Exhibit 10.2
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of May 13, 1999 (this
"Agreement"), by and among Transit Group, Inc., a Florida corporation having an
office at 0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000,
("Company"), and those stockholders of Company set forth on Annex I hereto
(individually, a "Stockholder" and collectively, the "Stockholders").
W I T N E S S E T H :
WHEREAS, Company and GE Capital Equity Investments, Inc. ("GE
Capital" or "Purchaser") have entered into that certain Purchase Agreement,
dated as of May 13, 1999 (the "Purchase Agreement"), pursuant to which Company
has agreed to sell, and Purchaser has agreed to purchase, on the terms and
subject to the conditions set forth therein, shares of Series A Convertible
Preferred Stock, no par value per share ("Convertible Preferred Stock"), of
Company convertible into shares of common stock of Company, $.01 par value per
share ("Common Stock");
WHEREAS, each of the parties hereto (other than Company) are
on the date hereof holders of the number of shares of Convertible Preferred
Stock or Common Stock (all shares of Convertible Preferred Stock and Common
Stock being referred to herein collectively as "Stock") as is set forth on
Annex I hereto (such Stockholders, other than Purchaser and its successors and
assigns, the "Existing Stockholders"); and
WHEREAS, certain terms used in this Agreement are defined in
the Purchase Agreement;
NOW, THEREFORE, in consideration of the agreements, premises
and mutual covenants contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Disposition of Stock.
(a) Restriction on Transfer of Stock. Each Existing Stockholder agrees that,
except in a transaction (or transactions) permitted by Section 1(b) or excepted
or contemplated by Section 2 below, such Existing Stockholder shall not during
the term of this Agreement either directly or indirectly, transfer, sell,
assign, mortgage, hypothecate, pledge, create a security interest in or lien
upon, encumber, donate, contribute, place in trust (excluding a voting trust),
or otherwise voluntarily or involuntarily dispose of (each, a "Transfer") any
of such Existing Stockholder's Stock.
(b) Permitted Dispositions of Stock. Each Existing Stockholder shall, without
regard to the provisions of Section 2 hereof, be entitled to directly or
indirectly Transfer all or any portion of its Stock (i) to any Affiliate of
such Existing Stockholder, (ii) pursuant to a will or the laws of descent and
distribution and (iii) in connection with the sale of all or substantially all
of the assets of Company or any merger or consolidation of Company with and
into another Person if such sale or merger is permitted under Section 5.2 of
the Purchase Agreement. (c) Condition Precedent to Permitted Dispositions. In
the event of any disposition to an Affiliate pursuant to Section 1(b)(i), the
transferee (and all subsequent transferees permitted pursuant to Section
1(b)(i)) shall be bound and obligated by, and shall be entitled to the rights
and benefits afforded to the Existing Stockholders under the terms and
provisions of, this Agreement. As a condition precedent to any disposition by
any Existing Stockholder of Stock permitted pursuant to Section 1(b)(i) above,
each purchaser, transferee or donee (other than an Existing Stockholder who is
already a party hereto) shall agree in writing to be bound by all of the
provisions and conditions of this Agreement and shall become an Existing
Stockholder hereunder, and no such purchaser, transferee or donee shall be
permitted to effect any transfer, sale or exchange of Stock which the Existing
Stockholders are not permitted to make under this Agreement. (d) Transfers in
Contravention of Agreement. Any purported Transfer of Stock by any Existing
Stockholder in contravention of this Agreement shall be null and void, and
Company agrees not to effectuate any such Transfer of Stock. 2. Tag-Along
Right.
(a) No Existing Stockholder shall directly or indirectly sell, transfer or
otherwise dispose of Stock, in a single transaction or related series of
transactions, to any third party (other than those Transfers permitted by
Section 1(b) hereof) unless the terms and conditions of such sale, transfer or
other disposition (the "Third Party Disposition") to such third party shall
contain an offer to Purchaser, to include in such Third Party Disposition such
number of shares of Common Stock or Convertible Preferred Stock as is
determined in accordance with Section 2(b) below; provided, however, that
Section 1 and this Section 2 shall not apply to any public sales by an Existing
Stockholder on the NASDAQ Stock Market or other securities exchange on which
the Common Stock may be listed or any redemptions of Stock by Company. At least
15 days prior to effecting any Third Party Disposition, such selling Existing
Stockholder (the "Selling Existing Stockholder") shall promptly cause the terms
and conditions of the Third Party Disposition to be reduced to a reasonably
detailed writing (which writing shall identify the third party purchaser and
shall include the offer to Purchaser to purchase or otherwise acquire its
Common Stock or Convertible Preferred Stock, as the case may be, according to
the terms and subject to the conditions of this Section 2), and shall deliver,
or cause the third party to deliver, written notice (the "Notice") of the terms
of such Third Party Disposition to Purchaser. The Notice shall be accompanied
by a true and correct copy of the agreement, if any, embodying the terms and
conditions of the proposed Third Party Disposition or such written summary
thereof if there is no agreement. At any time after receipt of the Notice (but
in no event later than 10 Business Days after receipt), Purchaser may accept
the offer included in the Notice for up to such number of its shares of Common
Stock or Convertible Preferred Stock, as the case may be, as determined in
accordance with the provisions of Section 2(b) below, by furnishing irrevocable
written notice of such acceptance to the Selling Existing Stockholder and to
the third party.
