufficiently given, served, sent, received or delivered for all purposes at such
time as it is delivered to the addressee (with the return receipt, the delivery
receipt, or the answerback being deemed conclusive, but not exclusive, evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.
6.11. Execution in Counterparts
To facilitate execution, this Agreement may be executed in as many
counterparts as may be required; and it shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall be
sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more of
the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
6.12. Expenses
Each party shall pay his or its own expenses incident to the
preparation and negotiation of this Agreement, including all legal fees and
disbursements.
-17-
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement,
or have caused this Stockholders Agreement to be duly executed on their behalf,
as of the day and year first hereinabove set forth.
EA Engineering, Science, and
Technology, Inc.
By:/s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
/s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx, Ph.D.
Xxxxxxx Xxx Xxxxxx Irrevocable Trust
By: /s/ Xxxxxxx Xxx Xxxxxx
----------------------
Xxxxxxx Xxx Xxxxxx, Trustee
Xxxxxxx Xxx Xxxxxx Irrevocable Trust
By:/s/ Xxxxx Xxxxx Xxxxxx
----------------------
Xxxxx Xxxxx Xxxxxx, Trustee
Xxxxx Xxxxx Xxxxxx Irrevocable Trust
By: /s/ Xxxxxxx Xxx Xxxxxx-Xxx
--------------------------
Xxxxxxx Xxx Xxxxxx-Xxx, Trustee
Ecolair LLLP
By:/s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx, Ph.D.
Title: Its General Partner
The Xxxxx Xxxxxx Group, Inc.
By: /s/ Xxxx X. Marantz
-------------------
Name: Xxxx X. Marantz
Title: Chairman of the Finance Committee
EXHIBIT A
TO STOCKHOLDERS' AGREEMENT
DATED AS OF JULY 24, 2001
-------------------------
DEFINITIONS
"Act" shall mean the Securities Act of 1933, as amended.
"Agreement" shall mean this Stockholders' Agreement.
"Business Day" shall mean Monday through Friday and shall exclude any
federal or banking holidays observed in New York City.
"Calculation Months" shall mean the twelve (12) full calendar months
immediately preceding the closing of the put option transaction pursuant to
Section 3.5 hereof.
"Change of Control Transaction" shall mean any of the following: (a) a
merger or consolidation of the Company into or with any Third Party where the
stockholders of the Company immediately prior to such merger or consolidation
possess less than a majority of the voting securities of the surviving entity
immediately after such merger or consolidation; (b) a single transaction or a
series of transactions, whether or not such transactions are related, in which
the stockholders of the Company immediately prior to such transaction or first
of such series of transactions possess less than a majority of the Company's
voting securities immediately after such transaction or series of such
transactions (provided that a Qualified Public Offering having such effect shall
not be a "Change of Control Transaction"); or (c) a single transaction or series
of transactions, whether or not such transactions are related, pursuant to which
a Third Party acquires all or substantially all of the Company's assets
determined on a consolidated basis.
"Common Stock" shall mean the common stock, par value $0.01 per share,
of the Company.
"Company" shall mean EA Engineering, Science, and Technology, Inc., a
Delaware corporation, or any successor thereto.
"EBITDA" shall mean the Company's net income or loss before interest
expense, taxes, depreciation and amortization, discontinued operations, non-
recurring charges, extraordinary items and any changes in accounting practices,
all as determined in accordance with GAAP. For purposes of determining EBITDA,
Xxxxxx'x annual compensation shall be deemed to be $250,000, regardless of his
actual compensation during any applicable period.
"Effective Date" shall mean the date on which the Agreement is
effective.
"Equity Securities" shall mean the Common Stock and any warrants or
other rights to subscribe for or to purchase, or any options for the purchase
of, Common Stock, or any stock or security convertible into or exchangeable for
Common Stock or any other stock, security or interest in the Company whether or
not convertible into or exchangeable for Common Stock.
"GAAP" shall mean United States generally accepted accounting
principles.
"Net Funded Debt" shall mean all of the indebtedness of the Company,
excluding accounts payable and accrued expenses incurred in the ordinary course
of business, that is formalized by the issuance of written bank, bond or note
obligations of the Company less the value of any cash, cash equivalents or
marketable securities of the Company at the time of such determination. For
purposes hereof, the amount of Net Funded Debt is determined at the close of
business on the day immediately preceding the closing of the exercise of the put
right pursuant to Section 3.5 hereof.
"Put Price Per Share" shall mean the greater of (i) the Tender Offer
Price and (ii) the calculation determined by (1) multiplying the Company's
EBITDA during the Calculation Months by six (6), (2) subtracting therefrom the
Net Funded Debt and (3) dividing such difference by the number of shares of
Common Stock outstanding at the time of the exercise of the put right pursuant
to Section 3.5 hereof determined on a fully-diluted basis. Notwithstanding the
foregoing, in the event that the EBITDA for the Calculation Months exceeds 150%
of the EBITDA for the twelve (12) full calendar months immediately preceding the
Calculation Months, then the EBITDA amount to be used in the calculation in the
preceding sentence shall equal the sum of (i) 150% of the EBITDA for the twelve
(12) full calendar months immediately preceding the Calculation Months and (ii)
one-half of the amount that the EBITDA for the Calculation Months exceeds 150%
of the EBITDA for the twelve (12) full calendar months immediately preceding the
Calculation Months, provided, however, that if the Put Price Per Share is
-----------------
calculated using this sentence and the EBITDA for the twelve (12) full calendar
months immediately following the Calculation Months is equal to or greater than
the EBITDA for the Calculation Months, the Put Price Per Share shall be
recalculated on the basis of the EBITDA for the Calculation Months and such
recalculation shall constitute a post-closing adjustment to the Put Price Per
Share.
"Qualified Public Offering" shall mean the public sale of any equity
securities of the Company under the Act through a nationally recognized
underwriter in which the Company's aggregate net proceeds realized from the
offering are at least $30 million, at an offering price per share equal to or
greater than the Threshold Price.
"Tender Offer" shall mean the tender offer by the Acquisition Company
to acquire the outstanding Common Stock of the Company.
"Tender Offer Price" shall mean the price pursuant to which the
Acquisition Company has purchased certain or all of the outstanding Common Stock
of the Company pursuant to the Tender Offer.
"Third Party" shall mean any person or entity excluding each of the
following: (a) the Company and any affiliate or associate of the Company; or
(b) each of the Stockholders and any of their respective successors, officers,
directors, affiliates or associates, and partners (limited and general).
"Threshold Price" shall mean three times the Tender Offer Price Per
Share.
"Transfer" means the sale, gift, mortgage, pledge, exchange, assignment
or other disposition or transfer, including a disposition under judicial order,
legal process, execution, attachment or enforcement of an encumbrance, but shall
not include: (a) a transfer by any Stockholder pursuant to the terms of a merger
or acquisition agreement to which the Company is a party and which involves all
of the Company's Equity Securities; (b) a transfer by a Stockholder to such
Stockholder's parents, spouse, children or grandchildren, or to trustees or
custodians for their benefit or any entity controlled by any of such persons
solely for estate planning purposes or upon the death of the Stockholder,
provided that the transferees shall hold the Equity Securities subject to the
-------- ----
terms of this Agreement and, as a condition precedent to such transfers, shall
be required to execute and deliver this Agreement; or (c) a transfer by a
Stockholder in a public offering registered under the Act.