(b) In the event that Purchaser elects to accept the offer included in the
Notice described in Section 2(a) above, Purchaser (in such capacity, the
"Included Stockholder") shall have the right to sell, transfer or otherwise
dispose of such number of its shares of Common Stock (including Convertible
Preferred Stock) pursuant to, and upon consummation of, the Third Party
Disposition which is equal to the product of (X) the total number of shares of
Common Stock owned by the Included Stockholder (assuming for the purpose of
this calculation, the conversion of all shares of Convertible Preferred Stock)
and (Y) a fraction, the numerator of which shall equal the total number of
shares of Common Stock to be sold to the third party, and the denominator of
which shall equal the total number of shares of Common Stock owned by all
Stockholders (assuming for the purposes of this calculation, the conversion of
all shares of Convertible Preferred Stock). If the third party purchaser is not
willing to purchase such additional shares, the number of shares to be sold by
the Selling Existing Stockholder and the Included Stockholder shall be
proportionately reduced. (c) The purchase of Stock pursuant to this Section 2
shall be made on the same terms (including, without limitation, the per share
consideration and method of payment, and the date of sale, transfer or other
disposition), and subject to the same conditions, if any, as are provided to
the Selling Existing Stockholder and stated in the Notice. (d) Upon the
consummation of the disposition of Stock to the third party pursuant to the
Third Party Disposition, the Selling Existing Stockholder shall (i) cause the
third party to remit directly to the Included Stockholder the sales price of
its Stock disposed of pursuant thereto, and (ii) furnish such other evidence of
the completion and time of completion of the disposition and the terms thereof
as may reasonably be requested by the Included Stockholder. (e) If Purchaser
has not delivered to the Selling Existing Stockholder and to the third party
written notice of its acceptance of the offer contained in the Notice within 10
Business Days after the receipt of such Notice, it shall be deemed to have
waived any and all rights pursuant to this Section 3 with respect to the
disposition of its Stock described in the Notice, and the Selling Existing
Stockholder shall have 45 days (calculated from the first day next succeeding
the expiration of the 10 Business Day acceptance period described above), in
which to dispose of the aggregate amount of Stock described in the Notice to
the third party identified in the Notice, on terms not more favorable to the
Selling Existing Stockholder than those which were set forth in the Notice. If
Purchaser has delivered irrevocable written notice of acceptance as described
in the preceding sentence and, if after 45 days following receipt of the
Notice, the Selling Existing Stockholder and the third party shall not have
completed the disposition of Stock to be sold in connection therewith in
accordance with the terms of the Third Party Disposition, all the restrictions
on the disposition of Stock contained in this Section 2 shall again be in force
and effect. 3. Board Observer. GE Capital may designate one individual (the
"Observer") to attend all meetings of the Board of Directors (and any
committees thereof) in a non-voting observer capacity. The Observer shall be
subject to the Confidentiality Agreement, dated April 5, 1999, between GE
Capital and Company (the "Confidentiality Agreement"). The Observer shall be
entitled to receive all reports, presentations and materials as if the Observer
were a member of the Board, all of which shall be subject to the terms of the
Confidentiality Agreement. Company shall reimburse the Observer for any
reasonable expenses incurred in connection with meetings of the Board of
Directors and committees thereof.
4. Stockholders' Representations and Warranties. Each Stockholder represents
and warrants to each of the other Stockholders that there are no agreements to
which such Stockholder is a party with respect to the transfer of the capital
stock of Company or with respect to any other aspect of Company's affairs,
other than this Agreement.
5. Equitable Relief. It is hereby acknowledged that irreparable harm would
occur in the event that any of the provisions of this Agreement were not
performed fully by the parties hereto in accordance with the terms specified
herein, and that monetary damages are an inadequate remedy for breach of this
Agreement because of the difficulty of ascertaining and quantifying the amount
of damage that will be suffered by the parties relying hereon in the event that
the undertakings and provisions contained in this Agreement were breached or
violated. Accordingly, each party hereto hereby agrees that each other party
hereto shall be entitled to an injunction or injunctions to restrain, enjoin
and prevent breaches of the undertakings and provisions hereof and to enforce
specifically the undertakings and provisions hereof in any court of the United
States or any state having jurisdiction over the matter; it being understood
that such remedies shall be in addition to, and not in lieu of, any other
rights and remedies available at law or in equity. 6. Miscellaneous.
(a) Notices. Any and all notices, designations, consents, offers, acceptances,
or any other communication provided for herein shall be made in writing by
personal-delivery, first-class mail (registered or certified, with return
receipt requested), telecopier (with "answer back" confirmation), or overnight
air courier guaranteeing next day delivery in the case of Company, at its
address set forth at the beginning of this Agreement (Attn: Xxxxxx X. Xxxxxx;
Telecopy No.: (000) 000-0000; with a copy to Womble, Carlyle, Xxxxxxxxx & Rice,
PLLC, Suite 3500, One Atlantic Center, 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, Attn: Xxxxxx X. XxXxxxxx, Esq., Telecopy No.: (000) 000-0000),
and in the case of any Stockholder, to the address of such party appearing
under its or his name on Annex I hereto (or to such other address as may be
designated in writing by any such party in accordance with this Section 7(a)).
Such notices or communications shall be effective and deemed given upon
delivery to said address.
(b) Complete Agreement; Amendment. This Agreement constitutes the complete
understanding of the parties with respect to its subject matter and supersedes
any other agreement or understanding relating thereto. No amendment, change or
modification of this Agreement shall be valid, binding or enforceable, unless
the same shall be in writing and signed by the Required Holders, the Company
and the Existing Stockholders to the extent their rights and obligations under
this Agreement would be affected thereby. (c) Termination. This Agreement may
be terminated at any time by an instrument in writing signed by Purchaser or,
if earlier, at such time as less than 30% of the shares of Convertible
Preferred Stock issued on the Closing Date are outstanding or if Purchaser and
its Affiliates fail to constitute the Required Holders. (d) Waiver. No failure
or delay on the part of the Stockholders or Company or any of them in
exercising any right, power or privilege hereunder, and no course of dealing
between the Stockholders or Company, shall operate as a waiver thereof nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the simultaneous or later exercise of any other right, power or
privilege. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights and remedies which the Stockholders or Company
would otherwise have. (e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. (f) Governing Law;
Waivers. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York without giving effect to the
conflict of laws provisions thereof. Each of the parties hereby submits to
personal jurisdiction and waives any objection as to venue in the County of New
York, State of New York. Service of process on the parties in any action
arising out of or relating to this Agreement shall be effective if mailed to
the parties in accordance with Section 6(a) hereof. The parties hereto waive
all right to trial by jury in any action or proceeding to enforce or defend any
rights hereunder. (g) Benefit and Binding Effect. All of the terms and
provisions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns, including any
permitted transferee of their Stock; provided, however, that any transferee
that is not an Affiliate of Purchaser and is acquiring less than 5% of the
Convertible Preferred Stock outstanding on the date of the original issuance of
the shares of Convertible Preferred Stock shall not receive the rights of
Purchaser under this Agreement. References herein to any Purchaser shall
include Purchaser and any of its successors and assigns. (h) Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this
Agreement. (i) After-Acquired Shares. All of the provisions of this Agreement
shall apply to all of the shares of capital stock of Company now owned or which
may be issued to or acquired by a Stockholder in consequence of any additional
issuance (including, without limitation, by exercise of an option or any
warrant), purchase, exchange, conversion or reclassification of stock,
corporate reorganization, or any other form of recapitalization, consolidation,
merger, stock split or stock dividend, or which are acquired by a Stockholder
in any other manner. (j) Approvals and Consents. The Stockholders hereby agree,
for themselves, their successors, heirs and legal representatives, to vote at
stockholders' and directors' meetings of Company, to prepare, execute and
deliver or cause to be prepared, executed and delivered such further
instruments and documents, to take such other actions and to adopt such by-laws
and provisions of the certificate of incorporation as may be reasonably
required to more effectively carry out the intent and purposes of this
Agreement and the transactions contemplated hereby. They further agree to cause
Company to do the same.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
TRANSIT GROUP, INC.
By: Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ Xxxxxxx Xxxxxxx
Name:Xxxxxxx Xxxxxxx
Title:
EXISTING STOCKHOLDERS:
/s/ T. Xxxxx Xxxxx
T. Xxxxx Xxxxx
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
ANNEX I
Number
Stockholders/Purchaser Class of Securities of Shares
G E Capital Equity Investments, Inc. Convertible Preferred Stock ________
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: GE Equity Group-Transit
Telecopy No. (000) 000-0000
with copies to:
General Electric
Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: GE Equity Group
Legal Counsel
Telecopy No. (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxx, Esq.
Telecopy No. (000) 000-0000
Number
Stockholders/Existing Stockholders Class of Securities of Shares
T. Xxxxx Xxxxx Common Stock _________
0000 Xxx Xxxxx Xxxx.
Xxxxxxxxxxxx, Xxxxxxx 00000
Telecopy No. ____________
Xxxxxx X. Xxxxxx Common Stock _________
Suite 1740
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy No:____________
